EXHIBIT 10.35
EXECUTION COPY
$175,000,000
TERM CREDIT AGREEMENT
Dated as of October 18, 2005
among
FELCOR TRS BORROWER 1, L.P.,
as Initial Borrower,
FELCOR TRS GUARANTOR, L.P.,
FELCOR LODGING LIMITED PARTNERSHIP
AND THE OTHER GUARANTORS NAMED HEREIN,
as Guarantors,
CITICORP NORTH AMERICA, INC.,
as Initial Lender,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and as Collateral Agent,
and
CITIGROUP GLOBAL MARKETS INC.,
as Sole Lead Arranger and Sole Book Running Manager
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms...................................................... 2
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions................. 24
SECTION 1.03. Accounting Terms........................................................... 25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Term Advances.......................................................... 25
SECTION 2.02. Making the Term Advances................................................... 25
SECTION 2.03. Repayment of Term Advances................................................. 26
SECTION 2.04. Mandatory Termination or Reduction of the Term Commitments................. 27
SECTION 2.05. Prepayments................................................................ 27
SECTION 2.06. Interest................................................................... 28
SECTION 2.07. Fees....................................................................... 29
SECTION 2.08. Conversion of Term Advances................................................ 29
SECTION 2.09. Increased Costs, Etc....................................................... 29
SECTION 2.10. Payments and Computations.................................................. 31
SECTION 2.11. Taxes...................................................................... 33
SECTION 2.12. Sharing of Payments, Etc................................................... 35
SECTION 2.13. Use of Proceeds............................................................ 36
SECTION 2.14. Evidence of Debt........................................................... 36
SECTION 2.15. Extension of Maturity Date................................................. 36
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Borrowing.................................. 37
SECTION 3.02. Conditions Precedent to Each Borrowing..................................... 40
SECTION 3.03. Determinations Under Section 3.01.......................................... 40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Loan Parties......................... 41
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. Affirmative Covenants...................................................... 48
SECTION 5.02. Negative Covenants......................................................... 52
SECTION 5.03. Reporting Requirements..................................................... 57
SECTION 5.04. Financial Covenants........................................................ 60
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.......................................................... 60
ARTICLE VII
GUARANTY
SECTION 7.01. Guaranty; Limitation of Liability.......................................... 63
SECTION 7.02. Guaranty Absolute.......................................................... 64
SECTION 7.03. Waivers and Acknowledgments................................................ 65
SECTION 7.04. Subrogation................................................................ 66
SECTION 7.05. Guaranty Supplements and Accession Agreements.............................. 67
SECTION 7.06. Indemnification by Guarantors.............................................. 67
SECTION 7.07. Subordination.............................................................. 67
SECTION 7.08. Continuing Guaranty........................................................ 68
SECTION 7.09. Recourse Nature of Guaranty; FLLP Cap Date................................. 68
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action; Appointment of Supplemental Collateral Agents.... 69
SECTION 8.02. Agents' Reliance, Etc...................................................... 70
SECTION 8.03. CNAI and Affiliates........................................................ 70
SECTION 8.04. Lender Credit Decision..................................................... 70
SECTION 8.05. Indemnification by Lenders................................................. 70
SECTION 8.06. Successor Agents........................................................... 71
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc............................................................ 72
SECTION 9.02. Notices, Etc............................................................... 72
SECTION 9.03. No Waiver; Remedies........................................................ 73
SECTION 9.04. Costs and Expenses......................................................... 74
SECTION 9.05. Right of Set-off........................................................... 75
SECTION 9.06. Binding Effect............................................................. 75
SECTION 9.07. Assignments and Participations; Replacement Notes.......................... 76
SECTION 9.08. Execution in Counterparts.................................................. 78
SECTION 9.09. Confidentiality............................................................ 78
SECTION 9.10. Release of Collateral...................................................... 79
SECTION 9.11. Patriot Act Notification................................................... 79
SECTION 9.12. Jurisdiction, Etc.......................................................... 79
SECTION 9.13. Governing Law.............................................................. 80
SECTION 9.14. WAIVER OF JURY TRIAL....................................................... 80
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SCHEDULES
Schedule I - Term Commitments and Applicable Lending Offices
Schedule II - Mortgage Assets
Schedule III - Unencumbered Assets
Schedule IV - Leased TRS Hotels
Schedule V - Previously Owned Hotels
Schedule VI - TRS Recapitalization Transactions
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(f) - Material Litigation
Schedule 4.01(n) - Existing Debt
Schedule 4.01(o) - Surviving Debt
Schedule 4.01(p) - Surviving Liens
Schedule 4.01(q) - Real Property
Part I - Owned Hotels
Part II - Leased Hotels
Part III - Management Agreements
Part IV - Franchise Agreements
Schedule 4.01(r) - Environmental Concerns
Schedule 4.01(w) - Plans and Welfare Plans
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Accession Agreement
Exhibit D - Form of Guaranty Supplement
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Security Agreement
Exhibit G - Form of Mortgage
Exhibit H - Form of Assignment of Leases
Exhibit I - Form of Closing Opinion of Jenkens & Gilchrist
Exhibit J - Form of Opinion of Local Counsel (Real Estate Matters)
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TERM CREDIT AGREEMENT
TERM CREDIT AGREEMENT dated as of October 18, 2005 (this
"AGREEMENT") among FELCOR TRS BORROWER 1, L.P., a Delaware limited partnership
(the "INITIAL BORROWER", and together with any Additional Borrowers (as
hereinafter defined) acceding hereto pursuant to Section 3.02 or 5.01(j), the
"BORROWERS"), FELCOR TRS GUARANTOR, L.P., a Delaware limited partnership (the
"TRS GUARANTOR"), FELCOR LODGING LIMITED PARTNERSHIP, Delaware limited
partnership ("FLLP"), the other entities identified herein as guarantors
(together with TRS Guarantor, FLLP, the Borrowers and any Additional Guarantors
acceding hereto pursuant to Section 5.01(j) or 7.05, the "GUARANTORS"), CITICORP
NORTH AMERICA, INC. ("CNAI"), as the initial lender (the "INITIAL LENDER"),
CNAI, as administrative agent (together with any successor administrative agent
appointed pursuant to Article VIII, the "ADMINISTRATIVE AGENT") for the Lenders
(as hereinafter defined), CNAI, as collateral agent (together with any successor
collateral agent appointed pursuant to Article VIII, the "COLLATERAL AGENT", and
together with the Administrative Agent, the "AGENTS") for the Secured Parties
(as hereinafter defined), and CITIGROUP GLOBAL MARKETS INC. ("CGMI"), sole lead
arranger and sole book running manager (the "ARRANGER").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCESSION AGREEMENT" means an agreement entered into by a Borrower
in substantially the form of Exhibit C hereto.
"ACTUAL DEBT SERVICE" has the meaning specified in the definition of
"Mortgage Assets Debt Service Coverage Ratio".
"ADDITIONAL BORROWER" means any direct or indirect wholly-owned
Subsidiary of FLLP, other than the Initial Borrower, that (a) is
designated as a Borrower in a Notice of Borrowing, and (b) is or will be
at by the close of business on the day of the Borrowing requested in such
Notice of Borrowing, the owner of one or more Mortgage Assets, either
directly or through a wholly-owned Subsidiary of such Borrower that is a
Guarantor hereunder.
"ADDITIONAL GUARANTORS" has the meaning specified in Section 7.05.
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank,
N.A., at its office at Two Penns Way, Suite 110, New Castle, Delaware
19720, ABA No. 021000089, Account No. 4078-4524, Account Name: Leverage
Finance, Reference: FelCor, Attention: Global Loans/Agency, or such other
account as the Administrative Agent shall specify in writing to the
Lenders.
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"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 20% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"AGENTS" has the meaning specified in the recital of parties to this
Agreement.
"AGREEMENT" has the meaning specified in the recital of parties to
this Agreement.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap
and Derivatives Association, Inc. (the "MASTER AGREEMENT"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement
was being terminated early on such date of determination, (ii) such Loan
Party or Subsidiary was the sole "Affected Party", and (iii) the
Administrative Agent was the sole party determining such payment amount
(with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the mark-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to
the Loan Party or Subsidiary of a Loan Party to such Hedge Agreement
determined by the Administrative Agent based on the settlement price of
such Hedge Agreement on such date of determination; or (c) in all other
cases, the mark-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of
a Loan Party to such Hedge Agreement determined by the Administrative
Agent as the amount, if any, by which (i) the present value of the future
cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the
present value of the future cash flows to be received by such Loan Party
or Subsidiary pursuant to such Hedge Agreement; capitalized terms used and
not otherwise defined in this definition shall have the respective
meanings set forth in the above described Master Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"APPLICABLE MARGIN" means, at any date of determination occurring
during any of the periods set forth below, the corresponding percentage
per annum as set forth below:
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APPLICABLE MARGIN APPLICABLE MARGIN
PERIOD FOR EURODOLLAR RATE ADVANCES FOR BASE RATE ADVANCES
- --------------------------------------- ---------------------------- ----------------------
October 18, 2005 through April 17, 2006 1.50% 0.50%
April 18, 2006 through October 17, 2006 1.75% 0.75%
October 18, 2006 through April 17, 2007 2.00% 1.00%
April 18, 2007 and thereafter 2.25% 1.25%
"APPRAISAL" means an appraisal complying with the requirements of
the Federal Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended from time to time, commissioned by and prepared for the
account of the Collateral Agent (for the benefit of the Lenders) by a MAI
appraiser selected by the Collateral Agent in consultation with the
Borrowers, and otherwise in scope, form and substance satisfactory to the
Collateral Agent.
"APPROVED FRANCHISOR" means, with respect to any Hotel Asset, a
nationally recognized hotel brand franchisor that has entered into a
written franchise agreement (or, if no separate franchise agreement has
been entered into with respect to such Hotel Asset, a written management
agreement) in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent confirms that as of the
Closing Date the existing franchisors of the Hotel Assets shown on
Schedule Part IV of Schedule 4.01(q) hereto are satisfactory to the
Administrative Agent.
"APPROVED MANAGER" means, with respect to any Hotel Asset, a
nationally recognized hotel manager (a) with (or controlled by a Person or
Persons with) at least ten years of experience in the hotel management
industry, and (b) that is engaged pursuant to a written management
agreement in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent confirms that as of the
Closing Date the existing hotel managers of the Hotel Assets shown on
Schedule Part III of Schedule 4.01(q) hereto are satisfactory to the
Administrative Agent. For purposes of this definition, the term "control"
(including the term "controlled by") of a Person means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"ARRANGER" has the meaning specified in the recital of parties to
this Agreement.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit D hereto.
"ASSIGNMENTS OF LEASES" has the meaning specified in Section
5.01(j)(ii)(B).
"BANKRUPTCY LAW" means any applicable law governing a proceeding of
the type referred to in Section 6.01(f) or Title 11, U.S. Code, or any
similar foreign, federal or state law for the relief of debtors.
"BASE RATE" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of (a) the rate of
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interest announced publicly by Citibank, N.A. in New York, New York, from
time to time, as Citibank, N.A.'s base rate and (b) 1/2 of 1% per annum
above the Federal Funds Rate.
"BASE RATE ADVANCE" means a Term Advance that bears interest as
provided in Section 2.06(a)(i).
"BORROWER EQUITY HOLDER" means each holder of direct Equity
Interests in any Borrower.
"BORROWERS" has the meaning specified in the recital of parties to
this Agreement. Each Borrower shall at all times be a direct or indirect
wholly-owned Subsidiary of FLLP.
"BORROWER ACCOUNT" means, with respect to each Borrowing, the
account specified in the Notice of Borrowing with respect thereto
maintained by or on behalf of the Borrower named therein.
"BORROWER PARTIES" means the Loan Parties (other than FLLP).
"BORROWING" means a borrowing consisting of simultaneous Term
Advances of the same Type made by the Lenders.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CAPITALIZED LEASES" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent owned
by the applicable Loan Party or any of its Subsidiaries free and clear of
all Liens (other than Liens created under the Collateral Documents) and
having a maturity of not greater than 90 days from the date of issuance
thereof: (a) readily marketable direct obligations of the Government of
the United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, (b) certificates of deposit of or time deposits with
any commercial bank that is a Lender or a member of the Federal Reserve
System, issues (or the parent of which issues) commercial paper rated as
described in clause (c) below, is organized under the laws of the United
States or any State thereof and has combined capital and surplus of at
least $1,000,000,000 or (c) commercial paper in an aggregate amount of not
more than $50,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States and
rated at least "Prime-1" (or the then equivalent grade) by Moody's or
"A-1" (or the then equivalent grade) by S&P.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
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"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CGMI" has the meaning specified in the recital of parties to this
Agreement.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(a) any Person or two or more Persons acting in concert shall have
acquired and shall continue to have following the date hereof beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Interests of the REIT (or other securities
convertible into such Voting Interests) representing 35% or more of the
combined voting power of all Voting Interests of the REIT; or (b) there is
a change in the composition of the REIT's Board of Directors over a period
of 24 consecutive months (or less) such that a majority of Board members
(rounded up to the nearest whole number) ceases, by reason of one or more
proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the
Board members described in clause (i) who were still in office at the time
such election or nomination was approved by the Board; or (c) any Person
or two or more Persons acting in concert shall have acquired and shall
continue to have following the date hereof, by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation
will result in their acquisition of the power to direct, directly or
indirectly, the management or policies of the REIT; or (d) any Borrower
Party ceases to be a direct or indirect wholly-owned Subsidiary of FLLP;
or (e) the REIT ceases to be the direct legal and beneficial owner of all
general partnership interests in FLLP and the indirect beneficial owner
(through its Equity Interests in other entities) of limited partnership
interests comprising more than 50% of the Equity Interests in FLLP; or (f)
FLLP or any of its Subsidiaries shall create, incur, assume or suffer to
exist any Lien on the direct or indirect Equity Interests in any Borrower
Party owned by it other than pursuant to the Collateral Documents.
"CLOSING DATE" means October 18, 2005 or such other date as may be
agreed upon by the Borrowers and the Administrative Agent.
"CNAI" has the meaning specified in the recital of parties to this
Agreement.
"COLLATERAL" means all "Collateral" and all "Mortgaged Property"
referred to in the Collateral Documents and all other property that is or
is intended to be subject to any Lien in favor of the Collateral Agent for
the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DELIVERY DATE" means January 10, 2006.
"COLLATERAL DELIVERABLES" means the following items, each in form
and substance satisfactory to the Administrative Agent (unless otherwise
specified) in sufficient copies for each Lender:
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(i) Completed requests for information dated as of a current
date, listing all effective financing statements filed in the
jurisdictions referred to in Section 5.01(j)(ii)(A) and in such
other jurisdictions specified by the Administrative Agent that name
any Borrower Party as debtor, together with copies of such financing
statements;
(ii) Copies of the Assigned Agreements referred to in the
Security Agreement and all amendments thereto with respect to each
Mortgage Asset), together with a consent to such assignment, in
substantially the form of Exhibit C to the Security Agreement or
otherwise in form and substance satisfactory to the Administrative
Agent, duly executed by each party to such Assigned Agreements other
than the Borrower Parties;
(iii) A subordination agreement executed and delivered by the
property manager of each Mortgage Asset;
(iv) A franchisor comfort letter executed and delivered by the
franchisor (if any) of each Mortgage Asset;
(v) Evidence that all other action that the Collateral Agent
may deem necessary or desirable in order to perfect and protect the
first priority liens and security interests created under the
Security Agreement has been taken (including, without limitation,
receipt of duly executed payoff letters, UCC termination statements
and landlords' and bailees' waiver and consent agreements);
(vi) Reports supplementing Schedules III, 4.01(b) and 4.01(q)
hereto, including descriptions of such changes in the information
included in such Schedules as may be necessary for such Schedules to
be accurate and complete, certified as correct and complete by a
Responsible Officer of the Borrowers;
(vii) With respect to each Mortgage Asset, a fully paid
American Land Title Association Lender's Extended Coverage title
insurance policy (collectively, the "MORTGAGE POLICIES") in form and
substance, with endorsements (including a zoning endorsement where
available) and in an amount (not to exceed in the aggregate for all
Mortgage Assets the aggregate principal amount of Term Advances then
outstanding) acceptable to the Collateral Agent, issued, coinsured
and reinsured by title insurers acceptable to the Collateral Agent,
insuring each Mortgage to be a valid first and subsisting Lien on
the property described therein, free and clear of all defects
(including, but not limited to, mechanics' and materialmen's Liens)
and encumbrances, excepting only Permitted Encumbrances (as defined
in the Mortgages), and providing for such other affirmative
insurance (including endorsements for mechanics' and materialmen's
Liens where applicable) and such coinsurance and direct access
reinsurance as the Collateral Agent may deem necessary or desirable,
and with respect to any such property located in a State in which a
zoning endorsement is not available, a zoning compliance letter from
the applicable municipality in a form reasonably acceptable to the
Collateral Agent;
(viii) With respect to each Unencumbered Asset, a current
record owner and lien search performed by a title insurer acceptable
to the
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Administrative Agent showing TRS Guarantor or a wholly-owned
Subsidiary thereof as the current record title holder of such
Unencumbered Asset and showing no Liens of record other than
Permitted Liens;
(ix) With respect to each Hotel Asset, an American Land Title
Association/American Congress on Surveying and Mapping form survey
for which all necessary fees have been paid, prepared by a land
surveyor duly registered and licensed in the State in which the
property described in such surveys is located and acceptable to the
Collateral Agent, showing all buildings and other improvements, any
off-site improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than
encroachments and other defects acceptable to the Collateral Agent,
provided that in the case of Mortgage Assets only, each such survey
shall be (A) dated no more than 30 days before the date of its
delivery to the Agents, and (B) certified to the Administrative
Agent, the Collateral Agent and the issuer of the Mortgage Policies
in a manner satisfactory to the Collateral Agent;
(x) With respect to each Mortgage Asset, engineering, soils,
environmental and other similar reports in form and substance and
from professional firms acceptable to the Administrative Agent;
(xi) Estoppel and consent agreements executed by each of the
lessors of any leased Mortgage Assets, along with (A) a memorandum
of lease in recordable form with respect to such leasehold interest,
executed and acknowledged by the owner of the affected Mortgage
Asset, as lessor, or (B) evidence that the applicable lease with
respect to such leasehold interest or memorandum thereof has been
recorded in all places necessary or desirable, in the Administrative
Agent's reasonable judgment, to give constructive notice to
third-party purchasers of such leasehold interest or (3) if such
leasehold interest was acquired or subleased from the holder of a
recorded leasehold interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in
form sufficient to give such constructive notice upon recordation;
(xii) An Appraisal of each Mortgage Asset;
(xiii) Such other consents, agreements, Affiliate lease
subordination agreements and confirmations of lessors and third
parties as the Administrative Agent may reasonably deem necessary or
desirable, and evidence that all other action that the Collateral
Agent may reasonably deem necessary or desirable, in order to create
and maintain valid first and subsisting Liens on the property
described in the Mortgages has been taken;
(xiv) Evidence of insurance (which may consist of binders or
certificates of insurance) naming the Administrative Agent as loss
payee and additional insured with such responsible and reputable
insurance companies or associations, and in such amounts and
covering such risks, as is customary for the hotel industry and
reasonably satisfactory to the Administrative Agent,
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including, without limitation, the insurance required by the terms
of the Security Agreement and the Mortgages;
(xv) An opinion of Jenkens & Gilchrist, counsel for the
Borrower Parties, with respect to (A) the valid existence, corporate
power and authority of the Borrower Parties party to the Loan
Documents, (B) the execution and delivery of the Loan Documents by
the Borrower Parties and enforceability thereof against the Borrower
Parties, (C) the perfection of the security interests created by the
Security Agreement, and (D) such other matters as any Lender through
the Administrative Agent may reasonably request;
(xvi) A favorable opinion of special New York counsel for the
Borrower Parties reasonably acceptable to the Administrative Agent
with respect to (A) the enforceability of the Loan documents against
the Loan Parties, (B) the creation of the security interests created
pursuant to the Security Agreement, and (C) such other matters as
any Lender through the Administrative Agent may reasonably request;
and
(xvii) Favorable opinions of local counsel for the Borrower
Parties in the States in which the Mortgage Assets are located, with
respect to the enforceability and perfection of the Mortgages,
substantially in the form of Exhibit J hereto or otherwise in form
and substance satisfactory to the Administrative Agent.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages,
the Assignments of Leases and any other agreement entered into by a Loan
Party that creates or purports to create a Lien in favor of the Collateral
Agent for the benefit of the Secured Parties.
"COMMUNICATIONS" has the meaning specified in Section 9.02(b).
"CONFIDENTIAL INFORMATION" means information that any Loan Party
furnishes to any Agent or any Lender in writing designated as
confidential, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to such
Agent or such Lender from a source other than the Loan Parties or the
Administrative Agent or any Lender.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection
or deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the Obligation of a
primary obligor, (b) the Obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any Obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or
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payment of any such primary obligation or (B) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (iii) to purchase property,
assets, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the holder of such primary obligation against loss in
respect thereof. 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
less, the maximum amount of such primary obligation for which such Person
may be liable pursuant to the terms of the instrument evidencing such
Contingent Obligation) 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.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion
of Term Advances of one Type into Term Advances of the other Type pursuant
to Section 2.08, 2.09 or 2.10.
"DEBT" of any Person means, without duplication for purposes of
calculating financial ratios, (a) all Debt for Borrowed Money of such
Person, (b) all Obligations of such Person for the deferred purchase price
of property or services other than trade payables incurred in the ordinary
course of business and not overdue by more than 60 days, (c) all
Obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations of
such Person under acceptance, letter of credit or similar facilities, (g)
all Obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such
Person or any other Person (other than Preferred Interests that are issued
by any Loan Party or Subsidiary thereof and classified as either equity or
minority interests pursuant to GAAP) or any warrants, rights or options to
acquire such Equity Interests, (h) all Obligations of such Person in
respect of Hedge Agreements, valued at the Agreement Value thereof, (i)
all Contingent Obligations of such Person and (j) all indebtedness and
other payment Obligations referred to in clauses (a) through (i) above of
another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness or other payment Obligations.
"DEBT FOR BORROWED MONEY" of any Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I
10
hereto or in the Assignment and Acceptance pursuant to which it became a
Lender, as the case may be, or such other office of such Lender as such
Lender may from time to time specify to the Borrowers and the
Administrative Agent.
"DRAW PERIOD" had the meaning specified in Section 2.01.
"EFFECTIVE DATE" means the first date on which the conditions set
forth in Article III shall be satisfied.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) an Affiliate or Fund
Affiliate of a Lender; (iii) a commercial bank organized under the laws of
the United States, or any State thereof, respectively, and having total
assets in excess of $500,000,000; (iv) a savings and loan association or
savings bank organized under the laws of the United States or any State
thereof, and having total assets in excess of $500,000,000; (v) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $500,000,000, so long as such bank is acting through a
branch or agency located in the United States; (vi) the central bank of
any country that is a member of the OECD; (vii) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$500,000,000; and (viii) any other Person approved by the Administrative
Agent, and, unless a Default has occurred and is continuing at the time
any assignment is effected pursuant to Section 9.07, approved by the
Borrowers, each such approval not to be unreasonably withheld or delayed.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury
or threat to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or third party
for damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
"ENVIRONMENTAL LAW" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"EQUITY INTERESTS" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or
11
other ownership or profit interests in) such Person, securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such
shares (or such other interests), and other ownership or profit interests
in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are authorized
or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA EVENT" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any
ERISA Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrowers and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate per
annum (rounded upward, if
12
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
U.S. dollars at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period for a period equal to such Interest
Period or, if for any reason such rate is not available, the rate per
annum (rounded upward, if necessary, to the nearest 1/100 of 1%) at which
deposits in U.S. dollars are offered by the principal office of the
Reference Bank in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day
of such Interest Period in an amount substantially equal to the Reference
Bank's Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period (or, if the Reference Bank shall
not have such a Eurodollar Rate Advance, $1,000,000) and for a period
equal to such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means a Term Advance that bears interest
as provided in Section 2.06(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing,
the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXISTING DEBT" means, without duplication, (a) all Debt of the
Borrower Parties and their Subsidiaries, and (b) all Debt secured by the
Hotel Assets, in each case in the respective principal amounts allocable
to such Hotel Assets and outstanding immediately before giving effect to
(i) the TRS Recapitalization Transactions scheduled to occur on or about
the Closing Date and (ii) the application of the proceeds of the initial
Borrowing.
"EXTENSION DATE" has the meaning specified in Section 2.15.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum 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 that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means the fee letter dated as of September 9, 2005
among the REIT, CNAI and CGMI, as the same may be amended from time to
time.
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"FF&E" means, with respect to any Hotel Asset, any furniture,
fixtures and equipment, including any beds, lamps, bedding, tables,
chairs, sofas, curtains, carpeting, smoke detectors, mini bars, paintings,
decorations, televisions, telephones, radios, desks, dressers, towels,
bathroom equipment, heating, cooling, lighting, laundry, incinerating,
loading, swimming pools, landscaping, garage and power equipment,
machinery, engines, vehicles, fire prevention, refrigerating, ventilating
and communications apparatus, carts, dollies, elevators, escalators,
kitchen appliances, restaurant equipment, computers, reservation systems,
software, cash registers, switchboards, cleaning equipment or any other
items of furniture, fixtures and equipment typically used in hotel
properties (including furniture, fixtures and equipment used in guest
rooms, lobbies, common areas, front desk, back office, bars, restaurants,
kitchens, laundries, concierge, bellman, recreation, amusement,
landscaping, parking and other areas of hotels) and any replacements of
all or any portion of any of the foregoing.
"FF&E RESERVE" means, with respect to any Mortgage Asset for any
fiscal period, an amount equal to 4% of the total revenues generated from
the operation of such Mortgage Asset for such fiscal period.
"FISCAL YEAR" means a fiscal year of FLLP and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"FLLP" has the meaning specified in the recital of the parties to
this Agreement.
"FLLP CAP" has the meaning specified in Section 7.09.
"FLLP CAP DATE" means the date on which the Loan Parties shall have
delivered to the Administrative Agent all Collateral Documents and
Collateral Deliverables and otherwise satisfied in full their respective
obligations under Sections 5.01(j)(ii) and 5.01(j)(iii).
"FRANCHISE AGREEMENTS" means (a) the Franchise Agreements set forth
on Part IV of Schedule 4.01(q) hereto (or, if no separate franchise
agreement has been entered into with respect to any Hotel Asset, the
applicable Management Agreement), and (b) any Franchise Agreement in
respect of a Hotel Asset (or if no separate franchise agreement is entered
into with respect thereto, the applicable Management Agreement) entered
into after the Closing Date in compliance with Sections 5.01(n) and
5.01(o).
"FUND AFFILIATE" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"GAAP" has the meaning specified in Section 1.03.
"GOOD FAITH CONTEST" means the contest of an item as to which: (a)
such item is contested in good faith, by appropriate proceedings, (b)
reserves that are adequate are established with respect to such contested
item in accordance with GAAP and (c) the failure to pay or comply with
such contested item during the period of such contest is not reasonably
likely to result in a Material Adverse Effect.
"GUARANTEED OBLIGATIONS" has the meaning specified in Section 7.01.
14
"GUARANTY" means the Guaranty by the Guarantors pursuant to Article
VII, together with any and all Guaranty Supplements and Accession
Agreements from time to time delivered pursuant to Section 5.01(j)(i) or
Section 7.05.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls, radon gas and
mold and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"HEDGE BANK" means any Lender or an Affiliate of a Lender in its
capacity as a party to a Secured Hedge Agreement.
"HOTEL ASSETS" means the Mortgage Assets and the Unencumbered
Assets.
"INDEMNIFIED COSTS" has the meaning specified in Section 8.05(a).
"INDEMNIFIED PARTY" has the meaning specified in Section 7.06(a).
"INITIAL BORROWER" has the meaning specified in the recital of the
parties to this Agreement.
"INITIAL LENDER" has the meaning specified in the recital of parties
to this Agreement.
"INITIAL MORTGAGE ASSETS" means those Mortgage Assets identified as
"Initial Mortgage Assets" on Schedule II hereto and with respect to which
all Liens securing Existing Debt encumbering such Mortgage Assets have
been satisfied and released in full on the Closing Date.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the applicable Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending on the last day of
the period selected by such Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two or three months
(or, to the extent available from all Lenders, any shorter period), as the
applicable Borrower may, upon notice received by the Administrative Agent
not later than 12:00 Noon (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided, however,
that:
15
(i) no Borrower may select any Interest Period with respect to
any Eurodollar Rate Advance that ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall
be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day; provided, however, that if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"INVESTMENT" means (a) any loan or advance to any Person, any
purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of any Person, any capital contribution to any Person or
any other direct or indirect investment in any Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
any Person, and (b) the purchase or other acquisition of any real
property.
"LEASED TRS HOTELS" means those hotels listed in Part I of Schedule
IV hereto.
"LENDERS" means the Initial Lenders, and each Person that shall
become a Lender hereunder pursuant to Section 9.07 for so long as such
Initial Lender or Person, as the case may be, shall be a party to this
Agreement.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"LOAN DOCUMENTS" means (a) this Agreement, (b) the Notes, (c) the
Fee Letter, (d) each Accession Agreement, (e) each Guaranty Supplement,
(f) the Collateral Documents and (g) each Secured Hedge Agreement, in each
case, as amended.
"LOAN PARTIES" means the Borrowers and the Guarantors.
"LOSSES" has the meaning specified in the definition of "Recourse
Carve-Out Liabilities".
16
"MANAGEMENT AGREEMENTS" means (a) the Management Agreements set
forth on Part III of Schedule 4.01(q) hereto, and (b) any Management
Agreement in respect of a Hotel Asset entered into after the Closing Date
in compliance with Section 5.01(n).
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), results of operations or
prospects of (a) FLLP or FLLP and its Subsidiaries, taken as a whole, or
(b) the Borrower Parties or the Borrower Parties and their Subsidiaries,
taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations or prospects of
(i) FLLP and its Subsidiaries, taken as a whole, or (ii) the Borrower
Parties and their Subsidiaries, taken as a whole, (b) the rights and
remedies of any Agent or any Lender under any Loan Document, (c) the
ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party or (d) the value of the
Mortgage Assets or the Unencumbered Assets, taken as a whole.
"MATERIAL CONTRACT" means each contract to which FLLP, any Borrower
Party or any Subsidiary of any Borrower Party is a party involving
aggregate consideration payable to or by FLLP, such Borrower Party or such
Subsidiary in an amount of $5,000,000 or more per annum or otherwise
material to the business, condition (financial or otherwise), operations,
performance, properties or prospects of FLLP or the Borrower Parties and
their Subsidiaries, taken as a whole. Without limitation of the foregoing,
the Management Agreements shall be deemed to comprise Material Contracts
hereunder.
"MATERIAL DEBT" means recourse Debt of any Loan Party or any
Subsidiary of a Loan Party that is outstanding in a principal amount (or,
in the case of any Hedge Agreement, an Agreement Value) of $10,000,000 or
more, either individually or in the aggregate; in each case (a) whether
the primary obligation of one or more of the Loan Parties or their
respective Subsidiaries, (b) whether the subject of one or more separate
debt instruments or agreements, and (c) exclusive of Debt outstanding
under this Agreement.
"MATERIAL LITIGATION" has the meaning specified in Section 3.01(f).
"MATURITY DATE" means the earlier of (a) the first anniversary of
the Closing Date, subject to the extension thereof pursuant to Section
2.16 and (b) the date of termination in whole of the Term Commitments
pursuant to Section 2.04 or 6.01.
"MAXIMUM FACILITY AMOUNT" means $175,000,000.
"MOODY'S" means Moody's Investors Service, Inc. and any successor
thereto.
"MORTGAGE POLICIES" has the meaning specified in the definition of
"Collateral Deliverables".
"MORTGAGE ASSETS" means those assets identified on Schedule II
hereto, which assets are (a) in the case of the Initial Mortgage Assets,
owned by the Initial Borrower or a Borrower Party that is a wholly-owned
Subsidiary of the Initial Borrower by the close
17
of business on the Closing Date, and (b) in the case of all other Mortgage
Assets, either (i) owned by a Borrower or a wholly-owned Subsidiary
thereof on the Closing Date or (ii) intended to be transferred to a
Borrower or a wholly-owned Subsidiary thereof in compliance with the
Qualifying Asset Conditions prior to the Collateral Delivery Date.
"MORTGAGE ASSETS DEBT SERVICE COVERAGE RATIO" means, at any date of
determination, the ratio of (a) the aggregate Net Operating Income for all
Mortgage Assets to (b) the actual interest expense and scheduled principal
amortization payments in respect of the Term Advances payable by the
Borrowers under this Agreement ("ACTUAL DEBT SERVICE") for the consecutive
four fiscal quarters of the Borrowers most recently ended; provided,
however, that:
(i) at any date of determination occurring on or before March
31, 2006, the amount described in clause (b) above shall be deemed
to equal (A) the One Month Eurodollar Rate plus the Applicable
Margin multiplied by (B) the aggregate principal amount of all Term
Advances then outstanding; and
(ii) at any date of determination occurring after March 31,
2006 and on or before December 31, 2006, the amount described in
clause (b) above shall be deemed to equal (A) the Actual Debt
Service for the immediately preceding fiscal quarter of the
Borrowers, multiplied by (B) four.
"MORTGAGES" has the meaning specified in Section 5.01(j)(ii)(B).
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"NEGATIVE PLEDGE" means, with respect to any asset, any provision of
a document, instrument or agreement (other than a Loan Document) which
prohibits or purports to prohibit the creation or assumption of any Lien
on such asset as security for Debt of the Person owning such asset or any
other Person.
"NET OPERATING INCOME" means, with respect to any Mortgage Asset,
(a) the total rental and other revenue from the operation of such Mortgage
Asset, minus (b) the sum of the FF&E Reserve for such Mortgage Asset plus
all expenses and other proper charges incurred in connection with the
operation and maintenance of such Mortgage Asset, including, without
limitation, management fees, repairs, real estate and chattel taxes and
bad debt expenses, but before payment or provision for debt service
charges, income taxes and depreciation, amortization and other non-cash
expenses, all as determined in accordance with GAAP and in each case for
the consecutive four fiscal quarters of operations of such Mortgage Asset
most recently ended.
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"NET SALES PROCEEDS" has the meaning specified in Section 5.02(e).
"NOTE" means a promissory note of any Borrower payable to the order
of any Lender, in substantially the form of Exhibit A hereto, evidencing
the aggregate indebtedness of such Borrower to such Lender resulting from
the Term Advances made by such Lender.
"NOTICE" has the meaning specified in Section 9.02(c).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of any Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of
the foregoing that any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"ONE MONTH EURODOLLAR RATE" means, at any date of determination, an
interest rate per annum equal to the Eurodollar Rate that would apply to a
hypothetical Term Advance made two Business Days after such date of
determination in an amount equal to the aggregate principal amount of all
Term Advances then outstanding and for a one month Interest Period.
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PATRIOT ACT" has the meaning specified in Section 9.12.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED DISTRIBUTION" has the meaning specified in Section
2.05(b).
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies not yet due and payable; (b) Liens imposed by law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that (i) are not overdue for a period of more than 30
days and (ii) individually or together with all other Permitted Liens
outstanding on any date of determination do not materially adversely
affect the use of the property to which they relate; (c) pledges or
deposits to secure obligations under workers' compensation or
19
unemployment laws or similar legislation or to secure public or statutory
obligations; (d) easements, zoning restrictions, rights of way and other
encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use or value of such property for its present purposes; (e) Tenancy
Leases; (f) Permitted Encumbrances as defined in the Mortgages, and (g)
possessory Liens on cash to the extent arising under any Management
Agreement or Franchise Agreement.
"PERMITTED VARIANCES" means certain terms and conditions of the
Leased TRS Hotels described on Part II of Schedule IV hereto.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLATFORM" has the meaning specified in Section 9.02(b).
"POST PETITION INTEREST" has the meaning specified in Section
7.07(c).
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"PREVIOUSLY OWNED HOTELS" means those hotel assets listed on
Schedule V hereto.
"QUALIFYING ASSET CONDITIONS" means, with respect to any Hotel
Asset, that such Hotel Asset (a) is located in one of the 48 contiguous
states of the United States of America or the District of Columbia, (b)
has been in operation for at least one year; (c) if a Mortgage Asset, is
100% owned directly by a Borrower or a Guarantor that is a wholly owned
Subsidiary of a Borrower either in fee simple absolute or subject to a
Qualifying Ground Lease; (d) if an Unencumbered Asset, is 100% owned
directly by TRS Guarantor or a Guarantor that is a wholly-owned Subsidiary
thereof either in fee simple absolute or subject to a Qualifying Ground
Lease, (d) is fully operating, open to the public, and not under
significant development or redevelopment; (e) is free of all material
structural defects or architectural deficiencies, title defects,
environmental or other material matters (including a casualty event or
condemnation) that could reasonably be expected to have a material adverse
effect on the value, use or ability to sell or refinance such Hotel Asset;
(f) is operated by an Approved Manager or any other property manager
approved by the Administrative Agent; (g) is subject to a Franchise
Agreement with an Approved Franchisor or any other franchisor approved by
the Administrative Agent; (h) is not subject to mezzanine Debt financing;
(i) is not, and no interest of any Loan Party therein is, subject to any
Lien (other than Permitted Liens and Liens created by the Collateral
Documents) or any Negative Pledge; and (j) the Borrower Party that owns
such Hotel Asset has the right to take the following actions without the
need to obtain the consent of any Person: (1) to create Liens on such
Hotel Asset as security for Debt of such Borrower Party, and (2) to sell,
transfer or otherwise dispose of such Hotel Asset.
20
"QUALIFYING GROUND LEASE" means a ground lease of real property
containing the following terms and conditions (subject, however to
Permitted Variances, which shall be deemed permitted hereunder): (a) a
remaining term (exclusive of any unexercised extension options) of 30
years or more from the Closing Date; (b) the right of the lessee to
mortgage and encumber its interest in the leased property without the
consent of the lessor; (c) the obligation of the lessor to give the holder
of any mortgage Lien on such leased real property written notice of any
defaults on the part of the lessee and agreement of such lessor that such
lease will not be terminated until such holder has had a reasonable
opportunity to cure or complete foreclosures, and fails to do so; (d)
reasonable transferability of the lessee's interest under such lease,
including the ability to sublease; and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder
of a leasehold estate demised pursuant to a ground lease.
"RECOURSE CARVE-OUT LIABILITIES" means (a) any claims, losses,
liabilities, demands, judgments, penalties, costs, damages and expenses,
including any loss of the principal amount of any Term Advances (or any
portion thereof), directly or indirectly incurred or sustained by any
Indemnified Party ("LOSSES") in connection with the Term Facility, the
Loan Documents, the transactions contemplated by the Loan Documents or the
Hotel Assets, caused by, resulting from or arising out of or in connection
with any of the following: (i) fraud, willful misconduct, or material
misrepresentation by any Loan Party, (ii) the misappropriation by any Loan
Party or any Affiliate thereof of any Net Operating Income or other cash
proceeds of the Collateral, (iii) the non-payment of real estate taxes in
respect of any Hotel Asset despite the existence of Net Operating Income
or other proceeds of the Hotel Assets sufficient therefor (other than real
estate taxes subject to a Good Faith Contest not required to be paid
pursuant to Section 5.01(b)), (iv) the commission of waste with regard to
any Hotel Asset (or any portion thereof) by any Loan Party, (v)
intentional misconduct of any Loan Party causing the cancellation of any
insurance coverage, (vi) the Transfer of any Hotel Asset (or any material
portion thereof) or any other property or asset in violation Section
5.02(e) or any other provision of the Loan Documents, (vii) the failure of
any Borrower Party to cause the Net Sales Proceeds of any Transfer of any
Hotel Asset to be applied to repay Term Advances at the times and to the
extent required pursuant to Section 2.05(b), (viii) the occurrence of any
Event of Default described in Section 6.01(f) consisting of a voluntary
bankruptcy or insolvency proceeding or as to which the applicable Loan
Party or Borrower Party Subsidiary shall fail to diligently contest such
bankruptcy or insolvency proceeding in good faith by appropriate
proceedings, (ix) any non-compliance by any Loan Party or any Subsidiary
thereof with any Environmental Law or the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries or any Environmental Action relating in any way to any Loan
Party or any of its Subsidiaries or any Hotel Asset, (x) from and after
the Collateral Delivery Date, any Loan Party or Affiliate thereof (A)
affirmatively seeks, in any case, action, suit or proceeding to suspend,
reduce, impede, or impair the right of recourse of the Collateral Agent or
any other Secured Party to the Collateral or any portion thereof, or (B)
engages in any intentional act or misrepresentation which has the effect
of suspending, delaying, reducing, impeding, or impairing the right of
recourse of the Collateral Agent or any other Secured Party to the
Collateral or any portion thereof, or (xi) the ownership, management or
operation of the Previously Owned Hotels or any other matter arising out
of or relating to the Previously Owned Hotels, plus (b) all attorneys'
fees, court costs, and other legal expenses and all other costs and
expenses of any kind which any Indemnified Party may at any time pay or
incur in attempting to collect, compromise or enforce in any respect the
Guaranty by FLLP of the Recourse Carve-Out Liabilities, whether or not
suit
21
is ever filed, and whether or not in connection with any insolvency,
bankruptcy, reorganization, arrangement or other similar proceeding
involving any Borrower or Guarantor.
"REFERENCE BANK" means Citibank, N.A.
"REGISTER" has the meaning specified in Section 9.07(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIT" means FelCor Lodging Trust Incorporated, a Maryland
corporation.
"REPORTING PARTIES" has the meaning specified in Section
5.03(b)(ii).
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
greater than 50% of the aggregate principal amount of the Term Advances
outstanding at such time.
"RESPONSIBLE OFFICER" means, with respect to any Loan Party, any
officer of, or any officer of any general partner or managing member of,
such Loan Party, which Officer has (a) responsibility for performing the
underlying function that is the subject of the action required of such
officer hereunder, or (b) supervisory responsibility for such an officer.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.
"SALE AND LEASEBACK TRANSACTION" shall mean any arrangement with any
Person providing for the leasing by a Borrower Party or any of its
Subsidiaries of any real property that has been sold or transferred or is
to be sold or transferred by such Borrower Party or such Subsidiary, as
the case may be, to such Person.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement permitted under
Article V that is entered into by and between any Loan Party and any Hedge
Bank and that is secured by the Collateral Documents.
"SECURED OBLIGATIONS" means, collectively, the "Secured Obligations"
as defined in the Security Agreement and the "Obligations" as defined in
the Mortgages.
"SECURED PARTIES" means the Agents, the Lenders and the Hedge Banks.
"SECURITIES ACT" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended to the date hereof and from time to time hereafter, and any
successor statute.
"SECURITY AGREEMENT" has the meaning specified in Section
5.01(j)(ii)(A).
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates
22
or (b) was so maintained and in respect of which any Loan Party or any
ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"SOLVENT" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person, on a
going-concern basis, is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b)
the present fair salable value of the assets of such Person, on a
going-concern basis, is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time (including,
without limitation, after taking into account appropriate discount factors
for the present value of future contingent liabilities), represents the
amount that can reasonably be expected to become an actual or matured
liability.
"SUBORDINATED OBLIGATIONS" has the meaning specified in Section
7.07(a).
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
50% or more of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in such trust or estate, in each
case, is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one
or more of such Person's other Subsidiaries.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning specified in Section
8.01(b).
"SURVIVING DEBT" means, without duplication, (a) all Debt of the
Borrower Parties and their Subsidiaries, and (b) all Debt secured by the
Hotel Assets in the respective principal amounts allocable to such Hotel
Assets, in each case to the extent outstanding immediately before and
after giving effect to (i) the TRS Recapitalization Transactions scheduled
to occur on or about the Closing Date, and (ii) the application of the
proceeds of the initial Borrowing on the Closing Date.
"TAXES" has the meaning specified in Section 2.12(a).
"TENANCY LEASES" means operating leases, subleases, licenses,
occupancy agreements and rights-of-use entered into by any Borrower Party
or any Subsidiary of a Borrower Party in its capacity as a lessor or a
similar capacity in the ordinary course of business that do not materially
and adversely affect the use of the real property encumbered thereby for
its intended purpose (excluding any lease entered into in connection with
a Sale and Leaseback Transaction).
23
"TERM ADVANCE" has the meaning specified in Section 2.01.
"TERM COMMITMENT" means, (a) with respect to any Lender at any time,
the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term Commitment" or (b) if such Lender has entered into
one or more Assignment and Acceptances, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as such Lender's "Term Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
"TERM FACILITY" means, at any time, the aggregate amount of the
Lenders' Term Commitments at such time.
"TRANSFER" has the meaning specified in Section 5.02(e).
"TRS GUARANTOR" has the meaning specified in the recital of parties
to this Agreement.
"TRS RECAPITALIZATION TRANSACTIONS" means the transactions described
in Schedule VI hereto.
"TYPE" refers to the distinction between Term Advances bearing
interest at the Base Rate and Term Advances bearing interest at the
Eurodollar Rate.
"UNENCUMBERED ASSETS" means those assets identified on Schedule III
hereto, which assets are owned by TRS Guarantor or a wholly-owned
Subsidiary thereof on the Closing Date, as such Schedule may be
supplemented from time to time pursuant to the provisions hereof.
"UNUSED COMMITMENT" means, with respect to any Lender at any date of
determination, (a) such Lender's Term Commitment at such time minus (b)
the aggregate principal amount of all Term Advances made by such Lender on
or prior to such date of determination.
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability under applicable law.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents in the computation of
periods of time from a specified date to a later specified date, the word "FROM"
means "from and including" and the words "TO" and "UNTIL" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "AS
AMENDED" shall mean and be a reference to such agreement or contract
24
as amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Term Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each, a "TERM
ADVANCE") to the Borrowers on any Business Day from the date hereof through
January 9, 2006 (the "DRAW PERIOD") in an amount for each such Term Advance not
to exceed such Lender's Unused Commitment at such time. Each such Borrowing
shall consist of Term Advances of the same Type made simultaneously by the
Lenders ratably according to their Term Commitments. Amounts borrowed under this
Section 2.01 and repaid or prepaid may not be reborrowed. Notwithstanding the
foregoing, no more than four Borrowings shall be permitted hereunder and no
Borrowings shall be permitted after the last day of the Draw Period.
SECTION 2.02. Making the Term Advances. (a) Each Borrowing shall
be made on notice, given not later than 12:00 Noon (New York City time) on the
third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or not later than 1:00 P.M.
(New York City time) on the date one Business Day prior to the date of the
proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances,
by the applicable Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "NOTICE OF BORROWING") shall be by telephone, confirmed immediately
in writing, or telex or telecopier or e-mail, in each case in substantially the
form of Exhibit B hereto, specifying therein the requested (i) Borrower in
respect of such Borrowing, (ii) date of such Borrowing, (iii) Type of Term
Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing, (v)
in the case of a Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Term Advance, and (vi) the account information for
the Borrower Account to which such Borrowing should be credited. Each Lender
shall, before 12:00 Noon (New York City time) on the date of such Borrowing in
the case of a Borrowing consisting of Eurodollar Rate Advances and 1:00 P.M.
(New York City time) on the date of such Borrowing in the case of a Borrowing
consisting of Base Rate Advances, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Term Commitments of such Lender and
the other Lenders. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the applicable Borrower
by crediting the applicable Borrower Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrowers may not select Eurodollar Rate Advances for
the initial Borrowing hereunder or for any Borrowing if the aggregate amount of
such Borrowing is less than $1,000,000 or if the obligation of the Lenders to
make Eurodollar Rate Advances shall then be suspended pursuant to Section
2.06(d)(ii), 2.08 or 2.9 and (ii) there may not be more than 5 separate
Borrowings outstanding at any time.
25
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrowers. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrowers shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent shall have received notice from
a Lender prior to (x) the date of any Borrowing consisting of Eurodollar Rate
Advances or (y) 12:00 Noon (New York City time) on the date of any Borrowing
consisting of Base Rate Advances that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the applicable Borrower severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
the applicable Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of any Borrower, the interest rate
applicable at such time under Section 2.06 to Term Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Term Advance as part of such
Borrowing for all purposes.
(e) The failure of any Lender to make the Term Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Term Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Term Advance to be made by such other Lender on the date of
any Borrowing.
SECTION 2.03. Repayment of Term Advances. The Borrowers shall repay
to the Administrative Agent for the ratable account of the Lenders the aggregate
outstanding principal amount of the Term Advances then outstanding on the
following dates in the amounts indicated (which amounts shall be reduced (a) as
a result of the application of prepayments in accordance with the order or
priority set forth in Section 2.05, and (b) to take into account any reduction
in the Term Commitments pursuant to Section 2.04(b) resulting from the failure
of the aggregate principal amount of Borrowings drawn during the Draw Period to
equal the Maximum Facility Amount, as determined by the Administrative Agent (it
being acknowledged that the payment amounts set forth below are intended to
reflect amortization based on a 25-year schedule applied to the aggregate
principal amount of Borrowings drawn during the Draw Period):
DATE AMOUNT
- ------------------ ------------
May 18, 2006 $ 252,527.00
June 18, 2006 $ 253,790.00
July 18, 2006 $ 255,059.00
August 18, 2006 $ 256,334.00
September 18, 2006 $ 257,616.00
October 18, 2006 $ 258,904.00
26
provided, however, that (i) the final principal installment shall be repaid on
the Maturity Date in an amount equal to the aggregate principal amount of the
Term Advances outstanding on such date, and (ii) if the Maturity Date shall be
extended pursuant to Section 2.15, the foregoing amortization schedule shall be
adjusted by the Administrative Agent to reflect such extension, and (subject to
the provisions of Sections 2.04, 2.05 and 6.01), the aggregate outstanding
principal amount of all Term Advances shall be repaid on the Maturity Date as so
extended.
SECTION 2.04. Mandatory Termination or Reduction of the Term
Commitments. (a) Upon each repayment or prepayment of the Term Advances, the
Term Facility shall be automatically and permanently reduced, on a pro rata
basis, by an amount equal to the amount by which the aggregate Term Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term Advances outstanding after giving effect to such repayment or
prepayment of the Term Advances. Each such reduction shall be allocated ratably
among the Lenders in accordance with their Term Commitments. Upon any reduction
of the Term Facility to zero, the Term Commitments shall be automatically
terminated.
(b) On the last day of the Draw Period, following the funding by the
Lenders of any Advances made on such date in accordance with Section 2.02, each
Lender's Term Commitment shall be automatically and permanently reduced by the
amount of such Lender's Unused Commitment.
SECTION 2.05. Prepayments. (a) Optional. The Borrowers may, upon
same day notice in the case of Base Rate Advances and two Business Days' notice
in the case of Eurodollar Rate Advances, in each case to the Administrative
Agent stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrowers shall, prepay the
outstanding aggregate principal amount of the Term Advances comprising part of
the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the aggregate principal amount prepaid;
provided, however, that (i) each partial prepayment shall be in an aggregate
principal amount of $1,000,000 or an integral multiple of $250,000 in excess
thereof or, if less, the amount of the Term Advances outstanding and (ii) if any
prepayment of a Eurodollar Rate Advance is made on a date other than the last
day of an Interest Period for such Term Advance, the Borrowers shall also pay
any amounts owing pursuant to Section 9.04(c). Each such prepayment of Term
Advances shall be applied to the installments thereof in inverse order of
maturity.
(b) Mandatory. In accordance with Section 5.02(e), the Borrowers
shall, upon the receipt of Net Sales Proceeds from the Transfer of any Hotel
Asset by any Borrower Party or any Subsidiary thereof, prepay a principal amount
of Term Advances equal to the amount of such Net Sales Proceeds; provided,
however that (A) TRS Guarantor and its Subsidiaries may exclude from the
mandatory prepayment required under this Section and distribute to FLLP an
aggregate amount not to exceed $36,000,000 of Net Sales Proceeds resulting from
the sale by TRS Guarantor and its Subsidiaries of Unencumbered Assets (the
"PERMITTED DISTRIBUTION"), and (B) any Net Sales Proceeds remaining after all
Term Advances have been prepaid in full may be retained by the applicable
Borrower Party or Subsidiary thereof. All prepayments under this subsection (b)
shall be made together with accrued interest to the date of such prepayment on
the principal amount prepaid. Each such prepayment of Term Advances shall be
applied to the installments thereof in inverse order of maturity.
27
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrowers shall
pay interest on the unpaid principal amount of each Term Advance owing to each
Lender from the date of such Term Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Term Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of (A)
the Base Rate in effect from time to time plus (B) the Applicable Margin
in effect from time to time, payable in arrears quarterly on the last day
of each December, March, June and September during such periods and on the
date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Term
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times
during each Interest Period for such Term Advance to the sum of (A) the
Eurodollar Rate for such Interest Period for such Term Advance plus (B)
the Applicable Margin in effect on the first day of such Interest Period,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day
of such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of any Event of Default, the Borrowers shall pay interest on (i) the unpaid
principal amount of each Term Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Term Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable under the Loan Documents that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of Term
Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above and, in all other cases, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) Notice of Interest Period and Interest Rate. Promptly upon
receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of
Conversion pursuant to Section 2.09 or a notice of selection of an Interest
Period pursuant to the definition of "Interest Period", the Administrative Agent
shall give notice to the Borrowers and each Lender of the applicable Interest
Period and the applicable interest rate determined by the Administrative Agent
for purposes of clause (a)(i) or (a)(ii) above, and the applicable rate, if any,
furnished by the Reference Bank for the purpose of determining the applicable
interest rate under clause (a)(ii) above.
(d) Interest Rate Determination. If Telerate Page 3750 (or a
successor page) is unavailable and the Reference Bank fails to furnish timely
information to the Administrative Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith notify the Borrowers
and the Lenders that the interest rate cannot be determined for such
Eurodollar Rate Advances,
28
(ii) each such Term Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate
Advance (or if such Term Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to Convert Term
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.07. Fees. The Borrowers shall pay to each Agent for its
own account the fees, in the amounts and on the dates, set forth in the Fee
Letter and such other fees as may from time to time be agreed between the
Borrowers and such Agent.
SECTION 2.08. Conversion of Term Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 12:00 Noon (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.06 and 2.09, Convert all or any portion of the Term Advances of one Type
comprising the same Borrowing into Term Advances of the other Type; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b), no Conversion of any Term Advances shall result in more
separate Borrowings than permitted under Section 2.02(b) and each Conversion of
Term Advances comprising part of the same Borrowing shall be made ratably among
the Lenders in accordance with their Term Commitments. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Term Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Term Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrowers.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Term Advances shall automatically Convert into Base Rate Advances.
(ii) If the applicable Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrowers and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (y) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(z) the obligation of the Lenders to make, or to Convert Term Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make
29
or of making, funding or maintaining Eurodollar Rate Advances (excluding, for
purposes of this Section 2.09, any such increased costs resulting from (y) Taxes
or Other Taxes (as to which Section 2.11 shall govern) and (z) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrowers shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided, however,
that a Lender claiming additional amounts under this Section 2.09(a) agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the
Borrowers by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend and other
commitments of such type (or similar contingent obligations), then, upon demand
by such Lender or such corporation (with a copy of such demand to the
Administrative Agent), the Borrowers shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend. A certificate as to such amounts submitted to the Borrowers by such
Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Eurodollar Rate Advances will not adequately reflect
the cost to such Lenders of making, funding or maintaining their Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrowers and the Lenders, whereupon (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Term Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrowers
that such Lenders have determined that the circumstances causing such suspension
no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrowers
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Term Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify the
Borrowers that such Lender has determined that the circumstances causing such
suspension no
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longer exist; provided, however, that, before making any such demand, such
Lender agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Eurodollar Lending
Office if the making of such a designation would allow such Lender or its
Eurodollar Lending Office to continue to perform its obligations to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.10. Payments and Computations. (a) The Borrowers shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.12), not
later than 12:00 Noon (New York City time) on the day when due in U.S. dollars
to the Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrowers is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender, to such Lenders for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lenders and (ii) if such
payment by the Borrowers is in respect of any Obligation then payable hereunder
to one Lender, to such Lender for the account of its Applicable Lending Office,
in each case to be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender and each of such
Lender's Affiliates, if and to the extent payment owed to such Lender is not
made when due hereunder or, in the case of a Lender, under the Notes held by
such Lender, to charge from time to time, to the fullest extent permitted by
law, against any or all of such Borrower's accounts with such Lender any amount
so due.
(c) All computations of interest based on the Base Rate shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days, as
the case may be, and all computations of interest based on the Eurodollar Rate
or the Federal Funds Rate and of fees shall be made by the Administrative Agent
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
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(e) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to any Lender
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(f) Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Agents and the Lenders under or in respect of
this Agreement and the other Loan Documents on any date, such payment shall be
distributed by the Administrative Agent and applied by the Agents and the
Lenders in the following order of priority:
(i) first, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Agents
(solely in their respective capacities as Agents) under or in respect of
this Agreement and the other Loan Documents on such date, ratably based
upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Agents on such date;
(ii) second, to the payment of all of the indemnification payments,
costs and expenses that are due and payable to the Lenders under Section
9.04 and any similar section of any of the other Loan Documents on such
date, ratably based upon the respective aggregate amounts of all such
indemnification payments, costs and expenses owing to the Lenders on such
date;
(iii) third, to the payment of all of the amounts that are due and
payable to the Administrative Agent and the Lenders under Sections 2.09
and 2.11 on such date, ratably based upon the respective aggregate amounts
thereof owing to the Administrative Agent and the Lenders on such date;
(iv) fourth, to the payment of all of the accrued and unpaid
interest on the Obligations of the Borrower under or in respect of the
Loan Documents that is due and payable to the Administrative Agent and the
Lenders under Section 2.06(b) on such date, ratably based upon the
respective aggregate amounts of all such interest owing to the
Administrative Agent and the Lenders on such date;
(v) fifth, to the payment of all of the accrued and unpaid interest
on the Term Advances that is due and payable to the Administrative Agent
and the Lenders under Section 2.06(a) on such date, ratably based upon the
respective aggregate amounts of all such interest owing to the
Administrative Agent and the Lenders on such date;
(vi) sixth, to the payment of the principal amount of all of the
outstanding Term Advances that are due and payable to the Lenders on such
date, ratably based upon the respective aggregate amounts of all such
principal the Lenders on such date; and
32
(vii) seventh, to the payment of all other Obligations of the Loan
Parties owing under or in respect of the Loan Documents that are due and
payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured
Parties on such date.
SECTION 2.11. Taxes. (a) Any and all payments by any Loan Party to
or for the account of any Lender or any Agent hereunder or under any other Loan
Document shall be made, in accordance with Section 2.10 or the applicable
provisions of such other Loan Document, if any, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and each Agent, taxes that are imposed on its overall
net income by the United States and taxes that are imposed on its overall net
income (and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction under the laws of which such Lender or such Agent, as the case may
be, is organized or any political subdivision thereof and, in the case of each
Lender, taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under any other Loan Document
being hereinafter referred to as "TAXES"). If any Loan Party shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to any Lender or any Agent, and unless such
requirement arises from the failure of a Lender to furnish the documentation
described in Section 2.11(e), (i) the sum payable by the such Loan Party shall
be increased as may be necessary so that after such Loan Party and any Agent
have made all required deductions (including deductions applicable to additional
sums payable under this Section 2.11) such Lender or such Agent, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Loan Party shall make all such deductions and
(iii) such Loan Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, each Loan Party shall pay any present or future
stamp, documentary, excise, property, intangible, mortgage recording or similar
taxes, charges or levies that arise from any payment made by such Loan Party
hereunder or under any other Loan Documents or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this
Agreement, or the other Loan Documents (hereinafter referred to as "OTHER
TAXES").
(c) The Loan Parties shall indemnify each Lender and each Agent for
and hold them harmless against the full amount of Taxes and Other Taxes, and for
the full amount of taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.11, imposed on or paid by such Lender or
such Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Lender or such Agent (as the case may be) makes written demand therefor.
(d) Upon the request of the Administrative Agent, within 30 days
after the date of any payment of Taxes, the appropriate Loan Party shall furnish
to the Administrative Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing such payment, to the extent
such receipt is issued therefor, or other evidence of payment thereof reasonably
satisfactory to the Administrative Agent. In the case of any payment hereunder
or under the other Loan Documents by or on behalf of a Loan Party through an
account or branch
33
outside the United States or by or on behalf of a Loan Party by a payor that is
not a United States person, if such Loan Party determines that no Taxes are
payable in respect thereof, such Loan Party shall furnish, or shall cause such
payor to furnish, to the Administrative Agent, at such address, an opinion of
counsel acceptable to the Administrative Agent stating that such payment is
exempt from Taxes. For purposes of subsections (d) and (e) of this Section 2.11,
the terms "UNITED STATES" and "UNITED STATES PERSON" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of the Initial Lender, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter as reasonably requested in
writing by the Borrowers (but only so long thereafter as such Lender remains
lawfully able to do so), provide each of the Administrative Agent and the
Borrowers with two original Internal Revenue Service Forms W8-BEN or W-8EC1, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
any other Loan Document. If the forms provided by a Lender at the time such
Lender first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however, that if, at the effective date of the
Assignment and Acceptance pursuant to which a Lender becomes a party to this
Agreement, the Lender assignor was entitled to payments under subsection (a) of
this Section 2.11 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If any form or
document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W8-BEN
or W8-EC1, that the applicable Lender reasonably considers to be confidential,
such Lender shall give notice thereof to the Borrowers and shall not be
obligated to include in such form or document such confidential information.
Upon the request of the Borrowers, any Lender that is a United States person and
is not an exempt recipient for U.S. backup withholding purposes shall deliver to
the Borrowers two copies of Internal Revenue Service form W-9 (or any successor
form).
(f) For any period with respect to which a Lender has failed to
provide the Borrowers with the appropriate form or other document described in
subsection (e) above (other than if such failure is due to a change in law, or
in the interpretation or application thereof, occurring after the date on which
a form or other document originally was required to be provided or if such form
or other document otherwise is not required under subsection (e) above), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.11 with respect to Taxes imposed by the United States by reason
of such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form or other document required hereunder,
the Loan Parties shall take such steps as such Lender shall reasonably request
to assist such Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.11 agrees to use reasonable efforts (consistent with its internal
policy and legal and
34
regulatory restrictions) to change the jurisdiction of its Eurodollar Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(h) In the event that an additional payment is made under Section
2.11(a) or (c) for the account of any Lender and such Lender, in its sole
discretion, determines that it has finally and irrevocably received or been
granted a credit against or release or remission for, or repayment of, any tax
paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such payment, such Lender shall, to the
extent that it determines that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
applicable Loan Party such amount as such Lender shall, in its sole discretion,
have determined to be attributable to such deduction or withholding and which
will leave such Lender (after such payment) in no worse position that it would
have been in if the applicable Loan Party had not been required to make such
deduction or withholding. Nothing herein contained shall interfere with the
right of a Lender to arrange its tax affairs in whatever manner it thinks fit
nor oblige any Lender to claim any tax credit or to disclose any information
relating to its affairs or any computations in respect thereof, and no Loan
Party shall be entitled to review the tax records of any Lender or the
Administrative Agent, or require any Lender to do anything that would prejudice
its ability to benefit from any other credits, reliefs, remissions or repayments
to which it may be entitled.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of Obligations due and payable to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender's ratable share
(according to the proportion of (i) the purchase price paid to such Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. Each Borrower agrees that any Lender so purchasing an interest or
participating interest from another Lender pursuant to this Section 2.12 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or participating
interest, as the case
35
may be, as fully as if such Lender were the direct creditor of such Borrower in
the amount of such interest or participating interest, as the case may be.
SECTION 2.13. Use of Proceeds. The proceeds of the Term Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely (a) to refinance certain Existing Debt and Surviving Debt secured by
mortgage Liens encumbering the Mortgage Assets plus the amount of any applicable
premiums and expenses, and (b) to pay fees, costs and expenses related to the
Term Facility, the TRS Recapitalization Transactions and the other transactions
contemplated by the Loan Documents.
SECTION 2.14. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from each Term Advance
owing to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. Each
Borrower agrees that upon notice by any Lender to the Borrowers (with a copy of
such notice to the Administrative Agent) to the effect that a promissory note or
other evidence of indebtedness is required or appropriate in order for such
Lender to evidence (whether for purposes of pledge, enforcement or otherwise)
the Term Advances owing to, or to be made by, such Lender, the Borrowers shall
promptly execute and deliver to such Lender, with a copy to the Administrative
Agent, a Note, in substantially the form of Exhibit A hereto, payable to the
order of such Lender in a principal amount equal to the Term Commitment of such
Lender. All references to Notes in the Loan Documents shall mean Notes, if any,
to the extent issued hereunder.
(b) The Register maintained by the Administrative Agent pursuant to
Section 9.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Term Advances
comprising such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrowers to each Lender hereunder, and (iv)
the amount of any sum received by the Administrative Agent from the Borrowers
hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrowers to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the Administrative Agent or such
Lender to make an entry, or any finding that an entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrowers under this Agreement.
SECTION 2.15. Extension of Maturity Date. At least 30 days but not
more than 60 days prior to the Maturity Date, the Borrowers, by written notice
to the Administrative Agent, may request, with respect to the Term Advances then
outstanding, a single one-year extension of the Maturity Date. The
Administrative Agent shall promptly notify each Lender of such request and the
Maturity Date in effect at such time shall, effective as at the Maturity Date
(the "EXTENSION DATE"), be extended for an additional one year period, provided
that on the Maturity Date the following statements shall be true and the
Administrative Agent shall have received for
36
the account of each Lender a certificate signed by a Responsible Officer of the
Borrowers, dated the Extension Date, stating that: (i) the representations and
warranties contained in Section 4.01 are true and correct on and as of the
Extension Date, and (ii) no Default or Event of Default has occurred and is
continuing or would result for such extension. In the event that extension is
effected pursuant to this Section 2.15 (but subject to the provisions of
Sections 2.04, 2.05 and 6.01), (x) the aggregate outstanding principal amount of
all Term Advances shall be repaid in full ratably to the Lenders on the Maturity
Date as so extended, and (y) a corresponding adjustment shall be made to the
table of scheduled principal amortization payments set forth in Section 2.03 to
reflect such extension, as determined by the Administrative Agent. As of the
Extension Date, any and all references to this Agreement, the Notes, if any, or
any other Loan Documents to the "Maturity Date" shall refer to the Maturity Date
as so extended.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender to make a Term Advance in respect of the initial
Borrowing on the Closing Date is subject to the satisfaction of the following
conditions precedent on or before such date:
(a) The Administrative Agent shall have received on or before the
Closing Date the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to the Administrative Agent
(unless otherwise specified) and (except for the Notes) in sufficient
copies for each Lender:
(i) A Note executed by the Initial Borrower payable to the
order of each Lender.
(ii) Certified copies of the resolutions of the Board of
Directors (or an appropriate committee thereof) of each Loan Party
approving the transactions contemplated by the Loan Documents and
each Loan Document to which such Loan Party is or is to be a party,
and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any,
with respect to the transactions under the Loan Documents and each
Loan Document to which such Loan Party is or is to be a party.
(iii) A copy of a certificate of the Secretary of State (or
equivalent authority) of the jurisdiction of incorporation,
organization or formation of each Loan Party and of each general
partner or managing member (if any) of each Loan Party, dated
reasonably near the Closing Date, certifying, if and to the extent
such certification is generally available for entities of the type
of such Loan Party, (A) as to a true and correct copy of the
charter, certificate of limited partnership, limited liability
company agreement or other organizational document of such Loan
Party, general partner or managing member, as the case may be, and
each amendment thereto on file in such Secretary's office, (B) that
(1) such amendments are the only amendments to the charter,
certificate of limited partnership, limited liability company
agreement or other organizational document, as applicable, of such
Loan Party, general partner or managing member, as the case may be,
on file in such Secretary's office, (2) such Loan Party, general
partner or managing member, as the case may be, has paid all
franchise taxes to the date of such certificate and (C) such Loan
Party, general partner or managing member, as the case may be, is
duly incorporated, organized
37
or formed and in good standing or presently subsisting under the
laws of the jurisdiction of its incorporation, organization or
formation.
(iv) A copy of a certificate of the Secretary of State (or
equivalent authority) of each jurisdiction in which any Borrower
Party or any general partner or managing member of a Borrower Party
owns or leases property or in which the conduct of its business
requires it to qualify or be licensed as a foreign corporation
except where the failure to so qualify or be licensed would not be
reasonably likely to have a Material Adverse Effect, dated
reasonably near (but prior to) the Closing Date, stating, with
respect to each such Borrower Party, general partner or managing
member, that such Borrower Party, general partner or managing
member, as the case may be, is duly qualified and in good standing
as a foreign corporation, limited partnership or limited liability
company in such State and has filed all annual reports required to
be filed to the date of such certificate.
(v) A certificate of each Loan Party and of each general
partner or managing member (if any) of each Loan Party, signed on
behalf of such Loan Party, general partner or managing member, as
applicable, by its President or a Vice President and its Secretary
or any Assistant Secretary (or those of its general partner or
managing member, if applicable), dated the Closing Date (the
statements made in which certificate shall be true on and as of the
date of the initial Borrowing), certifying as to (A) the absence of
any amendments to the constitutive documents of such Loan Party,
general partner or managing member, as applicable, since the date of
the certificate referred to in Section 3.01(a)(v), (B) a true and
correct copy of the bylaws, operating agreement, partnership
agreement or other governing document of such Loan Party, general
partner or managing member, as applicable, as in effect on the date
on which the resolutions referred to in Section 3.01(a)(iv) were
adopted and on the Closing Date, (C) the due incorporation,
organization or formation and good standing or valid existence of
such Loan Party, general partner or managing member, as applicable,
as a corporation, limited liability company or partnership organized
under the laws of the jurisdiction of its incorporation,
organization or formation and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, general partner or
managing member, as applicable, (D) the truth of the representations
and warranties contained in the Loan Documents as though made on and
as of the Closing Date and (E) the absence of any event occurring
and continuing, or resulting from the initial Borrowing, that
constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary
of each Loan Party (or Responsible Officer of the general partner or
managing member of any Loan Party) and of each general partner or
managing member (if any) of each Loan Party certifying the names and
true signatures of the officers of such Loan Party, or of the
general partner or managing member of such Loan Party, authorized to
sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.
(vii) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lenders shall have
reasonably requested, including, without limitation, information as
to possible contingent liabilities, tax matters, environmental
matters, obligations under Plans, Multiemployer Plans
38
and Welfare Plans, collective bargaining agreements and other
arrangements with employees, audited annual financial statements of
FLLP for the year ending December 31, 2004, interim financial
statements of FLLP dated the end of the most recent fiscal quarter
for which financial statements are available (or, in the event the
Lenders' due diligence review reveals material changes since such
financial statements, as of a later date within 45 days of the
Closing Date).
(viii) An opinion of Jenkens & Gilchrist, counsel for the Loan
Parties, with respect to the matters (and in substantially the form)
set forth in Exhibit I hereto and as to such other matters as any
Lender through the Administrative Agent may reasonably request.
(ix) An opinion of Shearman & Sterling LLP, counsel for the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
(x) A Notice of Borrowing relating to the initial Borrowing.
(b) The Lenders shall be satisfied with the financial condition of
FLLP and the corporate and legal structure and capitalization of the
Borrower Parties and the Subsidiaries of the Borrower Parties, including
the terms and conditions of the charter and bylaws, operating agreement,
partnership agreement or other governing document of each of them.
(c) The Lenders shall be satisfied that all Existing Debt, other
than Surviving Debt, has been (or will be, upon the application of the
proceeds of the initial Borrowing on the Closing Date) prepaid, redeemed
or defeased in full or otherwise satisfied and extinguished and that all
Surviving Debt shall be on terms and conditions satisfactory to the
Lenders.
(d) Those TRS Recapitalization Transactions scheduled to occur on or
about the Closing Date shall have been, substantially concurrently with
the execution of this Agreement, consummated.
(e) Before and after giving effect to the transactions contemplated
by the Loan Documents, there shall have occurred no Material Adverse
Change since December 31, 2004.
(f) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect other than
the matters described on Schedule 4.01(f) hereto (the "MATERIAL
LITIGATION") or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the
transactions contemplated thereby, and there shall have been no adverse
change in the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Material Litigation from that described on Schedule
4.01(f) hereto.
(g) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated by the Loan
Documents shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lenders)
39
and shall remain in effect, and no law or regulation shall be applicable
in the reasonable judgment of the Lenders that restrains, prevents or
imposes materially adverse conditions upon the transactions contemplated
by the Loan Documents.
(h) The Borrower shall have paid all accrued fees of the Agents and
the Lenders and all reasonable, out-of-pocket expenses of the Agents
(including the reasonable fees and expenses of counsel to the
Administrative Agent).
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make a Term Advance on the occasion of each Borrowing
(including the initial Borrowing) and the extension of the Maturity Date
pursuant to Section 2.15 shall be subject to the further conditions precedent
that on the date of such Borrowing or extension (a) the following statements
shall be true and the Administrative Agent shall have received (i) in the case
of any Borrowing by an Additional Borrower, (A) an Accession Agreement in
substantially the form of Exhibit C hereto or otherwise in form and substance
satisfactory to the Administrative Agent, and (B) for the benefit of each
Lender, a Note executed and delivered by such Additional Borrower to the order
of such Lender in a principal amount up to the aggregate principal amount of
such Lender's Term Commitment, dated the date of the related Accession Agreement
and otherwise substantially in the form of Exhibit A hereto (in each case to the
extent not previously delivered pursuant to Section 5.01(j)(i) or this Section
3.02), and (ii) for the account of such Lender a certificate signed by a
Responsible Officer of the Borrowers, dated the date of such Borrowing or
extension, stating that:
(A) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, before and after
giving effect to (1) such Borrowing or extension, and (2) in the case of
any Borrowing, the application of the proceeds therefrom, as though made
on and as of such date;
(B) no Default or Event of Default has occurred and is continuing,
or would result from (1) such Borrowing or extension or (2) in the case of
any Borrowing, from the application of the proceeds therefrom; and
(C) for each Term Advance, before and after giving effect to such
Term Advance, the Borrowers shall be in compliance with the covenants
contained in Section 5.04, together with supporting information in form
satisfactory to the Administrative Agent showing the computations used in
determining compliance with such covenants;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the Closing
Date specifying its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender's ratable portion of such
Borrowing.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Loan Parties.
Each Loan Party represents and warrants as follows:
(a) Organization and Powers; Qualifications and Good Standing. Each
Loan Party and each Subsidiary of a Borrower Party and each general
partner or managing member, if any, of each such Loan Party or Subsidiary
of a Borrower Party (i) is a corporation, limited liability company or
partnership duly incorporated, organized or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation,
organization or formation, (ii) is duly qualified and in good standing as
a foreign corporation, limited liability company or partnership in each
other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite
corporate, limited liability company or partnership power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted.
(b) Subsidiaries. Set forth on Schedule 4.01(b) hereto is a complete
and accurate list of all Borrower Parties and their respective
Subsidiaries and all holders of any direct or indirect Equity Interest in
any Borrower Party, showing as of the date hereof, and as of each other
date such Schedule 4.01(b) is required to be supplemented hereunder, (i)
as to each such Person, the jurisdiction of its incorporation,
organization or formation, and the percentage of each class of Equity
Interests in such Person owned (directly or indirectly) by any other
Person (exclusive of limited partners in FLLP that are not Subsidiaries of
the REIT), and (ii) as to each such Person other than the REIT, the number
of shares (or the equivalent thereof) of each class of Equity Interests in
such Person authorized, and the number outstanding, and the number of
shares (or the equivalent thereof) covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights. Each of the
Borrowers and TRS Guarantor is a direct or indirect wholly-owned
Subsidiary of FLLP. All of the outstanding Equity Interests in the
Borrower Parties and all Subsidiaries thereof has been validly issued, are
fully paid and (except in the case of general partnership interests)
non-assessable and to the extent owned by a Loan Party or one or more of
its Subsidiaries, are owned by such Loan Party or Subsidiaries free and
clear of all Liens (other than any Liens created by the Collateral
Documents). Each Subsidiary, if any, of TRS Guarantor is a Guarantor
hereunder. Each Subsidiary, if any, of a Borrower is a Borrower or
Guarantor hereunder. Each Borrower is (or after the application of the
proceeds of the applicable Borrowing, will be) the direct owner of one or
more Mortgage Assets or all of the Equity Interests in one or more
Subsidiaries that are the direct owners of one or more Mortgage Assets.
(c) Due Authorization; No Conflict. The execution and delivery by
each Loan Party and of each general partner or managing member (if any) of
each Loan Party of each Loan Document to which it is or is to be a party,
and the performance of its obligations thereunder, and the consummation of
the TRS Recapitalization Transactions and the other transactions
contemplated by the Loan Documents, are within the corporate, limited
liability
41
company or partnership action, and do not (i) contravene the charter or
bylaws, operating agreement, partnership agreement or other governing
document of such Loan Party, general partner or managing member, (ii)
violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default or
require any payment to be made under, any Material Contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or any of
their properties, or any general partner or managing member of any Loan
Party or (iv) except for the Liens created under the Collateral Documents
or Permitted Liens, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of any Loan Party or
any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could reasonably be
expected to have a Material Adverse Effect.
(d) Authorizations and Consents. No authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i)
the due execution, delivery, recordation, filing or performance by any
Loan Party or any general partner or managing member of any Loan Party of
any Loan Document to which it is or is to be a party or for the
consummation of the TRS Recapitalization Transactions or the other
transactions contemplated by the Loan Documents, (ii) the grant by any
Loan Party (or the general partner or managing member of such Loan Party)
of the Liens granted (or to be granted) by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by any Agent, the Collateral Agent or any Lender of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for (x)
authorizations, approvals, actions, notices and filings which have been
duly obtained, taken, given or made and are in full force and effect, and
(y) at any date prior to the Collateral Delivery Date, those actions,
notices and filings contemplated in Section 5.01(j)(ii).
(e) Binding Obligation. This Agreement has been, and each other Loan
Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party and general partner or managing member (if
any) of each Loan Party party thereto. This Agreement is, and each other
Loan Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party and general partner or managing
member (if any) of each Loan Party party thereto, enforceable against such
Loan Party, general partner or managing member, as the case may be, in
accordance with its terms.
(f) Litigation. There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries or any
general partner or managing member (if any) of any Loan Party, including
any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) could reasonably be expected to
have a Material Adverse Effect (other than the Material Litigation) or
(ii) purports to affect the legality, validity or enforceability of any
Loan Document or the consummation of the TRS Recapitalization Transactions
or the other transactions contemplated by the Loan Documents, and there
has been no adverse change in the
42
status, or financial effect on any Loan Party or any of its Subsidiaries
or any general partner or managing member (if any) of any Loan Party, of
the Material Litigation from that described on Schedule 4.01(f) hereto.
(g) Financial Condition. The Consolidated balance sheets of FLLP as
at December 31, 2004 and the related Consolidated statements of income and
Consolidated statements of cash flows of FLLP for the fiscal year then
ended, accompanied by unqualified opinions of PriceWaterhouseCoopers LLP,
independent public accountants and the Consolidated balance sheets of FLLP
as at June 30, 2005, and the related Consolidated statements of income and
Consolidated statements of cash flows of FLLP for the six months then
ended, copies of which have been furnished to each Lender, fairly present,
subject, in the case of such balance sheets as at June 30, 2005, and such
statements of income and cash flows for the six months then ended, to
year-end audit adjustments, the Consolidated financial condition of FLLP
as at such dates and the Consolidated results of operations of FLLP for
the periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis. Since December 31,
2004, there has been no Material Adverse Change.
(h) Forecasts. The Consolidated forecasted balance sheets,
statements of income and statements of cash flows of the Loan Parties and
their Subsidiaries delivered to the Lenders pursuant to Section
3.01(a)(vii) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, such Loan Parties' best estimate of
the future financial performance of such Loan Parties.
(i) Full Disclosure. None of the information, exhibits or reports
furnished by or on behalf of any Loan Party to any Agent or any Lender in
connection with the negotiation or syndication of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements made therein not misleading. The Loan Parties have
disclosed to the Administrative Agent, in writing, any and all existing
facts that have or may have (to the extent the Loan Parties can now
reasonably foresee) a Material Adverse Effect.
(j) Margin Regulations. No Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock,
and no proceeds of any Term Advance will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock.
(k) Certain Governmental Regulations. Neither any Loan Party nor any
of its Subsidiaries nor any general partner or managing member of any Loan
Party, as applicable, is an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended. Without limiting the generality of the foregoing, each Loan
Party and each of its Subsidiaries and each general partner or managing
member of any Loan Party, as applicable: (i) is primarily engaged,
directly or through a wholly-owned subsidiary or subsidiaries, in a
business or businesses other than that of (A) investing, reinvesting,
owning, holding or trading in securities or (B) issuing face-amount
certificates of the installment type; (ii) is not engaged in, does not
propose to engage in and does not hold itself out as being engaged in the
business of (A) investing, reinvesting, owning, holding or trading in
securities or (B) issuing face-amount
43
certificates of the installment type; (iii) does not own or propose to
acquire investment securities (as defined in the Investment Company Act of
1940, as amended) having a value exceeding forty percent (40%) of the
value of such company's total assets (exclusive of government securities
and cash items) on an unconsolidated basis; (iv) has not in the past been
engaged in the business of issuing face-amount certificates of the
installment type; and (v) does not have any outstanding face-amount
certificates of the installment type. Neither any Loan Party nor any of
its Subsidiaries nor any general partner or managing member of any Loan
Party or Subsidiary of a Loan Party that is a partnership or limited
liability company, as applicable, is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
Neither the making of any Term Advances, nor the application of the
proceeds or repayment thereof by the Borrowers, nor the consummation of
the other transactions contemplated by the Loan Documents, will violate
any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(l) Materially Adverse Agreements. Neither any Loan Party nor any of
its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter,
corporate, partnership, membership or other governing restriction that
could reasonably be expected to have a Material Adverse Effect.
(m) Perfection and Priority of Security Interests. At any date from
and after the Collateral Delivery Date, (i) all filings and other actions
necessary to perfect and protect the security interest in the Collateral
created under the Collateral Documents have been duly made or taken and
are in full force and effect, and the Collateral Documents create in favor
of the Administrative Agent for the benefit of the Secured Parties a valid
and, together with such filings and other actions, perfected first
priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly
taken, and (ii) the Borrower Parties are the legal and beneficial owners
of the Collateral free and clear of any Lien, except for Permitted Liens
and the Liens created under the Collateral Documents.
(n) Existing Debt. Set forth on Schedule 4.01(n) hereto is a
complete and accurate list of all Existing Debt (other than Surviving
Debt), showing as of the date hereof the obligor and the principal amount
outstanding thereunder immediately prior to the Closing Date.
(o) Surviving Debt. Set forth on Schedule 4.01(o) hereto is a
complete and accurate list of all Surviving Debt, showing as of the date
hereof the obligor and the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor.
(p) Surviving Liens. Set forth on Schedule 4.01(p) hereto is a
complete and accurate list showing as of the date hereof following
consummation of the TRS Recapitalization Transactions scheduled to occur
contemporaneously with the Closing Date, all Liens securing Debt for
Borrowed Money on the property or assets of any Borrower Party or any
Subsidiary thereof, the lienholder thereof, the principal amount of
44
the obligations secured thereby and the property or assets of such
Borrower Party or such Subsidiary subject thereto.
(q) Real Property; Hotel Assets. (i) Set forth on Part I of Schedule
4.01(q) hereto is a complete and accurate list of all real property owned
in fee by any Borrower Party or any of its Subsidiaries, showing as of the
close of business on the date hereof, and as of each other date such
Schedule 4.01(q) is required to be supplemented hereunder, the street
address, state, record owner and book value thereof. Each such Borrower
Party or Subsidiary has good, marketable and insurable fee simple title to
such real property, free and clear of all Liens, other than Permitted
Liens.
(ii) Set forth on Part II of Schedule 4.01(q) hereto is a
complete and accurate list of all leases of real property under
which any Borrower Party or any of its Subsidiaries is the lessee,
showing as of the close of business on the date hereof, and as of
each other date such Schedule 4.01(q) is required to be supplemented
hereunder, the street address, state, lessor, lessee, expiration
date and annual rental cost thereof. Each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(iii) The real property assets listed on Schedule 4.01(q) as
of the date hereof, and as of each other date such Schedule 4.01(q)
is required to be supplemented hereunder, consist solely of Mortgage
Assets and Unencumbered Assets. No real property other than Mortgage
Assets is owned (whether in fee or leased) by any Borrower or
Subsidiary thereof. No real property other than Unencumbered Assets
is owned (whether in fee or leased) by TRS Guarantor or any of its
Subsidiaries. No material assets other than Hotel Assets (exclusive
of cash and Cash Equivalents, FF&E, licenses, intangibles and other
personal property related to or otherwise associated with the
management and operation of such Hotel Assets) or Equity Interests
in Subsidiaries that own Hotel Assets, are owned by any Borrower
Party or any of its Subsidiaries.
(iv) Each Hotel Asset is operated and managed by an Approved
Manager pursuant to a Management Agreement listed on Part III of
Schedule 4.01(q).
(v) Each Hotel Asset is subject to a Franchise Agreement with
an Approved Franchisor as listed on Part IV of Schedule 4.01(q).
(vi) No Borrower Party or Subsidiary thereof has previously
owned any real property that is not a Mortgage Asset or Unencumbered
Asset, except that FelCor Lodging Company, L.L.C. previously owned
the Previously Owned Hotels.
(vii) Each Unencumbered Asset and each Initial Mortgage Asset
satisfies all Qualifying Asset Conditions. At any date from and
after the Collateral Delivery Date, each Mortgage Asset satisfies
all Qualifying Asset Conditions.
(r) Environmental Matters. (i) Except as otherwise set forth on Part
I of Schedule 4.01(r) hereto, the operations and properties of each
Borrower Party and each of its Subsidiaries comply in all material
respects with all applicable Environmental Laws
45
and Environmental Permits, all past material non-compliance with such
Environmental Laws and Environmental Permits has been resolved without
ongoing material obligations or costs, and, to the knowledge of each
Borrower Party and its Subsidiaries, no circumstances exist that could be
reasonably likely to (A) form the basis of an Environmental Action against
any Borrower Party or any of its Subsidiaries or any of their properties
that could have a Material Adverse Effect or (B) cause any such property
to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(ii) Except as otherwise set forth on Part II of Schedule
4.01(r) hereto, none of the properties currently or formerly owned
or operated by any Borrower Party or any of its Subsidiaries is
listed or, to the knowledge of each Borrower Party and its
Subsidiaries, proposed for listing on the NPL or on the CERCLIS or
any analogous foreign, state or local list or is adjacent to any
such listed property; there are no underground or above ground
storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been
treated, stored or disposed on any property currently owned or
operated by any Borrower Party or any of its Subsidiaries in
violation of any Environmental Law; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Borrower Party or any of its Subsidiaries except for
any non-friable asbestos-containing material that is being managed
pursuant to, and in compliance with, an operations and maintenance
plan and that does not currently require removal, remediation,
abatement or encapsulation under Environmental Law; and, to the
knowledge of each Borrower Party and its Subsidiaries, Hazardous
Materials have not been released, discharged or disposed of in any
material amount or in violation of any Environmental Law or
Environmental Permit on any property currently owned or operated by
any Borrower Party or any of its Subsidiaries or, to the knowledge
of each Borrower Party and its Subsidiaries, during the period of
their ownership or operation thereof, on any property formerly owned
or operated by any Borrower Party or any of its Subsidiaries.
(iii) Except as otherwise set forth on Part III of Schedule
4.01(r) hereto, neither any Borrower Party nor any of its
Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties,
any investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or disposal
of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law;
all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or formerly
owned or operated by any Borrower Party or any of its Subsidiaries
have been disposed of in a manner not reasonably expected to result
in a Material Adverse Effect; and, with respect to any property
formerly owned or operated by any Borrower Party or any of its
Subsidiaries, all Hazardous Materials generated, used, treated,
handled, stored or transported by or, to the knowledge of each
Borrower Party and its Subsidiaries, on behalf of any Borrower Party
or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in a Material Adverse Effect.
46
(s) Compliance with Laws. Each Loan Party and each Subsidiary is in
compliance with the requirements of all Laws (including, without
limitation, the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and
"Blue Sky" laws) applicable to it and its business, where the failure to
so comply could reasonably be expected to have a Material Adverse Effect.
(t) Force Majeure. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to
have a Material Adverse Effect.
(u) Loan Parties' Credit Decisions. Each Loan Party has,
independently and without reliance upon the Administrative Agent or any
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement (and in the case of the Guarantors, to give the guaranty under
this Agreement) and each other Loan Document to which it is or is to be a
party, and each Loan Party has established adequate means of obtaining
from each other Loan Party on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely familiar with,
the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.
(v) Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(w) ERISA Matters. (i) Set forth on Schedule 4.01(w) hereto is a
complete and accurate list of all Plans and Welfare Plans.
(ii) No ERISA Event has occurred within the preceding five
plan years or is reasonably expected to occur with respect to any
Plan that has resulted in or is reasonably expected to result in a
material liability of any Loan Party or any ERISA Affiliate.
(iii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to the
Lenders, is complete and accurate and fairly presents the funding
status of such Plan as of the date of such Schedule B, and since the
date of such Schedule B there has been no material adverse change in
such funding status.
(iv) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability
to any Multiemployer Plan.
(v) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.
47
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. Affirmative Covenants. So long as any Term Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid,
or any Lender shall have any Term Commitment hereunder:
(a) Compliance with Laws, Etc. Each Borrower Party will comply, and
cause each of its Subsidiaries to comply, in all material respects, with
all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) Payment of Taxes, Etc. Each Borrower Party will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before
the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and
(ii) all lawful claims that, if unpaid, might by law become a Lien upon
its property; provided, however, that neither the Borrower Parties nor any
of their Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is the subject of a Good Faith Contest,
unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Each Borrower Party will
comply, and cause each of its Subsidiaries and all lessees and other
Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew and cause each of its Subsidiaries to obtain and
renew all Environmental Permits necessary for its operations and
properties; and conduct, and cause each of its Subsidiaries to conduct,
any investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties in material compliance with
the requirements of all Environmental Laws; provided, however, that
neither the Borrower Parties nor any of their Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action
to the extent that its obligation to do so is the subject of a Good Faith
Contest.
(d) Maintenance of Insurance. Each Borrower Party will maintain, and
cause each of its Subsidiaries to maintain, insurance (including, from and
after the Collateral Delivery Date with respect to the Mortgage Assets,
the insurance required by the terms of the Mortgages) with responsible and
reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in
which such Borrower Party or such Subsidiaries operate.
(e) Preservation of Partnership or Corporate Existence, Etc. Each
Loan Party will preserve and maintain, and cause each Subsidiary of a
Borrower Party to preserve and maintain, its existence (corporate or
otherwise), legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises except, in the
case of Subsidiaries of the Borrower Parties (other than TRS Guarantor,
the Borrowers and any such Subsidiary that owns a Hotel Asset) only, if in
the reasonable business judgment of such Subsidiary it is in its best
economic interest not to preserve and maintain such
48
rights or franchises and such failure to preserve and maintain such rights
or franchises could not reasonably be expected to result in a Material
Adverse Effect (it being understood that the foregoing shall not prohibit,
or be violated as a result of any transaction by or involving any Borrower
Party or Subsidiary thereof otherwise permitted under Section 5.02(d) or
(e) below).
(f) Visitation Rights. Each Borrower Party will at any reasonable
time and from time to time, permit any of the Agents or Lenders, or any
agent or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit any Hotel
Assets owned by, any Borrower Party and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of any Borrower Party and any
of its Subsidiaries with any of their general partners, managing members,
officers or directors and with their independent certified public
accountants.
(g) Keeping of Books. Each Borrower Party will keep, and cause each
of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions and
the assets and business of such Borrower Party and each such Subsidiary in
accordance with GAAP.
(h) Maintenance of Properties, Etc. Each Borrower Party will
maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted and will from time to time make or cause to be made all
appropriate repairs, renewals and replacement thereof except where failure
to do so would not have a Material Adverse Effect.
(i) Transactions with Affiliates. Each Loan Party will conduct, and
cause each Subsidiary of a Borrower Party to conduct, all transactions
otherwise permitted under the Loan Documents with any of their Affiliates
(other than transactions exclusively among or between TRS Guarantor and/or
one or more of the Borrowers) on terms that are fair and reasonable and no
less favorable to such Loan Party or such Borrower Party Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security. Each
Borrower Party will:
(i) Within 10 days after the formation or acquisition of any
new direct or indirect Subsidiary by any Borrower Party, (A) cause
each such Subsidiary, and cause each direct and indirect parent of
such Subsidiary (if it has not already done so), to duly execute and
deliver to the Administrative Agent a Guaranty Supplement in
substantially the form of Exhibit D hereto or otherwise in form and
substance satisfactory to the Administrative Agent, and (B) if such
Subsidiary is intended to be an Additional Borrower, cause such
Subsidiary to deliver (in lieu of the Guaranty Supplement by such
Subsidiary required under clause (A) above) (1) an Accession
Agreement in substantially the form of Exhibit C hereto or otherwise
in form and substance satisfactory to the Administrative Agent, and
(2) for the benefit of each Lender, a Note executed and delivered by
such Additional Borrower to the order of such Lender in a principal
amount up to the aggregate principal amount of such Lender's Term
Commitment, dated the date of the related Accession Agreement and
otherwise substantially in the form of Exhibit A hereto.
49
(ii) On or before the Collateral Delivery Date, deliver (or
cause to be delivered) to the Administrative Agent the following, in
form and substance satisfactory to the Administrative Agent (unless
otherwise specified) and in sufficient copies for each Lender:
(A) (1) A security agreement in substantially the form
of Exhibit F hereto (as amended, the "SECURITY AGREEMENT"),
duly executed by each Borrower Equity Holder, each Borrower
and each Subsidiary thereof that owns any Mortgage Asset,
together with acknowledgment copies of proper financing
statements, duly filed on or before the Collateral Delivery
Date under the Uniform Commercial Code of all jurisdictions
that the Collateral Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and
security interests created under the Collateral Documents,
covering the Collateral described therein, and (2) a Guaranty
Supplement duly executed by each Borrower Equity Holder not
then a Borrower Party.
(B) Deeds of trust, trust deeds and mortgages in
substantially the form of Exhibit G hereto (in each case as
amended, the "MORTGAGES") and assignments of leases and rents
in substantially the form of Exhibit H hereto (in each case as
amended, the "ASSIGNMENTS OF LEASES") (in each case with such
changes as may be required to account for local law matters
and otherwise satisfactory in form and substance to the
Collateral Agent) covering all Mortgage Assets (and including,
in the case of any Mortgage Asset subject to a Qualifying
Ground Lease from an Affiliate of any Loan Party, a joinder by
the lessor under such Qualifying Ground Lease subordinating
its fee interest in such Mortgage Asset to the Mortgage), duly
executed by the appropriate Borrower Party (and, if
applicable, the fee owner), together with evidence that
counterparts of the Mortgages and Assignments of Leases have
been duly executed, acknowledged and delivered on or before
the Collateral Delivery Date and are in form suitable for
filing or recording in all filing or recording offices that
the Collateral Agent may deem necessary or desirable in order
to create a valid first and subsisting Lien on the collateral
described therein in favor of the Collateral Agent for the
benefit of the Secured Parties and that all required
affidavits, tax forms and filings pertaining to any applicable
documentary stamp, intangible and mortgage recordation taxes
have been executed and delivered by all appropriate parties
and are in form suitable for filing with all applicable
governmental authorities.
(C) Evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement that
the Collateral Agent may deem necessary or desirable in order
to perfect and protect the Liens created thereby.
(iii) (A) Within 60 days after the Collateral Delivery Date
(or such longer period as shall be approved by the Administrative
Agent), deliver to the Agents the Collateral Deliverables, and (B)
within two Business Days following completion of the delivery of all
such Collateral Deliverables to the Agents pursuant to the preceding
sentence, deliver to the Administrative Agent a certificate signed
by a Responsible Officer of the Borrower Parties confirming
50
that (1) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, and (2) no
Default or Event of Default has occurred and is continuing.
(k) Further Assurances. Each Loan Party will:
(i) Promptly upon request by any Agent, or any Lender through
the Administrative Agent, correct, and cause each Loan Party to
promptly correct, any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof.
(ii) Promptly upon request by any Agent, or any Lender through
the Administrative Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments of leases and rents,
assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as any Agent, or any
Lender through the Administrative Agent, may reasonably require from
time to time (A) to carry out more effectively the purposes of the
Loan Documents, (B) from and after the Collateral Delivery Date, to
the fullest extent permitted by applicable law, to subject any Loan
Party's or any of its Subsidiaries' properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by
any of the Collateral Documents, (C) from and after the Collateral
Delivery Date, to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and any of the Liens
intended to be created thereunder, and (D) to assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan
Document or under any other instrument executed in connection with
any Loan Document to which any Loan Party or any of its Subsidiaries
is or is to be a party, and cause each of its Subsidiaries to do so.
(l) Performance of Material Contracts. Each Loan Party will perform
and observe, and cause each of its Subsidiaries to perform and observe,
all the terms and provisions of each Material Contract to be performed or
observed by it, maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms,
take all such action to such end as may be from time to time requested by
the Administrative Agent, and, upon request of the Administrative Agent,
make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Loan Party or
any of its Subsidiaries is entitled to make under such Material Contract,
and cause each of its Subsidiaries to do so.
(m) Compliance with Leases. Each Borrower Party will make all
payments and otherwise perform all obligations in respect of all leases of
real property to which any such Borrower Party or any of its Subsidiaries
is party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled (except if in the reasonably business judgment of
such Borrower Party or Subsidiary it is in its best economic interest not
to maintain such lease or prevent such lapse, termination, forfeiture or
cancellation and such failure to maintain such lease or prevent such
lapse, termination, forfeiture or cancellation is not in respect of
51
a Qualifying Ground Lease of a Hotel Asset and could not otherwise
reasonably be expected to result in a Material Adverse Effect), notify the
Administrative Agent of any default by any party with respect to such
leases and cooperate with the Administrative Agent in all respects to cure
any such default, and cause each of its Subsidiaries to do so.
(n) Management Agreements. Each Borrower Party will at all times
cause each Hotel Asset to be managed and operated by an Approved Manager
who has (i) entered into a management agreement with respect to such
Borrowing Base Asset in form and substance satisfactory to the
Administrative Agent, and (ii) to the extent required pursuant to Section
5.01(j)(iii) with respect to Mortgage Assets only, executed and delivered
a management agreement subordination agreement in form and substance
satisfactory to the Administrative Agent.
(o) Franchise Agreements. Each Borrower Party will at all times
cause each Hotel Asset to be subject to a franchise agreement or similar
arrangement with an Approved Franchisor who has (i) entered into a
franchise agreement or similar agreement with respect to such Hotel Asset
in form and substance satisfactory to the Administrative Agent, and (ii)
to the extent required pursuant to Section 5.01(j)(iii) with respect to
Mortgage Assets only, executed and delivered a franchisor comfort letter
in form and substance satisfactory to the Administrative Agent.
(p) Qualifying Asset Conditions. Each Borrower Party will (i) at all
times cause each Unencumbered Asset and Initial Mortgage Asset to satisfy
all Qualifying Asset Conditions; and (ii) at all times from and after the
Collateral Delivery Date, cause each Mortgage Asset to satisfy all
Qualifying Asset Conditions.
(q) Transfer of Leased TRS Hotels. The Loan Parties will (i) cause
the leasehold estates in the Leased TRS Hotels located in Miami, Florida
and Stamford, Connecticut to be assigned to TRS Guarantor or a Subsidiary
thereof on or prior to the Collateral Delivery Date, and (ii) use
commercially reasonable efforts to obtain the requisite landlord consents
necessary to assign (and, upon receipt of such consents shall promptly
cause to be assigned) the leasehold estates in the Leased TRS Hotels
located in San Antonio, Texas and Amarillo, Texas to TRS Guarantor or a
Subsidiary thereof on or prior to the Collateral Delivery Date. Upon the
transfer of any Leased TRS Hotel to TRS Guarantor or a Subsidiary thereof,
such Leased TRS Hotel shall become an Unencumbered Asset for all purposes
of this Agreement. At all times prior to each such transfer, the Loan
Parties will cause the leasehold estate in the applicable Leased TRS Hotel
to be owned by a wholly-owned Subsidiary of FLLP, which shall hold the
same free and clear of all Liens (other than Permitted Liens).
SECTION 5.02. Negative Covenants. So long as any Term Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, or any
Lender shall have any Term Commitment hereunder:
(a) Liens, Etc. No Borrower Party shall create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of its
assets of any character (including, without limitation, accounts) whether
now owned or hereafter acquired, or sign or file or suffer to exist, or
permit any of its Subsidiaries to sign or file or suffer to exist, under
the Uniform Commercial Code of any jurisdiction, a financing statement
that names such Borrower Party or any of its Subsidiaries as debtor, or
sign or suffer to exist, or permit any of its Subsidiaries to sign
52
or suffer to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of
its Subsidiaries to assign, any accounts or other right to receive income,
except:
(i) Liens created under the Collateral Documents;
(ii) Permitted Liens;
(iii) Prior to the Collateral Delivery Date, Liens described
on Schedule 4.01(p) hereto;
(iv) Purchase money Liens upon or in equipment acquired or
held by such Borrower Party or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
equipment or to secure Debt incurred solely for the purpose of
financing the acquisition of any such equipment to be subject to
such Liens, or Liens existing on any such equipment at the time of
acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount; provided, however, that no such Lien shall
extend to or cover any property other than the equipment being
acquired, and no such extension, renewal or replacement shall extend
to or cover any property not theretofore subject to the Lien being
extended, renewed or replaced; provided further that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (iv) shall not exceed the amount permitted under Section
5.02(b)(iii); and
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iv), provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases.
(b) Debt. No Borrower Party shall create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Debt, except:
(i) Debt under the Loan Documents;
(ii) Debt owed to any other Borrower Party, provided that, in
each case, such Debt (A) shall be on terms acceptable to the
Administrative Agent and (B) shall be evidenced by promissory notes
in form and substance satisfactory to the Administrative Agent,
which promissory notes shall (unless payable to a Borrower) by their
terms be subordinated to the Obligations of the Loan Parties under
the Loan Documents;
(iii) Debt secured by Liens permitted by Section 5.02(a)(iv)
not to exceed in the aggregate $3,000,000 at any time outstanding in
respect of all Borrower Parties;
(iv) (A) Capitalized Leases not to exceed in the aggregate
$3,000,000 at any time outstanding in respect of all Borrower
Parties, and (B) in the case of any Capitalized Lease to which any
Subsidiary of a Borrower Party is a party, any Contingent Obligation
of such Borrower Party guaranteeing the Obligations of such
Subsidiary under such Capitalized Lease;
53
(v) Prior to the Collateral Delivery Date, the Surviving Debt
described on Schedule 4.01(o);
(vi) Debt in respect of Hedge Agreements designed to hedge
against fluctuations in interest rates incurred in the ordinary
course of business and consistent with prudent business practices;
(vii) Endorsements of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and
(viii) Any other Debt not to exceed $3,000,000 in the
aggregate at any time outstanding in respect of all Borrower Parties
and which is not secured by any Lien.
(c) Change in Nature of Business. No Loan Party shall make, or
permit any Subsidiary of a Borrower Party to make, any material change in
the nature of its business as carried at the Closing Date (after giving
effect to the TRS Recapitalization Transactions scheduled to occur on or
about such date and the other transactions contemplated by the Loan
Documents) or engage in, or permit any Subsidiary of a Borrower Party to
engage in, any business other than ownership, development, licensing and
management of hotel assets in the United States consistent in quality with
the Hotel Assets presently owned by the Borrower Parties and their
Subsidiaries, and other business activities incidental thereto.
(d) Mergers, Etc. Neither FLLP nor any Borrower Party shall merge or
consolidate with or into, or convey, transfer (except as permitted by
Section 5.02(e)), lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person, or
permit any Subsidiary of any Borrower Party to do so; provided, however,
that so long as no Default or Event of Default shall have occurred and be
continuing at the time of such proposed transaction or would result
therefrom, (x) FLLP may merge with any Person that is not a Borrower Party
so long as FLLP is the surviving entity, and (y) after the FLLP Cap Date,
FLLP may merge with any Person that is not a Borrower Party and need not
be the surviving entity so long as (1) the surviving entity has a net
worth immediately following the merger at least equal to the net worth of
FLLP immediately preceding such merger, (2) the surviving entity executes
an assumption agreement in form and substance satisfactory to the
Administrative Agent expressly assuming all obligations of FLLP under the
Loan Documents and (3) the Loan Parties acknowledge and agree that all
references in the Loan Documents to FLLP shall be deemed to be references
to such surviving entity). Notwithstanding any other provision of this
Agreement, (i) any Subsidiary of a Borrower Party (other than TRS
Guarantor or any Borrower) may liquidate or dissolve if the Borrowers
determine in good faith that such liquidation or dissolution is in the
best interests of the Borrowers and the assets or proceeds from the
liquidation or dissolution of such Subsidiary are transferred to a
Borrower Party, provided that no Default or Event of Default shall have
occurred and be continuing at the time of such proposed transaction or
would result therefrom, and (ii) any Borrower Party or Subsidiary thereof
shall be permitted to effect any Transfer of Assets through the sale or
transfer of direct or indirect Equity Interests in the Person that owns
such Assets so long as Section 5.02(e) would otherwise permit the Transfer
of all Assets owned by such Subsidiary at the time of such sale or
transfer of such Equity Interests. Upon the sale or transfer of Equity
Interests in a Person permitted under clause
54
(ii) above, provided that (x) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (y) any prepayment
of Term Advances required pursuant to Section 2.05(b) shall have been
made, and (z) if such Person is the sole Borrower hereunder, all
Obligations of the Loan Parties under the Loan Documents have been paid in
full in cash, all Secured Hedge Agreements shall have expired or been
terminated and all Term Commitments shall have expired or been terminated,
then the Administrative Agent shall, upon the request of the Borrowers,
release such Person from its Obligations under the Loan Documents.
(e) Sales, Etc. of Assets. No Borrower Party shall sell, lease,
transfer or otherwise dispose of, or grant any option or other right to
purchase, lease or otherwise acquire, or permit any of its Subsidiaries to
sell, lease (other than by entering into Tenancy Leases), transfer or
otherwise dispose of, or grant any option or other right to purchase,
lease (other than any option or right to enter into Tenancy Leases) or
otherwise acquire (each such action, including without limitation and Sale
and Leaseback Transaction, being a "TRANSFER"), any Hotel Asset (or any
direct or indirect Equity Interests in the owner thereof) other than the
following Transfers, which shall be permitted hereunder only so long as no
Default or Event of Default shall exist on the date of such Transfer or
would result therefrom: (i) the Transfer of any Mortgage Asset to a
Borrower on or prior to the Collateral Delivery Date pursuant to the TRS
Recapitalization Transactions, (ii) the Transfer of any Hotel Asset from
any Borrower Party to any wholly-owned Subsidiary of such Borrower Party
that is itself a Borrower Party (or that becomes a Borrower Party on the
date of such Transfer), and (iii) the Transfer of any Hotel Asset at any
time to any Person, provided that any Transfer described in this clause
(iii) satisfies the following requirements: (A) the purchase price paid to
the applicable Borrower Party for such Hotel Asset shall not be less than
the fair market value of such Hotel Asset at the time of such sale, (B)
the entire purchase price paid for such Hotel Asset shall be paid to the
applicable Borrower Party solely in cash, and (C) all gross sales proceeds
from such Transfer, net of actual expenses incurred in connection
therewith (the "NET SALES PROCEEDS"), shall be applied to prepay the Term
Advances to the extent required pursuant to Section 2.05(b).
(f) Investments. No Borrower Party shall make or hold, or permit any
of its Subsidiaries to make or hold, any Investment other than:
(i) In the case of the Borrowers and their Subsidiaries,
Investments in the Mortgage Assets;
(ii) In the case of TRS Guarantor and its Subsidiaries,
Investments in the Unencumbered Assets;
(iii) Investments in Cash Equivalents;
(iv) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(ii);
(v) Investments by the Borrower in Hedge Agreements permitted
under Section 5.02(b)(vi);
(vi) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the
grant of trade credit
55
extended in the ordinary course of business in an aggregate amount
for all Borrower Parties not to exceed at any time $3,000,000; and
(vii) Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to
the extent reasonably necessary in order to prevent or limit loss.
(g) Restricted Payments. No Borrower Party shall, following the
occurrence and during the continuance of any Default or Event of Default,
without the prior consent of the Required Lenders, declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent
Persons thereof) as such, make any distribution of assets, Equity
Interests, obligations or securities to its stockholders, partners or
members (or the equivalent Persons thereof); provided, however, that
nothing in this Section 5.02(g) shall limit or restrict the ability of TRS
Guarantor or its Subsidiaries to make the Permitted Distribution to FLLP.
(h) Amendments of Constitutive Documents. No Loan Party shall amend,
in each case in any material respect, its limited liability company
agreement, partnership agreement, certificate of incorporation or bylaws
or other constitutive documents, provided that any amendment to any such
constitutive document that would be adverse to any of the Secured Parties
shall be deemed "material" for purposes of this Section; provided further
that any amendment to any such constitutive document that would designate
such Subsidiary as a "special purpose entity" or otherwise confirm such
Subsidiary's status as a "special purpose entity" shall be deemed "not
material" for purposes of this Section; and provided still further that
this Section 5.02(h) shall not apply to FLLP (but it shall continue to
apply to the other Loan Parties) after the FLLP Cap Date.
(i) Accounting Changes. No Loan Party shall make or permit any
change in (i) accounting policies or reporting practices, except as
required or permitted by generally accepted accounting principles, or (ii)
Fiscal Year.
(j) Speculative Transactions. No Loan Party shall engage, or permit
any of its Subsidiaries to engage, in any transaction involving commodity
options or futures contracts or any similar speculative transactions.
(k) Payment Restrictions Affecting Subsidiaries. No Borrower Party
shall directly or indirectly, enter into or suffer to exist, or permit any
of its Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or
repay or prepay any Debt owed to, make loans or advances to, or otherwise
transfer assets to or invest in, such Borrower Party (whether through a
covenant restricting dividends, loans, asset transfers or investments, a
financial covenant or otherwise), except (i) prior to the Collateral
Delivery Date, any agreement or instrument evidencing Surviving Debt, and
(ii) any agreement in effect at the time such Subsidiary becomes a
Subsidiary of such Borrower Party, so long as such agreement was not
entered into solely in contemplation of such Person becoming a Subsidiary
of such Borrower Party.
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(l) Amendment, Etc. of Material Contracts. No Loan Party shall
cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any
Material Contract or give any consent, waiver or approval thereunder,
waive any default under or breach of any Material Contract, agree in any
manner to any other amendment, modification or change of any term or
condition of any Material Contract or take any other action in connection
with any Material Contract that would impair in any material respect the
value of the interest or rights of any Loan Party thereunder or that would
impair or otherwise adversely affect in any material respect the interest
or rights, if any, of any Agent or any Lender, or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that this
Section 5.02(l) shall not apply to FLLP (but it shall continue to apply to
the other Loan Parties) after the FLLP Cap Date.
(m) Negative Pledge. No Borrower Party shall enter into or suffer to
exist, or permit any of its Subsidiaries to enter into or suffer to exist,
any agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets except (i) pursuant to the
Loan Documents, or (ii) in connection with (A) any Surviving Debt (but
only prior to the Collateral Delivery Date), (B) any purchase money Debt
permitted under Section 5.02(b)(iii) solely to the extent that the
agreement or instrument governing such Debt prohibits a Lien on the
property acquired with the proceeds of such Debt, or (C) any Capitalized
Lease permitted by Section 5.02(b)(iv) solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto.
(n) Multiemployer Plans. Neither any Loan Party nor any ERISA
Affiliate will contribute to or be required to contribute to any
Multiemployer Plan.
SECTION 5.03. Reporting Requirements. So long as any Term Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid or any Lender shall have any Term Commitment hereunder, the Borrower
Parties will furnish to the Agents and the Lenders in accordance with Section
9.02(b):
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the Chief Financial Officer
(or other Responsible Officer) of the Borrower Parties setting forth
details of such Default or such event, development or occurrence and the
action that the Borrower Parties have taken and propose to take with
respect thereto.
(b) Annual Financials. (i) As soon as available and in any event
within 90 days after the end of the Fiscal Year ending December 31, 2005,
a copy of the annual audit report for such year for FLLP and its
Subsidiaries, including therein Consolidated balance sheets of FLLP and
its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and a Consolidated statement of cash flows of FLLP
and its Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders of PriceWaterhouseCoopers LLP
or other independent public accountants of recognized standing acceptable
to the Required Lenders, together with (A) a certificate of such
accounting firm to the Lenders stating that in the course of the regular
audit of the business of FLLP and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge of
non-compliance with the covenants contained in Section 5.04, or if, in the
opinion of such accounting
57
firm, any such non-compliance has occurred, a statement as to the nature
thereof, (B) a schedule in form satisfactory to the Administrative Agent
of the computations used by such accountants in determining, as of the end
of such Fiscal Year, compliance with the covenants contained in Section
5.04, provided that in the event of any change in GAAP used in the
preparation of such financial statements, FLLP shall also provide, if
necessary for the determination of compliance with Section 5.04, a
statement of reconciliation conforming such financial statements to GAAP
and (C) a certificate of the Chief Financial Officer (or other Responsible
Officer) of FLLP stating that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the
nature thereof and the action that FLLP has taken and proposes to take
with respect thereto.
(ii) As soon as available and in any event within 90 days
after the end of each Fiscal Year commencing with the Fiscal Year
ending December 31, 2006, a copy of the annual audit report for such
year for TRS Guarantor and the Borrowers and their respective
Subsidiaries as a Consolidated group (the "REPORTING PARTIES"),
including therein a Consolidated balance sheet for the Reporting
Parties as of the end of such Fiscal Year and a Consolidated
statement of income and a Consolidated statement of cash flows for
the Reporting Parties for such Fiscal Year, in each case accompanied
by an opinion acceptable to the Required Lenders of
PriceWaterhouseCoopers LLP or other independent public accountants
of recognized standing acceptable to the Required Lenders, together
with (A) a certificate of such accounting firm to the Lenders
stating that in the course of the regular audit of the business of
the Reporting Parties, which audit was conducted by such accounting
firm in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of non-compliance with the
covenants contained in Section 5.04, or if, in the opinion of such
accounting firm, any such non-compliance has occurred, a statement
as to the nature thereof, (B) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Section 5.04, provided that in the event of
any change in GAAP used in the preparation of such financial
statements, the Reporting Parties shall also provide, if necessary
for the determination of compliance with Section 5.04, a statement
of reconciliation conforming such financial statements to GAAP and
(C) a certificate of the Chief Financial Officer (or other
Responsible Officer) of each Reporting Party stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
such Reporting Party has taken and proposes to take with respect
thereto.
(c) Quarterly Financials. Commencing with the fiscal quarter ending
March 31, 2006, as soon as available and in any event within 45 days after
the end of each of the first three quarters of each Fiscal Year,
Consolidated balance sheets of each Reporting Party and its Subsidiaries
as of the end of such quarter and Consolidated statements of income and a
Consolidated statement of cash flows of such Reporting Party and its
Subsidiaries for the period commencing at the end of the previous fiscal
quarter and ending with the end of such fiscal quarter and Consolidated
statements of income and a Consolidated statement of cash flows of such
Reporting Party and its Subsidiaries for the period commencing at the end
of the previous Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures
(to the extent available) for the corresponding date or period of the
preceding Fiscal Year, all
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in reasonable detail and duly certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, Chief Financial Officer or
Treasurer (or other Responsible Officer performing similar functions) of
such Reporting Party as having been prepared in accordance with GAAP,
together with (i) a certificate of such officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that such
Reporting Party has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by such Reporting Party in determining compliance with
the covenants contained in Section 5.04, provided that in the event of any
change in GAAP used in the preparation of such financial statements, each
Reporting Party shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP.
(d) Monthly Operating Statements. As soon as available and in any
event within 15 days after the end of each calendar month, commencing with
the calendar month in which the FLLP Cap Date occurs, unaudited statements
of gross revenues and operating and other expenses for each Hotel Asset,
in each case in form and detail satisfactory to the Administrative Agent
and duly certified by the Chief Executive Office, Chief Financial Office
or Treasurer (or other Responsible Officer performing similar functions)
of the applicable Reporting Party that owns such Hotel Asset pursuant to a
certificate of such officer stating that such statements fairly present,
in all material respects, the financial condition of the Hotel Assets
indicated as of the dates indicated.
(e) Material Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings
before any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, affecting any Loan Party
or any of its Subsidiaries of the type described in Section 4.01(f), and
promptly after the occurrence thereof, notice of any adverse change in the
status or the financial effect on any Loan Party or any of its
Subsidiaries of the Material Litigation from that described on Schedule
4.01(f) hereto.
(f) Real Property. As soon as available and in any event within 15
days after the end of each quarter of each Fiscal Year, commencing with
the fiscal quarter in which the FLLP Cap Date occurs, a report
supplementing Schedule 4.01(q) hereto, including an identification of all
owned and leased real property disposed of by any Borrower Party or any of
its Subsidiaries during such fiscal quarter and a description of such
other changes in the information included in such Schedule as may be
necessary for such Schedule to be accurate and complete.
(g) Environmental Conditions. Notice in writing to the
Administrative Agent (i) promptly upon obtaining knowledge of any material
violation of any Environmental Law affecting any Hotel Asset or the
operations thereof or the operations of any of its Subsidiaries, (ii)
promptly upon obtaining knowledge of any known release, discharge or
disposal of any Hazardous Materials at, from, or into any Hotel Asset
which it reports in writing or is legally required to report in writing to
any governmental authority and which is material in amount or nature or
which could reasonably be expected to materially adversely affect the
value of such Hotel Asset, (iii) promptly upon its receipt of any written
notice of material violation of any Environmental Laws or of any material
release, discharge or disposal of Hazardous Materials in violation of any
Environmental Laws or any matter that could reasonably be expected to
result in an Environmental Action,
59
including a notice or claim of liability or potential responsibility from
any third party (including without limitation any federal, state or local
governmental officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard to (A) such
Borrower Party's or any other Person's operation of any asset or property
in compliance with Environmental Laws, (B) Hazardous Materials
contamination on, from or into any asset or property, or (C) investigation
or remediation of off-site locations at which such Borrower Party or any
of its predecessors are alleged to have directly or indirectly disposed of
Hazardous Materials, or (iv) upon such Borrower Party's obtaining
knowledge that any expense or loss has been incurred by such governmental
authority in connection with the assessment, containment, removal or
remediation of any Hazardous Materials with respect to which such Borrower
Party could reasonably be expected to incur material liability or for
which a Lien may be imposed on any asset of such Borrower Party, provided
that notice is required only for any of the events described in clauses
(i) through (iv) above that could reasonably be expected to have a
Material Adverse Effect, could reasonably be expected to result in a
material Environmental Action with respect to any Hotel Asset or could
reasonably be expected to result in a Lien against any Hotel Asset.
(h) Hotel Asset Value. Promptly after discovery of any setoff,
claim, withholding or defense asserted or effected against any Loan Party,
or to which any Hotel Asset is subject, which could reasonably be expected
to (i) have a material adverse effect on the value of a Hotel Asset, (ii)
have a Material Adverse Effect or (iii) result in the imposition or
assertion of a Lien against any Hotel Asset which is not a Permitted Lien,
provide the Administrative Agent with notice thereof.
(i) Compliance with Qualifying Asset Conditions. Promptly after
obtaining actual knowledge of any condition or event which causes any
Hotel Asset to fail to satisfy any of the Qualifying Asset Conditions at a
time when satisfaction of such conditions by such Hotel Asset is required
pursuant to Section 5.01(p) (other than those Qualifying Asset Conditions,
if any, that have theretofore been waived by the Required Lenders with
respect to a particular Hotel Asset, to the extent of such waiver),
provide the Administrative Agent with notice thereof.
(j) Other Information. Promptly, such other information respecting
the business, condition (financial or otherwise), operations, performance,
properties or prospects of any Borrower Party or any Subsidiary thereof as
the Administrative Agent, or any Lender through the Administrative Agent,
may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Term Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender shall have any Term Commitment hereunder, the Borrowers will
maintain at the end of each fiscal quarter of the Borrowers a Mortgage Assets
Debt Service Coverage Ratio of not less than 1.25:1.00.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("EVENTS
OF DEFAULT") shall occur and be continuing:
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(a) Failure to Make Payments When Due. (i) The Borrowers shall fail
to pay any principal of any Term Advance when the same shall become due
and payable or (ii) the Borrowers shall fail to pay any interest on any
Term Advance, or any Loan Party shall fail to make any other payment under
any Loan Document, in each case under this clause (ii) within three
Business Days after the same becomes due and payable; or
(b) Breach of Representations and Warranties. Any representation or
warranty made by any Loan Party (or any of its officers or the officers of
its general partner or managing member, as applicable) under or in
connection with any Loan Document shall prove to have been incorrect in
any material respect when made; or
(c) Breach of Certain Covenants. Any Loan Party (i) shall fail to
perform or observe any term, covenant or agreement contained in Section
2.13, 5.01(d), (e), (f), (i), (j), (n), (o) or (q), 5.02, 5.03(a), (e),
(g), (h), (i) or (j) or 5.04; or (ii) shall fail to perform or observe any
term, covenant or agreement contained in Section 5.03 (b), (c), (d) or (f)
on its part to be performed or observed if such failure shall remain
unremedied for five Business Days after the earlier of the date on which
(A) a Responsible Officer becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrowers by any Agent or any
Lender; or
(d) Other Defaults under Loan Documents. Any Loan Party shall fail
to perform or observe any other term, covenant or agreement contained in
any Loan Document on its part to be performed or observed if such failure
shall remain unremedied for 30 days after the earlier of the date on which
(i) a Responsible Officer becomes aware of such failure or (ii) written
notice thereof shall have been given to the Borrowers by any Agent or any
Lender; or
(e) Cross Defaults. (i) Any Loan Party or any Subsidiary of a
Borrower Party shall fail to pay any principal of, premium or interest on
or any other amount payable in respect of any Material Debt when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or (ii) any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Material Debt, if (A) the effect of such event or
condition is to permit the acceleration of the maturity of such Material
Debt or otherwise permit the holders thereof to cause such Material Debt
to mature, and (B) such event or condition shall remain unremedied or
otherwise uncured for a period of 30 days; or (iii) the maturity of any
such Material Debt shall be accelerated or any such Material Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease
such Material Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
(f) Insolvency Events. Any Loan Party or any Subsidiary of a
Borrower Party shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any Loan Party or any
Subsidiary of a Borrower Party seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part
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of its property and, in the case of any such proceeding instituted against
it (but not instituted by it) that is being diligently contested by it in
good faith, either such proceeding shall remain undismissed or unstayed
for a period of 60 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur; or
any Loan Party or any Subsidiary of a Borrower Party shall take any
corporate action to authorize any of the actions set forth above in this
subsection (f); or
(g) Monetary Judgments. Any judgments or orders, either individually
or in the aggregate, for the payment of money in excess of $5,000,000
shall be rendered against any Loan Party or any Subsidiary of a Borrower
Party and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be any period
of 30 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not give
rise to an Event of Default under this Section 6.01(g) if and so long as
(A) the amount of such judgment or order which remains unsatisfied is
covered by a valid and binding policy of insurance between the respective
Loan Party or Subsidiary and the insurer covering full payment of such
unsatisfied amount and (B) such insurer, which shall be rated at least "A"
by A.M. Best Company, has been notified, and has not disputed the claim
made for payment, of the amount of such judgment or order; or
(h) Non-Monetary Judgments. Any non-monetary judgment or order shall
be rendered against any Loan Party or any Subsidiary of a Borrower Party
that could reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) Unenforceability of Loan Documents. Any provision of any Loan
Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall
for any reason (other than pursuant to the terms thereof) cease to be
valid and binding on or enforceable against any Loan Party party to it, or
any such Loan Party shall so state in writing; or
(j) Security Failure. Any Collateral Document or financing statement
after delivery thereof pursuant to Section 5.01(j) shall for any reason
(other than pursuant to the terms thereof) cease to create a valid and
perfected first priority lien on and security interest in the Collateral
purported to be covered thereby; or
(k) Change of Control. A Change of Control shall occur; or
(l) ERISA Events. Any ERISA Event shall have occurred with respect
to a Plan and the sum (determined as of the date of occurrence of such
ERISA Event) of the Insufficiency of such Plan and the Insufficiency of
any and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Term Commitments of each Lender and the obligation of each Lender to
make Term Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
62
consent, of the Required Lenders, by notice to the Borrowers, declare the Notes,
all interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each Borrower; provided, however, that
in the event of an actual or deemed entry of an order for relief with respect to
the Borrower under any Bankruptcy Law, (y) the Term Commitment of each Lender
and the obligation of each Lender to make Term Advances shall automatically be
terminated and (z) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Borrower.
ARTICLE VII
GUARANTY
SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "GUARANTEED
OBLIGATIONS"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Agreement or any
other Loan Document. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party. This
Guaranty is a guaranty of payment and not merely of collection.
(b) Each Guarantor, the Administrative Agent and each Lender and, by
its acceptance of the benefits of this Guaranty, each other Secured Party,
hereby confirms that it is the intention of all such Persons that this Guaranty
and the Obligations of each Guarantor hereunder not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Guarantors, the Administrative Agent, the Lenders and, by their acceptance
of the benefits of this Guaranty, the other Secured Parties hereby irrevocably
agree that the Obligations of each Guarantor under this Guaranty at any time
shall be limited to the maximum amount as will result in the Obligations of such
Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured Party
under this Guaranty or any other guaranty, such Guarantor will contribute, to
the maximum extent permitted by law, such amounts to each other Guarantor and
each other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
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SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the other Loan Documents, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Administrative Agent or any other Secured Party with
respect thereto. The Obligations of each Guarantor under or in respect of this
Guaranty are independent of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of this Agreement or the other Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrowers (or any of them) or any other Loan Party
or whether the Borrowers (or any of them) or any other Loan Party is joined in
any such action or actions. The liability of each Guarantor under this Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit
to the Borrowers (or any of them), any other Loan Party or any of their
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of, or consent
to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Loan Party under the Loan Documents or any
other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of the Administrative Agent or any other Secured
Party to disclose to any Loan Party any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party now or hereafter known to
the Administrative Agent or such other Secured Party (each Guarantor
waiving any duty on the part of the Administrative Agent and each other
Secured Party to disclose such information);
(g) the failure of any other Person to execute or deliver this
Agreement, any other Loan Document, any Guaranty Supplement, any Accession
Agreement or any other guaranty or agreement or the release or reduction
of liability of any Guarantor or other guarantor or surety with respect to
the Guaranteed Obligations; or
64
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any other Secured Party that
might otherwise constitute a defense available to, or a discharge of, any
Loan Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrowers (or any of them) or
any other Loan Party or otherwise, all as though such payment had not been made.
SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right (including without limitation any such right arising under California
Civil Code Section 2815) to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any and all rights and defenses available to it by reason of Sections 2787 to
2855, inclusive, 2899 and 3433 of the California Civil Code, including without
limitation any and all rights or defenses such Guarantor may have by reason of
protection afforded to the principal with respect to any of the Guaranteed
Obligations, or to any other guarantor of any of the Guaranteed Obligations with
respect to any of such guarantor's obligations under its guaranty, in either
case pursuant to the antideficiency or other laws of the State of California
limiting or discharging the principal's indebtedness or such guarantor's
obligations, including without limitation Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure, (ii) any defense arising by reason of any
claim or defense based upon an election of remedies by the Administrative Agent
or any other Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any collateral and (iii) any defense based on any right
of set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder. No other provision of the Guaranty shall be construed as
limiting the generality of any of the covenants and waivers set forth in this
paragraph. As provided below, this Guaranty shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of New York.
This paragraph is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guaranteed
Obligations.
(d) Each Guarantor waives any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against any Loan
Party or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute (including without
limitation under California Civil Code Section 2847, 2848 or 2849), under
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common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against any such Loan Party, (b) any right to enforce, or to
participate in, any claim, right or remedy that any Secured Party now has or may
hereafter have against any Loan Party, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any Secured
Party.
(e) Each Guarantor acknowledges that the Administrative Agent may,
without notice to or demand upon such Guarantor and without affecting the
liability of such Guarantor under this Guaranty, foreclose under any mortgage by
nonjudicial sale, and each Guarantor hereby waives any defense to the recovery
by the Administrative Agent and the other Secured Parties against such Guarantor
of any deficiency after such nonjudicial sale and any defense or benefits that
may be afforded by applicable law (including, without limitation, Sections 580a
and 580d of the California Code of Civil Procedure or any other law of any other
jurisdiction having similar effect).
(f) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of the Administrative Agent or any other Secured Party to
disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower, any other Loan Party or any of their Subsidiaries now
or hereafter known by the Administrative Agent or such other Secured Party.
(g) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by
this Agreement and the other Loan Documents and that the waivers set forth in
Section 7.02 and this Section 7.03 are knowingly made in contemplation of such
benefits.
SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrowers (or any of them), any other Loan Party or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under or in respect of this
Guaranty, this Agreement or any other Loan Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of any
Secured Party against the Borrowers (or any of them), any other Loan Party or
any other insider guarantor or any collateral, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Borrowers (or any of
them), any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Secured Hedge Agreements
shall have expired or been terminated and the Term Commitments shall have
expired or been terminated. If any amount shall be paid to any Guarantor in
violation of the immediately preceding sentence at any time prior to the latest
of (a) the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guaranty, (b) the latest date of expiration or
termination of all Secured Hedge Agreements, and (c) the Maturity Date, such
amount shall be received and held in trust for the benefit of the Secured
Parties, shall be segregated from other property and funds of such Guarantor and
shall forthwith be paid or delivered to the Administrative Agent in the same
form as so received (with any necessary endorsement or assignment) to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents. If (i) any Guarantor shall make payment to any Secured
Party of all or any part of the Guaranteed Obligations, (ii) all of the
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Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, (iii) all Secured Hedge Agreements shall have
expired or been terminated, and (iv) the Maturity Date shall have occurred, the
Administrative Agent and the other Secured Parties will, at such Guarantor's
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.
SECTION 7.05. Guaranty Supplements and Accession Agreements. Upon
the execution and delivery by any Person of a Guaranty Supplement or an
Accession Agreement, (a) such Person shall be referred to as an "ADDITIONAL
GUARANTOR" and shall become and be a Guarantor hereunder, and each reference in
this Agreement to a "Guarantor" or a "Loan Party" shall also mean and be a
reference to such Additional Guarantor, and each reference in any other Loan
Document to a "Guarantor" shall also mean and be a reference to such Additional
Guarantor, and (b) each reference herein to "this Agreement", "this Guaranty",
"hereunder", "hereof" or words of like import referring to this Agreement and
this Guaranty, and each reference in any other Loan Document to the "Loan
Agreement", "Guaranty", "thereunder", "thereof" or words of like import
referring to this Agreement and this Guaranty, shall mean and be a reference to
this Agreement and this Guaranty as supplemented by such Guaranty Supplement or
Accession Agreement.
SECTION 7.06. Indemnification by Guarantors. (a) Without limitation
on any other Obligations of any Guarantor or remedies of the Administrative
Agent or the Secured Parties under this Agreement, this Guaranty or the other
Loan Documents, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Administrative Agent, each
other Secured Party and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of any
Loan Party enforceable against such Loan Party in accordance with their terms.
(b) Each Guarantor hereby also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Term Facility, the
actual or proposed use of the proceeds of the Term Advances, the Loan Documents
or any of the transactions contemplated by the Loan Documents.
SECTION 7.07. Subordination. Each Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 7.07.
(a) Prohibited Payments, Etc. Except during the continuance of a
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments or payments made in the ordinary
course of business from any other Loan Party on account of the
Subordinated Obligations. After the occurrence and during the
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continuance of any Default (including the commencement and continuation of
any proceeding under any Bankruptcy Law relating to any other Loan Party),
however, unless the Administrative Agent otherwise agrees, no Guarantor
shall demand, accept or take any action to collect any payment on account
of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees
that the Secured Parties shall be entitled to receive payment in full in
cash of all Guaranteed Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any Bankruptcy Law,
whether or not constituting an allowed claim in such proceeding ("POST
PETITION INTEREST")) before such Guarantor receives payment of any
Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for
the Secured Parties and deliver such payments to the Administrative Agent
on account of the Guaranteed Obligations (including all Post Petition
Interest), together with any necessary endorsements or other instruments
of transfer, but without reducing or affecting in any manner the liability
of such Guarantor under the other provisions of this Guaranty.
(d) Administrative Agent Authorization. After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name
of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to
the Guaranteed Obligations (including any and all Post Petition Interest),
and (ii) to require each Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any
amounts received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
SECTION 7.08. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (ii) the Maturity Date and (iii) the latest date of
expiration or termination of all Secured Hedge Agreements, (b) be binding upon
the Guarantors, their successors and assigns and (c) inure to the benefit of and
be enforceable by the Administrative Agent and the other Secured Parties and
their successors, transferees and assigns.
SECTION 7.09. Recourse Nature of Guaranty; FLLP Cap Date. The
Guaranteed Obligations shall be full recourse obligations of FLLP; provided,
however, that notwithstanding any provision herein to the contrary, from and
after the FLLP Cap Date, the aggregate liability of FLLP in respect of the
Guaranteed Obligations shall be limited to an amount equal to the aggregate
amount of Losses comprising Recourse Carve-Out Liabilities (the "FLLP CAP"). The
FLLP Cap shall be reduced only by the final payments in such amount made by the
Borrowers in respect of their Obligations under the Loan Documents. The
Guaranteed Obligations shall at all times be full recourse obligations of each
Guarantor other than FLLP.
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ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action; Appointment of Supplemental
Collateral Agents. (a) Each Lender (on behalf of itself and its Affiliates as
potential Hedge Banks) hereby appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to such Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that no Agent shall be required to
take any action that exposes such Agent to personal liability or that is
contrary to this Agreement or applicable law. Each Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrowers pursuant to the
terms of this Agreement. Notwithstanding anything to the contrary in any Loan
Document, no Person identified as a syndication agent, documentation agent,
senior manager, sole lead arranger or sole book running manager, in such
Person's capacity as such, shall have any obligations or duties to any Loan
Party, the Administrative Agent or any other Secured Party under any of such
Loan Documents.
(b) Anything contained herein or in the Collateral Documents to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more trustees,
co-trustees, collateral co-agents or collateral subagents (each, a "SUPPLEMENTAL
COLLATERAL AGENT") with respect to all or any part of the Collateral. In the
event that the Collateral Agent so appoints any Supplemental Collateral Agent
with respect to any Collateral, (i) such Supplemental Collateral Agent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent under the
Collateral Documents with respect to such Collateral; (ii) such Supplemental
Collateral Agent shall be deemed to be an "Agent" for purposes of this Agreement
and the other Loan Documents, and the provisions of this Article and Section
9.04 hereof that refer to the Agents (or either of them) shall inure to the
benefit of such Supplemental Collateral Agent, and all references therein and in
the other Loan Documents to the Collateral Agent shall be deemed to be
references to the Collateral Agent and/or such Supplemental Collateral Agent, as
the context may require; and (iii) the term "Collateral Agent", when used herein
or in any applicable Collateral Document in relation to the Liens on or security
interests in such Collateral granted in favor of the Collateral Agent, and any
rights, powers, privileges, interests and remedies of the Collateral Agent with
respect to such Collateral, shall be deemed to include such Supplemental
Collateral Agent; provided, however, that no such Supplemental Collateral Agent
shall be authorized to take any action with respect to any such Collateral
unless and except to the extent expressly authorized in writing by the
Collateral Agent. Should any instrument in writing from any Borrower or any
other Loan Party be required by any Supplemental Collateral Agent so appointed
by the Collateral Agent to more fully or certainly vest in and confirming to
such Supplemental Collateral Agent such rights, powers, privileges and duties,
the applicable Borrower shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Collateral Agent. If any Supplemental Collateral Agent, or successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall automatically vest in and be exercised by the
Collateral Agent until the appointment of a new Supplemental Collateral Agent.
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SECTION 8.02. Agents' Reliance, Etc. Neither any Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent: (a) in the
case of the Administrative Agent, may treat the payee of any Note as the holder
thereof until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, or, in the case of any other
Agent, such Agent has received notice from the Administrative Agent that it has
received and accepted such Assignment and Acceptance, as provided in Section
9.07; (b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance, observance or
satisfaction of any of the terms, covenants or conditions of any Loan Document
on the part of any Loan Party or the existence at any time of any Default under
the Loan Documents or to inspect the property (including the books and records)
of any Loan Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex or other electronic communication) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 8.03. CNAI and Affiliates. With respect to its Term
Commitment, the Term Advances made by it and the Notes issued to it, CNAI shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not an Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include CNAI in its
individual capacity. CNAI and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any Subsidiary of any Loan Party and any Person that may do business with
or own securities of any Loan Party or any such Subsidiary, all as if CNAI were
not the Administrative Agent or the Collateral Agent and without any duty to
account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon any Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification by Lenders. (a) Each Lender severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or
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disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under the Loan
Documents (collectively, the "INDEMNIFIED COSTS"); provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from any Agent's gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender agrees to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
9.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrowers. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 8.05 applies
whether any such investigation, litigation or proceeding is brought by any
Lender or any other Person.
(b) For purposes of this Section 8.05, the Lenders' respective
ratable shares of any amount shall be determined, at any time, according to
their respective Term Commitments at such time. The failure of any Lender to
reimburse any Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to such Agent as provided herein shall not
relieve any other Lender of its obligation hereunder to reimburse such Agent for
its ratable share of such amount, but no Lender shall be responsible for the
failure of any other Lender to reimburse such Agent for such other Lender's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender hereunder, the agreement and obligations of each Lender
contained in this Section 8.05 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the other Loan
Documents.
SECTION 8.06. Successor Agents. Any Agent may resign at any time by
giving 30 days' prior written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Required Lenders;
provided, however, that any removal of the Administrative Agent will not be
effective until it has been replaced as Collateral Agent and released from all
obligations in respect thereof. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent (which
successor Agent shall, provided no Event of Default shall then have occurred and
by continuing, be reasonably acceptable to the Borrowers). If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent (which
successor Agent shall, provided no Event of Default shall then have occurred and
by continuing, be reasonably acceptable to the Borrowers), which shall be a
commercial bank organized under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $250,000,000. Upon
the acceptance of any appointment as an Agent hereunder by a successor Agent,
and, in the case of a successor Collateral Agent, upon the execution and filing
or recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages and Assignments of Leases, and such
other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents. If
within 45 days after written notice is given of the retiring Agent's resignation
or removal under this Section 8.06 no successor Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (i) the retiring
Agent's resignation or removal shall become effective, (ii) the retiring Agent
shall
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thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as an Agent shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the applicable Loan Party and
signed or consented to by the Administrative Agent and the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders, do
any of the following at any time: (i) change the number of Lenders or the
percentage of (x) the Term Commitments or (y) the aggregate unpaid principal
amount of the Term Advances that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (ii) release the Borrowers
(or any of them) with respect to the Obligations (except to the extent permitted
pursuant to the last sentence of Section 5.02(d)) or, except to the extent
expressly permitted under this Agreement, reduce or limit the obligations of any
Guarantor under Article VII or release such Guarantor or otherwise limit such
Guarantor's liability with respect to the Guaranteed Obligations, (iii) release
all or substantially all of the Collateral (other than pursuant to Section
5.02(e) or 9.11), (iv) amend this Section 9.01, (v) increase the Term
Commitments of the Lenders or subject the Lenders to any additional obligations,
(vi) reduce the principal of, or interest on, the Obligations of the Loan
Parties under the Loan Documents or any fees or other amounts payable
thereunder, (vii) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder or (viii)
extend the Maturity Date (other than as provided by Section 2.15); provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Administrative Agent or the Collateral Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent or the Collateral Agent, as the case may be, under this
Agreement or the other Loan Documents.
SECTION 9.02. Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including telecopier or
telegraphic communication) and mailed, telecopied, telegraphed or delivered, (y)
as and to the extent set forth in Section 9.02(b) and in the proviso to this
Section 9.02(a), in an electronic medium and delivered as set forth in Section
9.02(b) or (z) as and to the extent expressly permitted in this Agreement,
transmitted by e-mail, provided that such e-mail shall in all cases include an
attachment (in PDF format or similar format) containing a legible signature of
the person providing such notice, if to any Loan Party, at c/o FelCor Lodging
Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas
75062-3933, Attention: Andrew J. Welch or, if applicable, at awelch@felcor.com
(and in the case of transmission by e-mail, with a copy by U.S. mail to the
attention of Andrew J. Welch and Joel Eastman at 545 E. John Carpenter Freeway,
Suite 1300, Irving, Texas 75062-3933); if to the Initial Lender, at its Domestic
Lending Office or, if applicable, at the e-mail address specified opposite its
name on Schedule I hereto (and in the case of a transmission by e-mail, with a
copy by U.S. mail to its Domestic Lending Office); if to any other Lender, at
its Domestic Lending Office or, if applicable, at the e-mail address specified
in the Assignment and Acceptance pursuant to which it became a Lender (and
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in the case of a transmission by e-mail, with a copy by U.S. mail to its
Domestic Lending Office); and if to the Administrative Agent or the Collateral
Agent, at its address at Two Penns Way, Suite 100, New Castle, Delaware 19720,
Attention: Annemarie E. Pavco, Global Loans, or, if applicable, at
annemarie.e.pavco@citigroup.com (and in the case of a transmission by e-mail,
with a copy by U.S. mail to Two Penns Way, Suite 110, New Castle, Delaware
19720, Attention: Annemarie E. Pavco, Global Loans) or, as to any Loan Party or
any Agent, at such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the
Borrowers and the Administrative Agent. All such notices and communications
shall, when mailed, telecopied, telegraphed or e-mailed, be effective when
deposited in the mails, telecopied, delivered to the telegraph company or
confirmed by e-mail, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VIII or to the Collateral Agent under the
Collateral Documents shall not be effective until received by such Agent or the
Collateral Agent, as the case may be. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.
(b) So long as CNAI is the Administrative Agent, materials required
to be delivered pursuant to Sections 5.03(a), (b), (c), (d), (e) and (i) shall
be delivered to the Administrative Agent in an electronic medium in a format
acceptable to the Administrative Agent and the Lenders by e-mail at
oploanswebadmin@citigroup.com. Each Borrower agrees that the Administrative
Agent may make such materials, as well as any other written information,
documents, instruments and other material relating to any Borrower, any Loan
Party, any of their Subsidiaries or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the "COMMUNICATIONS") available to the Lenders by posting such
notices on Intralinks or a substantially similar electronic transmission system
(the "PLATFORM"). Each Borrower acknowledges that (i) the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the
Administrative Agent nor any of its Affiliates warrants the accuracy, adequacy
or completeness of the Communications or the Platform and each expressly
disclaims liability for errors or omissions in the Communications or the
Platform. No warranty of any kind, express, implied or statutory, including,
without limitation, any warranty of merchantability, fitness for a particular
purpose, non-infringement of third party rights or freedom from viruses or other
code defects, is made by the Administrative Agent or any of its Affiliates in
connection with the Platform.
(c) Each Lender agrees that notice to it (as provided in the next
sentence) (a "NOTICE") specifying that any Communications have been posted to
the Platform shall constitute effective delivery of such information, documents
or other materials to such Lender for purposes of this Agreement, provided that
if requested by any Lender, the Administrative Agent shall deliver a copy of the
Communications to such Lender by e-mail or telecopier. Each Lender agrees (i) to
notify the Administrative Agent in writing of such Lender's e-mail address to
which a Notice may be sent by electronic transmission (including by electronic
communication) on or before the date such Lender becomes a party to this
Agreement (and from time to time thereafter to ensure that the Administrative
Agent has on record an effective e-mail address for such Lender) and (ii) that
any Notice may be sent to such e-mail address.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any
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other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs and Expenses. (a) Each Loan Party agrees jointly
and severally to pay on demand (i) all reasonable out-of-pocket costs and
expenses of each Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses, (B) the reasonable fees and
expenses of counsel for such Agent with respect thereto (including, without
limitation, with respect to reviewing and advising on any matters required to be
completed by the Loan Parties on a post-closing basis), with respect to advising
such Agent as to its rights and responsibilities, or the perfection, protection
or preservation of rights or interests, under the Loan Documents, with respect
to negotiations with any Loan Party or with other creditors of any Loan Party or
any of its Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto and (C) the reasonable fees and expenses of counsel
for such Agent with respect to the preparation, execution, delivery and review
of any documents and instruments at any time delivered pursuant to Section
5.01(j)) and (ii) all reasonable out-of-pocket costs and expenses of each Agent
and each Lender in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Loan Documents, whether in
any action, suit or litigation, or any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for such Agent and each Lender with
respect thereto).
(b) Each Loan Party agrees to indemnify, defend and save and hold
harmless each Indemnified Party from and against, and shall pay on demand, any
and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Term Facility, the actual or proposed
use of the proceeds of the Term Advances, the Loan Documents or any of the
transactions contemplated thereby or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Loan Documents are consummated. Each Loan Party also agrees not to assert
any claim against any Agent, any Lender or any of their Affiliates, or any of
their respective officers, directors, employees, agents and advisors, on any
theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facilities, the actual or proposed
use of the proceeds of the Term Advances, the Loan Documents or any of the
transactions contemplated by the Loan Documents.
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(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Term Advance, as a result
of a payment or Conversion pursuant to Section 2.05, 2.08(b)(i) or 2.09(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or if the Borrowers fail to make any payment or prepayment of a
Term Advance for which a notice of prepayment has been given or that is
otherwise required to be made, whether pursuant to Section 2.03, 2.05 or 6.01 or
otherwise, the Borrowers shall, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion or such failure to pay or prepay, as the case may be,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Term Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by any Agent or any Lender, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower and the other Loan Parties contained in Sections
2.09 and 2.11, Sections 7.06 and 7.09 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Borrower or any other Loan
Party against any and all of the Obligations of such Borrower or such Loan Party
now or hereafter existing under the Loan Documents, irrespective of whether such
Agent or such Lender shall have made any demand under this Agreement or such
Note or Notes and although such obligations may be unmatured. If such deposits
are not pledged pursuant to a valid security agreement, the prior written
consent of the Administrative Agent shall be obtained before any right of
set-off shall be exercised. Each Agent and each Lender agrees promptly to notify
such Borrower or such Loan Party after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
Lender and their respective Affiliates under this Section 9.05 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender and their respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Initial Borrower and each Guarantor
named on the signature pages hereto and the Administrative Agent shall have been
notified by the Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of each Borrower and
Guarantor named on the signature pages hereto and each Agent and each Lender
75
and their respective successors and assigns, except that no Borrower or any
other Loan Party shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 9.07. Assignments and Participations; Replacement Notes. (a)
At any time following the six-month anniversary of the Closing Date, each Lender
may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Term Commitment, the Term Advances owing to it and the Notes held
by it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and in respect
of the Term Facility, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender, an Affiliate of any Lender
or a Fund Affiliate of any Lender or an assignment of all of a Lender's rights
and obligations under this Agreement, the aggregate amount of the Term
Commitments being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof (or such lesser amount as shall be approved by the
Administrative Agent and, so long as no Default shall have occurred and be
continuing at the time of effectiveness of such assignment, the Borrowers),
(iii) each such assignment shall be to an Eligible Assignee, (iv) no such
assignments shall be permitted at any time without the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and (v)
the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and, except if such assignment is being made by a Lender to an
Affiliate or Fund Affiliate of such Lender, a processing and recordation fee of
$3,500.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (i)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender, hereunder and (ii)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.09, 2.11, 7.06,
7.09, 8.05, and 9.04 to the extent any claim thereunder relates to an event
arising prior to such assignment) and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all of
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of
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the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address referred
to in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Term Commitment of, and principal amount of the Term
Advances owing to, each Lender from time to time (the "REGISTER"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agents and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Agent or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit D
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and each other Agent. In the case of any assignment by a Lender,
within five Business Days after their receipt of such notice, each Borrower, at
its own expense, shall, if requested by the applicable Lender, execute and
deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a substitute Note to the order of such Eligible Assignee in an amount
equal to the Term Commitment assumed by it pursuant to such Assignment and
Acceptance and, if any assigning Lender has retained a Term Commitment
hereunder, a substitute Note to the order of such assigning Lender in an amount
equal to the Term Commitment retained by it hereunder. Such substitute Note or
Notes, if any, shall be in an aggregate principal amount up to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit A hereto.
(f) Each Lender may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Term Commitment, the Term Advances owing to
it and the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Term
Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, (v) no participant under
any such participation shall have any right to approve any amendment or waiver
of any provision of any Loan Document, or any
77
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral and (vi) if, at the time of such
sale, such Lender was entitled to payments under Section 2.11(a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to such
participant on such date, provided that such participant complies with the
requirements of Section 2.11(e) as if it were a Lender hereunder.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Loan Parties (or any of them)
furnished to such Lender by or on behalf of any Loan Party; provided, however,
that, prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
Confidential Information received by it from such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Term
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
(i) Upon notice to the Borrowers from the Administrative Agent or
any Lender of the loss, theft, destruction or mutilation of any Lender's Note,
the Borrowers will execute and deliver, in lieu of such original Note, a
replacement promissory note, identical in form and substance to, and dated as of
the same date as, the Note so lost, stolen or mutilated, subject to delivery by
such Lender to the Borrowers of an affidavit of lost note and indemnity in
customary form. Upon the execution and delivery of the replacement Note, all
references herein or in any of the other Loan Documents to the lost, stolen or
mutilated Note shall be deemed references to the replacement Note.
SECTION 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
SECTION 9.09. Confidentiality. Neither any Agent nor any Lender
shall disclose any Confidential Information to any Person without the consent of
the Borrowers, other than (a) to such Agent's or such Lender's Affiliates and
their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process, (c)
as requested or required by any state, Federal or foreign authority or examiner
regulating such Lender and (d) to any rating agency when required by it,
provided that, prior to any such
78
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Loan Parties received by it from
such Lender.
SECTION 9.10. Release of Collateral. (a) Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party
(including, without limitation, (i) as a result of the sale of the Equity
Interests in the Loan Party that owns such Collateral, and (ii) any Transfer
pursuant to Section 5.02(e)) that is permitted in accordance with the terms of
the Loan Documents, then, in either such event, the Collateral Agent will, at
the Borrowers' expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Document in accordance with the terms of the Loan Documents.
(b) Upon the latest to occur of (i) the payment in full in cash of
the Secured Obligations, (ii) the termination or expiration of all Secured Hedge
Agreements, and (iii) the Maturity Date, the Liens granted by the Collateral
Documents shall terminate and all rights to the Collateral shall revert to the
applicable Loan Party. Upon any such termination, the Collateral Agent will, at
the Borrowers' expense, execute and deliver to the applicable Loan Parties such
documents as such Loan Parties shall reasonably request to evidence such
termination.
SECTION 9.11. Patriot Act Notification. Each Lender and each Agent
(for itself and not on behalf of any Lender) hereby notifies the Loan Parties
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "PATRIOT ACT"), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of such Loan Party and other
information that will allow such Lender or such Agent, as applicable, to
identify such Loan Party in accordance with the Patriot Act. The Loan Parties
shall, and shall cause each of their Subsidiaries to, provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by any Agents or any Lenders in order to assist the
Administrative Agent and the Lenders in maintaining compliance with the Patriot
Act.
SECTION 9.12. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent
79
permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 9.13. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.14. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE OTHER
LOAN PARTIES, THE AGENTS AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TERM ADVANCES OR THE ACTIONS OF ANY AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
INITIAL BORROWER:
FELCOR TRS BORROWER 1, L.P.
By: FELCOR TRS BORROWER GP 1,
L.L.C., its General Partner
By /s/ Joel M. Eastman
-----------------------------
Name: JOEL M. EASTMAN
Title: VICE PRESIDENT
TRS GUARANTOR:
FELCOR TRS GUARANTOR, L.P.
By: FELCOR TRS GUARANTOR GP,
L.L.C., its General Partner
By /s/ Joel M. Eastman
-----------------------------
Name: JOEL M. EASTMAN
Title: VICE PRESIDENT
FLLP:
FELCOR LODGING LIMITED
PARTNERSHIP
By: FELCOR LODGING TRUST
INCORPORATED, its General Partner
By /s/ Joel M. Eastman
-----------------------------
Name: JOEL M. EASTMAN
Title:VICE PRESIDENT
Credit Agreement Signature Page
INITIAL LENDER, ADMINISTRATIVE AGENT
AND COLLATERAL AGENT:
CITICORP NORTH AMERICA, INC.
By /s/ David Bouton
-----------------------------
Name: DAVID BOUTON
Title: VICE PRESIDENT
Credit Agreement Signature Page
SCHEDULES AND EXHIBITS
INTENTIONALLY OMITTED
Sch 1