1
DRAFT
05/16/96
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SENIOR SECURED REVOLVING CREDIT AGREEMENT
DATED AS OF MAY 20, 1996
AMONG
WYNDHAM HOTEL CORPORATION,
AS BORROWER,
THE LENDERS PARTY HERETO
AND
BANKERS TRUST COMPANY,
AS AGENT
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2
WYNDHAM HOTEL CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement; Pro Forma . . . 72
1.3 References to Articles, Sections, Exhibits, Schedules and Attachments . . . . . . . . . . . . . . . 72
1.4 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
1.5 Drafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
1.6 References to Persons Include Permitted Successors and Assigns . . . . . . . . . . . . . . . . . . . 72
1.7 References to Applicable Law and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
1.8 Herein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
1.9 Including Without Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
1.10 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
1.11 Singular and Plural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
1.12 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 2
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . 74
2.1 Commitments; Loans; Notes; the Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
2.2 Interest on the Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
2.4 Repayments and Prepayments; General Provisions Regarding Payments. . . . . . . . . . . . . . . . . . 83
2.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
2.6 Special Provisions Governing Eurodollar Rate Loans. . . . . . . . . . . . . . . . . . . . . . . . . 89
2.7 Increased Costs; Taxes; Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
2.8 Obligation of the Lenders to Mitigate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
2.9 Releases of Pool A Properties, Pool B Properties, Management Agreements and Servicing
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 3
LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . 99
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein. . . . . . . . . . . . 99
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(i)
3
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3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit. . . . . . . . . . . . . . . . . 102
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . . . . . 105
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 4
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 108
4.1 Conditions to Effectiveness of Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 5
COMPANY'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 122
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . . . . 122
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
5.3 Financial Condition; No Material Adverse Effect; Contingent Obligations . . . . . . . . . . . . . . 126
5.4 Properties; DAB Notes and Affiliate Notes; Agreements; Licenses . . . . . . . . . . . . . . . . . . 127
5.5 Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
5.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
5.7 Performance of Agreements; Materially Adverse Agreements. . . . . . . . . . . . . . . . . . . . . . 130
5.8 Governmental Regulation; Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
5.9 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
5.10 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.11 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.12 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
5.13 Liens on the Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
5.14 Zoning; Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.15 Physical Condition; Encroachment; Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . 135
5.17 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
5.18 Environmental Reports; Engineering Reports; Appraisals; Market Studies . . . . . . . . . . . . . . . 136
5.19 No Condemnation or Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
5.20 Utilities and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
5.21 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
5.22 Wetlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
5.23 Cash Management System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
5.24 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
5.25 Employment and Labor Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
5.26 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
(ii)
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SECTION 6
COMPANY'S AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 139
6.1 Financial Statements and Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
6.2 Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
6.3 Corporate Existence; Corporate Separateness etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 148
6.4 Taxes and Claims; Tax Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
6.5 Maintenance of Properties; Repair; Alteration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
6.6 Inspection; Lenders' Meeting; Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
6.7 Compliance with Laws, Authorizations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
6.8 Performance of Loan Documents and Related Documents . . . . . . . . . . . . . . . . . . . . . . . . 151
6.9 Payment of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
6.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
6.11 Casualty and Condemnation; Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
6.12 Renovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
6.13 Brundage Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
6.14 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
6.15 Cash Management System; Agent Rights; Application of Cash Flow; Depository Account Names . . . . . . 168
6.16 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
6.17 Deferred Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
6.18 Management of Properties; Servicing Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 172
6.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
6.20 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
SECTION 7
COMPANY'S NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 174
7.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
7.2 Liens and Related Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
7.3 Investments, Guaranties and Certain Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
7.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
7.7 Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
7.8 Zoning and Contract Changes and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
7.9 No Joint Assessment; Separate Lots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
7.10 Transactions with Affiliated Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
7.11 Sales and Lease-Backs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
7.12 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
7.13 Transfer of Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
7.15 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
7.16 Management Agreements, Servicing Agreements and Other Management Agreements . . . . . . . . . . . . 203
(iii)
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7.17 Intellectual Property; Franchise Agreements; Other Jurisdictions . . . . . . . . . . . . . . . . . . 207
7.18 Material Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
7.19 Amendments of Credit Agreement, Other Indebtedness, Obligations, Certain Documents . . . . . . . . . 208
7.20 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
SECTION 8
EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . 210
8.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
8.2 Certain Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
SECTION 9
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 219
9.1 Assignments and Participations in Loans and Letters of Credit. . . . . . . . . . . . . . . . . . . . 219
9.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
9.3 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
9.4 No Joint Venture or Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
9.5 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
9.6 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
9.7 Independence of Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
9.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
9.9 Survival of Representations, Warranties and Agreements. . . . . . . . . . . . . . . . . . . . . . . 226
9.10 Agent's Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
9.11 Obligations Several; Independent Nature of the Lenders' Rights. . . . . . . . . . . . . . . . . . . 227
9.12 Remedies of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
9.13 Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
9.14 Maximum Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
9.15 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
9.16 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
9.17 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
9.18 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
9.19 Consent to Jurisdiction and Service of Process. . . . . . . . . . . . . . . . . . . . . . . . . . . 229
9.20 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
9.21 Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
9.22 Material Inducement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
9.23 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
9.24 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
9.25 Reliance by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
(iv)
6
EXHIBITS
I FORM OF REVOLVING NOTE
II FORM OF SWING LINE NOTE
III FORM OF NOTICE OF BORROWING
IV FORM OF NOTICE OF CONVERSION/CONTINUATION
V FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF SUBSIDIARY GUARANTY
IX FORM OF SECURITY AGREEMENT
X FORM OF TRADEMARK SECURITY AGREEMENT
XI FORM OF CASH MANAGEMENT LETTER
XII FORM OF OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT
XIII FORM OF ENVIRONMENTAL INDEMNITY
XIV FORM OF COLLATERAL ACCOUNT AGREEMENT
XV FORM OF OPINION OF LOAN PARTIES' COUNSEL
XVI FORM OF ADDITION CERTIFICATE
XVII FORM OF NOTICE OF RENOVATION/RESTORATION
XVIII FORM OF COMPLETION CERTIFICATE
XIX FORM OF MANAGEMENT AGREEMENT REPORT
XX MANAGEMENT AGREEMENT CRITERIA
XXI FORM OF CONFIDENTIALITY AGREEMENT
(v)
7
SCHEDULES
1.1 PAYROLL SUBSIDIARIES
2.1A LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1G POOL A GROUND LEASE ESTOPPEL
4.1H POOL B GROUND LEASE ESTOPPELS
4.1I MANAGEMENT AGREEMENT ESTOPPELS
4.1J SERVICING AGREEMENTS
4.1L MATERIAL LEASE ESTOPPELS
4.1S POOL A SECURED INDEBTEDNESS
4.1U AFFILIATE STOCK OWNERSHIP
5.1A ORGANIZATION AND CAPITALIZATION
5.1B GOOD STANDING
5.2C GOVERNMENT CONSENTS
5.3C CONTINGENT OBLIGATIONS
5.4A1 POOL A PROPERTIES
5.4A2 POOL B PROPERTIES
5.4A3 POOL C PROPERTIES
5.4B DAB NOTES AND AFFILIATE NOTES
5.4C POOL A GROUND LEASES
5.4D POOL B DOCUMENTS
5.4E MANAGEMENT AGREEMENTS
5.4F SERVICING AGREEMENTS
5.4G FRANCHISE AGREEMENTS
5.4H MATERIAL LEASES
5.4I LIQUOR LICENSES
5.5 LITIGATION
5.14A ZONING
5.15B REQUIRED CAPITAL EXPENDITURES
5.16 INSURANCE
5.21A INTELLECTUAL PROPERTY
5.22 WETLANDS
5.23 CASH MANAGEMENT SYSTEM
5.25 EMPLOYMENT AND LABOR AGREEMENTS
5.26B AFFILIATE INTERESTS
6.16B RENOVATION PLANS FOR ROSE HALL PROPERTY
6.17A DEFERRED MAINTENANCE
7.1(iv) POOL B OBLIGATIONS
7.2 PERMITTED ENCUMBRANCES
7.5 PERMITTED JUNIOR PAYMENTS
7.10A AFFILIATE TRANSACTIONS
(vi)
8
SENIOR SECURED REVOLVING CREDIT AGREEMENT
This SENIOR SECURED REVOLVING CREDIT AGREEMENT is dated as of May 20,
1996 and entered into among WYNDHAM HOTEL CORPORATION, a Delaware corporation
(the "COMPANY"), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (individually
referred to herein as a "LENDER" and collectively as the "LENDERS") and BANKERS
TRUST COMPANY ("BANKERS"), as agent for the Lenders (in such capacity, the
"AGENT").
R E C I T A L S
A. The Company and its Subsidiaries desire that the Lenders
provide certain loan facilities, the proceeds of which, together with the
proceeds of the Public Offerings, will be used for the general corporate
purposes of the Company and its Subsidiaries, which include but are not limited
to (i) the reimbursement of an Issuing Lender of any amounts drawn under any
Letter of Credit, (ii) the acquisition, ownership, renovation, restoration,
management, operation and disposition of upscale full service hotels, garden
style hotels and resort hotels located in the United States of America, (iii)
the provision of Investments in Joint Ventures formed to acquire such hotels
and (iv) the acquisition, extension, renewal or modification of Management
Agreements, Servicing Agreements and Other Management Agreements and the
provision of Investments in, and Guaranties of Indebtedness or other
obligations of, owners of Managed Properties.
B. The Subsidiaries of the Company that are Loan Parties desire
to guaranty the obligations of the Company under the Credit Agreement.
C. The Company and the other Loan Parties desire to grant Liens
in the Collateral in favor of the Agent to secure their respective obligations
under the Loan Documents.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Company, the Lenders and the
Agent agree as follows:
SECTION 1
INTERPRETATION
This Agreement and the other Loan Documents shall be construed and
interpreted in accordance with this Section 1.
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement and the other Loan
Documents shall have the following meanings when used herein with initial
capital letters:
9
"ACQUISITION" means any acquisition by the Company, any Pool B
Subsidiary or any Pool C Subsidiary of any fee or ground leasehold interest in
any hotel property, including, without limitation, the acquisition by a Wholly
Owned Subsidiary of the Company of the fee interest in the Vinings Property.
"ACQUISITION AGREEMENTS" means, collectively, the agreements entered
into by the Company and any of its Subsidiaries in connection with an
Acquisition by (i) the Company or, if approved by the Agent in its sole
discretion, a Wholly Owned Subsidiary pursuant to subsection 7.15A(i), (ii) by
a Subsidiary of the Company pursuant to subsection 7.15A(ii), (iii) by any Pool
C Subsidiary pursuant to subsection 7.15A(iii) or (iv) by the Vinings
Subsidiary pursuant to subsection 7.15A(iv).
"ADDITIONAL FRANCHISE AGREEMENT" has the meaning assigned to that term
in subsection 7.17B.
"ADDITIONAL MANAGEMENT AGREEMENT" has the meaning assigned to that
term in subsection 7.16A(i).
"ADDITIONAL POOL A PROPERTY" has the meaning assigned to that term in
subsection 7.15A(i).
"ADDITIONAL POOL B PROPERTY" has the meaning assigned to that term in
subsection 7.15A(ii).
"ADDITION CERTIFICATE" means an Officers' Certificate, substantially
in the form attached hereto as Exhibit XVI, delivered to the Agent pursuant to
subsection 7.15A or subsection 7.16A.
"ADDITION DATE" means the following:
(i) with respect to any Pool A Property, Pool B Property,
Management Agreement or Servicing Agreement listed on Schedule 5.4A1,
5.4A2, 4.1I or 4.15, as the case may be, as of the Effective Date, the
Effective Date;
(ii) with respect to any Additional Pool A Property, any
Additional Pool B Property, or any Pool C Property (including the
Vinings Property) acquired after the Funding Availability Date in
accordance with subsection 7.15A, the latest to occur of (a) the date
on which the Acquisition of such Property is consummated, and (b) the
date on which all the conditions to such Acquisition set forth in
subsection 7.15(A)(i), (ii), (iii) or (iv), as the case may be, shall
have been satisfied with respect to such Property; and
(iii) with respect to any Additional Management Agreement,
Servicing Agreement or Other Management Agreement acquired or entered
into after the Funding Availability Date, in each case in accordance
with subsection 7.15A or 7.16A, as the case may be, the latest to
occur of (a) the date on which the acquisition of such
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Management Agreement or Other Management Agreement is consummated or
the effective date of such Additional Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, and (b)
the date on which all the conditions to such acquisition or
effectiveness set forth in subsection 7.15A(i), (ii), (iii) or (iv) or
7.16A(i) or (ii), as the case may be, shall have been satisfied with
respect to such Management Agreement, Servicing Agreement or Other
Management Agreement.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to a Eurodollar Rate Loan, the rate per annum obtained by
dividing (i) the arithmetic average (rounded upward to the nearest 1/16 of one
percent) of the offered quotation, if any, to first class banks in the
interbank Eurodollar market by each of the Reference Lenders for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Eurodollar Rate Loan of that Reference Lender for which the Adjusted Eurodollar
Rate is then being determined with maturities comparable to the Interest Period
for which such Adjusted Eurodollar Rate will apply as of approximately 10:00
A.M. (New York time) on such Interest Rate Determination Date by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D); provided, however, that if any Reference Lender fails to provide
the Agent with its aforementioned quotation then the Adjusted Eurodollar Rate
shall be determined based on the quotation(s) provided to the Agent by the
other Reference Lender(s).
"ADJUSTED STOCKHOLDERS' EQUITY" means, as of any date of
determination, the sum of (i) $200,000,000; plus (ii) the cumulative net income
(loss) of the Company and its Subsidiaries, determined in accordance with GAAP,
determined from December 31, 1995, to the last day of the calendar month ending
not less than 30 days before such date of determination; provided that the
calculation of Adjusted Stockholders' Equity shall exclude gains and losses,
together with any related provision for taxes on such gains and losses,
realized in connection with the sale or other permanent disposition of any
Property or other asset, and excluding any extraordinary gains and losses,
together with any related provision for taxes on such extraordinary gains and
losses; plus (iii) an amount equal to the aggregate net cash proceeds received
by the Company from the issue or sale of equity Securities of the Company on
and after the day following the initial closing under the Equity Offering of
the Public Offerings.
"ADJUSTMENT CONDITION" means, as of any date of determination, that:
(i) as of such date of determination, any unsecured
Indebtedness that is recourse to the Company shall have both at least
a "BBB" rating from S&P and a "Baa2" rating from Moody's;
(ii) as of such date of determination, the Senior Notes
shall have both at least a "BB+" rating from S&P and a "Ba1" rating
from Moody's; or
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(iii) as of the last day of the month preceding such date
of determination, the ratio of Total Consolidated Indebtedness to
Consolidated EBITDA (calculated for the 12 consecutive months ending
on the last day of such month) (a) is equal to or less than 3.0 to 1.0
and (b) shall not have been greater than 3.0 to 1.0 as of any date of
determination during the six months ending on the last day of such
month.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.
"AFFILIATE NOTES" means, collectively, the promissory notes of the
obligors and in the principal amounts listed on Schedule 5.4B annexed hereto.
"AFFILIATED OWNERS" means, collectively, the Joint Ventures and other
Persons, and the respective Affiliates thereof, in each of which the Loan
Parties and their respective Subsidiaries shall have made Investments following
the Effective Date, for whose benefit the Loan Parties and their respective
Subsidiaries shall have become liable with respect to Guaranties following the
Effective Date or to which the Loan Parties and their prospective Subsidiaries
shall have made payments following the Effective Date, in each case as
permitted by subsections 7.3(vi), (vii) and (viii), or from which Persons one
or more Pool B Properties shall have been leased by one or more Pool B
Subsidiaries in which the Loan Parties shall have made Investments permitted by
subsection 7.3(viii).
"AGENT" has the meaning assigned to that term in the introduction to
this Agreement and also means and includes any successor Agent hereunder.
"AGREEMENT" means this Credit Agreement dated as of the date first
written above among the Company, the Lenders and the Agent, as it may be
amended, restated, supplemented or otherwise modified from time to time.
"ALTA" means the American Land Title Association or any successor
thereto.
"APPLICABLE BASE RATE MARGIN" means, as of any date of determination,
a per annum rate equal to 1.00%; provided that the Applicable Base Rate Margin
shall be a per annum rate of .75% if and so long as any Adjustment Condition
shall occur and be continuing.
"APPLICABLE EURODOLLAR RATE MARGIN" means, as of any date of
determination, a per annum rate equal to 2.00%; provided that the Applicable
Eurodollar Rate Margin shall be a per
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annum rate of 1.75% if and so long as any Adjustment Condition shall occur and
be continuing.
"APPLICABLE LAWS" means, collectively, all statutes, laws, rules,
regulations, ordinances, orders, decisions, writs, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws)
affecting the Company, any Loan Party or the Collateral or any part thereof
(including the acquisition, development, construction, Renovation, occupancy,
use, improvement, alteration, management, operation, maintenance, repair or
restoration thereof), whether now or hereafter enacted and in force, and all
Authorizations relating thereto, and all covenants, conditions and restrictions
contained in any instruments, either of record or known to the Company or any
other Loan Party, at any time in force affecting any Property or any part
thereof, including any such covenants, conditions and restrictions which may
(i) require improvements, repairs or alterations in or to such Property or any
part thereof or (ii) in any way limit the use and enjoyment thereof; for
purposes of usury, Applicable Laws means the law of the State of New York
applicable to maximum rates of interest.
"APPRAISAL" means, with respect to any Property, a written appraisal
of such Property prepared by an Appraiser and requested by the Agent pursuant
to subsection 6.6B or delivered to the Agent pursuant to subsection 4.1L,
7.15A(i) or (ii) in each case in form, content and methodology satisfactory to
the Agent and in compliance with all applicable legal and regulatory
requirements (including the requirements of Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. Sections
3331, et seq., as amended (or any successor statute thereto), and the
regulations promulgated thereunder).
"APPRAISER" means Cushman & Wakefield, Hospitality Valuation Services,
Inc. or any other independent appraiser selected by the Agent and reasonably
acceptable to the Company who meets all regulatory requirements applicable to
the Agent and the Lenders, who is a member of the American Institute with a
national practice and who has at least 10 years experience with real estate of
the same type and in the geographic area of the Property to be appraised.
"APPROVED CAPITAL POLICY" means the Company's stated policy for the
capitalization of expenditures delivered to the Agent and the Lenders on or
before the Funding Availability Date pursuant to subsection 4.1R and, for
purposes of the calculation of Operating Expenses hereunder, shall include any
subsequent changes to such stated policy as shall be approved in writing by the
Agent, in its reasonable discretion.
"APPROVED ENVIRONMENTAL CONSULTANT" means Law Engineering and
Environmental Services, Inc. or any other qualified, independent environmental
consultant reasonably acceptable to the Agent.
"APPROVED MANAGEMENT FEES" has the meaning assigned to that term in
the definition of Management EBITDA.
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"ASSIGNMENT OF RENTS AND LEASES" means each Assignment of Rents and
Leases executed and acknowledged by the Loan Party thereto in favor of the
Agent for the benefit of the Agent and the Lenders in the form delivered on or
before the Funding Availability Date pursuant to subsection 4.1E(i), as any
such Assignment of Rents and Leases may be amended, restated, supplemented,
consolidated, extended or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"ATTRIBUTABLE INDEBTEDNESS" means, when used with respect to any sale
and leaseback transaction, as of any date of determination, the greater of (i)
the gross purchase price for the property subject to such transaction and (ii)
the present value (discounted at 10% per annum, compounded on a monthly basis)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such arrangement (including any period for which
such lease has been extended), as each such amount shall be reasonably
determined by the Company and certified to the Agent in an Officer's
Certificate of the Chief Executive Officer or the Chief Financial Officer of
the Company, together with the information utilized by the Company to make such
determination.
"AUTHORIZATION" means any authorization, approval, franchise, license,
variance, land use entitlement, sewer and waste water discharge permit, storm
water discharge permit, air pollution authorization to operate, certificate of
occupancy, municipal water and sewer connection permit, and any like or similar
permit now or hereafter required for the construction or Renovation of any
Improvements located on any Property or for the use, occupancy or operation of
any Property and all amendments, modifications, supplements and addenda
thereto.
"BANKERS" has the meaning assigned to that term in the introduction to
this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the rate per annum that is the higher
of (i) of the Prime Rate and (ii) the sum of (a) the Federal Funds Effective
Rate plus (b) 1/2 of 1.00%.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BEDROCK" means, collectively, [** WYNDHAM TO CONFIRM: **] Wynopt
Investment Partnership, L.P., a Delaware limited partnership, Wynopt Investment
Partnership Level II, L.P., a __________ limited partnership, Bedrock Hotel
Partners, L.L.C., a Delaware limited liability company, Bedrock Holdings
Partners, a Texas general partnership, Hampstead Investments, Inc., a Texas
corporation, Bedrock Hotel subsidiary, L.L.C., a Delaware limited liability
company, The Hampstead Group, L.L.C., a Texas limited liability company, and
Bedrock Partners Financing, L.P., a Delaware limited partnership, any holder of
5% or more of any class of equity Securities of any of the foregoing (in each
case as of the Funding Availability Date) and the respective Affiliates of each
of the foregoing, including, without limitation, Donald J. McNamara, Robert A.
Whitman and Daniel A. Decker.
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"BEDROCK INVESTMENT PROGRAM AGREEMENTS" means (i) the Investment
Agreement dated as of May 2, 1994 among The Hampstead Group, Inc., Wyndham
Hotel Company Ltd., the partners in Wyndham Hotel Company, Ltd. listed on the
signature pages thereto and Crow Family Partnership, L.P., as amended by a
letter agreement dated May 17, 1995, and (ii) the Investment Agreement dated as
of May 17, 1995 among Bedrock Hotel Partners, L.L.C., Bedrock Hotel Subsidiary,
L.L.C., The Hampstead Group, L.L.C., Bedrock Financing, L.P., Bedrock Holding
Partners, General Motors Hourly-Rate Employees Pension Trust and General Motors
Salaried Employees Pension Trust; as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"BORROWING BASE" means, as of any date of determination from and after
the Funding Availability Date through and including the Maturity Date, the
amount determined by the Agent as of the last day of the preceding month or, if
subsequent thereto, the most recent Addition Date or Release Date, that is
equal to the sum of the following:
(i) the sum of the Pool A Property Amounts in respect of
all Pool A Properties as of such date of determination; provided that
the calculation of the amount referred to in this clause (i) shall
exclude (a) the amount, if any, by which the Pool A Property Amount
with respect to any Pool A Property (other than the Rose Hall Property
and any Additional Pool A Property referred to in clause (c) below) as
of such date of determination otherwise exceeds 25% of the amount
determined pursuant to this clause (i) for such period, (b) the
amount, if any, by which the Pool A Property Amount with respect to
the Rose Hall Property as of such date of determination, otherwise
exceeds the correlative percentages of the amount determined pursuant
to this clause (i) indicated for the periods set forth below:
PERIOD PERCENTAGE
F.A. Date-12/31/96 35%
01/01/97-6/30/97 30%
07/01/97-Maturity Date 25%; and
(c) if the Pool A Amount with respect to an Additional Pool A Property
exceeds 25% of the amount determined pursuant to this clause (i) as of
such Addition Date, the amount, if any, by which the Pool A Property
Amount with respect to such Additional Pool A Property otherwise
exceeds the amount that bears the same percentage relationship to the
amount determined pursuant to this clause (i) as of such date of
determination as the Pool A Property Amount with respect to such
Additional Pool A Property on the Addition Date with respect thereto
bears to the amount determined pursuant to this clause (i) as of such
Addition Date; plus
(ii) the lesser of (a) the sum of the Management Amounts
in respect of all Management Agreements and Servicing Agreements as of
such date of determination; provided that, assuming for the purpose of
calculating the amount referred to in this clause (a) that all
Servicing Agreements for the Pool A Properties (other than the Rose
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Hall Property) have been assigned the ranking 2 (as so contemplated by
the definition of Management Amount), the calculation of the amount
referred to in this clause (a) shall exclude the amount, if any, by
which the sum of the Management Amounts in respect of all Management
Agreements and Servicing Agreements as of such date of determination
for which the Agent has then specified the ranking 3 (as so
contemplated) exceeds the sum of the Management Amounts in respect of
the Management Agreements and Servicing Agreements as of such date of
determination for which the Agent has then specified ranking 1 or 2
(as so contemplated), and (b) the greater of (x) an amount equal to 66
2/3% of the amount determined pursuant to the preceding clause (i) and
(y) the amount by which $15,000,000 is greater than the amount
determined pursuant to the preceding clause (i);
provided, however, that, as of any date of determination, the amount calculated
pursuant to this definition of the Borrowing Base shall not be greater than the
following:
(x) if giving effect to the preceding clause (ii)(b)(y) does
not cause the amount calculated pursuant to this definition of the
Borrowing Base to be greater than the amount that would be so
calculated if effect were not given to such clause, then the amount so
calculated shall not be greater than the amount which, if multiplied
by the weighted average interest rate of all Loans then outstanding,
as determined by the Agent after taking into account the Interest Rate
Agreements then in effect, or, if no Loans are then outstanding, the
rate per annum that is the Adjusted Eurodollar Rate for Loans with an
initial Interest Period of one month plusthe Applicable Eurodollar
Rate Margin, in each case as of such date of determination (the
product obtained thereby being referred to in this definition of
Borrowing Base as the "ASSUMED INTEREST CHARGE"), would permit the
ratios of (a) Collateral EBITDA and (b) Collateral EBITDA-Cap. Ex, in
each case calculated for the 12 most recently completed calendar
months ending not less than 30 days before such date of determination,
to (c) the Assumed Interest Charge, to be equal to or greater than the
respective correlative ratios indicated for such period:
RATIO RATIO
PERIOD (a):(c) (b):(c)
F.A. Date-12/31/96 4.00 to 1.0 3.65 to 1.0
01/01/97-12/31/97 4.25 to 1.0 3.80 to 1.0
01/01/98-12/31/98 4.50 to 1.0 4.00 to 1.0
01/01/99-Maturity Date 4.75 to 1.0 4.25 to 1.0; and
(y) if giving effect to the preceding clause (ii)(b)(y)
causes the amount calculated pursuant to this definition of the
Borrowing Base to be greater than the amount that would be so
calculated if effect were not given to such clause, then the amount so
calculated shall not be greater than the amount which, if multiplied
by the Assumed Interest Charge, would permit the ratios of (A)
Collateral EBITDA and (B) Collateral EBITDA-Cap. Ex, in each case
calculated for the 12 most recently completed calendar months ending
not less than 30 days before such date of
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determination, to (C) the Assumed Interest Charge, to be equal to 5.0
to 1.0 and 4.75 to 1.0, respectively.
The Borrowing Base is subject to (1) reduction from time to time as provided in
subsections 2.4B(iii) and 2.9 and (2) adjustment from time to time as provided
in the definitions of Pool A Property Amount, Property EBITDA, Management
Amount and Management EBITDA, respectively.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form annexed hereto as Exhibit VII delivered by the Company pursuant to Section
4 or subsection 6.1(iv).
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close.
"CAPITAL EXPENDITURES" means, with respect to any Property, for any
period and as of any date of determination, the sum of (i) 3.50% of Property
Gross Revenues from such Property for such period plus (ii) the aggregate
amount, if any, in excess of 3.50% of Property Gross Revenues which is required
to be paid, deposited or reserved by the Company or any of its Subsidiaries in
respect of such Property for Capital Items pursuant to the Pool B Obligations
or the Pool C Obligations, as the case may be, for such period.
"CAPITAL ITEMS" means, with respect to any Property for any period and
as of any date of determination, the cost of capital repairs and replacements
of all or any portion of the Improvements or any other portion of such
Property, including (i) costs of tenant improvements and brokerage commissions
payable in connection with lease transactions at any Property, (ii) costs of
environmental audits and monitoring, environmental remediation work or any
other costs and expenses incurred with respect to compliance with Environmental
Laws, (iii) costs of any Restoration, (iv) costs of any Renovation, (v) costs
of FF&E, (vi) costs of appraisals, valuations, title insurance and inspections
and (vii) any other costs incurred in connection with the Properties that are
not included in Operating Expenses, in each case to the extent such costs would
be capitalized on a balance sheet in accordance with GAAP.
"CAPITAL LEASE" means, with respect to any Person, lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL RESERVE ACCOUNT" means, collectively, one or more
interest-bearing accounts to be established and maintained by the Company at
the offices of the Agent located at 280 Park Avenue, New York, New York, each
in the name of "Bankers Trust Company, as Agent - Wyndham Hotel Corporation
Capital Reserve Account," with such additional identifying references in such
name as the Company and the Agent shall agree. Capital Reserve Accounts are
not, and do not include, Other Capital Reserve Accounts.
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"CAPITAL STOCK" means, with respect to any Person, any capital stock,
partnership or joint venture interests of such Person and shares, interests,
participations or other ownership interests (however designated) of any Person
and any rights (other than debt securities convertible into any of the
foregoing), warrants or options to purchase any of the foregoing.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as of any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Moody's; (iii) commercial paper maturing
no more than one year from the date of creation thereof and having, at the time
of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1
from Moody's; (vi) Eurodollar deposits due within one year of any commercial
banks whose outstanding senior long-term debt securities are rate either A- or
higher by S&P or A-3 or higher by Moody's; (v) repurchase obligations with a
term of not more than 7 days for underlying securities of the types described
in clause (i) of this paragraph with any bank meeting the qualifications
specified in clause (vi) of this paragraph; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
that (a) is at least "adequately capitalized" (as defined in the regulations of
its primary Federal banking regulator) and (b) has Tier 1 capital (as defined
in such regulations) of not less than $100,000,000; and (vii) shares of any
money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody's.
"CASH MANAGER" means Bank One, Texas, N.A., or any successor thereto
approved by the Agent.
"CASH MANAGER CASH MANAGEMENT AGREEMENT" means the letter agreement
substantially in the form of Exhibit XI annexed hereto and delivered pursuant
to subsection 4.1E(xi) by and among the Cash Manager, the Agent and the
Company.
"CASH MANAGEMENT LETTERS" means (i) the Cash Manager Cash Management
Agreement, (ii) each letter agreement among each Loan Party, its Subsidiaries
(if applicable), the financial institutions at which Deposit Accounts are
located pursuant to the Cash Management System and the Agent, in each case
substantially in the form of Exhibit XI annexed hereto with such changes as are
acceptable to the Agent, and (iii) all other agreements with or directions to
the financial institutions at which Deposit Accounts are located satisfactory
to the Agent, in either case pursuant to which, in accordance with subsection
6.15,
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such financial institutions are to direct funds from such Deposit Accounts to
the Concentration Account.
"CASH MANAGEMENT SYSTEM" means the system of Deposit Accounts of Loan
Parties and their Subsidiaries pursuant to which all Receipts of Loan Parties
and such Subsidiaries are collected and distributed, all as described in
Schedule 5.23 annexed hereto, as it may be modified from time to time in
accordance with the terms hereof.
"CASH PROCEEDS" means, with respect to any sale or other disposition
or refinancing of any Property, Cash payments received from such sale or
disposition or refinancing.
"COLLATERAL" means, collectively, all property (including Capital
Stock), whether real, personal or mixed, tangible or intangible, owned or to be
owned or leased or to be leased or otherwise held or to be held by the Company
or any of its Subsidiaries (other than all property, whether real, personal,
mixed, tangible or intangible, owned or to be owned or leased or to be leased
or otherwise held or to be held by a Pool C Subsidiary) or in which the Company
or any of its Subsidiaries (other than a Pool C Subsidiary) has or shall
acquire an interest, to the extent of the Company's or such Subsidiary's
interest therein, now or hereafter granted, assigned, transferred, mortgaged or
pledged to the Agent and/or the Lenders or in which a Lien is granted to the
Agent and/or the Lenders to secure all or any part of the Obligations, whether
pursuant to the Security Documents or otherwise, including, without limitation,
the Mortgaged Properties, the Leases and Rents (other than those generated by
or related to a Pool C Property), the DAB Notes and rights under the Original
Acquisition Documents, the Acquisition Documents (other than Acquisition
Documents with respect to a Pool C Property) and the Management Agreements, and
any and all proceeds of the foregoing, but excluding the Excluded Assets.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Collateral Account Agreement.
"COLLATERAL EBITDA" means, for any period and as of any date of
determination, the sum of Total Pool A Property EBITDA and Management EBITDA,
in each case for such period.
"COLLATERAL EBITDA-CAP. EX", means, for any period and as of any date
of determination, the sum of Total Pool A Property EBITDA-Cap. Ex plus
Management EBITDA, in each case for such period.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by the Company and the Agent on or before the Funding
Availability Date, substantially in the form of Exhibit XIV annexed hereto,
pursuant to which the Company may pledge cash to the Agent to secure the
obligations of the Company to reimburse Issuing Lenders for payments made under
one or more Letters of Credit as provided in Section 8, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
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"COLLECTING AGENT(S)" has the meaning assigned to that term in
subsection 6.15B(i).
"COMMERCE LEASE" means the Sublease Agreement dated as of November 17,
1989 between Crow-Staley Commerce #1 Limited Partnership and Commerce Hotel
Partners Ltd. (which shall be succeeded in interest by the Company after giving
effect to the Formation as of the Funding Availability Date), with respect to
the Commerce Property, as such agreement may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms thereof
and hereof.
"COMMERCE PROPERTY" means the real property (including the leasehold
created by the Commerce Lease), together with all Improvements thereon and all
fixtures attached thereto and all personal property used in connection
therewith, located in the City of Commerce, California and known, as of the
date of this Agreement, as the Commerce Wyndham Garden Hotel, as more
particularly described in Schedule 5.4A1 annexed hereto.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by the Company
or any of its Subsidiaries.
"COMMITMENT" means the commitment of a Lender to maintain or make
Loans pursuant to subsection 2.1A, and "COMMITMENTS" means such commitments of
all Lenders in the aggregate.
"COMMON STOCK" means the common stock of the Company, par value $.01
per share.
"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPANY'S ADJUSTED EQUITY INTEREST" means, with respect to any Joint
Venture or other Person in which any Loan Party or any of its Subsidiaries
shall have made an Investment or for whose benefit such Loan Party or
Subsidiary shall have become liable with respect to a Guaranty, and as of any
date of determination, the aggregate fair market value of the equity and debt
Investments of the Loan Parties and their respective Subsidiaries in such Joint
Venture or other Person or any Subsidiary thereof as of such date of
determination, as reasonably determined by the Company and certified to the
Agent in an Officers' Certificate of the Chief Executive Officer or the Chief
Financial Officer of the Company to such effect, together with the information
utilized by the Company to make such determination; provided that, for the
purpose of calculating such amount, (i) the principal amount of any obligation
of such Joint Venture or other Person or Subsidiary thereof so Guaranteed shall
be deemed to be a debt Investment by such Loan Party or Subsidiary so
Guaranteeing such obligation and (ii) there shall be excluded from such amount
debt Investments made in such Joint Venture or other Person if both (a) there
shall not be outstanding any Indebtedness of any Subsidiary of such Joint
Venture or other Person that is not subordinate in right and time of payment to
such debt Investments and (b) such debt Investments (which, with respect to
debt Investments that are evidenced by Guaranties made by any Loan Party or any
of its subsidiaries, shall mean the Indebtedness so Guaranteed) rank pari passu
with all other Indebtedness of such Joint Venture
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or other Person that is not subordinate in right or time of payment to any
other Indebtedness of such Joint Venture or other Person or their respective
Subsidiaries and rank prior in right and time of payment to all equity
Securities of such Joint Venture or other Person outstanding from time to time.
"COMPARABLE COMPANIES" has the meaning assigned to that term in
subsection 7.6B.
"COMPLETION CERTIFICATE" means any notice of completion of a Major
Renovation/Restoration delivered to the Agent pursuant to subsection 6.11G,
6.12C or 7.16B.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to the Agent by the Company pursuant to
subsection 6.1(vi).
"CONCENTRATION ACCOUNT" means the interest bearing account No.________
established and maintained in the name of the Agent at the offices of the Cash
Manager pursuant to the terms of the Security Agreement, to which all funds on
deposit in the Deposit Accounts included in the Cash Management System are
directed by the Agent in accordance with subsection 6.15.
"CONDEMNATION PROCEEDS" means all compensation, awards, damages,
rights of action and proceeds awarded to any Loan Party or any of its
Subsidiaries by reason of any Taking.
"CONSOLIDATED EBITDA" means, for any period, the remainder of the
following:
(i) the sum, without duplication, of (a) Total Property
EBITDA and Total Management EBITDA, in each case for such period, plus
(b) all revenue of the Company and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP, that was
not included in the calculation of Total Property EBITDA and Total
Management EBITDA for such period irrespective of whether such income
relates to the Properties, the Management Agreements, the Servicing
Agreements or the Other Management Agreements; provided that the
calculation of the amount referred to in this clause (i) shall exclude
(v) income expressly excluded from the definition of Property Gross
Revenue, (w) income resulting from the write-up of the value of
assets, (x) income from interest earned on the DAB Notes, the
Affiliate Notes or on other notes and receivables from affiliates
except to the extent actually paid in cash, (y) the income of a Joint
Venture and income accounted for by the equity method of accounting,
in each case except to the extent distributed to the Company or any of
its Subsidiaries, and increases or decreases in earnings attributable
to minority interests and (z) the income of any Person acquired in a
pooling of interests transaction before the date of acquisition; minus
(ii) all expenses, without duplication, of the Company and
its Subsidiaries (to the extent not deducted from the calculation of
Total Property EBITDA or Total Management EBITDA) for such period and
determined on a consolidated basis in accordance with GAAP, whether or
not such expenses relate to the Properties, the Management Agreements,
the Servicing Agreements or the Other Management
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Agreements; provided that the calculation of the amount referred to in
this clause (ii) shall exclude the expenses expressly excluded from
the definitions of Operating Expenses, Property EBITDA and Management
EBITDA and any expense related to the charge off of amounts referred
to in clause (x) above previously recognized as revenue; plus
provided further, that the calculation of the amount referred to in this
definition of Consolidated EBITDA shall exclude the cumulative effect of
changes in accounting principles.
"CONSOLIDATED EBITDA-CAP EX" means, for any period, Consolidated
EBITDA minus Capital Expenditures with respect to all Properties.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of the
following, without duplication: (i) total interest expense of the Company and
its Subsidiaries on a consolidated basis in conformity with GAAP with respect
to (a) all outstanding Indebtedness under this Agreement and the other Loan
Documents, (b) that portion of the Pool B Obligations that is classified as a
liability on a balance sheet in accordance with GAAP, (c) the Pool C
Indebtedness, (d) the FF&E Financing Indebtedness and (e) the Senior Notes;
plus (ii) the interest component of all amounts payable under Capital Leases,
including, without limitation, the WHI Lease; plus (iii) one-third of the
rental expense attributable to Operating Leases with respect to real property,
including, without limitation, the Commerce Lease and the HPT Leases and
one-third of the rental expense attributable to operating leases with respect
to personal property with an initial term, including any renewals at the option
of either party, in excess of one year; plus (iv) net payments, if any,
pursuant to Interest Rate Agreements; plus (v) the amortization of original
issue discount and deferred costs related to Interest Rate Agreements; plus
(vi) commissions, discounts and other fees and charges paid or accrued with
respect to letters of credit and bankers' acceptance financing; plus (vii)
interest expense attributable to that portion of the Indebtedness or other
obligations of a Person (other than the Company or any of its Subsidiaries)
that is Guaranteed by the Company or any of its Subsidiaries or for the payment
of which the Company or any of its Subsidiaries is responsible or liable,
directly or indirectly, primarily or contingently, whether by law, contract,
ownership of Securities or otherwise; plus (viii) the sum of the amounts that
are determined with respect to the Pool B Ground Leases entered into pursuant
to sale and lease-back transactions permitted by subsection 7.11, which amounts
shall, with respect to each such Pool B Ground Lease, be equal to the greater
of (a) an amount equal to interest that would have accrued on the Attributable
Indebtedness with respect to such sale and lease-back transaction, calculated
at a per annum interest rate equal to the Adjusted Eurodollar Rate Loans with
an initial Interest Period of one month plus the Applicable Eurodollar Rate
Margin, in each case as of such date of determination, and (b) the payment
under such Pool B Ground Lease; minus (ix) if Property EBITDA with respect to a
Property for such period shall be zero by reason of the effect of clause (v)(2)
to the proviso to the definition of Property EBITDA (and not for any other
reason), the sum of amounts determined with respect to all such Properties,
which amounts shall be equal to interest that would have accrued on the
principal amount of Indebtedness secured by a Lien on such Property paid by the
Loan Parties and their respective Subsidiaries from gross purchase price paid
to the Loan Parties and their respective Subsidiaries in consideration of such
sale or other permanent disposition, calculated at a per annum interest
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rate equal to the Adjusted Eurodollar Rate for Eurodollar Rate Loans with an
initial Interest Period of one month plus the Applicable Eurodollar Rate
Margin, in each case as of such date of determination.
"CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of
determination, the sum of the following, without duplication: (i) all
Indebtedness of the Company and its Subsidiaries, determined on a consolidated
basis in conformity with GAAP; plus (ii) all other Indebtedness of the Company
and its Subsidiaries; plus (iii) all Capital Lease obligations; plus (iv) all
obligations owed for all or any part of the deferred purchase price of real
property and management contracts purchased by the Company or any of its
Subsidiaries and all indebtedness created or arising under any conditional sale
or title retention agreement with respect to real property purchased by the
Company and its Subsidiaries; plus (v) trade payables of the Company and its
Subsidiaries that by their terms are more than 90 days delinquent; plus (vi)
all Contingent Obligations of the Company and its Subsidiaries to make any
Investments, Guaranties or payments pursuant to subsection 7.3; plus (vii) all
Guaranties of the Company or any of its Subsidiaries and other obligations for
the payment of which the Company or any of its Subsidiaries is responsible or
liable, directly or indirectly, primarily or contingently, whether by law,
contract, ownership of Securities or otherwise, directly or indirectly, that
either (a) are in existence as of the Effective Date but not included in
Schedule 5.3 annexed hereto, (b) are in existence as of the Effective Date and
are specified in such Schedule as Guaranties to be included in this definition
of Consolidated Total Indebtedness, (c) became effective after the Effective
Date or (d) are modified after the Effective Date pursuant to this Agreement to
increase the amount thereof or to change the obligors with respect thereto or
both, provided that, for purposes of calculating the amount of Consolidated
Total Indebtedness, the amount of any guaranty subject to this clause (d) by
reason of the increase in the amount thereof shall be equal to the amount of
such increase; plus (viii) the maximum amount of all Letters of Credit minus
the sum of (a) the amount of Letters of Credit supporting other Indebtedness of
the Company or any of its Subsidiaries plus (b) the amount of Cash deposited
and held pursuant to the terms of the Collateral Account Agreement; plus (ix)
withdrawal liability or insufficiency under ERISA or under any qualified plan
or related trust; plus (x) Attributable Indebtedness; plus (xi) if any Senior
Notes are then outstanding, all other obligations of the Company and its
Subsidiaries that are included in any definition of Indebtedness contained in
the Senior Note Documents.
"CONTINGENT OBLIGATION" means, with respect to any Person, as of any
date of determination and without duplication, any direct or indirect
liability, contingent or otherwise, of that Person which has not been (or to
the extent that it has not been) paid or otherwise discharged with respect to
the following: (i) any Guaranty; (ii) any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings (including, with respect to the Company, Letters of
Credit); (iii) performance, surety and similar bonds in respect of any
Restoration, Renovation or other design, construction, restoration, renovation
or repair of any Improvements, in each case with respect to any Property,
Managed Property or other hotel property; (iv) other performance, surety and
appeal bonds; and (v) indemnification or contribution obligations of any
nature, including, without limitation, liabilities in respect of (a) agreements
providing for indemnification, adjustment of purchase price or similar
obligations or for Guaranties or letters of credit, surety bonds and
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23
performance bonds securing any obligations of that Person pursuant to such
agreements, (b) environmental and "bad deed" indemnities and (c) the issuance
or sale of Securities of that Person. The amount of any Contingent Obligation,
as of any date of determination, shall be equal to the least of (x) the amount
of the obligation so Guaranteed or that otherwise may be required to be paid,
(y) the amount to which such Contingent Obligation is expressly limited and (z)
the maximum exposure under such Contingent Obligation as reasonably calculated
by Company and approved by Agent on its sole discretion; provided, however,
that if the Contingent Obligation is described in two or more of the clauses in
the preceding sentence, the amount of the Contingent Obligation is the sum of
the amounts with respect to such Contingent Obligation, as calculated in
accordance with the preceding clauses (x) and (y).
"CONTRACTUAL OBLIGATION" means, with respect to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, deed to secure debt, contract, lease, purchase order,
undertaking, agreement or other instrument to which that Person is a party or
by which it or any of its properties is bound or to which it or any of its
properties is subject, including, with respect to the Company or any of its
Subsidiaries, any provision of the Related Documents to which the Company or
such Subsidiary is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CREDIT BID" means a bid in a foreclosure sale pursuant to a Mortgage
made by the Agent consisting of all or a portion of the outstanding amount of
the Obligations.
"CROW INTERESTS" means, collectively, (i) Mr. and Mrs. Trammell Crow,
any lineal descendant of Mr. and Mrs. Trammell Crow, or any trust of which not
less than [**75%**] of the beneficial interests are held by Mr. and Mrs.
Trammell Crow or such lineal descendants and (ii) any Joint Venture of which
not less than [**75%**] of the outstanding equity interests are owned directly
or indirectly by Mr. and Mrs. Trammell Crow or such lineal descendants, CF
Securities, L.P. and Mill Spring Holdings, Inc., The Trammel Crow 1994
Revocable Trust, Trammell S. Crow, Harlan R. Crow, the Trammell S. & Barbara
H. Crow Children's Trust, The Stuart M. Crow Management Trust, the Stuart M.
Crow Descendants' Trust, The Howard D. Crow Special Trust, Crow Family, Inc.,
The Howard D. Crow Irrevocable Family Branch Trust, The Harlan R. Crow
Irrevocable Family Branch Trust, The Trammell S. Crow Irrevocable Family Branch
Trust, The Stuart M. Crow Irrevocable Family Branch Trust, The Harlan R. Crow
Descendants' Trust and The Crow Long-Term Trust, any holder (as of the
Formation Date) of 5% or more of any class of equity Securities of any of the
foregoing Persons referred to in this clause (ii) and the respective Affiliates
of the Persons referred to in this clause (ii).
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect the Company or any of its
Subsidiaries against fluctuations in currency values.
"CWS" means CW Synergistech, L.P., a limited partnership proposed to
be formed by Trammel Crow Company and an entity owned by the Crow Interests and
the Senior
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Executives, as described in the Debt Prospectus in the section entitled
"Certain Relationships and Transactions".
"CWS AGREEMENTS" means, collectively, the Service Agreement and Asset
Management Agreement, each dated as of __________, 1996 and between CWS and the
Company, each substantially in the form thereof that has been approved by the
Agent, together with such alterations therein as shall be approved by the
Agent, which approval may be granted, withheld, conditioned or delayed in its
sole discretion, as each such agreement may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms thereof
and hereof.
"DAB NOTES" means, collectively, the promissory notes of the obligors
and in the principal amounts listed on Schedule 5.4B annexed hereto.
"DEBT OFFERING" means the public offering by the Company of Senior
Notes in an aggregate principal amount of $100,000,000 pursuant to the Debt
Offering Documents.
"DEBT OFFERING DOCUMENTS" means, collectively, the Debt Underwriting
Agreements, the Debt Registration Statement, the Indenture and each of the
other documents and agreements executed in connection with the Debt Offering,
as each such document and agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"DEBT PROSPECTUS" means the prospectus relating to the Senior Notes in
the form included in the Debt Registration Statement or, if the prospectus
included in the Debt Registration Statement omits information in reliance on
Rule 430A under the Act and such information is included in prospectuses filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act, "Prospectus" means the prospectus relating to the Senior Notes
in the form included in the Debt Registration Statement as supplemented by the
addition of the Rule 430A information contained in the prospectus relating to
the Senior Notes filed with the Securities and Exchange Commission pursuant to
Rule 424(b).
"DEBT REGISTRATION STATEMENT" means Registration Statement (No.
333-2458) of the Company on Form S-1 and the prospectus included therein, as
filed with the Securities and Exchange Commission on March 15, 1996, as amended
by Amendment Nos. 1, 2 and 3 thereto, as filed with the Securities and Exchange
Commission on May 1, 1996, May 16, 1996 and May __, 1996, respectively,
together with the Debt Prospectus, and as each may be further amended or
supplemented from time to time, before or after the effectiveness thereof, with
respect to the Debt Offering.
"DEBT UNDERWRITING AGREEMENTS" means, collectively, the Underwriting
Agreements, each dated as of May __, 1996, among the Company, Smith Barney Inc.
and the other underwriters named therein, as each such agreement may be
amended, restated, consolidated, supplemented or otherwise modified from time
to time in accordance with the terms thereof and hereof, pursuant to which the
Senior Notes are proposed to be issued and sold in the Debt Offering.
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"DEFAULT RATE" means the rate of interest payable pursuant to
subsection 2.2E.
"DEFERRED MAINTENANCE" means the deferred maintenance and repair in
respect of the Pool A Properties and the estimated cost thereof, each as set
forth in the Engineering Reports delivered by the Company pursuant to
subsection 4.1N and specified on Schedule 6.17A annexed hereto.
"DEFERRED MAINTENANCE ACCOUNT" means, collectively, one or more
interest-bearing accounts to be established and maintained by the Company at
the offices of the Agent located at 280 Park Avenue, New York, New York, each
in the name of "Bankers Trust Company, as Agent - Wyndham Hotel Corporation
Deferred Maintenance Account," with such additional identifying references in
such name as the Company and the Agent shall agree.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced, by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"EFFECTIVE DATE" means the date on which this Agreement shall become
effective pursuant to subsection 9.21.
"ELIGIBLE ASSIGNEE" means (i) a Person that has entered into a
confidentiality agreement pursuant to subsection 9.24 and is (a) a commercial
bank organized under the laws of the United States of America or any state
thereof; (b) a savings and loan association or savings bank organized under the
laws of the United States of America or any state thereof; (c) a commercial
bank organized under the laws of any other country or a political subdivision
thereof; provided, however, that (x) such bank is acting through a branch or
agency located in the United States of America or (y) such bank is organized
under the laws of a country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such country; and (d)
any other entity which is an "accredited investor" (as defined in Regulation D
under the Securities Act) which extends credit or buys loans as one of its
principal businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (a) through
(d) above) that is reasonably acceptable to the Agent; and (ii) any Lender and
any Affiliate of any Lender; provided further, however, that each Eligible
Assignee under clauses (i)(a) through (i)(c) above shall have Tier 1 capital
(as defined in the regulations of its primary Federal banking regulator) of not
less than $100,000,000; provided further, however, that no Affiliate of the
Company or any other Person who, either directly or through one or more
Affiliates, owns or operates hotels as one of its primary business activities
shall be an Eligible Assignee (it being understood that the direct or indirect
ownership or operation of hotels as an activity incidental to customary lending
activities (whether pursuant to shared-appreciation loans upon the foreclosure
of any lien or other security interest or otherwise) shall not constitute a
"primary business activity" for the purposes of this definition of Eligible
Assignee).
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"ELIGIBLE PARTICIPANT" means a Person that has entered into a
confidentiality agreement pursuant to subsection 9.24 and is not an Affiliate
of the Company or any other Person who, either directly or indirectly, owns or
operates hotels as one of its primary business activities (it being understood
that the direct or indirect ownership or operation of hotels as an activity
incidental to customary lending activities (whether pursuant to
shared-appreciation loans upon the foreclosure of any lien or other security
interest or otherwise) shall not constitute a "primary business activity" for
the purposes of this definition of Eligible Participant).
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by the Company, any of its Subsidiaries, or any of their
respective ERISA Affiliates.
"ENGINEER" means Law Engineering and Environmental Services, Inc. or
such other reputable engineer approved by the Agent licensed as such in the
state in which the applicable Property in question is located.
"ENGINEERING REPORT" means, with respect to any Property, a written
report prepared by an Engineer, describing and analyzing the physical condition
of the Improvements of such Property, describing any necessary or recommended
repairs, estimating the cost of such repairs and otherwise in form and
substance reasonably satisfactory to the Agent.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any other Person
for any damage, including personal injury (including sickness, disease or
death), tangible or intangible property damage, contribution, indemnity,
indirect or consequential damages, damage to the environment, damage to natural
resources, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, in each case relating to,
resulting from or in connection with Hazardous Materials and relating to the
Company, any of its Subsidiaries (including any Person who was a Subsidiary
prior to the Funding Availability Date) or any Property.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity executed
and delivered by the Company, GHALP Corp., WHI, Rose Hall GP Corp., Rose Hall
GP and Rose Hall Partnership on or before the Funding Availability Date, and
thereafter by each other Subsidiary of the Company that becomes a party
thereto, in favor of the Agent and the Lenders, in substantially the form of
Exhibit XIII annexed hereto, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"ENVIRONMENTAL LAWS" means all statutes, laws, ordinances, orders,
rules, regulations, written guidelines, writs, judgments, decrees or
injunctions and the like relating to (i) environmental matters, including those
relating to fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Hazardous Release or
threatened Hazardous Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and
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health, industrial hygiene, or the protection of human, plant or animal health
or welfare, in any manner applicable to any Loan Party or any of its
Subsidiaries or any of their properties, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Sections
1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections
6901, et seq.), the Federal Water Pollution Control Act ( 33 U.S.C. Sections
1251, et seq.), the Clean Air Act (42 U.S.C. Sections 7401, et seq.), the Toxic
Substances Control Act (15 U.S.C. Sections 2601, et seq.), the Solid Waste
Disposal Act (42 U.S.C. Sections 6901, et seq.), as amended by the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901, et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sections 136, et seq.),
the Occupational Safety and Health Act (29 U.S.C. Sections 651, et seq.) and
the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Sections
11001, et seq.), each as amended or supplemented, and rules and regulations,
policies and guidelines promulgated pursuant thereto and any analogous future or
present local, state and federal statutes and rules and regulations, policies
and guidelines promulgated pursuant thereto, each as in effect as of the date of
determination.
"EQUITY OFFERING" means the public offering by the Company of
approximately 3,852,000 shares of Common Stock pursuant to the Equity Offering
Documents, including 532,000 shares of Common Stock that may be issued and sold
pursuant to the exercise of the underwriters' overallotment option.
"EQUITY OFFERING DOCUMENTS" means, collectively, the Equity
Underwriting Agreements, the Equity Registration Statement and each of the
other documents and agreements executed in connection with the Equity Offering,
as each such document and agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"EQUITY PROSPECTUS" means the prospectus relating to the Common Stock
in the form included in the Equity Registration Statement or, if the prospectus
included in the Debt Registration Statement omits information in reliance on
Rule 430A under the Act and such information is included in prospectuses filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act, "Prospectus" means the prospectus relating to the Common Stock
in the form included in the Equity Registration Statement as supplemented by
the addition of the Rule 430A information contained in the prospectus relating
to the Common Stock filed with the Securities and Exchange Commission pursuant
to Rule 424(b).
"EQUITY REGISTRATION STATEMENT" means Registration Statement (No.
333-2214) of the Company on Form S-1 and the prospectus included therein, as
filed with the Securities Exchange Commission on March 11, 1996, as amended by
Amendment Nos. 1, 2 and 3 thereto, as filed with the Securities and Exchange
Commission on May 1, 1996, May 14, 1996 and May __, 1996, respectively,
together with the Equity Prospectus, and as each may be further amended or
supplemented from time to time, before or after the effectiveness thereof, with
respect to the Equity Offering.
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"EQUITY UNDERWRITING AGREEMENTS" means, collectively, the Underwriting
Agreements, each dated as of May __, 1996, among the Company, Smith Barney Inc.
and the other underwriters named therein, as each such agreement may be
amended, restated, consolidated, supplemented or otherwise modified from time
to time in accordance with the terms thereof, pursuant to which 3,852,500
shares of Common Stock are proposed to be issued and sold in the Equity
Offering, including 502,500 shares of Common Stock that may be issued and sold
to cover over-allotments.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, with respect to any Person, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any former ERISA
Affiliate of any Loan Party or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of such Loan Party or such Subsidiary, within the
meaning of this definition with respect to the period during which such entity
was an ERISA Affiliate of such Loan Party or such Subsidiary and with respect
to liabilities arising after such period for which such Loan Party or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation), (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to
any Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan, (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA, (iv)
the withdrawal by any Loan Party, any of its Subsidiaries or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability
pursuant to Section 4063 or 4064 of ERISA, (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan, (vi) the
imposition of liability on any Loan Party or any of its Subsidiaries or any of
their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA, (vii) the
withdrawal by any Loan Party or any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal
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(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by any Loan
Party or any of its Subsidiaries or any of their respective ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA, (viii) the occurrence of
an act or omission which could give rise to the imposition on any Loan Party or
any of its Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409 or Section 502(c)(2), (i) or (l), or Section 4071 of
ERISA in respect of any Employee Benefit Plan, (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other than a Multiemployer Plan or the assets thereof, or against any Loan
Party or any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any such Employee Benefit Plan, (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in subsection
8.1.
"EXCESS CASH FLOW" means, for any period, an amount equal to the
following:
(i) the sum of the following amounts for such period,
without duplication:
(a) all Property Gross Revenues and other
Receipts with respect to the Properties; plus
(b) all Management Fees and other Receipts under
the Management Agreements and the Other Management Agreements;
plus
(c) any other items reported as income on the
consolidated statement of operations of the Company and its
Subsidiaries, including, without limitation, (x) interest
income on the Properties' bank accounts or otherwise earned by
the Company or any of its Subsidiaries and (y) rebates or
refunds; plus
(d) Extraordinary Receipts of the Loan Parties
and any of their respective Subsidiaries; less
(ii) the sum of the following amounts for such period,
without duplication, in each case as approved in advance by the Agent:
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(a) all reasonable and customary Operating
Expenses for the Properties incurred in the ordinary course of
business, consistent with past practice; provided, however,
that for purposes of the calculation of Excess Cash Flow for
any period, (x) Operating Expenses shall include (1) scheduled
payments in respect of any Ground Lease and (2) only those
franchise fees then due and payable to Persons who are not
Affiliates of the Company and (y) Operating Expenses shall not
include any Management Fees with respect to the Properties;
(b) all expenses payable by Management Corp.
under Management Agreements and Other Management Agreements
that Management Corp. reasonably believes will be reimbursed
timely and in full by the other parties thereto;
(c) a reserve for Capital Items, in an amount not
to exceed the sum of (x) 3.50% of Property Gross Revenues for
each of the Properties for such period plus (y) the aggregate
additional amount, if any, required to be paid, deposited or
reserved by the Company for Capital Items or any of its
Subsidiaries in respect of the Pool B Properties and the Pool
C Properties pursuant to the Pool B Obligations or the Pool C
Obligations, as the case may be, for such period, in each case
as approved by the Agent, which approval shall not be
unreasonably withheld, conditioned or delayed, and all
expenditures from such reserves (to the extent included in the
amount calculated pursuant to clause (i) above for such
period);
(d) all scheduled payments of rent, principal or
interest with respect to the Pool B Obligations, the Pool C
Indebtedness and the FF&E Financing Indebtedness;
(e) federal, state and local taxes;
(f) Permitted Junior Payments by the Loan Parties
or any of their respective Subsidiaries; and
(g) reasonable and customary sales, general and
administrative expenses of the Company and its Subsidiaries
incurred in the ordinary course of business, consistent with
past practice.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCLUDED ASSETS" means the rights of the Loan Parties under
Management Agreements and Other Management Agreements that, by their terms and
in accordance with general practice, cannot be pledged to the Agent.
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"EXCUSABLE DELAY" means a delay due to acts of God, governmental
restrictions, enemy actions, war, civil commotion, fire, casualty, strikes,
shortages of supplies or labor, work stoppages or other causes beyond the
reasonable control of the Company or any of its Affiliates, but lack of funds
shall not be deemed a cause beyond the reasonable control of the Company or any
of its Affiliates.
"EXTRAORDINARY RECEIPTS" means the proceeds to any Loan Party or any
of its Subsidiaries from such items as (i) sales, exchanges or other
dispositions of the assets of any Loan Party or any of its Subsidiaries other
than in the ordinary course of business thereof, (ii) damage recoveries and
casualty insurance proceeds (including Condemnation Proceeds or Insurance
Proceeds but other than the proceeds of business interruption insurance or
rental loss insurance), (iii) income derived from Securities and other property
acquired for investment except to the extent such Securities represent Cash
Equivalents, income from Joint Ventures and interest and distributions received
on account of Investments made under 7.3(vii), (iv) condemnation awards or
sales in lieu of and under the threat of condemnation (other than awards or
other payments for any Taking for temporary use), (v) debt or equity financing
or refinancing, and (vi) all other amounts of any nature paid to any Loan Party
or any of its Subsidiaries not arising out of the ordinary course of business
thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"FF&E" means, with respect to any Property or the offices of the
Company and its Subsidiaries, 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 pool, 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, hotel 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 FINANCING INDEBTEDNESS" means Indebtedness (other than any
Loans) incurred by the Company or any of its Subsidiaries for the financing or
refinancing of FF&E, including, without limitation, that portion of the
obligations with respect to a Capital Lease, conditional sale agreement or
similar arrangement that is classified as a liability on a balance sheet in
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conformity with GAAP, and any refinancing, exchange or refunding thereof that
is permitted pursuant to subsection 7.1(iii).
"FORMATION" means, collectively, the transactions contemplated by the
Formation Agreement, the Hampstead Exchange Agreement and the Rose Hall
Transfer Agreement as described in the Debt Prospectus in the section entitled
"The Formation and the Financing Plan -- Formation Transactions" and as more
particularly described on Schedule 5.1F annexed hereto.
"FORMATION AGREEMENT" means the Formation Agreement dated as of March
10, 1996 among the Company and the other parties identified on the signature
pages thereof, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"FORMATION DATE" means the date on which the transactions constituting
the Formation shall be consummated, or, if there shall be more than one such
date, the date of the initial closing of the Public Offerings.
"FORMATION DOCUMENTS" means, collectively, the Formation Agreement,
the Hampstead Exchange Agreement, the Rose Hall Transfer Agreement, the
Registration Rights Agreement, the Stockholders' Agreement and each other
agreement or other document giving effect to the Formation, the Confidential
Offering Memorandum dated March 8, 1996 of the Company relating to the
Formation and the transactions contemplated by the foregoing agreements,
together with the exhibits and other attachments to such Memorandum, and each
opinion, agreement, assignment, deed, instrument, material certificate or other
material document delivered in connection therewith or pursuant thereto.
"FRANCHISE AGREEMENT" means each of the franchise agreements listed on
Schedule 4.1K annexed hereto, as each such agreement may be amended, restated,
supplemented or otherwise modified or replaced from time to time in accordance
with subsection 7.17C.
"FUNDING AVAILABILITY DATE" or "F.A. DATE" means the date on which
each of the conditions set forth in subsection 4.1 are satisfied.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, in each case as the
same are applicable to the circumstances as of the date of determination.
"GE OPTION" means the option of General Electric Pension Trust ("GE")
to acquire Common Stock, the exercise of which is reflected in a letter
agreement dated April 29, 1996
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between GE and the Company, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"GEORGIA INTANGIBLE TAX" means any and all mortgage recording taxes,
transfer taxes, general intangibles taxes, intangible recording taxes and
governmental stamp and other taxes, duties, imposts, assessments or charges
(including, without limitation, all interest and penalties thereon) payable to
the Tax Commissioner of Fulton County, Georgia or any other Governmental
Authority in the State of Georgia and arising out of or in connection with the
execution, delivery, filing, recordation or registration of, or performance
under, the Georgia Mortgages or any other Loan Document or the Aggregate
Taxable Borrowings.
"GHALP" means Garden Hotel Associates L.P. (also known as Garden Hotel
Associates Limited Partnership), a Texas limited partnership.
"GHALP II" means Garden Hotel Associates Two L.P. (also known as
Garden Hotel Associates II Limited Partnership), a Texas limited partnership.
"GHALP CORP." means GHALP Corporation, a Delaware corporation.
"GHALP SECURITY DEPOSIT" means the amount owed by HPTWN to GHALP Corp.
pursuant to Section 3.2 of the HPT Sale Agreement and Section 3.5 of the HPT
Leases, in each case as in effect as of the date of this Agreement.
"GOVERNMENTAL ACTS" has the meaning assigned to that term in
subsection 3.5A.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state,
county, municipality or other political subdivision or branch thereof, and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including any agency,
board, central bank, commission, court, department or officer thereof.
"GREYSTAR AGREEMENTS" means the agreement or agreements between
Greystar Partnership and the Company with respect to the program between
Greystar Partnership and the Company for the management of "extended-stay"
hotel properties described in the Debt Prospectus in the second paragraph in
the section entitled "Business -- Growth Strategy -- II. Additional Growth
Opportunities -- New Lodging Products", as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof. Greystar Agreements do not include Other
Management Agreements with respect to such hotel properties.
"GREYSTAR PARTNERSHIP" means the partnership owned by Crow Funding
Interests. Trammell Crow Residential and Greystar Inc. described in the second
paragraph in the section entitled "Business -- Growth Strategy -- II.
Additional Growth Opportunities -- New Lodging Products".
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"GROUND LEASES" means, collectively, the Pool A Ground Lease and the
Pool B Ground Leases.
"GUARANTY" means, with respect to any Person, any obligation,
contingent or otherwise, of that Person which has not been (or to the extent
that it has not been) paid or otherwise discharged with respect to any
Indebtedness, Ground Lease, other lease, dividend or other obligation of any
other Person if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof. Guaranties shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (otherwise 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 another, (ii) the obligation to
make take-or-pay or similar payments if required regardless of non- performance
by any other party or parties to an agreement, and (iii) any liability of such
Person for the obligation of another Person through any agreement (contingent
or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation
or any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise) or (b) to maintain the solvency or any
balance sheet item, level of income or financial condition of another Person
if, in the case of any agreement described under subclauses (a) or (b) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Guaranty shall be equal to the least of
(x) the amount of the obligation so guaranteed or otherwise supported, (y) the
amount to which such Guaranty is specifically limited and (z) the maximum
exposure under such Guaranty as reasonably calculated by the Company and
approved by the Agent in its sole discretion. Guaranties shall not include any
of the foregoing obligations to the extent that the same constitutes
Indebtedness under the definition thereof or is a Guaranty with respect
thereto. The term "Guarantee" used as a verb has a corresponding meaning.
"HAMPSTEAD EXCHANGE AGREEMENT" means the Exchange Agreement dated as
of March 10, 1996 among Wyndham Hotel Company Ltd., the Company, Wynopt
Investment Partnership Level II, L.P., Wynopt Investment Partnership, L.P. and
The Hampstead Group L.L.C. and joined in by Bedrock Hotel Partners, L.L.C., as
such agreement may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof and hereof.
"HARBOUR ISLAND LEASE" means the Lease and Assignment dated as of
March 1, 1988 between Lincoln Island Associates No. 1, Limited and WHI Limited
Partnership (which shall be succeeded in interest by WHI after giving effect to
the Formation as of the Formation Date), with respect to the Harbour Island
Property, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"HARBOUR ISLAND PROPERTY" means the real property (including the
leasehold created by the Harbour Island Lease), together with all Improvements
thereon and all fixtures attached
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thereto and all personal property used in connection therewith, located in
Tampa, Florida and known, as of the date of this Agreement, as the Wyndham
Harbour Island Hotel, as more particularly described in Schedule 5.4A2 annexed
hereto.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances",
"pollutant", "contaminant" or any other formulations intended to define, list
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws, (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance, (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources, (iv) any flammable substances
or explosives, (v) any radioactive materials, (vi) asbestos in any form, (vii)
urea formaldehyde foam insulation, (viii) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million, (ix) pesticides, and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any Governmental Authority or which may or could pose a hazard to the health
and safety of the owners, occupants or any Persons in the vicinity of the
Properties; provided, however, that Hazardous Materials shall not include any
materials in a non-hazardous form such as asphalt contained in road-surfacing
materials or hazardous materials customarily used in the operation of hotel
properties and properly stored and maintained.
"HAZARDOUS RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other receptacles containing any Hazardous Materials), or into or
out of any Property, including the movement of any Hazardous Material through
the air, soil, surface water, groundwater or property.
"HPT" means Hospitality Properties Trust, a Maryland real estate
investment trust.
"HPT AGREEMENTS" means, collectively, the HPT Sale Agreement, the
Agreement to Lease dated as of April 1, 1996 between HPT and GHALP II (as such
agreement has been amended by First Amendment to Purchase and Sale Agreement
and Agreement to Lease dated as of April 19, 1996 among GHALP, GHALP II, HPT
and HPTWN and Second Amendment to Agreement to Lease dated as of May 2, 1996
between GHALP II and HPTWN), the HPT Leases, the HPT Collateral Documents, the
Partnership Interest Pledge and Security Agreement dated as of May 3, 1996 from
Garden Hotel Partners LP and Garden Hotel Partners Two LP in favor of HPTWN,
the HPT Stock Pledge and the HPT Estoppel, as each such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
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"HPT COLLATERAL DOCUMENTS" means, collectively, the Collateral
Assignment of Leases, Contracts and Agreements dated as of May 3, 1996 between
GHALP II and HPTWN, the Assignment and Security Agreement dated as of May 3,
1996 between GHALP II and HPTWN and the Security Agreement dated as of May 3,
1996 between GHALP II and HPTWN, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"HPT ESTOPPEL" means, collectively, the Ground Lessor Estoppel
Certificates and Agreements, in each case containing terms and conditions
satisfactory to the Agent in its sole discretion, that shall be executed and
delivered by HPTWN and acknowledged by the Company and the Agent.
"HPT LEASES" means, collectively, the Lease Agreements dated as of May
2, 1996 or May 3, 1996, as the case may be, between HPTWN and GHALP II, with
respect to the HPT Properties, as such agreements may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"HPT PROPERTIES" means, collectively, the Pool B Properties designated
as such on Schedule 1.1B annexed hereto.
"HPT SALE AGREEMENT" means the Purchase and Sale Agreement dated March
5, 1996 between GHALP and HPT, as amended by First Amendment to Purchase and
Sale Agreement and Agreement to Lease dated as of April 19, 1996 among GHALP,
GHALP II, HPT and HPTWN and by Second Amendment to Purchase and Sale Agreement
dated as of May 2, 1996 between GHALP and HPTWN, as such agreement may be
further amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.
"HPT STOCK PLEDGE" means the Stock Pledge and Security Agreement to be
dated the date of the initial closing of the Public Offering from the Company
for the benefit of HPTWN, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"HPTWN" means HPTWN Corporation, a Delaware corporation.
"IMPOSITIONS" means all real property taxes and assessments, of any
kind or nature whatsoever, including, without limitation, vault, water and
sewer rents, rates, charges and assessments, levies, permits, inspection and
license fees and other governmental, quasi-governmental or nongovernmental
levies or assessments such as maintenance charges, owner association dues or
charges or fees resulting from covenants, conditions and restrictions affecting
the Properties, assessments resulting from inclusion of any Property in any
taxing district or municipal or other special district, any of which are
assessed or imposed upon the Property, or become due and payable, and which
create or may create a Lien upon the Property, or any part thereof. In the
event that any penalty, interest or cost for nonpayment of any Imposition
becomes due and payable, such penalty, interest or cost shall be included
within the term "Impositions".
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"IMPROVEMENTS" means all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Land, including all building
materials, water, sanitary and storm sewers, drainage, electricity, steam, gas,
telephone and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto and all
renewals, substitutions and replacements thereof.
"INDEBTEDNESS" means, with respect to any Person and without
duplication, to the extent required to be shown on a balance sheet prepared in
conformity with GAAP, (i) all indebtedness for money borrowed by that Person,
(ii) that portion of obligations with respect to Capital Leases that is
classified as a liability on a balance sheet in conformity with GAAP, (iii)
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money, (iv) all obligations owed for
all or any part of the deferred purchase price of assets or services purchased
by that Person, which purchase price is fully earned (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument, (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, except obligations for
Impositions which are not due and payable and Liens permitted pursuant to
subsection 6.9, (vi) obligations under Currency Agreements and Interest Rate
Agreements and (vii) that portion of any other obligation of that Person (other
than reservation and similar deposits received and held in the ordinary course
of business) that is classified as a liability on a balance sheet in conformity
with GAAP, which obligation is (a) due more than six months from the date of
incurrence thereof or (b) evidenced by a note or similar written instrument.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
subsection 9.3.
"INDENTURE" means the Indenture dated as of May 24, 1996 between the
Company and Bank One, Columbus, N.A., as Trustee, pursuant to which the Company
shall issue the Senior Notes as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"INSURANCE PROCEEDS" means all insurance proceeds, damages, claims and
rights of action and the right thereto under any insurance policies relating to
any portion of any Property.
"INSURANCE REQUIREMENTS" means all terms of any insurance policy
required hereunder covering or applicable to any Property or any part thereof,
all requirements of the issuer of any such policy, and all orders, rules,
regulations and other requirements of the National Board of Fire Underwriters
(or any other body exercising similar functions) applicable to or affecting any
Property or any part thereof or any use of any Property or any portion thereof.
"INTELLECTUAL PROPERTY" means, as of any date of determination, all
patents, trademarks, tradenames, copyrights, technology, know-how and processes
used in or necessary
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for the conduct of the business of the Loan Parties and their respective
Subsidiaries as conducted on such date of determination that are material to
the business, operations, condition (financial or otherwise) or prospects of
the Loan Parties and their Subsidiaries, taken as a whole, including any of the
foregoing licensed to the Loan Parties or any of their respective Subsidiaries
by other Persons.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
Adjusted Eurodollar Rate for purposes of determining the interest rate in
respect of an Interest Period. The Interest Rate Determination Date shall be
the second Business Day prior to the first day of the related Interest Period
for any Loan.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" means, with respect to any Person or any of its
Subsidiaries, as of any date of determination and without duplication, (i) any
direct or indirect purchase or other acquisition (whether or not for
consideration) by such investing Person or Subsidiary of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value by such
investing Person or Subsidiary from any other Person (other than (a) a Person
with respect to which such investing Person or Subsidiary is a Wholly Owned
Subsidiary or (b) any other Wholly Owned Subsidiary of the Person referred to
in the preceding clause (a); provided that, in the case of the Company and its
Subsidiaries, such other Wholly Owned Subsidiary is a Loan Party and has
Guaranteed the Obligations), of any equity Securities of such investing Person
or Subsidiary, (iii) any direct or indirect loan, advance (other than advances
to officers, employees, consultants, accountants, attorneys and other advisors
and members of the Board of Directors of any Person for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in each case
incurred in the ordinary course of business) or capital contribution by to any
other Person, including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from sales to that
other Person in the ordinary course of business, (iv) any commitment or
obligation (including, without limitation, any obligation under or in
connection with a Management Agreement) to make any investment described in
clauses (i) through (iii) above and (v) any liability that is recourse to such
investing Person or Subsidiary or secured by any asset of such investing Person
or Subsidiary and that arises, by law, contract, ownership of Securities or
otherwise, directly or indirectly, as the result of or otherwise in connection
with the origination, continuation or termination of any investment described
in clauses (i) through (iv) above. The amount of any Investment, as of any date
of determination, shall be equal to (x) with respect to an Investment referred
to in clause (i) or (ii) of the preceding sentence, the remainder of (1) the
sum of original cost of such Investment plus the cost of all additions thereto
as of such date of determination, minus (2) the aggregate amount
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paid to such Person or Subsidiary as a return of such Investment, provided,
that (A) the calculation of the amount referred to in this clause (2) shall
exclude all fees and other amounts (or the portion thereof) that shall
constitute interest, dividends or other amounts in respect of the return on
such Investment, as determined in accordance with GAAP, and (B) the calculation
of the amount referred to in this clause (i) shall exclude, all adjustments for
increases or decreases in value, and write-ups, write-downs or write-offs with
respect to such Investment, (y) with respect to an Investment referred to in
clause (iv) or (v) of the preceding sentence, the maximum aggregate liability
for which such investing Person or Subsidiary may become liable, by law,
contract, ownership of Securities or otherwise, with respect to such Investment
as of such date of determination, and (z) with respect to an Investment
described in two or more of clauses (i), (ii), (iii) and (iv), the sum of the
amounts with respect to such Investment, as calculated in accordance with the
preceding clauses (x) and (y), in each case as of such date of determination.
"IP CORP." means Wyndham IP Corporation, a Delaware corporation and a
Subsidiary of the Company.
"IP LICENSE AGREEMENTS" has the meaning assigned to that term in
subsection 5.21A.
"ISIS 2000" means ISIS 2000, a limited partnership to be formed by the
Crow Family Interests and the Senior Executives, as described in the Debt
Prospectus in the section entitled "Business Customers and Marketing Central
Reservation System".
"ISIS 2000 AGREEMENTS" means, collectively, the Service Agreement and
the Asset Management Agreement that shall be executed and delivered and between
ISIS 2000 and the Company, each substantially in the form thereof that has been
approved by the Agent, together with such alterations therein as shall be
approved by the Agent, which approval may be granted, withheld, conditioned or
delayed in its sole discretion, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
however, that in no event shall any Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"LAND" means the land located in the towns, counties and states listed
on Schedule 5.4A1 annexed hereto (and more particularly described in Exhibit A
to each Mortgage (other than the Mortgages with respect to the Ground Leases,
in which the applicable Land is described in Exhibit A-1 to each such
Mortgage)), Schedule 5.4A2 annexed hereto and Schedule 5.4A3 annexed hereto,
together with all strips and gores within or adjoining such property, all
estate, right, title, interest, claim or demand whatsoever of any Loan Party or
any
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of its Subsidiaries in the streets, roads, sidewalks, alleys, and ways adjacent
thereto (whether or not vacated and whether public or private and whether open
or proposed), all vaults or chutes adjoining such land, all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights pursuant to
any trackage agreement, rights to the use of common drive entries,
rights-of-way and other rights, privileges and appurtenances thereunto
belonging or in any way pertaining thereto, all reversions, remainders, dower
and right of dower, curtesy and right of curtesy, all of the air space and
right to use said air space above such property, all transferable development
rights arising therefrom or transferred thereto, all water and water rights
(whether riparian, appropriative or otherwise, and whether or not appurtenant)
and shares of stock evidencing the same, all mineral, mining, gravel,
geothermal, oil, gas, hydrocarbon substances and other rights to produce or
share in the production of anything related to such property, all drainage,
crop, timber, agricultural, and horticultural rights with respect to such
property, and all other appurtenances appurtenant to such property, including
without limitation, any now or hereafter belonging or in any way appertaining
thereto, and all claims or demands of such Loan Party or such Subsidiary,
either at law or in equity, in possession or expectancy, now or hereafter
acquired, of, in or to the same.
"LEASE" means each of the leases (other than the Ground Leases),
licenses, concession agreements, franchise agreements (other than the Franchise
Agreements) and other occupancy agreements and other agreements demising,
leasing or granting rights of possession or use or, to the extent of the
interest therein of any Loan Party or any of its Subsidiaries, any sublease,
subsublease, underletting or sublicense, which now or hereafter may affect any
Property or any part thereof or interest therein, including any agreement
relating to a loan or other advance of funds made in connection with any such
lease, license, concession agreement, franchise or other occupancy agreement
and such sublease, subsublease, underletting or sublicense, and every
amendment, restatement, supplement, consolidation or other modification of or
other agreement relating to or entered into in connection with such lease,
license, concession agreement, franchise or other occupancy agreement and such
sublease, subsublease, underletting or sublicense, and every Guaranty of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto, and any Guaranties of
leasing commissions.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 9.1 and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.
"LETTER OF CREDIT" OR "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of the Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed
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by the Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B).
"LIEN" means any lien (including any lien or security title granted
pursuant to any mortgage, deed of trust or deed to secure debt), pledge,
hypothecation, assignment, security interest, charge, levy, attachment,
restraint or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any agreement
to give any security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"LIQUOR LICENSES" means the licenses set forth on Schedule 5.4I
annexed hereto and each other license issued by the Department of Alcoholic
Beverage Control or similar state or local agency to any Loan Party or any of
its Subsidiaries or in respect of any Property, in each case in connection with
the sale of alcoholic beverages at any Property, as such Schedule may be
revised from time to time pursuant to subsection 7.15 or 7.16.
"LIQUOR OPERATIONS SERVICING AGREEMENTS" means, collectively, the
sub-management agreements entered into between Management Corp. and each Loan
Party (or Subsidiary of a Loan Party) that is a holder of a Liquor License in
the form delivered on or before the Funding Availability Date, as any such
sub-management agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"LOAN" and "LOANS" means one or more of the Revolving Loans or Swing
Line Loans or any combination thereof.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Subsidiary
Guaranty, the Notes, the Security Documents, the Environmental Indemnity, the
Letters of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by the Company in favor of an Issuing
Lender relating to, the Letters of Credit), the Collateral Account Agreement
and any other documents entered into in connection with the Cash Management
System.
"LOAN PARTIES" means, collectively, the Company, Rose Hall GP Corp.,
Rose Hall GP, Rose Hall Partnership, Management Corp., IP Corp., GHALP Corp.,
WHI and any other Subsidiary of the Company which is or becomes a party to a
Loan Document.
"LOCAL ACCOUNTS" means, collectively, the Deposit Accounts listed on
Schedule 5.23 annexed hereto as "Local Accounts" and any other Deposit Account
established with respect to one or more Properties for the purpose of receiving
Receipts pursuant to subsection 6.15.
"MAJOR RENOVATION/RESTORATION" means, as of any date of determination,
any Renovation or Restoration of a Property or a Managed Property with respect
to which more than 20% of the rooms "available for sale" at the applicable
Property or Managed Property, as the case may be, have been, are scheduled to
be, or could reasonably be expected to be, "rooms out-of-order", as determined
in accordance with the Uniform System, during any
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period of more than 30 consecutive days; provided that a Restoration related to
a casualty or Taking and conducted pursuant to and, as of such date of
determination, satisfying the conditions of subsection 6.11F is not a Major
Renovation/Restoration.
"MAJOR RENOVATION/RESTORATION REMOVAL PERIOD" means (i) with respect
to any Property, Managed Property or Other Managed Property, the period
commencing on the day that a Major Renovation/Restoration shall commence with
respect to such Property, Managed Property or Other Property or (ii) with
respect to any Management Agreement, Servicing Agreement or Other Management
Agreement, the period commencing on the day that a Major Renovation/Restoration
shall commence with respect to the related Managed Property, Property or Other
Managed Property, as the case may be, and in each case terminating on the day
that such Major Renovation/Restoration shall terminate with respect to such
Property, Managed Property or Other Managed Property, as the case may be, in
each case as such dates of commencement and termination shall be reasonably
determined by the Agent based on documentation received from the Company or
Management Corp. and on such other information as the Agent shall determine to
be relevant.
"MANAGED PROPERTIES" means, collectively, the real properties,
together with all Improvements thereon and all fixtures attached thereto and
all personal property used in connection therewith, that are managed by
Management Corp. or any of its Wholly Owned Subsidiaries pursuant to the
Management Agreements. Managed Properties do not include Properties or Other
Managed Properties.
"MANAGEMENT AGREEMENT REPORT" means a report substantially in the form
of Exhibit XIX annexed hereto delivered by the Company to the Agent pursuant to
subsection 4.1I or 7.16E, as such Exhibit may be amended from time to time as
may be agreed upon by the Company and the Agent.
"MANAGEMENT AGREEMENTS" means, collectively, the management agreements
and asset management agreements listed on Schedule 4.1I annexed hereto, as such
Schedule may be revised or supplemented from time to time pursuant to
subsection 2.9 or 6.1(iii), as any such management agreement or asset
management agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"MANAGEMENT AMOUNT" means, as of any date of determination, the
following:
(i) with respect to each Management Agreement or
Servicing Agreement (other than a Management Agreement referred to in
clause (ii) below), the product of (a) the applicable factor set forth
below with respect to the ranking specified by the Agent for such
Management Agreement or Servicing Agreement, as the case may be, as of
such date of determination in accordance with the criteria specified
in Exhibit XX annexed hereto, multiplied by (b) the Management EBITDA
for such Management Agreement or Servicing Agreement, as the case may
be, for the 12 most recently completed calendar months ending not less
than 30 days before such date of determination for which the Agent has
received the financial statements with respect to
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such Management Agreement or Servicing Agreement required to be
delivered pursuant to subsection 6.1(ii) or subsection 7.16A(ii), as
the case may be:
PERIOD RANKING
1 2 3 4
F.A. Date-12/31/96 3.0 2.5 2.0 0.0
01/01/97-12/31/97 2.9 2.4 1.8 0.0
01/01/98-12/31/98 2.8 2.3 1.6 0.0
01/01/99-Maturity Date 2.7 2.2 1.4 0.0; or
(ii) with respect to any Management Agreement for a
Managed Property owned or leased by the Crow Interests or their
Affiliates that does not provide, for a remaining period of at least
three months from such date of determination, for either or both of
(a) the payment to the Management Corp. upon termination without cause
of a fee in an amount equal to not less than the Approved Management
Fees for the 12 most recently completed calendar months ending not
less than 30 days before such date of determination or (b) a
prohibition against the termination thereof upon the transfer of such
Managed Property, an amount equal to 50% of the amount that would be
calculated with respect thereto if such Management Agreement were
subject to clause (i) above;
provided that, the Management Amount with respect to such Management Agreement
for such period shall be zero if, on or before such date of determination (x)
any Loan Party or any of its Subsidiaries shall have received written notice
(or any other notice pursuant to the applicable agreement) from any other party
to such Management Agreement that such Management Agreement will be cancelled
or terminated before the scheduled date of expiration and such written notice
(or other notice) shall not have been rescinded or otherwise withdrawn or (y)
any Loan Party or any of its Subsidiaries shall have received written notice
from or on behalf of the transferor or transferee of the Managed Property
subject to such Management Agreement with respect to the execution of a
definitive agreement providing for the sale or other permanent disposition of
such Managed Property [**more than _____ days after the execution of such
agreement**] and such transferee shall not have agreed by written instrument
satisfactory in form and substance to the Agent to assume the obligations of
the transferor under such Management Agreement, arising after the date of
transfer; provided further, however, that (1) if a termination fee shall be
payable to the Company or Management Corp. upon the actual cancellation or
termination of a Management Agreement subject to clause (x) above as of such
date of determination or upon the closing of the sale or other permanent
disposition of a Managed Property subject to clause (y) above as of such date
of determination, then, as of such date of determination and each date of
determination thereafter (until such Management Agreement shall cease to be
subject to the preceding clause (x) or (y), as the case may be) the Management
Amount with respect to such Management Agreement shall be equal to the lesser
of (A) the termination fee that Management Corp. or any of its Wholly Owned
Subsidiaries reasonably expects, as of such date of determination, to receive
not later than 3 months following the occurrence of the event referred to in
the preceding clause (x) or (y), as the case may be, and (B) an amount equal to
50% of the Management Amount with respect to such Management Agreement if
effect were not given to the proviso and this further proviso
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44
to the definition of Management Amount and (2) the aggregate Management Amount
with respect to all Management Agreements subject to the preceding clause (x)
or (y), as the case may be, calculated pursuant to the preceding clause (1) as
of such date of determination shall not exceed $1,000,000.
"MANAGEMENT CORP." means Wyndham Management Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of the Company.
"MANAGEMENT EBITDA" means, with respect to any Management Agreement,
Servicing Agreement or Other Management Agreement, as the case may be, for any
period and as of any date of determination and calculated on the accrual basis
of accounting, whether a positive or negative number, the amount equal to the
remainder of the following:
(i) the aggregate amount of base, trade name and
incentive fees (collectively, "APPROVED MANAGEMENT FEES") that are
payable to the manager under such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, with
respect to such period, as determined by the Agent in its sole
discretion and without duplication; provided that the calculation of
the amount referred to in this clause (i) shall exclude, without
duplication, (a) all such fees or other amounts (or the portion
thereof) the current payment of which shall have been subject to any
actual deferral, suspension, set-off, prohibition, pay-over,
reduction, adjustment or other interruption of any nature pursuant to
any subordination provisions in such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, or the
provisions of any other agreement, instrument or other document to
which any party to such Management Agreement, Servicing Agreement or
Other Management Agreement, as the case may be, is a party or by which
any of their respective properties or assets are bound, (b) all such
fees or other amounts (or the portion thereof) that shall be subject
to reduction, repayment or adjustment in any subsequent period other
than normal year-end adjustments, (c) all such fees or other amounts
(or the portion thereof) that shall constitute payments of principal,
interest, dividends or other amounts in respect of the return of or
return on any Investment or Guaranty, as determined by the Agent in
its sole discretion, (d) all such fees or other amounts (or the
portion thereof) that are payable in consideration of or otherwise in
respect of the amendment, modification, extension, expiration,
cancellation or termination of such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, or
related agreements, (e) all such fees or other amounts (or the portion
thereof) that are payable in consideration of or otherwise in respect
of the performance of any service not directly related to the
management or operation of a hotel property, including, without
limitation, fees or other amounts payable for accounting, design,
construction purchasing and asset management services, (f) payments
(whether pursuant to reimbursement, indemnification and otherwise) of
costs and expenses incurred or paid by or on behalf of the manager in
connection with the performance of any obligations or the exercise of
any rights under such Management Agreement, Servicing Agreement or
Other Management Agreement, as the case may be, or any related asset
management agreement or other agreement to the extent not taken into
account in calculating Management Expenses for such period, including,
without limitation,
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contributions, reimbursements and other payments in respect of
accounting administrative, tax, legal, finance, risk management and
disposition services, salaries and benefits of hotel employees,
marketing programs, research services, advertising and public
relations, national and local sales and marketing services, and
centralized reservations services; provided further, that (x) if the
terms on which the Approved Management Fees are calculated with
respect to such period or any subsequent period shall have been
modified as of such date of determination, then the amount of Approved
Management Fees that shall be included in the calculation of
Management EBITDA for such period for the purpose of calculating the
Management Amount with respect to such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be (but not
for purposes of calculating any amount pursuant to subsections 7.6D,
7.6E, 7.6F and 7.6G), as of such date of determination shall not
exceed the amount of Approved Management Fees that would have been
payable to the manager under such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, with
respect to such period if such terms, as so modified, had been in
effect during the entire period; and (y) Approved Management Fees with
respect to such Management Agreement, Servicing Agreement or Other
Management Agreement, as the case may be, shall be included in the
calculation of Management EBITDA for such period only to the extent
that the Agent and Lenders shall have received the financial
statements for such Management Agreement or Servicing Agreement, as
the case may be, for such period required to be delivered on or before
such date of determination pursuant to subsection 6.1(ii) or
7.16A(i)(2), as the case may be; multiplied by
(ii) the Management Margin (A) if the following clause (B)
is not applicable is not applicable, determined with respect to the
four most recently completed calendar quarters ending not less than 30
days before such date of determination and (B) if Total Utilization is
not less than $50,000,000 as of such date of determination and the
Agent shall so elect by written notice to the Company, determined with
respect to the 12 most recently completed calendar quarters ending not
less than 30 days before such date of determination;
provided that:
(w) if the Addition Date with respect to such Management
Agreement, Servicing Agreement or Other Management Agreement shall
have occurred after the Funding Availability Date and after the
commencement of such period but before the termination of such period:
(1) for purposes of calculating the Management
Amount with respect to such Management Agreement or Servicing
Agreement, as the case may be, as of such date of
determination, Management EBITDA with respect to such
Management Agreement or Servicing Agreement, as the case may
be, for such period shall be the sum of (A) the Management
EBITDA which would have been generated for the portion of such
period commencing on the first day of such period and ending
on the day before such Addition Date if the
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46
Management Agreement or Servicing Agreement had then been in
effect, as the same shall be determined based upon the
financial statements for such period required by subsection
7.16A to be delivered with respect to such Management
Agreement or Servicing Agreement, as the case may be, and such
other information with respect thereto that may be provided by
the Loan Parties and their respective Subsidiaries, subject to
such adjustments as may be required by the Agent in its sole
discretion, plus (B) Management EBITDA with respect to such
Management Agreement or Servicing Agreement, as the case may
be, for the portion of such period commencing on such Addition
Date and ending on the last day of such period, based upon the
financial statements for such period required to be delivered
on or before such date of determination pursuant to subsection
6.1(i), subject to such adjustments as may be required by the
Agent in its sole discretion; provided, however, that with
respect to each Management Agreement or Servicing Agreement
related to a Managed Property or Property, as the case may be,
for which a Major Renovation/Restoration shall occur, or shall
be scheduled to commence, on or before the first anniversary
of the Addition Date with respect thereto, Management EBITDA
with respect to such Management Agreement or Servicing
Agreement, as the case may be, for such period shall be zero;
(2) for purposes of calculating any amount
pursuant to subsection 6.14, 7.6D, 7.6E, 7.6F and 7.6G as of
such date of determination, Management EBITDA with respect to
such Management Agreement or Servicing Agreement, as the case
may be, Management EBITDA for such period shall be the sum of
(A) zero, for the portion of such period commencing on the
first day of such period and ending on the day before such
Addition Date, plus (B) Management EBITDA with respect to such
Management Agreement or Servicing Agreement, as the case may
be, for the portion of such period commencing on such Addition
Date and ending on the last day of such period, based upon the
results of operations of the Loan Parties and their respective
Subsidiaries with respect thereto during such period, as
reflected in the financial statements for such period required
to be delivered on or before such date of determination
pursuant to subsection 6.1(i), subject to such adjustments as
may be required by the Agent in its sole discretion;
(x) for purposes of calculating the Management Amount with
respect to such Management Agreement, Servicing Agreement or Other
Management Agreement, as the case may be, and any amount pursuant to
subsection 6.14 (but not for purposes of calculating any amount
pursuant to subsection 7.6D, 7.6E, 7.6F and 7.6G) as of such date of
determination, Management EBITDA for such period shall be zero if (1)
the Addition Date with respect to such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, shall not
have occurred on or before such date of determination, (2) on or
before such date of determination, such Management Agreement,
Servicing Agreement or Other Management Agreement, as the case may be,
shall have expired (without renewal or extension), been cancelled or
otherwise terminated, (3) on or before such date of determination, the
related Managed
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Property, Property or Other Managed Property, as the case may be,
shall have been sold or otherwise permanently disposed of and such
transferee shall not have agreed by written instrument satisfactory in
form and substance to the Agent to assume the obligations of the
transferor under such Management Agreement, Servicing Agreement, or
Other Management Agreement, as the case may be, arising after the date
of transfer, (4) to the knowledge of the Company, on such date of
determination there shall have occurred and be continuing any event or
condition which, with the giving of notice or the lapse of time or
both, would cause, or would permit (w) any party to such Management
Agreement, Servicing Agreement or Other Management Agreement, as the
case may be, to cause, the cancellation or other termination of such
Management Agreement, Servicing Agreement or Other Management
Agreement, as the case may be, (x) any holder of any Indebtedness (or
a trustee on behalf of such holders) secured by such Managed Property,
Property or Other Managed Property, as the case may be, to cause, such
Indebtedness to become or be declared due and payable prior to its
stated maturity, (y) any lessor under any Ground Lease or other ground
lease affecting such Managed Property, Property or Other Managed
Property as the case may be, to cause the termination of such Ground
Lease or other ground lease or (z) any of the foregoing Persons
referred to in this clause (4) or any other Person to cause, any
deferral, suspension, set-off, prohibition, pay-over, reduction,
adjustment or other interruption of any nature of any Approved
Management Fees pursuant to any subordination provisions in such
Management Agreement, Servicing Agreement or Other Management
Agreement, as the case may be, or the provisions of any other
agreement, instrument or other document to which any party to such
Management Agreement, Servicing Agreement or Other Management
Agreement, as the case may be, is a party or by which any of their
respective properties or assets are bound or (5) if such date of
determination shall occur during a Major Renovation/Restoration
Removal Period with respect to such Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, and such
Management EBITDA would be a positive number if effect were not given
to this clause (x);
(y) if such date of determination shall occur during a
Voluntary Removal Period, then (1) for purposes of calculating the
Management Amount with respect to such Management Agreement or
Servicing Agreement, as the case may be, as of such date of
determination, Management EBITDA with respect to such Management
Agreement or Servicing Agreement, as the case may be, shall be zero
and (2) if the Management EBITDA with respect to such Management
Agreement, Servicing Agreement or Other Management Agreement for such
period would be a positive number if effect were not given to this
clause (y), for purposes of calculating any amount pursuant to
subsections 7.6D, 7.6E, 7.6F and 7.6G as of such date of
determination, Management EBITDA with respect to such Management
Agreement, Servicing Agreement or Other Management Agreement, as the
case may be, shall be zero; and
(z) for purposes of calculating the Borrowing Base (but not
for purposes of calculating any amount pursuant to subsections 7.6D,
7.6E, 7.6F and 7.6G), as of such date of determination, Management
EBITDA with respect to the Commerce Property
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shall be zero for such period if such date of determination shall
occur before the date, if any, on which the Company shall have
acquired the superior ground lease with respect to the Commerce
Property or on which the leasehold interest under the superior ground
lease with respect to the Commerce Property shall have been merged
with the Commerce Lease, in any case on terms satisfactory to the
Agent in its sole discretion.
"MANAGEMENT FEES" means, collectively, all hotel management fees
(however characterized, including base fees, trade name fees, incentive fees,
special incentive fees, termination fees and all fees in respect of liquor
license operations) and all other fees or charges payable to the manager for
the management and operation of a hotel property, the related land and the
improvements thereof.
"MANAGEMENT INFORMATION" means, with respect to the acquisition or
effectiveness of any Additional Management Agreement or Other Management
Agreement pursuant to subsection 7.16A(i) or (ii), as the case may be, the
following information:
(i) financial statements in respect of the related
Managed Property or Other Managed Property, as the case may be, for
the most recently completed three calendar years and for the completed
calendar months after the most recently completed calendar year, in
each case, to the extent such financial statements exist and can be
readily obtained by any Loan Party or any of its Subsidiaries;
(ii) copies of all other balance sheets and related
statements of operations and statements of cash flows of such Managed
Property or Other Managed Property, as the case may be, that are to be
delivered to any Loan Party or any of its Subsidiaries in connection
with such acquisition or effectiveness;
(iii) to the extent Renovation is then proposed for such
Additional Managed Property or Other Managed Property, as the case may
be, a preliminary project plan and a project budget for such Managed
Property or Other Managed Property, as the case may be;
(iv) (a) a comprehensive environmental audit with respect
to such Managed Property or Other Managed Property, as the case may
be, (which shall include a Phase I environmental audit and, if
necessary or desirable in the Agent's opinion; a Phase II
environmental audit), satisfactory in form and substance to the Agent,
conducted and certified by an Approved Environmental Consultant (the
Company shall certify as of the closing date of such Acquisition that,
as to any environmental audit delivered by the Company prior to such
closing date, to the Company's knowledge, the information contained in
such audit remains true, correct and complete), (b) a reliance letter
from such Approved Environmental Consultant with respect to each such
environmental audit addressed to the Agent and Lenders, which reliance
letter shall be satisfactory in form and substance to the Agent, (c)
evidence that all required approvals from all Governmental Authorities
having jurisdiction with respect to the environmental condition of
such Managed Property or Other Managed Property, as the case may be,
if any, have been obtained, and (d) such other environmental reports,
inspections and
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investigations as the Agent shall, in its sole discretion, require,
prepared, in each instance, by an Approved Environmental Consultant,
which audits, approvals, reports, inspections and investigations shall
be satisfactory in form and substance to the Agent, in its sole
discretion;
(v) to the extent then available, copies (if available)
or drafts of such Additional Management Agreement, or Other Management
Agreement, as the case may be, agreements with respect to any related
Investment or Guaranty, letters of intent or other related agreements
entered into by any Loan Party or any of its Subsidiaries in
connection with such acquisition or effectiveness (it being understood
and agreed that, to the extent such agreements or letters of intent
have not been entered into in such time, copies of such agreements and
letters of intent shall be delivered reasonably promptly after the
execution thereof);
(vi) each market study with respect to such Managed
Property or Other Managed Property, as the case may be, in the
possession of, or that can readily be obtained by, any Loan Party or
any of its Subsidiaries;
(vii) a draft of the Addition Certificate with respect to
such Additional Management Agreement or Other Management Agreement, as
the case may be;
(viii) drafts of supplements to the Schedules to this
Agreement reflecting the acquisition or effectiveness of such
Additional Management Agreement or Other Management Agreement, as the
case may be; and
(ix) any other information relating to such Additional
Management Agreement or Other Management Agreement, as the case may
be, reasonably requested by the Agent.
"MANAGEMENT MARGIN" means as of any date of determination, 1.00 minus
a percentage obtained by dividing (x) the expenses of the Company and its
Consolidated Subsidiaries for any period, as reflected on the consolidated
statements of income delivered to Agent pursuant to subsection 5.3A or 6.1, as
the case may be, excluding expenses reflected as "hotel expenses" and
"depreciation and amortization", by (y) the consolidated revenues of the
Company and its Subsidiaries for such period, as reflected on the consolidated
statements of income delivered to the Agent pursuant to subsection 5.3A or 6.1,
as the case may be, increased by Management Fees paid pursuant to Service
Agreements, excluding revenues reflected as "hotel revenues", "service fees"
and "reimbursements"; provided however, as of any date of determination on or
before November 15, 1996 with respect to a period ending on a day on or before
September 30, 1996, the percentage shall be deemed to be forty-four percent
(44%) and, upon any date of determination which occurs after November 15, 1996,
the percentage shall never exceed fifty-five percent (55%).
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
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"MARKET EQUITY CAPITALIZATION" means, with respect to any issuer and
as of any date of determination, the product of (i) the number of shares of
common stock of such issuer outstanding as of such date multiplied by (ii) the
average of the closing bid prices of such common stock on the principal
national securities exchange on which such common stock is listed or, if such
common stock is not so listed, on NASDAQ/NMS, as the case may be, for each of
the 30 consecutive trading days next preceding such date of determination (or
such shorter period during which such common stock shall have been publicly
traded until such time as it has been so traded for 30 consecutive trading
days); provided that the amount referred to in the preceding clause (ii) for
the Common Stock on the Formation Date shall be the initial offering price per
share of Common Stock pursuant to the Equity Offering.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole, or (ii) the impairment of the
ability of the Company and its Subsidiaries, taken as a whole, to perform, or
of the Agent or the Lenders to enforce, monetary Obligations or the material
impairment of the ability of any Loan Party to perform, or of the Agent or the
Lenders to enforce, non-monetary Obligations, including the obligations of any
Loan Party to perform, or of the Agent or the Lenders to enforce, any Security
Document.
"MATERIAL LEASE" means each Lease either (i) demising in excess of
5,000 square feet of the Improvements with respect to any Property or (ii)
generating in excess of 10% of the Property Gross Revenues with respect to any
Property or otherwise identified as a Material Lease by the Company pursuant to
subsection 4.1L.
"MATURITY DATE" means the earliest of (i) the date that is four years
from the Effective Date, (ii) the date as of which the Obligations shall have
become immediately due and payable pursuant to subsection 8.1 and (iii) the
date as of which the Obligations shall have become immediately due and payable
pursuant to subsection 2.4B(vii).
"MOODY'S" means Moody's Investors Service, Inc. or any successor to
the business thereof.
"MORTGAGE" means each Mortgage, Assignment of Rents, Security
Agreement and Fixture Filing and each Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing and each Deed to Secure Debt, Assignment
of Rents, Security Agreement and Fixture Filing executed and acknowledged by
the Loan Party thereto in favor of the Agent for the benefit of the Lenders
(or, in the case of a deed of trust, to a trustee for the benefit of the Agent
and the Lenders) in the form delivered on or before the Funding Availability
Date pursuant to subsection 4.1E(i), as each such agreement may be amended,
restated, supplemented, consolidated, extended or otherwise modified from time
to time in accordance with the terms thereof and hereof.
"MORTGAGED PROPERTY" has the meaning assigned to that term in the
Mortgages.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA.
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"NASDAQ/NMS" means the National Association of Securities Dealers
Automated Quotation System/National Market Securities.
"NET INSURANCE/CONDEMNATION PROCEEDS" means all Insurance Proceeds on
account of damage or destruction to any Pool A Property or any Pool B Property
or all Condemnation Proceeds in respect of any Pool A Property or any Pool B
Property, minus the reasonable cost, if any, of such recovery and of paying out
such proceeds, including reasonable attorneys' fees and costs allocable to
inspecting the Work and the plans and specifications therefor.
"NET SALES PRICE" means, with respect to any sale or other permanent
disposition by a Loan Party or any of its Subsidiaries of a Property, a
Management Agreement, Servicing Agreement, Other Management Agreement,
Franchise Agreement or other asset, the gross purchase price therefor less the
sum of (i) the amounts applied to the payment of Indebtedness or other
obligations secured by a Lien on such Property, Management Agreement, Servicing
Agreement Other Management Agreement, Franchise Agreement or other asset (other
than the Obligations), (ii) the reasonable out-of-pocket costs and expenses
incurred by such Loan Party or Subsidiary directly in connection with such sale
or other permanent disposition, including income taxes paid or estimated to be
actually payable as a result thereof, after taking into account any available
tax credits or deductions and any tax sharing arrangements (provided that the
amount of income taxes so estimated to be actually payable shall be approved by
the Agent, which approval shall not be unreasonably withheld), and (iii)
closing of adjustments contemplated and reserved.
"NET WORTH" means, as of any date of determination, the sum of the
capital stock and additional paid-in capital plus retained earnings (or minus
accumulated deficits) of the Company and its Subsidiaries determined in
conformity with GAAP.
"NOTES" means one or more of the Revolving Notes or Swing Line Note or
any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit III annexed hereto delivered by the Company to the Agent pursuant to
subsection 2.1B with respect to a proposed borrowing hereunder.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit IV annexed hereto delivered by the Company to the Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit V annexed hereto delivered by the Company to the Agent
pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"NOTICE OF RENOVATION/RESTORATION" means a notice, substantially in
the form attached hereto as Exhibit XVII, delivered to the Agent pursuant to
subsection 6.11E, 6.12A, 7.15C or 7.16C.
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"OBLIGATIONS" means, collectively, all obligations of every nature of
the Company or any of its Subsidiaries from time to time owed to the Agent or
Lenders or any of them under or in respect of the Loans and the Loan Documents,
whether for principal, interest, reimbursement of amounts drawn under Letters
of Credit, fees, commissions, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by a person or persons
specified in this Agreement for such purpose or, in the absence of such
specification, by any of the Chief Executive Officer, Chief Financial Officer
or Chief Accounting Officer of such corporation; provided, however, that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of the Loan hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with.
"OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT" means the Agreement
regarding Servicing Agreements and Liquor Licenses executed and delivered by
Management Corp., the Company and each other Loan Party thereto in favor of the
Agent on or before the Funding Availability Date pursuant to subsection
4.1E(i), and thereafter by each other Subsidiary of the Company that becomes a
party thereto, substantially in the form of Exhibit XII annexed hereto, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms hereof and thereof.
"OPERATING ACCOUNT" means the interest bearing account of the Company
to be established and maintained by the Company with the Cash Manager at its
offices at __________, in the name of Wyndham Hotel Corporation - Operating
Account."
"OPERATING EXPENSES" means, for any period and as calculated on the
accrual basis of accounting, all expenses incurred by the Company or any of its
Subsidiaries during such period in connection with the ownership, management,
operation, cleaning, maintenance, ordinary repair or leasing of any Property,
including, without duplication:
(i) costs and expenses in connection with the cleaning,
ordinary repair, maintenance, decoration and painting of such
Property;
(ii) wages, benefits, payroll taxes, uniforms, insurance
costs and all other related expenses for employees of the Company
engaged in the management, operation, cleaning, maintenance, ordinary
repair and leasing of such Property and service to guests, customers,
Tenants, concessionaires and licensees of such Property;
(iii) the cost of all services and utilities with respect
to such Property, including all electricity, oil, gas, water, steam,
heating, ventilation, air conditioning,
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elevator, escalator, landscaping, model furniture, answering services,
telephone maintenance, credit check, snow removal, trash removal and
pest extermination costs and expenses and any other energy, utility or
similar item and overtime services with respect to such Property;
(iv) the cost of building and cleaning supplies with
respect to such Property;
(v) insurance premiums required in order to maintain the
insurance policies required under this Agreement or any other Loan
Documents, FF&E Financing Indebtedness, Pool B Obligations or Pool C
Obligations, in each case with respect to such Property (which, in the
case of any policies covering multiple Properties, shall be allocated
among the Properties pro rata in proportion to the insured value of
the Properties covered by such policies);
(vi) legal, accounting, engineering and other fees, costs
and expenses incurred by or on behalf of the Company or such
Subsidiary in connection with the ownership, management, operation,
maintenance, ordinary repair and leasing of such Property, including
collection costs and expenses;
(vii) operating costs and expenses of security and security
systems provided to and/or installed and maintained with respect to
such Property;
(viii) operating costs and expenses of reservation systems,
internal telephone exchanges and key card systems with respect to such
Property;
(ix) costs and expenses of parking and valet services,
parking lot maintenance and ordinary parking lot repairs in respect of
such Property;
(x) costs and expenses of food and beverages with respect
to such Property;
(xi) real property taxes and assessments with respect to
such Property and the costs incurred in seeking to reduce such taxes
or the assessed value of such Property;
(xii) advertising, marketing and promotional costs and
expenses with respect to such Property;
(xiii) costs and expenses incurred in connection with lock
changes, storage, moving, market surveys, permits (and the application
or registration therefor) and licenses (and the application or
registration therefor) with respect to such Property;
(xiv) maintenance and cleaning costs related to guest and
customer amenities with respect to such Property;
(xv) costs and expenses of maintaining and repairing FF&E
(including the breakage or loss of any such FF&E) with respect to such
Property;
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(xvi) franchise fees due and payable with respect to such
Property;
(xvii) payments due and payable under the Ground Lease with
respect to such Property, if applicable;
(xviii) actual reserves required under the Ground Lease with
respect to such Property, if applicable;
(xix) Management Fees with respect to such Property for
such period;
(xx) tenant improvements and leasing commissions with
respect to such Property accrued during such period;
(xxi) contributions by the Company or any of its
Subsidiaries to any merchants' association, whether as dues or
advertising costs or otherwise with respect to such Property;
(xxii) costs incurred pursuant to any reciprocal easement
agreement affecting such Property;
(xxiii) refunds the Company or any of its Subsidiaries must
pay to guests, customers, Tenants, concessionaires and licensees and
other occupants of such Property;
(xxiv) reserves (other than reserves required to be
deposited in the Capital Reserve Account) for such purposes and in
such amounts as the Company and the Agent may reasonably agree upon;
(xxv) costs and expenses of maintaining operating,
repairing and servicing vehicles, including fuel and insurance
premiums; and
(xxvi) all other ongoing expenses which in accordance with
the accrual basis of accounting should be included in the Company's or
any of its Subsidiaries' annual financial statements as operating
expenses of such Property.
Notwithstanding the foregoing, Operating Expenses shall not include, without
duplication, (a) non-cash equity participation expenses, (b) Consolidated Fixed
Charges, including such items included within the definition thereof as shall
apply to any Property or Properties with respect to which such Operating
Expenses are being determined, (c) income taxes, (d) depreciation, (e)
amortization, (f) principal or Release Prices, if any, due under the Loans or
the Notes or otherwise in connection with the Obligations, (g) principal, if
any, due in respect of the Pool B Obligations, the Pool C Indebtedness, FF&E
Financing Indebtedness and the Senior Notes, or (h) any other items that are
capitalized on the financial statements of the Company or any of its
Subsidiaries in conformity with GAAP or in accordance with the Approved Capital
Policy.
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"OPERATING LEASE" means, with respect to any Person, lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is not accounted for as a capital lease on the balance
sheet of that Person.
"ORIGINAL ACQUISITION AGREEMENTS" means, collectively, the agreements
entered into before the Funding Availability Date by any Loan Party or any of
its Subsidiaries or any predecessor to any Loan Party or such Subsidiary in
connection with the acquisition of a Property, other than the Formation
Documents, under or with respect to which agreements the Company has any rights
or obligations as of the Funding Availability Date, as any such agreement may
be amended, restated, supplemented or otherwise modified from time to time.
"ORIGINAL ACQUISITION DOCUMENTS" means, collectively the Original
Acquisition Agreements and each certificate, opinion, agreement, assignment,
deed, instrument or other document delivered in connection therewith or
pursuant thereto.
"ORIGINAL FINANCING LETTER" means, collectively, the letter agreement
dated April 26, 1996 and the Indemnification Letter (as defined therein), in
each case, between Bankers, on the one part, and Wyndham Hotel Company Ltd. and
the Company, on the other part.
"OTHER CAPITAL RESERVE ACCOUNTS" means, collectively, accounts
required to be maintained by the Loan Parties and their respective Subsidiaries
pursuant to the terms of the Pool B Obligations and the Pool C Obligations, as
the case may be, for the deposit, reserve and disbursement of funds for Capital
Items in respect of the related Pool B Properties or Pool C Properties, as the
case may be. Other Capital Reserve Accounts are not Capital Reserve Accounts.
"OTHER MANAGED PROPERTIES" means, collectively, the real properties,
together with all Improvements and all fixtures attached thereto and all
personal property used in connection therewith, that are managed by Management
Corp. or any of its Subsidiaries pursuant to the Other Management Agreements.
Other Managed Properties do not include Properties or Managed Properties.
"OTHER MANAGEMENT AGREEMENTS" has the meaning stated in subsection
7.16A(ii), as any such management agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"PARTNERSHIP SUBSIDIARIES" means, collectively, Rose Hall Partnership
and any other Partnership Subsidiary of the Company that is or becomes a Loan
Party.
"PAYMENT DATE" means the fifteenth day of each month, beginning June
15, 1996, or, if such fifteenth day is not a Business Day, the next succeeding
Business Day.
"PAYROLL SUBSIDIARIES" means the Subsidiaries listed on Schedule 1.1
annexed hereto and each other Subsidiary formed after the Effective Date solely
for the purpose of being the nominal employer of Persons providing services to
a Managed Property.
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"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the Liens shown on Schedule 7.2 annexed
hereto for such Property and, with respect to any Property (including any Pool
C Property), the following types of Liens (other than any such Lien imposed
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by
ERISA):
(i) Liens for real property Taxes, assessments, vault
charges, water and sewer rents, and other Impositions the payment of
which is not, at the time, required by subsection 6.4;
(ii) the Leases in existence on the Effective Date and any
Leases entered into thereafter in accordance with the requirements of
the Loan Documents;
(iii) covenants, easements, rights-of-way, restrictions,
minor encroachments or other similar encumbrances not impairing the
marketability of such Property and not interfering, and which could
not reasonably be expected to interfere, with the use of the Property
for hotel purposes or with the ordinary conduct of the business of the
Company and its Subsidiaries;
(iv) Liens securing the Obligations;
(v) Liens that are bonded and thereby released of record
in a manner reasonably satisfactory to the Agent;
(vi) rights of guests to occupy rooms and of Tenants under
Leases;
(vii) all exceptions contained in any Title Policy approved
by the Agent with respect to the Acquisition of an Additional Pool A
Property, an Additional Pool B Property or a Pool C Property, as the
case may be.
"PERMITTED JUNIOR PAYMENTS" means payments in such amounts as
described in subsection 7.5 hereto.
"PERSON" means, collectively, natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.
"POOL A GROUND LEASE" means each of the ground leases with respect to
the Pool A Properties listed on Schedule 4.1G annexed hereto, as such Schedule
may be revised or supplemented from time to time pursuant to subsection 2.9 or
7.15A(i), together with all right, title and interest of any Loan Party, as the
case may be, in and to the leasehold estate created
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pursuant to each such ground lease as each such ground lease may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"POOL A PROPERTIES" means, collectively, the hotel properties, the
Land on which they are located, the related Pool A Ground Leases and all
Improvements thereon and all fixtures attached thereto and all personal
property used in connection therewith, in each case as listed on Schedule 5.4A1
annexed hereto, as such Schedule may be revised or supplemented from time to
time pursuant to subsection 2.9 or 7.15A(i).
"POOL A PROPERTY AMOUNT" means, as of any date of determination, the
following:
(i) with respect to a Pool A Property (other than the
Rose Hall Property) listed on Schedule 5.4A1 annexed hereto as of the
Effective Date, the product of (a) the applicable factor set forth
below as of such date of determination multiplied by (b) the Property
EBITDA for such Pool A Property for the 12 most recently completed
calendar months ending not less than 30 days before such date of
determination for which the Agent has received the financial
statements with respect to such Properties required to be delivered
pursuant to subsection 6.1(i):
PERIOD FACTOR
F.A. Date-12/31/96 4.25
01/01/97-12/31/97 4.00
01/01/98-12/31/98 3.75
01/01/99-Maturity Date 3.50;
provided that such Pool A Property Amount shall not be greater than an
amount equal to 55% of the value thereof specified in the Appraisal
with respect to such Pool A Property most recently approved by the
Agent on or before such date of determination; or
(ii) with respect to the Rose Hall Property, the product
of (a) the applicable factor set forth below as of such date of
determination multiplied by (b) the Property EBITDA for the Rose Hall
Property for the 12 most recently completed calendar months ending not
less than 30 days before such date of determination for which the
Agent has received the financial statements with respect to such
Property required to be delivered pursuant to subsection 6.1(i):
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PERIOD FACTOR
F.A. Date-12/31/96 3.25
01/01/97-12/31/97 3.00
01/01/98-12/31/98 2.75
01/01/99-Maturity Date 2.50;
provided that such Pool A Property Amount shall not be greater than
the least of (1) the Pool A Property Amount with respect to the Rose
Hall Property as of the Funding Availability Date, (2) an amount equal
to 40% of the value thereof specified on the Appraisal with respect to
the Rose Hall Property most recently approved by the Agent on or
before such date of determination and (3) zero during any period in
which there shall have occurred and be continuing a material adverse
change in the business, operations, condition (financial or otherwise)
or prospects of Rose Hall Partnership that shall have resulted, or
could reasonably be expected to result, from the occurrence of events
or the existence of conditions that have not, or could not reasonably
be expected to, affect other resort hotels in the Caribbean of a type,
quality and character similar to that of the Rose Hall Property in
substantially the same manner and to substantially the same extent; or
(iii) with respect to each Additional Pool A Property
(other than an Additional Pool A Property referred to in the following
clause (iv)), the product of (a) the applicable factor specified from
time to time by the Agent, in its sole discretion, for such Additional
Pool A Property multiplied by (b) the Property EBITDA for such
Additional Pool A Property for the 12 most recently complete calendar
months ending not less than 30 days before the applicable date of
determination for which the Agent has received the financial
statements with respect to such Properties required to be delivered
pursuant to subsection 6.1(i) or 7.16A(i), as the case may be;
provided that such Pool A Property Amount shall not be greater than an
amount equal to 55% of the value thereof specified in the Appraisal
with respect to such Pool A Property most recently approved by the
Agent on or before such date of determination; or
(iv) with respect to each Additional Pool A Property for
which a Major Renovation/Restoration shall occur, or shall be
scheduled to commence, on or before the first anniversary of the
Addition Date with respect thereto, the amount that is equal to 35% of
the sum of (a) the cash purchase price therefor paid therefor by the
Company on or before such date of determination plus (b) the actual
cost of such Major Renovation/ Restoration paid by the Company on or
before such date of determination; provided that, as of any date of
determination after the completion of such Major
Renovation/Restoration that shall occur on or before the end of 12
complete calendar months ending not less than 30 days before the
applicable date of determination for which the Agent has received the
financial statements with respect to such Additional Pool A Property
required to be delivered pursuant to subsection 6.1(i), such Pool A
Property Amount shall not be greater than an amount equal to 35% of
the value thereof, on an as-completed basis, specified in the
Appraisal with respect to such Additional Pool A Property as of a date
not earlier than 30 days before such date of completion.
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"POOL B DOCUMENTS" means, collectively, each Pool B Ground Lease,
agreement, Guaranty, instrument, promissory note or other document entered into
by any Loan Party or any of its Subsidiaries in connection with any Pool B
Obligation and set forth on Schedule 7.1(iv) annexed hereto, including, without
limitation, the HPT Agreements, the Harbour Island Lease (and, in the
circumstances referred to in the last sentence of subsection 7.15A(iv), the
Vinings Agreement and the Vinings Bond Documents), as each such Pool B Ground
Lease, agreement, Guaranty, instrument or other document may be amended,
restated, supplemented or otherwise modified from time to time), as such
Schedule may be revised from time to time pursuant to subsections 2.9,
7.15A(ii) and 7.15A(iv).
"POOL B GROUND LEASE" means each of the ground leases with respect to
the Pool B Properties listed on Schedule 4.1H annexed hereto, as such Schedule
may be revised from time to time pursuant to subsection 2.9.
"POOL B OBLIGATIONS" means, collectively, the obligations of the Loan
Parties and their respective Subsidiaries of every nature, from time to time
owed under or in respect of any Pool B Document, whether for rent, principal,
interest, fees, commissions, expenses, indemnification or otherwise.
"POOL B PROPERTIES" means, collectively, the hotel properties, the
Land on which they are located, the related Pool B Ground Leases and all
Improvements thereon and all fixtures attached thereto and all personal
property used in connection therewith, in each case as listed on Schedule 5.4A2
annexed hereto, as such Schedule may be revised or supplemented from time to
time pursuant to subsections 2.9, 7.15A(ii) and 7.15A(iv).
"POOL C DOCUMENTS" means, collectively, each agreement, Guaranty,
instrument, promissory note or other document entered into by any Loan Party or
any of its Subsidiaries in connection with any Pool C Obligations (including,
without limitation, any Pool C Indebtedness and, in the circumstances referred
to in the last sentence of subsection 7.15A(iv), the obligations of the Loan
Parties and their respective subsidiaries under or with respect to the Vinings
Agreement and the Vinings Indebtedness), as each such agreement, Guaranty,
instrument or other document may be amended, restated, supplemented or
otherwise modified from time to time pursuant to subsections 7.15(A)(iii) and
7.15A(iv).
"POOL C INDEBTEDNESS" has the meaning assigned to that term in
subsection 7.1(vii).
"POOL C OBLIGATIONS" means, collectively, the obligations of any of
the Loan Parties, any of their respective Subsidiaries and any of the Pool C
Subsidiaries, respectively, of any nature, from time to time owed in respect of
any Pool C Property, whether for principal, interest, fees, commissions,
expenses, indemnification or otherwise.
"POOL C PROPERTIES" means, collectively, the hotel properties, the
Land on which they are located and all Improvements thereon and all fixtures
attached thereto and all personal property used in connection therewith, in
each case as listed on Schedule 5.4A3 annexed hereto, as such Schedule may be
revised or supplemented from time to time pursuant to subsection 2.9,
7.15A(iii) and 7.15A(iv).
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"POOL C SUBSIDIARY" means any Wholly Owned Subsidiary of the Company
created pursuant to subsection 7.7(iii) to own one or more Pool C Properties.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within the applicable grace
period.
"PRIME RATE" means the rate that Bankers announces from time to time
as its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROPERTIES" means, collectively, from and after the respective dates
of Acquisition, each of the Pool A Properties, the Pool B Properties and the
Pool C Properties. Properties do not include Managed Properties or Other
Managed Properties.
"PROPERTY EBITDA" means, with respect to any Property, for any period
and as of any date of determination and calculated on the accrual basis of
accounting, whether a positive or negative number, the amount equal to the
remainder of the following:
(i) all Property Gross Revenues for such period in
respect of such Property; provided that Property Gross Revenues for
such period in respect of any Property shall be included in the
calculation of Property EBITDA for such period only to the extent that
the Agent and Lenders shall have received the financial statements for
such period required to be delivered on or before such date of
determination pursuant to subsection 6.1(i) or 7.15A, as the case may
be; minus
(ii) all Operating Expenses for such period with respect
to such Property, without duplication of items excluded from the
definitions of Property Gross Revenues; provided that (x) if the terms
of any expenses or other obligations with respect to which the
Operating Expenses are calculated for such period or any subsequent
period for the purpose of calculating the amount of the Borrowing Base
(but not for purposes of calculating any amount pursuant to
subsections 7.6D, 7.6E, 7.6F and 7.6G) of such date of determination
shall have been modified as of such date of determination, then the
amount of Operating Expenses that shall be included in the calculation
of Property EBITDA for such period shall not be less than the amount
of Operating Expenses that would have been calculated for such period
if such terms, as so modified, had been in effect during the entire
period, and (y) Management Fees included in the calculation of
Property EBITDA for such period with respect to such Property, shall
not be less than 5.0% of Property Gross Revenues for such period with
respect to such Property;
provided that:
(v) Property EBITDA with respect to any Property shall be
zero for such period if (1) the Addition Date with respect to such
Property shall not have occurred on or
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before such date of determination or (2) such Property shall have been
sold or otherwise permanently disposed of or any Loan Party or any of
its Subsidiaries shall have executed a definitive agreement with
respect to the sale or other permanent disposition of such Property,
in each case on or before such date of determination, provided that
this subclause (2) shall not be given effect upon the execution of
such agreement with respect to (A) a Pool A Property if the proposed
Net Sales Price with respect to such sale or other permanent
disposition shall be greater than the aggregate amount of principal
and interest that would be required to be paid by the Company pursuant
to paragraphs (i) and (iii) of the definition of Release Price
(without giving effect to the proviso to such paragraph (iii)) if the
closing thereof were to occur on such date of determination and the
Servicing Agreement to which such Pool A Property is subject were to
terminate on such date, as such determination shall be specified by
written notice delivered to the Agent, together with the information
used by the Company to make such determination, (B) a Pool B Property
if the proposed Net Sales Price with respect to such sale other
permanent disposition by reason of such sale or other permanent
disposition shall be greater than the aggregate amount of principal
and interest that would be required to be paid by the Company pursuant
to paragraphs (ii) and (iii) of the definition of Release Price
(without giving effect to the proviso to such paragraph (iii)) if the
closing thereof were to occur on such date of determination and the
Servicing Agreement to which such Pool B Property is subject were to
terminate on such date, as such determination shall be specified in an
Officers' Certificate delivered to the Agent, together with the
information used by the Company to make such determination, and (C) a
Pool C Property if the proposed Net Sales Price with respect to such
sale or other permanent disposition by reason of such sale or other
permanent disposition shall be greater than the aggregate amount of
principal and interest that would be required to be paid by the
Company pursuant to paragraph (iii) of the definition of Release Price
(without giving effect to the proviso to such paragraph (iii)) if the
closing thereof were to occur on such date of determination and the
Servicing Agreement to which such Pool C Property is subject were to
terminate on such date, as such determination shall be specified in an
Officers' Certificate delivered to the Agent, together with the
information used by the Company to make such determination; provided
further that, for purposes of calculating any Net Sales Price pursuant
to this clause (v), the amount thereof shall be (1) increased or
reduced, as the case may be, to give effect to all adjustments that
are reasonably likely to be made thereto, whether before or after the
closing thereof, and to give effect to all modifications thereto from
time to time before the closing thereof by reason of such sale or
other permanent disposition and (2) reduced by an amount equal to the
appropriate amount to be provided by such Loan Party or Subsidiary as
a reserve, in accordance with generally accepted accounting
principles, after such sale or other permanent disposition, including,
without limitation, liabilities related to environmental matters and
liabilities under any indemnification obligations;
(w) if the Addition Date with respect to such Property shall
have occurred after the Funding Availability Date and after the
commencement of such period but before the termination of such period:
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(1) for purposes of calculating the Property
Amount with respect to such Property (if such Property is a
Pool A Property) as of such date of determination, Property
EBITDA with respect to such Pool A Property for such period
shall be the sum of (A) Property EBITDA for the portion of
such period commencing on the first day of such period and
ending on the day before such Addition Date, as the same shall
be determined based upon the financial statements for such
period required by subsection 7.15A to be delivered with
respect to such Pool A Property and such other information
with respect thereto that may be provided by the Loan Parties
and their respective Subsidiaries, subject to such adjustments
as may be required by the Agent in its sole discretion, plus
(B) Property EBITDA with respect to such Pool A Property for
the portion of such period commencing on such Addition Date
and ending on the last day of such period, based upon the
financial statements for such period required to be delivered
on or before such date of determination pursuant to subsection
6.1(i), subject to such adjustments as may be required by the
Agent in order that revenues and expenses are allocated and
determined in the same manner as for Properties owned by the
Company during the entire period; months provided, however,
that with respect to each Additional Pool A Property for which
a Major Renovation/Restoration shall occur, or shall be
scheduled to commence, on or before the first anniversary of
the Addition Date with respect thereto, Property EBITDA with
respect to such Additional Pool A Property for such period be
zero; and
(2) for purposes of calculating any amount
pursuant to subsections 7.6D, 7.6E, 7.6F and 7.6G as of such
date of determination, Property EBITDA with respect to such
Property for such period shall be the sum of (A) zero, for the
portion of such period commencing on the first day of such
period and ending on the day before such Addition Date, plus
(B) Property EBITDA with respect to such Property for the
portion of such period commencing on such Addition Date and
ending on the last day of such period, based upon the results
of operations of the Loan Parties and their respective
Subsidiaries with respect thereto during such period, as
reflected in the financial statements for such period required
to be delivered on or before such date of determination
pursuant to subsection 6.1(i);
(x) except as provided to the contrary in the proviso to the
preceding clause (w)(1), if such date of determination shall occur
during a Major Renovation/Restoration Removal Period with respect to
such Property and the Property EBITDA with respect to such Property
for such period is a positive number, then (1) for purposes of
calculating the Property Amount with respect to such Property (if such
Property is a Pool A Property) and any amount pursuant to subsection
6.14 as of such date of determination, Property EBITDA with respect to
such Property for such period shall be zero and (2) for purposes of
calculating any amount pursuant to subsections 7.6D, 7.6E, 7.6F and
7.6G as of such date of determination, Property EBITDA with respect to
such Property for such period shall be equal to the product of (1) the
applicable factor set forth below as of such date of determination, as
determined by reference to the
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percentage amount of the rooms "available for sale" at such Property
that have been, are scheduled to be, or could reasonably be expected
to be, "rooms out-of-order", as determined in accordance with the
Uniform System, during such Major Renovation/Restoration Removal
Period, multiplied by (2) the amount of Property EBITDA with respect
to such Property for such period as of such date of determination if
effect were not given to this clause (x):
PERCENTAGE FACTOR
0.00% - 19.99% 1.00
20.00% - 49.99% 0.75
50.00% - 74.99% 0.33
75.00%- 100.00% 0.00;
(y) if such date of determination shall occur during a
Voluntary Removal Period, then (1) for purposes of calculating the
Property Amount with respect to such Property (if such Property is a
Pool A Property) as of such date of determination, Property EBITDA
with respect to such Pool A Property shall be zero and (2) if the
Property EBITDA with respect to such Property for such period would be
a positive number if effect were not given to this clause (y), for
purposes of calculating any amount pursuant to subsections 7.6D, 7.6E,
7.6F and 7.6G as of such date of determination, Property EBITDA with
respect to such Property shall be zero; and
(z) for purposes of calculating the Property Amount with
respect to the Commerce Property (but not for purposes of calculating
any amount pursuant to subsections 7.6D, 7.6E, 7.6F and 7.6G) as of
such date of determination, Property EBITDA with respect to the
Commerce Property shall be zero for such period if such date of
determination shall occur before the date, if any, on which the
Company shall have acquired the superior ground lease with respect to
the Commerce Property or the superior ground lease with respect to the
Commerce Property shall have been merged with the Commerce Lease, in
any case on terms satisfactory to the Agent in its sole discretion.
"PROPERTY GROSS REVENUE" means, for any period, all Receipts resulting
from the operation of such Property, including, without limitation, Rents or
other payments from guests and customers, Tenants, licensees and
concessionaires and business interruption and rental loss insurance payments;
provided that Property Gross Revenue shall be determined net of allowances in
accordance with the Uniform System and shall exclude (i) excise, sales, use,
occupancy and similar taxes and charges collected from guests or customers and
remitted to Governmental Authorities, (ii) gratuities collected for employees
of such Property, (iii) security deposits and other advance deposits, until and
unless same are forfeited to any Loan Party or Subsidiary thereof or applied
for the purpose for which collected, (iv) federal, state or municipal excise,
sales, use or similar taxes collected directly from patrons or guests or
included as part of the sales price of any goods or services, (v) interest
income on such Property's bank accounts, (vi) rebates, refunds or discounts
(including, without limitation, free or discounted accommodations) and (vii)
Extraordinary Receipts.
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"PROPERTY INFORMATION" means, with respect to any Acquisition of any
Additional Pool A Property pursuant to subsection 7.15A(i), any Additional Pool
B Property pursuant to subsection 7.15A(ii), any Pool C Property pursuant to
subsection 7.15A(iii) or the Vinings Property pursuant to subsection
7.15(A)(iv), the following information:
(i) financial statements in respect of such Property for
the most recently completed three calendar years and for the completed
calendar months after the most recently completed calendar year, in
each case, to the extent such financial statements exist and can be
readily obtained by any Loan Party or any of its Subsidiaries;
(ii) copies of all other consolidated balance sheets and
related statements of operations and statements of cash flows of such
Property that are to be delivered to any Loan Party or any of its
Subsidiaries in connection with such Acquisition;
(iii) to the extent any Renovation is then proposed for
such Property, a preliminary project plan and a project budget for
such Property which, as to a Pool A Property, shall be satisfactory in
form and substance to the Agent in its sole discretion;
(iv) (a) a comprehensive environmental audit with respect
to such Property (which shall include a Phase I environmental audit
and, if necessary or desirable in the Agent's opinion, a Phase II
environmental audit), satisfactory in form and substance to the Agent,
conducted and certified by an Approved Environmental Consultant (the
Company shall certify as of the closing date of such Acquisition that,
as to any environmental audit delivered by the Company prior to such
closing date, to the Company's knowledge, the information contained in
such audit remains true, correct and complete), (b) a reliance letter
from such Approved Environmental Consultant with respect to each such
environmental audit addressed to the Agent and Lenders, which reliance
letter shall be satisfactory in form and substance to the Agent, (c)
evidence that all required approvals from all Governmental Authorities
having jurisdiction with respect to the environmental condition of
such Property, if any, have been obtained, and (d) such other
environmental reports, inspections and investigations as the Agent
shall in its sole discretion require, prepared, in each instance, by
an Approved Environmental Consultant, which audits, approvals,
reports, inspections and investigations shall be satisfactory in form
and substance to the Agent, in its sole discretion;
(v) (a) a written Engineering Report with respect to such
Property dated not more than 90 days prior to the closing date and
prepared by an Engineer acceptable to the Agent, which Engineering
Report shall be satisfactory in form and substance to the Agent and
(b) a reliance letter from such Engineer with respect to each such
Engineering Report addressed to the Agent and Lenders, which letter
shall be in form and substance reasonably satisfactory to the Agent;
(vi) to the extent then available, copies (if available)
or drafts of the related Acquisition Agreements, all other purchase
agreements, letters of intent or other related agreements entered into
by any Loan Party or any of its Subsidiaries in connection with such
Acquisition (it being understood and agreed that, to the extent such
agreements or
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letters of intent have not been entered into at such time, copies of
such agreements and letters of intent shall be delivered reasonably
promptly after the execution thereof);
(vii) a market study with respect to such Property as of a
date not earlier than 90 days before the proposed date of closing of
such Acquisition and copies of all other appraisals and market studies
with respect to such Property to the extent such appraisals and market
studies exist and can be readily obtained by any Loan Party or any of
its Subsidiaries;
(viii) a draft of the Addition Certificate with respect to
such Property;
(ix) drafts of supplements to the Schedules to this
Agreement reflecting the acquisition of such Property, the
Environmental Indemnity, the Security Agreement and the Omnibus
Management and Liquor License Agreement reflecting the acquisition of
such Property, as such Schedules may be required to be delivered
pursuant to proviso (e)(2) to subsection 7.15A(i), proviso (i)(4) to
subsection 7.15A(ii), proviso (g)(5) to subsection 7.15A(iii) or
proviso (g)(4) to subsection 7.15A(iv), as the case may be; and
(x) any other information relating to such Acquisition or
such Property reasonably requested by the Agent;
provided that Property Information (x) with respect to an Additional Pool B
Property shall exclude the information referred to in clauses (i) and (v) above
and (y) with respect to a Pool C Property (other than the Vinings Property)
shall exclude the information referred to in clause (v) above.
"PROPERTY SERVICING AGREEMENTS" means, collectively, the Servicing
Agreements entered into between Management Corp. or any of its Subsidiaries, on
the one part, and the Company and each of its Subsidiaries of the Company that
owns a fee or leasehold interest in any Property, on the other part, in the
form delivered to the Agent on or before the Funding Availability Date, as any
such Servicing Agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"PRO RATA SHARE" means, with respect to any Lender, as of any date of
determination (i) prior to the termination of the Revolving Commitments, that
Lender's Revolving Commitment and (ii) after the termination of the Revolving
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender, plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of
Credit issued by that Lender (in each case net of any participations purchased
by other Lenders in such Letters of Credit or any unreimbursed drawings
thereunder), plus (c) the aggregate amount of all participations purchased by
that Lender in any outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit, plus (d) in the case of Swing Line Lender, the
aggregate outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders), plus (e) the aggregate
amount of all participations purchased by that Lender in any outstanding Swing
Line Loans.
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"PUBLIC OFFERINGS" means, collectively, the Equity Offering and the
Debt Offering.
"PUBLIC OFFERING DOCUMENTS" means, collectively, the Equity Offering
Documents and the Debt Offering Documents.
"QUALIFIED CAPITAL STOCK" means, with respect to any Person, any
series or class of Capital Stock of that Person which may not be required to be
redeemed or repurchased, in whole or in part, by that Person or any of its
Subsidiaries, in whole or in part, at the option of the holder thereof, on or
prior to the Maturity Date, or not be convertible or exchangeable into or
exercisable for Capital Stock of the Company that is not Qualified Capital
Stock on or prior to the date that is one year and one day after the Maturity
Date; provided that Capital Stock will be deemed to be Qualified Capital Stock
if it may only be so redeemed or put solely in consideration of Qualified
Capital Stock.
"RECEIPTS" means, collectively, all cash, Cash Equivalents, checks,
notes, drafts and any items of payment or collection received, by or on behalf
of the Company or any of its Subsidiaries, or by any officers, employees or
agents of the Company or any of its Subsidiaries or other Persons acting for or
in concert with the Company or such Subsidiary to make collections on the
Company's or such Subsidiary's behalf in connection with or in any way relating
to the Company or such Subsidiary or the operation of the Company's or such
Subsidiary's business, including, without limitation, any proceeds received
from or pursuant to (i) any sales of, or loans against, accounts of the Company
or any of its Subsidiaries (other than the Loans pursuant to this Agreement or
Pool C Indebtedness), (ii) any disposition of assets (including, without
limitation, any disposition of assets permitted hereunder or consented to by
the Agent, but excluding amounts applied to the repayment of indebtedness or
other obligations secured by a Lien on the assets subject to such disposition)
or issuance or sale of equity Securities by the Company or any of its
Subsidiaries, (iii) the incurrence of Indebtedness by the Company or any of its
Subsidiaries and the issuance and sale by the Company or any of its
Subsidiaries of equity or debt Securities, in each case other than the
Obligations and other Indebtedness permitted by this Agreement, (iv) insurance
policies (other than liability insurance payable directly or indirectly to a
third party) maintained by the Company or any of its Subsidiaries, whether or
not the Agent is an additional insured or named as loss payee thereunder, (v)
the successful prosecution (including any settlement) of any claims, actions or
other litigation or proceeding by or on behalf of or against the Company or any
of its Subsidiaries and (vi) the Management Agreements (other than amounts
received by the Company or any of its Subsidiaries in respect of the Managed
Properties and other Managed Properties on behalf of, or as agent for, the
parties to the Management Agreements or Other Management Agreements other than
the Company and its Subsidiaries); it being understood and agreed that nothing
contained in this definition shall in any respect be deemed to permit any
transactions by the Company or any of its Subsidiaries otherwise restricted or
prohibited by this Agreement.
"REFERENCE LENDERS" means, collectively, Bankers and such other
Lenders as may from time to time be designated by Bankers.
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"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(ii).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement proposed to be dated as of the date of the initial closing of the
Public Offerings among the Company and the other parties identified on the
signature pages thereof, each substantially in the form thereof that has been
approved by the Agent, together with such alterations therein as shall be
approved by the Agent, which approval may be granted, withheld, conditioned or
delayed in its sole discretion, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"REGISTRATION STATEMENTS" means, collectively, the Equity Registration
Statement and the Debt Registration Statement.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED DOCUMENTS" means, collectively, the Original Acquisition
Documents, the Acquisition Documents, the Management Agreements, the Franchise
Agreements, the IP License Agreements, the Ground Leases, the Material Leases,
the Pool B Documents, the Pool C Documents, the Senior Note Documents, the
Public Offering Documents, the Formation Documents, the GE Option, the ISIS
2000 Agreements, the CWS Agreements, the Wynright Agreements, the Greystar
Agreements and the Bedrock Investment Program Agreements.
"RELEASE" means any satisfaction, release, assignment instrument, deed
of reconveyance or similar instrument or instruments (each in recordable form
and otherwise in form reasonably satisfactory to the Company but without any
representation or warranty of the Agent or the Lenders) necessary and
sufficient to release any Collateral from the Lien of all applicable Security
Documents.
"RELEASE DATE" means the date of a release of the Lien of the Security
Documents on any Property pursuant to subsection 2.9.
"RELEASE PRICE" means, as calculated as of any Release Date, the
following:
(i) with respect to any Pool A Property, the amount that
is the greatest of the following:
(a) the amount equal to 125% of the Pool A
Property Amount with respect to such Pool A Property;
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(b) in the event of a sale or other permanent
disposition of such Pool A Property, the amount equal to 85%
of the Net Sales Price for such Pool A Property;
(c) the amount necessary to ensure that the Total
Utilization shall not exceed the Borrowing Base in effect as
of such date after giving effect to (x) any reduction in the
Borrowing Base required pursuant to subsections 2.4B(iii) and
7.15B and (y) each other payment made as of the Release Date
pursuant to any other provision of this definition of Release
Price; and
(d) in the event of a casualty or Taking with
respect to such Pool A Property, the Insurance Proceeds or
Condemnation Proceeds, as the case may be, resulting
therefrom;
(ii) with respect to any Pool B Property, the amount that
is the greater of the following:
(a) the amount necessary to insure that the Total
Utilization shall not exceed the Borrowing Base in effect as
of such date after giving effect to (x) any reduction in the
Borrowing Base required pursuant to subsections 2.4B(iii) and
7.15B and (y) each other payment made as of the Release Date
pursuant to any other provision of this definition of Release
Price; and
(b) in the event of a casualty or Taking with
respect to such Pool B Property, the Insurance Proceeds or
Condemnation Proceeds, as the case may be, resulting
therefrom, net of the aggregate payments of Pool B Obligations
required to be made pursuant to the Pool B Documents in
respect of such casualty or Taking;
(iii) with respect to any Management Agreement, Servicing
Agreement, Other Management Agreement or Franchise Agreement, the
amount that is the greatest of the following:
(a) the amount equal to 100% of the Management
Amount with respect to such Management Agreement or Servicing
Agreement, as the case may be;
(b) the amount necessary to ensure that the Total
Utilization shall not exceed the Borrowing Base in effect as
of such date after giving effect to (x) any reduction in the
Borrowing Base required pursuant to subsections 2.4(B)(iii)
and 7.16B and (y) each other payment made as of the Release
Date pursuant to any other provision of this definition of
Release Price;
(c) in the event of a sale or other permanent
disposition of such Management Agreement, Servicing Agreement,
Other Management Agreement or Franchise Agreement, the amount
equal to 85% of the Net Sales Price for
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such Management Agreement, Servicing Agreement, Other
Management Agreement or Franchise Agreement, as the case may
be; and
(d) in the event of the expiration (without
renewal or extension), cancellation or other termination of
such Management Agreement, Servicing Agreement, Other
Management Agreement or Franchise Agreement, the aggregate
amount of termination fees and other amounts paid to the
manager (other than as reimbursement of expenses) under such
Management Agreement, Servicing Agreement, Other Management
Agreement or Franchise Agreement, as the case may be, in
connection therewith;
provided that, for the purposes of determining the Release Price with
respect to a Management Agreement, an Other Management Agreement or a
Franchise Agreement, that shall have been terminated by Management
Corp. or any of its Wholly Owned Subsidiaries for cause in accordance
with the terms thereof or by the other party thereto, and in either
case no termination fee is payable to Management Corp. or such Wholly
Owned Subsidiary in connection therewith, the amount determined with
respect to this clause (iii) shall be zero if the Company shall have
complied with subsection 2.9C(iv) with respect to such Management
Agreement, Other Management Agreement or Franchise Agreement on or
before the date that such Release Price is otherwise due and payable;
and
(iv) with respect to any item of Collateral not subject to
clause (i), (ii) or (iii) above, the amount that is the greater of the
following:
(a) the amount necessary to ensure that the Total
Utilization shall not exceed the Borrowing Base in effect as
of such date after giving effect to (x) any reduction in the
Borrowing Base required pursuant to subsections 2.4(B)(iii)
and 7.16B and (y) each other payment made as of the Release
Date pursuant to any other provision of this definition of
Release Price;
(b) in the event of a sale or other permanent
disposition of such item of Collateral, the amount equal to
100% of the Net Sales Price for such item or, if the release
of the Lien on such item of Collateral shall not be effected
in connection with the sale or other permanent disposition of
such item, 100% of the aggregate amount of termination fees
and other amounts paid to the Loan Parties and their
respective Subsidiaries in connection therewith;
provided that, for the purposes of determining the Release Price with
respect to the DAB Notes or the Affiliate Notes, the amount determined
with respect to this clause (iv) shall be zero if the Company shall
have complied with subsection 2.9C(iv) with respect to such item on or
before the date that such Release Price is otherwise due and payable.
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"RENOVATION" means the rebuilding, repair, restoration, refurbishment,
fixturing and equipping of the Improvements at a Property, a Managed Property
or an Other Managed Property.
"RENTS" means, collectively, all rents, issues, profits, royalties,
receipts, revenues, accounts receivable, security deposits and other deposits
(subject to the prior right of Tenants making such deposits) and income,
including room receipts, rack charges, vending machine receipts, food and
beverage receipts, concession fees and charges, public assembly room receipts,
fixed, additional and percentage rents, occupancy charges, operating expense
reimbursements, reimbursements for increases in taxes, sums paid by Tenants to
any Loan Party or any of its Subsidiaries to reimburse such Loan Party or such
Subsidiary for amounts originally paid or to be paid by such Loan Party or such
Subsidiary or such Loan Party's or such Subsidiary's agents or Affiliates for
which such Tenants were liable, as, for example, tenant improvements costs in
excess of any work letter, lease takeover costs, moving expenses and tax and
operating expense pass-throughs for which a Tenant is solely liable, parking,
valet, maintenance, common area, tax, insurance, utility and service charges
and contributions, proceeds of sale of electricity, gas, heating,
air-conditioning and other utilities and services, deficiency rents and
liquidated damages, and other benefits.
"RESTORATION" means the construction, design services, labor,
materials and other indirect costs and direct costs required to repair,
restore (including demolition), replace and rebuild all or any portion of a
Property or a Managed Property (or the Improvements thereof) following the
destruction, damage, loss or Taking thereof. The term "Restore" used as a verb
has a corresponding meaning.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of the Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class (and cash
in lieu of fractional shares in an aggregate amount not greater than $25,000),
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any equity
Securities, now or hereafter outstanding, of the Company or any of its
Subsidiaries that are not Wholly Owned Subsidiaries, including without
limitation, the purchase of any Securities pursuant to the Stockholders'
Agreement, (iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any now or
hereafter outstanding, of the Company or any of its Subsidiaries that are not
Wholly Owned Subsidiaries and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in substance or legal defeasance), sinking fund or
similar payment with respect to, any Indebtedness of the Company or any of its
Subsidiaries, including the Senior Notes, that is subordinated in right of
payment to the Obligations.
"REVOLVING COMMITMENTS" means, collectively, the commitments of the
Lenders to make Revolving Loans to the Company prior to the Revolving
Commitment Conversion Date pursuant to subsection 2.1A(i) and, on and after the
Revolving Commitment Conversion Date, to maintain such Revolving Loans pursuant
to subsection 2.1A(i).
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"REVOLVING COMMITMENT CONVERSION DATE" means the date that is the
third anniversary of the Effective Date.
"REVOLVING LOANS" means, collectively, the Loans made by the Lenders
to the Company pursuant to subsection 2.1A.
"REVOLVING NOTES" means, collectively, (i) the promissory notes of the
Company issued on or before the Funding Availability Date pursuant to
subsection 2.10(i) and (ii) any promissory notes issued by the Company pursuant
to the last sentence of subsection 10.1B(i) in connection with assignments of
the Revolving Loan Commitments and Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit I annexed hereto, as they may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"ROSE HALL GP" means WHC Caribbean Limited, a Jamaica corporation and
the sole general partner of Rose Hall Partnership.
"ROSE HALL GP CORP." means WHC Rose Hall Limited, a Jamaica
corporation and the sole stockholder of Rose Hall GP.
"ROSE HALL PARTNERSHIP" means Rose Hall Associates Limited
Partnership, a Texas limited partnership.
"ROSE HALL PROPERTY" means the real property (including the fee
interest of Rose Hall Partnership in the hotel property and the leasehold
interest of Rose Hall Partnership in the golf course property adjacent
thereto), together with all Improvements thereon and all fixtures attached
thereto and all personal property used in connection therewith, located at
Montego Bay, Jamaica, and known, as of the date of this Agreement, as the
Wyndham Rose Hall Resort, as more particularly described on Schedule 5.4A1
annexed hereto.
"ROSE HALL TRANSFER AGREEMENT" means the Transfer Agreement dated as
of March 14, 1996 among the Company, Bank of Nova Scotia, The Bank of Nova
Scotia Jamaica Limited and Caribbean Hotel Management Company, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof and hereof.
"SECURITIES" means any stock, shares, partnership interests, interests
in limited liability companies, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of
the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
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"SECURITY AGREEMENT" means the Security and Pledge Agreement executed
and delivered by each Loan Party and the Agent on or before the Funding
Availability Date pursuant to subsection 4.1E(i), and thereafter by each other
Subsidiary of the Company that becomes a party thereto, in substantially the
form of Exhibit IX annexed hereto, pursuant to which such Loan Party will
pledge and grant a security interest in the Collateral described therein to
Agent for the benefit of the Agent and the Lenders, as such Security and Pledge
Agreement may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof and hereof.
"SECURITY DOCUMENTS" means, collectively, the Mortgages, the
Assignments of Rents and Leases, the Security Agreement, the Trademark
Agreement, the Cash Management Letters, the Omnibus Management and Liquor
License Agreement, the Tenant Subordination Agreements and all deeds of trust,
deeds to secure debt, mortgages, security agreements, pledge agreements,
assignments and all other instruments or documents (including UCC-1 financing
statements, fixture filings, amendments of financing statements or similar
documents required or advisable in order to perfect or maintain the Liens
created by the Security Documents) delivered by any Person pursuant to this
Agreement or any of the other Loan Documents, whether such delivery is prior
to, contemporaneous with or after delivery of this Agreement, in order to grant
to the Agent Liens in real, personal or mixed property of that Person, and to
maintain such Liens as each of the foregoing may be amended, restated,
consolidated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof. Security Documents do not
include this Agreement or the Notes.
"SENIOR EXECUTIVES" means, collectively, James D. Carreker, Leslie V.
Bentley, Eric A. Danziger, Anne L. Raymond and Stanley M. Koonce, Jr.
"SENIOR NOTE DOCUMENTS" means, collectively, (i) the Debt Underwriting
Agreements, the Senior Notes, the Indenture, the Senior Note Subsidiary
Guaranty and each agreement, instrument, certificate, opinion, or other
document executed and delivered by or on behalf of any Loan Party or any of its
Subsidiaries in connection with the issuance and sale of the Senior Notes in
the Debt Offering and (ii) each agreement, instrument, indenture, note,
certificate, opinion or other document executed and delivered by or on behalf
of any Person in connection with the issuance of any Securities referred to in
clause (ii) or (iii) of the definition of Senior Notes; in each case, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"SENIOR NOTES" means, collectively, (i) the senior subordinated notes
issued by the Company pursuant to the Indenture, (ii) any Securities issued by
any Person to a holder of any of the Securities referred to in this definition
of Senior Notes pursuant to an order of decree of a court of competent
jurisdiction and (iii) any Securities issued by any Person in connection with
any refinancing, exchange or refunding of any of the securities referred to in
this definition of Senior Notes; in each case with respect to securities
referred to in this definition of Senior Notes, as such securities are amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
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"SENIOR NOTE SUBSIDIARY GUARANTY" means the Guaranty of the Senior
Notes effected pursuant to Article _____ [**GUARANTY PROVISION**] of the
Indenture by each Loan Party (other than the Company) and each other Subsidiary
of the Company that becomes a party thereto in accordance with the terms
thereof and hereof, as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.
"SERVICING AGREEMENTS" means, collectively, the Property Servicing
Agreements and the Liquor Operations Servicing Agreements listed on Schedule
4.1J annexed hereto, as such Schedule may be revised or supplemented from time
to time pursuant to subsection 2.9 or 7.16A(i), as any such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting any corporate purposes,
including (i) workers' compensation liabilities of the Company or any of its
Subsidiaries, (ii) the obligations of third party insurers of the Company or
any of its Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, and (iii) performance, payment, deposit or
surety obligations of the Company or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry; provided that Standby Letters of Credit may not
be issued for the purpose of supporting (a) trade payables or (b) any
Indebtedness constituting "antecedent debt" (as that term is used in Section
547 of the Bankruptcy Code).
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement proposed
to be dated as of May 24, 1996 among the Company and each of the stockholders
listed on the signature pages thereof, each substantially in the form thereof
that has been approved by the Agent, together with such alterations therein as
shall be approved by the Agent, which approval may be granted, withheld,
conditioned or delayed in its sole discretion, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY GUARANTOR" means each Loan Party under the Subsidiary
Guaranty.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty by each Loan Party
(other than the Company) and any other Subsidiary of the Company that becomes a
party thereto, substantially in the form of Exhibit VIII annexed hereto, as
such Subsidiary Guaranty may be
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amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"SURVEY" means, with respect to any Property, a current survey map
prepared by a surveyor licensed in the state in which such Property is located,
acceptable to the Agent, containing the legal description of such Property and
conforming, and certified by such surveyor to the Agent and the Lenders and the
Title Company as conforming, to the Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys for urban survey class as adopted by ALTA and
American Congress on Surveying & Mapping (1992 version), and showing, to the
extent practicable, all matters described in "Table A/Optional Survey
Responsibilities and Specifications" in such Minimum Standard Detail
Requirements; provided, however, that the survey need not meet the foregoing
requirements if the Title Company has eliminated the survey exception from the
Title Policies and all other exceptions to the Title Policies based upon such
survey are acceptable. Any such survey shall contain a certification by such
surveyor to the Agent and the Lenders stating whether the Property is located
in an area having special flood hazards as identified by the Federal Emergency
Management Agency.
"SWING LINE LENDER" means Bankers, or any Person serving as a
successor Agent hereunder, in its capacity as Swing Line Lender hereunder.
"SWING LINE COMMITMENT" means the commitment of Swing Line Lender to
make Swing Line Loans to the Company pursuant to subsection 2.1A(ii).
"SWING LINE LOANS" means, collectively, the Loans made by Swing Line
Lender to the Company pursuant to subsection 2.1A(ii).
"SWING LINE NOTE" means, collectively, (i) the promissory note of the
Company issued pursuant to subsection 2.1D(ii) on or before the Funding
Availability Date and (ii) any promissory note issued by the Company to any
successor Agent and Swing Line Lender pursuant to the last sentence of
subsection 9.5B, in each case, substantially in the form of Exhibit II annexed
hereto, as it may be amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof and hereof.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or any successor to the business thereof.
"TAKING" means the taking or appropriation (including by deed in lieu
of condemnation or by voluntary sale or transfer under threat of condemnation
or while legal proceedings for condemnation are pending) of any Property, or
any part thereof or interest therein, for public or quasi-public use under the
power of eminent domain, by reason of any public improvement or condemnation
proceeding, or in any other manner or any damage or injury or diminution in
value through condemnation, inverse condemnation or other exercise of the power
of eminent domain. The term "Taken" used as a verb has a correlative meaning.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, on
whomsoever and wherever
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imposed, levied, collected, withheld or assessed by a Governmental Authority;
provided, however, that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of any Lender, its lending
office) is located or in which that Person is deemed to be doing business on
all or part of the net income, profits or gains of that Person (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise).
"TENANT" means any Person liable by contract or otherwise to pay rent
or a percentage of income, revenue or profits pursuant to a Lease, and includes
a tenant, subtenant, lessee and sublessee.
"TENANT SUBORDINATION AGREEMENT" means any Subordination,
Non-Disturbance and Attornment Agreement executed and acknowledged by a Tenant,
the Company or any other Loan Party and the Agent, and reasonably satisfactory
in form and substance to the Agent, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"TITLE COMPANY" means Chicago Title Insurance Company or such other
title company as may be selected by the Company and approved by the Agent in
its sole discretion.
"TITLE POLICIES" means, with respect to the Pool A Properties (other
than the Rose Hall Property), the paid mortgagee policies of title insurance in
the form of a 1970 ALTA loan policy (or other form of loan policy available in
the applicable state and acceptable to the Agent) and issued by the Title
Company.
"TOTAL ADJUSTED EQUITY INTERESTS" means, with respect to a Joint
Venture or other Person in which any Loan Party or any of its Subsidiaries
shall have made an Investment or for whose benefit such Loan Party or
Subsidiary shall have become liable with respect to a Guaranty following the
Effective Date, and as of any date of determination, the sum of (i) the
aggregate fair market value of the equity Securities of such Joint Venture or
other Person outstanding as of such date of determination plus (ii) the
aggregate fair market value of all debt Investments made by such Loan Party or
Subsidiary thereof, in each case as reasonably determined by the Company and
certified to the Agent in an Officers' Certificate of the Chief Executive
Officer or the Chief Financial Officer of the Company to such effect, together
with the information utilized by the Company to make such determination;
provided that, for the purpose of calculating such amount, there shall be
included and excluded, as the case may be, such debt Investments of the Loan
Parties and their respective Subsidiaries as shall be so included or excluded,
as the case may be, with respect to such Joint Venture or other Person or
Subsidiary thereof, as of such date of determination, in accordance with the
proviso to the definition of Company's Adjusted Equity Interest.
"TOTAL MANAGEMENT EBITDA" means, for any period and as of any date of
determination, the aggregate Management EBITDA for such period in respect of
all Management Agreements and Servicing Agreements and Other Management
Agreements.
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"TOTAL POOL A PROPERTY EBITDA" means, for any period and as of any
date of determination, the aggregate Property EBITDA in respect of all Pool A
Properties.
"TOTAL POOL A PROPERTY EBITDA-CAP. EX" means, for any period and as of
any date of determination, Total Pool A Property EBITDA minus Capital
Expenditures with respect to the Pool A Properties.
"TOTAL PROPERTY EBITDA" means, for any period and as of any date of
determination, the aggregate Property EBITDA for such period with respect to
all Properties.
"TOTAL UTILIZATION" means, as of any date of determination, the sum of
the following, without duplication:
(i) the Total Utilization of Revolving Commitments; plus
(ii) the sum of Guaranties of the Loan Parties and their
respective Subsidiaries either (a) that are in existence on the
Effective Date (1) but are not specified on Schedule 5.3 annexed
hereto, as approved by the Agent, or (2) are specified on Schedule 5.3
but the maximum estimated amounts specified therefor are greater than
the corresponding maximum estimated amounts specified therefor on
Exhibit E to the Original Financing Letter (provided that, with
respect to each Guaranty referred to in this subclause (2), the amount
of such Guaranty that shall be included in any calculation of Total
Utilization, shall be equal to the amount of such excess), or (b)
permitted by subsection 7.3(vi), (vii), (viii) or (ix) or subsection
7.4(ii)(a), in each case referred to in the preceding clauses (a) and
(b) which have not been paid or otherwise discharged as of such date
of determination; provided, that the Guaranties by Subsidiaries of the
Company of the Senior Notes shall not be included in the calculation
of Total Utilization; plus
(iii) the sum of (a) the excess of $4,000,000 over the
aggregate amount actually paid by or on behalf of the Rose Hall
Partnership for the Renovation of the Rose Hall Property after the
Effective Date and on or before such date of determination plus (b)
the excess of $60,000 over the sum of (x) the aggregate amount
actually paid by or on behalf of the Rose Hall Partnership on and
after the Effective Date for the remediation recommended in the
environmental audit with respect to the Rose Hall Property delivered
pursuant to subsection 4.1M or actually deposited by or on behalf of
Rose Hall Partnership in a segregated account for such purpose and not
withdrawn from such account and actually applied by or on behalf of
the Rose Hall Partnership for such purpose, in each case on or before
such date of determination, plus (y) the aggregate amount of the
indemnification obligations with respect to such remediation
expenditures owed to the Rose Hall Partnership by such Person or
Persons, pursuant to such indemnification agreement or agreements and
secured by such collateral, as in each case shall be approved by the
Agent, which approval may be withheld, conditioned or delayed in its
sole discretion; plus
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(iv) the aggregate costs for the Restoration of any Pool A
Property or Pool B Property pursuant to subsection 6.11G, in each case
as specified in the Restoration Budget therefor most recently
delivered to the Agent, for which payment has not been made, as
determined by the Agent in its sole discretion; plus
(v) the aggregate amount of principal, interest and other
amounts referred to in subsection 7.1(vii)(s)(3);
provided that the payment or discharge of such Guaranties and costs of
Restoration, and the amount of each such payment or discharge, shall be
determined by the Agent, in its sole discretion, after taking into account any
written notices and other information with respect thereto that may be provided
by the Company or its Subsidiaries to the Agent from time to time.
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as of any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying
any Refunded Swing Line Loans or reimbursing the applicable Issuing Lender for
any amount drawn under any Letter of Credit but not yet so applied), plus (ii)
the Letter of Credit Usage, plus (iii) the aggregate principal amount of all
outstanding Swing Line Loans.
"TRADEMARK AGREEMENT" means the Trademark Security Agreement by the
Company, Management Corp. and IP Corp. in favor of the Agent for the benefit of
the Agent and the Lenders, in substantially the form of Exhibit X annexed
hereto, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"TRANSFER" means any conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (i) in all or any portion of any Property, (ii) in any
right under a Management Agreement, including without limitation, the right to
receive payments of any amounts thereunder, or (iii) in any other assets of any
Loan Party or any of its Subsidiaries.
"UNDERWRITING AGREEMENTS" means, collectively, the Equity Underwriting
Agreements and the Debt Underwriting Agreements.
"UNIFORM SYSTEM" means the Uniform System of Accounts for Hotels, 8th
Revised Edition, 1986, as published by the Hotel Association of New York City,
as the same may be further revised from time to time.
"UNITED STATES OF AMERICA" means the 50 states of the United States of
America and Washington, D.C., but excluding any territories or possessions
thereof OTHER THAN THE COMMONWEALTH OF PUERTO RICO.
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"VININGS AGREEMENT" means the Sale and Purchase Agreement dated as of
March 5, 1996 between Overlook Vinings Inn and Conference Center Associates,
Ltd. and Wyndham Hotel Company, Ltd., as such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"VININGS BOND DOCUMENTS" means, collectively, the Vinings Bonds, the
Vinings Indenture, the Loan Agreement dated as of October 1, 1985 between the
Development Authority of Cobb County (the "AUTHORITY") and Overlook Vinings Inn
and Conference Center Associates, Ltd. ("VININGS OVERLOOK"), the Note dated
October 1, 1995, in the original principal amount of $9,675,000 made by Vinings
Overlook payable to the order of the Authority, and assigned by the Authority
without recourse to The Citizens and Southern National Bank (as predecessor to
NationsBank, N.A. (South), a national banking association (successor by merger
to NationsBank of Georgia, National Association, formerly known as The Citizens
and Southern National Bank), as Trustee under the Vinings Indenture, the Deed
to Secure Debt from Vinings Overlook to the Authority, The Mutual Benefit Life
Insurance Company, and the Trustee, dated as of October 1, 1985, as assigned by
Memorandum of Assignment from the Authority to the Trustee, dated as of October
1, 1985, the Agreement Regarding Interest and Charges dated November 26, 1985
between Vinings Overlook and the Authority, the Vinings Forbearance Agreement
and all other agreements entered into by Vinings Overlook in connection with
the Vinings Bonds, as each such agreement, instrument or other document may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"VININGS BONDS" means the $9,675,000 Development Authority of Cobb
County Industrial Development Revenue Bonds 1985 Series (Overlook Inn Project)
issued by the Development Authority of Cobb County pursuant to the Vinings
Indenture, as such securities are amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof.
"VININGS FORBEARANCE AGREEMENT" means the Forbearance Agreement
referred to in Section 2.2 of the Vinings Agreement and proposed to be entered
into by NationsBank, N.A. (South), a national banking association successor by
merger to NationsBank of Georgia, National Association, formerly known as The
Citizens and Southern National Bank), as Trustee under the Vinings Indenture,
Overlook Vinings Inn and Conference Center Associates, Ltd., and Mutual Benefit
Life Insurance Company, in liquidation, in the form of Draft No. 5 (dated
October 19, 1995) reviewed by the Agent, with such alterations therein as shall
be approved by the Agent, which approval may be granted, withheld, conditioned
or delayed in its sole discretion, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"VININGS INDEBTEDNESS" means the Indebtedness and other obligations of
the Vinings Subsidiary, if any, created or evidenced by, or otherwise assumed
or otherwise incurred in connection with, the Vinings Bond Documents, as such
Indebtedness or other obligations may be refinanced, exchanged or refunded in
accordance with the terms thereof and hereof.
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"VININGS INDENTURE" means the Trust Indenture dated as of October 1,
1985, by and between the Development Authority of Cobb County and The Citizens
and Southern National Bank (predecessor to NationsBank, N.A. (South), a
national banking association), as Trustee, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof and
thereof.
"VININGS PROPERTY" means the real property, together with all
Improvements thereon and all fixtures attached thereto and all personal
property used in connection therewith, located in Atlanta, Georgia and known,
as of the date of this Agreement, as the Vinings Wyndham Garden Hotel.
"VININGS SUBSIDIARY" has the meaning assigned to that term in
subsection 7.15A(iv).
"VOLUNTARY REMOVAL PERIOD" means, with respect to any Property,
Managed Property, Other Managed Property, Management Agreement, Servicing
Agreement or Other Management Agreement, the period (i) commencing on the date
specified in an Officers' Certificate delivered to the Agent on or before such
date, provided that no such period may commence before the payment in full of
any amount required to be prepaid pursuant to subsection 2.4B(iv) if effect
were not given to an election duly made by the Company to defer such prepayment
pursuant to the second sentence of subsection 2.4B(iv), and (ii) terminating on
the earlier of (a) the date specified in such Officers' Certificate, which
shall be not less than 3 months after the date of such commencement, and (b)
the date on which the Company would have been required to make a prepayment
pursuant to subsection 2.4B(iv) if effect were not given to an election duly
made by the Company to defer such prepayment pursuant to the second sentence of
subsection 2.4B(iv). Except as provided in clause (ii)(b) of the preceding
sentence, the term of a Voluntary Removal Period may not be shortened, extended
or otherwise modified. The effectiveness of a Voluntary Removal Period with
respect to a condition or event specified in subsection 8.1 shall not
constitute or cause, or be deemed to constitute, a waiver by the Agent or the
Lenders of any other condition or event specified in subsection 8.1.
"WEL" means Wyndham Employees Ltd., a Texas limited partnership.
"WHI" means WH Interest, Inc., a Texas corporation.
"WHI LIMITED PARTNERSHIP" means WHI Limited Partnership, a Texas
limited partnership.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, a
Subsidiary all of the outstanding equity Securities of which (other than any
director's qualifying shares, Investments by foreign nationals mandated by
Applicable Law or Investments by local residents mandated by Applicable Law in
connection with the issuance of a Liquor License) are owned directly or
indirectly by such Person.
"WORK" has the meaning assigned to that term in subsection 6.11F.
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"WYNRIGHT" means Wynright Insurance Corporation, a Bermuda
corporation.
"WYNRIGHT AGREEMENTS" means, collectively, the Insurance Policy dated
__________, 1996 and the Asset Management Agreement to be executed and
delivered by Wynright and the Company, each substantially in the form thereof
that has been approved by the Agent, together with such alterations therein as
shall be approved by the Agent, which approval may be granted, withheld,
conditioned or delayed in its sole discretion, as each such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT; PRO FORMA.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by the Company to the Agent for distribution to the
Lenders pursuant to subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation. Except as otherwise expressly
provided herein, calculations in connection with the definitions, covenants and
other provisions of this Agreement shall utilize accounting principles and
policies in conformity with those used to prepare the financial statements
referred to in subsection 5.3(i). For purposes of calculating the Borrowing
Base and any amount pursuant to subsections 6.14, 7.6D, 7.6E, 7.6F and 7.6G, as
of any date of determination and for any period, pro forma effect shall be
given to the consummation of the Formation, the Public Offerings and the
exercise of the GE Option, and the application of all proceeds therefrom, as if
such transactions shall have been consummated on the first day of such period.
1.3 REFERENCES TO ARTICLES, SECTIONS, EXHIBITS, SCHEDULES AND ATTACHMENTS.
All references appearing in a Loan Document to Articles, Sections,
subsections, clauses, Recitals, Exhibits, Schedules or Attachments are
references to the Articles, Sections, subsections, clauses and Recitals thereof
and to the Exhibits, Schedules or Attachments annexed to such Loan Document
unless expressly otherwise designated in such Loan Document. All references
appearing in a Loan Document to Exhibits, Schedules and Attachments are
references to such documents as initially annexed to such Loan Document or as
supplemented or revised in accordance with the terms of this Agreement or such
other Loan Document.
1.4 CAPTIONS.
All captions to any Article, Section, subsection, clause, Recital,
Exhibit, Schedule or Attachment in a Loan Document are used for convenience and
reference only and in no way define, limit or describe the scope or intent of,
or in any way affect, such Loan Document.
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1.5 DRAFTER.
No inference against or in favor of any party to any Loan Document
shall be drawn from the fact that such party or its counsel has drafted any
portion of any Loan Document.
1.6 REFERENCES TO PERSONS INCLUDE PERMITTED SUCCESSORS AND ASSIGNS.
Except as otherwise specified in a Loan Document, all references in
such Loan Document to any Person, other than the Company or any of its
Affiliates, shall be deemed to include the successors and assigns of such
Person.
1.7 REFERENCES TO APPLICABLE LAW AND CONTRACTS.
Except as otherwise specified in a Loan Document, all references in
such Loan Document to any Applicable Law or contracts specifically defined or
referred to therein, shall be deemed references to such Applicable Law or
contracts as may be amended, restated, supplemented, consolidated or otherwise
modified from time to time, or, in the case of any such contract, as the terms
thereof may be waived or modified, but only in the case of each such amendment,
waiver or modification of a contract, to the extent permitted by, and effected
in accordance with, the terms thereof and hereof and only to the extent such
amendment, waiver or modification of a contract is not prohibited by any of the
Loan Documents.
1.8 HEREIN.
The words "herein", "hereinabove", "hereinbelow", "hereof",
"hereunder" and words of similar import, when used in a Loan Document, shall
refer to such Loan Document as a whole.
1.9 INCLUDING WITHOUT LIMITATION.
The words "includes", "including" and similar terms used in any Loan
Document shall be construed as if followed by the words "without limitation".
1.10 GENDER.
Whenever the context so requires, the neuter gender includes the
masculine or feminine and the singular number includes the plural, and vice
versa.
1.11 SINGULAR AND PLURAL.
Any of the terms defined in a Loan Document may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
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1.12 KNOWLEDGE.
As used in this Agreement or in any other Loan Document, the phrases
"TO THE COMPANY'S ACTUAL KNOWLEDGE", "TO THE KNOWLEDGE OF THE COMPANY" and any
variations thereof shall mean, as of any date of determination and after due
inquiry, the actual knowledge or awareness, as of such date, of the persons who
occupy the offices of Chairman of the Board, Chief Executive Officer, President
- Wyndham Gardens Division, President - Wyndham Hotels and Resorts Division,
Executive Vice President and Chief Financial Officer, Executive Vice President,
Vice President - General Counsel, Vice President - Chief Information Officer,
Vice President - Development, Vice President - Marketing, Vice President -
Human Resources, Vice President - Corporate Controller, Vice President -
Technical Services, Secretary, Treasurer, vice presidents of operations and
regional directors of operations; provided, however, that the knowledge of a
vice president of operations or a regional director of operations shall be
imputed to the Company only with respect to matters affecting the region or the
Properties for which such vice president or regional director provides regional
or property management services. The Company represents and warrants that the
foregoing Persons have executive and administrative responsibility for the
Company and its assets and, in the performance of their duties in the ordinary
course of business, would customarily have knowledge of the matters referred to
herein.
SECTION 2
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; LOANS; NOTES; THE REGISTER.
A. COMMITMENTS.
(i) Revolving Commitments. Subject to the terms and
conditions of this Agreement and in reliance upon the representations
and warranties of the Company herein set forth, each Lender hereby
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Loans permitted to be outstanding
from time to time, to lend to the Company from time to time during the
period from the Funding Availability Date to but excluding the
Revolving Commitment Conversion Date, an aggregate amount not
exceeding such Lender's Pro Rata Share of the aggregate amount of the
Revolving Commitments to be used for the purposes identified in
subsection 2.5A. In addition, each Lender hereby agrees to maintain
as Revolving Loans, subject to the provisions of subsection 2.4, the
Revolving Loans of such Lender outstanding on the Revolving Commitment
Conversion Date during the period from the Revolving Commitment
Conversion Date to the Maturity Date; provided that, except with
respect to Revolving Loans made pursuant to subsection 3.3B to
reimburse an Issuing Lender, no Lender shall be required to make
additional Revolving Loans on or after the Revolving Commitment
Conversion Date. The amount of such payment shall not be reduced or
increased as the result of any payment pursuant to subsection 2.4B.
The original amount of each Lender's Revolving Commitment and such
Lender's Pro Rata Share is set forth opposite its name on Schedule
2.1A annexed hereto and the
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aggregate original amount of the Revolving Commitments is
$100,000,000; provided, however, that the Revolving Commitments of the
Lenders shall be adjusted to give effect to any assignments of the
Revolving Commitments pursuant to subsection 9.1; provided further,
however, that the amount of the Revolving Commitments shall be
automatically reduced by the amount of any reductions to the Revolving
Commitments made pursuant to subsection 2.4B(ii).
Each Lender's Revolving Commitment shall expire on the
Maturity Date and all Loans and all other amounts owed hereunder with
respect to the Loans and the Revolving Commitments shall be paid in
full no later than the Maturity Date; provided, however, that each
Lender's Revolving Commitment shall expire immediately and without
further action on July 31, 1996, if the Funding Availability Date has
not occurred on or before that date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Commitments
shall be subject to the limitation that the Total Utilization (after
giving effect to any concurrent payment of the Loans made with the
proceeds of Loans) shall not exceed the lesser of the Borrowing Base
and the Revolving Commitments then in effect.
(ii) Swing Line Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations
and warranties of the Company herein set forth, Swing Line Lender
hereby agrees, subject to the limitations set forth below with respect
to the maximum amount of Swing Line Loans permitted to be outstanding
from time to time, to make a portion of the Revolving Commitments
available to the Company from time to time during the period from the
Funding Availability Date to but excluding the Revolving Commitment
Conversion Date by making Swing Line Loans to the Company in an
aggregate amount not exceeding the amount of the Swing Line Commitment
to be used for the purposes identified in subsection 2.5A,
notwithstanding the fact that such Swing Line Loans, when aggregated
with Swing Line Lender's outstanding Revolving Loans and Swing Line
Lender's Pro Rata Share of the Letter of Credit Usage then in effect,
may exceed Swing Line Lender's Revolving Commitment. The original
amount of the Swing Line Commitment is $10,000,000; provided that any
reduction of the Revolving Commitments made pursuant to subsection
2.4B(ii) which reduces the aggregate Revolving Commitments to an
amount less than the then current amount of the Swing Line Commitment
shall result in an automatic corresponding reduction of the Swing Line
Commitment to the amount of the Revolving Commitments, as so reduced,
without any further action on the part of the Company, the Agent or
Swing Line Lender. The Swing Line Commitment shall expire on the
Revolving Commitment Conversion Date and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans
shall be paid in full no later than that date; provided that the Swing
Line Commitment shall expire immediately and without further action on
July 31, 1996 if the Funding Availability Date has not occurred on or
before that date. Amounts borrowed under this subsection 2.1A(ii) may
be repaid and reborrowed prior to but excluding the Revolving
Commitment Conversion Date.
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Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Commitment
shall be subject to the limitation that in no event shall the Total
Utilization (after giving effect to any concurrent payment of the
Loans made with the proceeds of Loans) at any time exceed the
Revolving Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by the Company pursuant to subsection 2.4B(i),
Swing Line Lender may, at any time in its sole and absolute
discretion, deliver to the Agent (with a copy to the Company), no
later than 10:00 A.M. (New York City time) on the first Business Day
in advance of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company) requesting the
Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans
(the "REFUNDED SWING LINE LOANS") outstanding on the date such notice
is given which Swing Line Lender requests the Lenders to prepay.
Anything contained in this Agreement to the contrary notwithstanding,
(i) the proceeds of such Revolving Loans made by the Lenders other
than Swing Line Lender shall be immediately delivered by the Agent to
Swing Line Lender (and not to Company) and applied to repay a
corresponding portion of the Refunded Swing Line Loans and (ii) on the
day such Revolving Loans are made, Swing Line Lender's Pro Rata Share
of the Refunded Swing Line Loans shall be deemed to be paid with the
proceeds of a Revolving Loan made by Swing Line Lender, and such
portion of the Swing Line Loans deemed to be so paid shall no longer
be outstanding as Swing Line Loans and shall no longer be due under
the Swing Line Note of Swing Line Lender but shall instead constitute
part of Swing Line Lender's outstanding Revolving Loans and shall be
due under the Revolving Note of Swing Line Lender. The Company hereby
authorizes the Agent and Swing Line Lender to charge the Company's
accounts with the Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by the Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of the Company from Swing
Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by subsection 9.5.
If for any reason (a) Revolving Loans are not made upon the
request of Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans or (b) the
Revolving Commitments are terminated at a time when any Swing Line
Loans are outstanding, each Lender shall be deemed to, and hereby
agrees to, have purchased a participation in such outstanding Swing
Line Loans in an amount equal to its Pro Rata Share (calculated, in
the case of the foregoing clause (b), immediately prior to such
termination of the Revolving Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon.
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Upon one Business Day's notice from Swing Line Lender, each Lender
shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the office of Swing Line Lender
located at 21 Bankers Trust Plaza, New York, New York. In order to
further evidence such participation (and without prejudice to the
effectiveness of the participation provisions set forth above), each
Lender agrees to enter into a separate participation agreement at the
request of Swing Line Lender in form and substance reasonably
satisfactory to Swing Line Lender. In the event any Lender fails to
make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall
be entitled to recover such amount on demand from such Lender together
with interest thereon at the rate customarily used by Swing Line
Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. In the event Swing Line Lender
receives a payment of any amount in which other Lenders have purchased
participations as provided in this paragraph, Swing Line Lender shall
promptly distribute to each such other Lender its Pro Rata Share of
such payment.
Anything contained herein to the contrary notwithstanding,
each Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional
and shall not be affected by any circumstance, including without
limitation (a) any setoff, counterclaim, recoupment, defense or other
right which such Lender may have against Swing Line Lender, the
Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event
of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
the Company or any of its Subsidiaries; (d) any breach of this
Agreement or any other Loan Document by any party thereto; or (e) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations of
each Lender are subject to the condition that (y) Swing Line Lender
believed in good faith that all conditions under Section 4 to the
making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (z)
the satisfaction of any such condition not satisfied had been waived
in accordance with subsection 9.6 prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans were made.
B. BORROWING MECHANICS. Loans made on any Funding Date (other
than Revolving Loans made pursuant to subsection 3.3B for the purpose of
reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it or Revolving Loans made pursuant to a request by Swing Line
Lender pursuant to subsection 2.1A(ii) for the purpose of repaying any Refunded
Swing Line Loans) shall be in an aggregate minimum amount of $500,000. The
Company shall be permitted to borrow Revolving Loans pursuant to this
subsection 2.1B only twice during any 30 day period; provided that such
limitation shall not apply to Swing Line Loans. Whenever the Company desires
that the Lenders make Revolving
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Loans, it shall deliver to the Agent a Notice of Borrowing no later than 10:00
A.M. (New York time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).
Whenever the Company desires that Swing Line Lender make a Swing Line Loan, it
shall deliver to Agent a Notice of Borrowing no later than 12:00 Noon (New York
City time) on the proposed Funding Date.
Each Notice of Borrowing shall contain the information specified in
the form attached hereto as Exhibit III. If any of the proceeds of such Loan
is to be applied to the Renovation or Restoration of any Property, together
with such Notice of Borrowing there shall be delivered the lien waivers and
search report referred to in subsection 4.2A(ii).
If none of the proceeds of the requested Loan is to be applied to the
Renovation or Restoration of any Property, the Company may give the Agent
telephonic notice by the required time of any proposed Loan under this
subsection 2.1B in lieu of delivering the Notice of Borrowing; provided,
however, that such telephonic notice shall be promptly confirmed in writing by
delivery of a Notice of Borrowing to the Agent on or before the applicable
Funding Date. Neither the Agent nor any Lender shall incur any liability to
the Company in acting upon any telephonic notice referred to above that the
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to borrow on behalf of the Company or for otherwise
acting in good faith under this subsection 2.1B, and upon funding of Loans by
the Lenders in accordance with this Agreement pursuant to any such telephonic
notice the Company shall have effected Loans hereunder.
The Company shall notify the Agent prior to the funding of any Loans
in the event that any of the matters to which the Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by the Company of the
proceeds of any Loans shall constitute a re-certification by the Company, as of
the applicable Funding Date, as to the matters to which the Company is required
to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B and 2.6C, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by the Lenders simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Revolving Loan requested hereunder nor shall the
Commitment of any Lender be increased or decreased as a result of a default by
any other Lender in that other Lender's obligation to make a Revolving Loan
requested hereunder. Promptly after receipt by the Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
the Agent shall notify each Lender or Swing Line Lender, as the case may be, of
the proposed borrowing. Each Lender shall make the amount of its Revolving
Loan available to the Agent, in same day funds, at the office of the Agent
located
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at One Bankers Trust Plaza, New York, New York, not later than 12:00 Noon (New
York time) on the applicable Funding Date and Swing Line Lender shall make the
amount of its Swing Line Loan available to the Agent not later than 2:00 P.M.
(New York City time) on the applicable Funding Date, in each case in same day
funds in Dollars. Except as provided in subsection 2.1A(ii) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.1 (in the case of Loans made on the Funding
Availability Date) and 4.2 (in the case of all Loans), the Agent shall make the
proceeds of such Loans available to the Company on the applicable Funding Date
by causing an amount of same day funds equal to the proceeds of all such Loans
received by the Agent from the Lenders to be transferred to the Operating
Account.
Unless the Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available
to the Agent the amount of such Lender's Loan requested on such Funding Date,
the Agent may assume that such Lender has made such amount available to the
Agent on such Funding Date and the Agent may, in its sole discretion, but shall
not be obligated to, make available to the Company a corresponding amount on
such Funding Date. If such corresponding amount is not in fact made available
to the Agent by such Lender, the Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to the
Agent, at the Federal Funds Effective Rate for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon the Agent's demand therefor, the Agent shall promptly
notify the Company and the Company shall immediately pay such corresponding
amount to the Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to the Agent, at the rate
payable under this Agreement for Base Rate Loans. Nothing in this subsection
2.1C shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that the Company may have
against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) The Agent shall maintain, at its address referred to
in subsection 9.8, a register for the recordation of the names and
addresses of the Lenders and the Commitment and Loans of each Lender
from time to time (the "REGISTER"). The Company, the Agent 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 Company or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(ii) The Agent shall record in the Register the Revolving
Commitment and the Revolving Loans from time to time of each Lender,
the Swing Line Loan Commitment and the Swing Line Loans from time to
time of Swing Line Lender, and each repayment or prepayment in respect
of the principal amount of the Revolving Loans of each Lender or the
Swing Line Loans of Swing Line Lender. Any such
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recordation shall be conclusive and binding on the Company and each
Lender, absent manifest error; provided, however, that failure to make
any such recordation, or any error in such recordation, shall not
affect the Company's Obligations in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including any promissory note described in subsection 2.1D(iv)) the
amount of each Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on the Company,
absent manifest error; provided, however, that failure to make any
such recordation, or any error in such recordation, shall not affect
the Company's Obligations in respect of the applicable Loans; provided
further, however, that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
(iv) Any Lender may, by notice to the Agent and the
Company, request that all or part of the principal amount of the
Company's Loans from such Lender hereunder be evidenced by a Note.
Within three Business Days of the Company's receipt of such notice,
the Company shall execute and deliver to the Agent for delivery to the
appropriate Lender a Note in the principal amount(s) of such Loans, in
the form of Exhibit I attached hereto, payable to the notifying Lender
or, if so specified in such notice, any Person who is an assignee of
such Lender pursuant to subsection 9.1 hereof. If the foreclosure or
other enforcement of any Mortgage or any other Security Document
requires the presentation of a Note evidencing the Obligations secured
by such Security Document and the Company fails or refuses to comply
with a request for such Note, then a copy of this Agreement may be
presented in lieu of such a Note.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.2E, 2.6 and 2.7, each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through the Maturity Date at a rate
determined by reference to the Adjusted Eurodollar Rate or the Base Rate, as
the case may be. The applicable basis for determining the rate of interest
with respect to any Loan shall be selected by the Company initially at the time
a Notice of Borrowing is given with respect to such Loan pursuant to subsection
2.1B. The basis for determining the interest rate with respect to any Loan
shall be changed from time to time in accordance with subsection 2.2D. Subject
to the provisions of subsection 2.7, each Swing Line Loan shall bear interest
on the unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at a rate determined by reference to the
Base Rate.
Subject to the provisions of subsections 2.2E, 2.4B(iv) and 2.7, the
Revolving Loans shall bear interest through the Maturity Date as follows:
(i) if a Base Rate Loan, then at a rate equal to the sum
of the Base Rate plus the Applicable Base Rate Margin; and
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(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at a per annum rate equal to the sum
of the Base Rate plus 1.0%.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, the Company shall, pursuant to the applicable Notice of Borrowing or
Notice of Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be at the Company's option either a one, two, three or six month period;
provided, however, that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan;
(ii) each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that, if any Interest
Period would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date;
(vi) there shall be no more than five (5) Interest Periods
outstanding at any time;
(vii) in the event the Company shall fail to specify an
Interest Period for a Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Continuation, the Company shall be deemed to
have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on the Loans shall be payable monthly in arrears on and to each
Payment Date, upon any prepayment of the Loans (to the extent accrued on the
amount being prepaid) and at the Maturity Date.
D. CONVERSION/CONTINUATION. Subject to the provisions of
subsections 2.2E and 2.6, the Company shall have the option (i) to convert at
any time all or any part of its
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outstanding Revolving Loans equal to $500,000 and integral multiples of
$500,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or
any portion of such Loan equal to $500,000 and integral multiples of $500,000
in excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may be converted into a Base Rate Loan only on the
expiration date of an Interest Period applicable thereto; and provided further
that no Loan may be made as or converted into a Base Rate Loan during the
period from December 24 of any year to and including January 7 of the
immediately succeeding year.
The Company shall deliver a Notice of Conversion/Continuation
to Agent no later than 10:00 A.M. (New York City time) at least one Business
Day in advance of the proposed conversion date in the case of a conversion to a
Base Rate Loan and at least three Business Days in advance of the proposed
conversion/continuation date in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan. A Notice of Conversion/Continuation shall contain
the information indicated on the form thereof attached hereto as Exhibit IV.
In lieu of delivering the above-described Notice of Conversion/Continuation,
the Company may give Agent telephonic notice by the required time of any
proposed conversion/continuation under this subsection 2.2D; provided that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent on or before the proposed
conversion/continuation date.
Neither the Agent nor any Lender shall incur any liability to
the Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to act on behalf of the Company or for otherwise acting in
good faith under this subsection 2.2D, and upon continuation of the applicable
basis for determining the interest rate with respect to any Loans in accordance
with this Agreement pursuant to any such telephonic notice the Company shall
have effected a continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.2E, 2.6B and
2.6C, a Notice of Continuation for continuation of a Eurodollar Rate Loan (or
telephonic notice in lieu thereof) shall be irrevocable on and after the
related Interest Rate Determination Date, and Company shall be bound to effect
a continuation in accordance therewith.
E. DEFAULT RATE INTEREST. During the continuation of any Event
of Default, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon not paid when due
and any fees and other amounts then due and payable hereunder, shall thereafter
bear interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy or insolvency laws) payable upon
demand at a rate that is 3.0% per annum in excess of the interest rate
otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 3.0%
per annum in excess of the interest rate otherwise payable under this Agreement
for Base Rate Loans); provided, however, that, in the case of Eurodollar Rate
Loans, if such Event of Default is continuing, upon the expiration of
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the Interest Period in effect at the time any such increase in interest rate is
effective, such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 3.0%
per annum in excess of the interest rate otherwise payable under this Agreement
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of the Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed (i) in the case of Base Rate Loans, on the basis of a 365-day or
366-day year, as the case may be, and (ii) in the case of Eurodollar Rate
Loans, on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan shall be included, and the date of payment of
such Loan or the expiration date of an Interest Period applicable to such Loan
shall be excluded; provided, however, that if a Loan is repaid on the same day
on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A. FACILITY FEES. On the Effective Date, the Company shall pay
the Agent (in addition to any facility fees previously paid to the Agent), for
distribution to each Lender in proportion to that Lender's Pro Rata Share, a
non-refundable facility fee equal to 0.625% of the aggregate amount of the
Commitments in effect on the date of such effectiveness, prior to the initial
funding of any Loans.
B. COMMITMENT FEES. The Company agrees to pay to the Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Effective Date to and
excluding the Revolving Commitment Conversion Date, equal to (i) the average of
the daily unused portion of the Commitments (other than the Swing Line
Commitment), taking into consideration any reductions thereof in accordance
with Section 2.4B(ii), multiplied by (ii) 0.375% per annum, such commitment
fees to be calculated on the basis of a 360-day year and the actual number of
days elapsed and to be payable quarterly in arrears on the last day of each
calendar quarter, commencing with the first such date to occur after the
Effective Date, and on the Revolving Commitment Conversion Date. Anything
contained in this Agreement to the contrary notwithstanding, for purposes of
calculating the commitment fees payable by the Company pursuant to this
subsection 2.3B, the "unused portion of the Commitments," as of any date of
determination, shall be an amount equal to the aggregate amount of Revolving
Commitments as of such date minus the sum of (i) the aggregate principal amount
of all outstanding Revolving Loans on such date plus (ii) the aggregate face
amount of outstanding Letters of Credit. The commitment fee shall be payable
as provided in this subsection notwithstanding that the amount available to be
borrowed hereunder may be less than the amount of the Commitments due to the
operation of the Borrowing Base.
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2.4 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF THE LOANS; MAXIMUM MATURITY OF REVOLVING
LOANS.
(i) Scheduled Payments. On each of __________, 2000
__________, 2000 and __________, 2000, the Company shall make a
principal payment in the amount equal to 6 2/3% of the amount of the
Total Utilization of Revolving Commitments on the Revolving Commitment
Conversion Date. The amounts of the payments required by the
preceding sentence shall not be increased or decreased by the
occurrence or amounts of prepayments pursuant to subsection 2.4B or
otherwise; provided that voluntary prepayments made after the
Revolving Commitment Conversion Date pursuant to subsection 2.4B(i)
shall be applied against the schedule payments required pursuant to
this subsection 2.4A(i) in order of maturity. The Loans and all other
Obligations shall be paid in full by the Company no later than the
Maturity Date.
(ii) Maximum Maturity of Revolving Loans. Notwithstanding
anything to the contrary contained in this Agreement, each Revolving
Loan and Swing Line Loan shall be repaid no later than the date that
is 35 months after the Funding Date of such Loan; provided that,
subject to the terms and conditions contained in this Agreement
(including, without limitation, subsection 4.2) such Loans may be
repaid with the proceeds of other Revolving Loans and Swing Line
Loans.
B. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. The Company may, without
prepayment charge or penalty, upon written or telephonic notice to the
Agent on or prior to 12:00 Noon (New York City time) on the date of
prepayment, which notice, if telephonic, shall be promptly confirmed
in writing, at any time and from time to time prepay any Swing Line
Loan on any Business Day in whole or in part in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of
that amount. The Company may, without prepayment charge or penalty
(except as provided in Section 2.6D), upon not less than one Business
Day's prior written or telephonic notice, in the case of Base Rate
Loans, and upon not less than three Business Days' prior written or
telephonic notice in the case of Eurodollar Rate Loans, in each case
confirmed in writing to the Agent (which notice the Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time prepay any Loans on any Business Day in
whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount (or, if less,
the total amount of all outstanding Loans); provided, however, that in
the event a Eurodollar Rate Loan is prepaid on a day other than the
last day of the Interest Period applicable thereto, such prepayment
shall be accompanied by the payment of any amounts payable under
subsection 2.6D. Notice of prepayment having been given as aforesaid,
the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein;
provided, however, that any such notice given in connection with a
proposed sale or other disposition of a Property pursuant to
subsection 7.15B may be withdrawn by the Company (and the Loans shall
not become
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so due and payable) in the event such proposed sale or other
disposition fails to be consummated on the proposed prepayment date;
provided further, however, that in the case of any such withdrawal,
the Company shall promptly pay all amounts then due to the Lenders
pursuant to subsection 2.6D. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(vii). Amounts prepaid
pursuant to this subsection 2.4B(i) may be reborrowed pursuant to
subsection 2.1A.
(ii) Voluntary Reductions of Commitments. The Company
may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to the Agent (which notice the
Agent will promptly transmit by telegram, telex or telephone to each
Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the
Commitments in an amount up to the amount by which the Commitments
exceed the Total Utilization; provided, however, that any such partial
reduction of the Commitments shall be in an aggregate minimum amount
of $500,000 and integral multiples of $100,000 in excess of that
amount. The Company's notice to the Agent shall designate the date
(which shall be a Business Day) of such termination or reduction and
the amount of any partial reduction, and such termination or reduction
of the Commitments shall be effective on the date specified in the
Company's notice and shall reduce the Commitment of each Lender in the
same proportion as its Pro Rata Share.
(iii) Reductions in Borrowing Base Due to Casualty,
Condemnation or Disposition of Pool A Property or Termination of
Management Agreement or Servicing Agreement. If there shall occur (a)
a casualty or Taking with respect to any Pool A Property (or any
portion thereof) or a sale or other permanent disposition of such Pool
A Property, with respect to which occurrence a prepayment is required
to be made pursuant to subsection 6.11E or 7.15B, as the case may be,
then the Borrowing Base shall be reduced by an amount equal to the
Pool A Property Amount with respect to such Pool A Property; or (b)
the expiration (without renewal or extension), cancellation or other
termination of a Management Agreement or a Servicing Agreement, with
respect to which occurrence a prepayment is required to be made
pursuant to subsection 7.16B, then the Borrowing Base shall be reduced
by an amount equal to the Management Amount with respect to such
Management Agreement or Servicing Agreement, as the case may be.
(iv) Prepayments Due to Borrowing Base. If at any time
the Total Utilization exceeds the Borrowing Base then in effect, as
demonstrated by a Borrowing Base Certificate delivered (or required to
be delivered) pursuant to subsection 6.1(iv), the Company shall prepay
the Loans (or, if no Loans are then outstanding, deposit Cash to be
held pursuant to the terms of the Collateral Account Agreement with
respect to Letters of Credit then outstanding, whether or not any
beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other
documents or certificates required to draw under such Letter of
Credit) in an amount equal to such excess not later than 5 Business
Days after the date that such Borrowing Base Certificate shall have
been delivered (or, if such Borrowing Base Certificate shall not have
been delivered timely or at all, on the last day that such
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Borrowing Base Certificate is permitted by subsection 6.1(iv) to be
delivered). However, notwithstanding anything in the foregoing to the
contrary, if a prepayment (or such cash collateralization) is required
pursuant to this subsection 2.4(B)(iv) on or before December 31, 1996,
then the Company shall either (a) make such prepayment (or such cash
collateralization) when due or (b) notify the Agent by Officers'
Certificate that it intends to defer such prepayment (or such cash
collateralization) for a three-month period commencing on such due
date, which Officers' Certificate shall confirm that all Voluntary
Removal Periods then in effect are terminated as of such due date. In
the event the Company elects to so defer such prepayment (or such cash
collateralization), then if and so long as the Total Utilization
exceeds the Borrowing Base, (1) the Loans shall bear interest at a
rate that is 0.50% per annum in excess of the interest rate otherwise
applicable to the Loans hereunder pursuant to subsection 2.2A, (2) the
fee payable on outstanding Letters of Credit Pursuant to subsection
3.2(i)(b) shall be 0.50% per annum in excess of the fee otherwise
payable pursuant to such subsection, (3) all Excess Cash Flow
thereafter, as determined within 30 days after the end of each month,
shall be applied to prepay the Loans (or so cash collateralize the
Letters of Credit) until the Total Utilization does not exceed the
Borrowing Base then in effect and (4) the Company shall not be
required to make any prepayments (or such cash collateralization)
pursuant to the first sentence of this subsection 2.4(iv). If on the
last day of such three-month period the Total Utilization exceeds the
Borrowing Base then in effect, then the Company shall prepay the Loans
(or so cash collateralize the Letters of Credit) on such day in an
amount equal to such excess. Any mandatory prepayments pursuant to
this subsection 2.4B(iv) shall be applied as specified in subsection
2.4B(vii).
(v) Prepayment from Sales of Pool C Properties. If there
shall occur any sale or other permanent disposition of any Pool C
Property, the Company shall prepay the Loans (or, if no Loans are then
outstanding, deposit Cash to be held pursuant to the terms of the
Collateral Account Agreement with respect to Letters of Credit then
outstanding, whether or not any beneficiary under any such Letter of
Credit shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under such
Letter of Credit), not later than the first Business Day following the
date of receipt of any Cash Proceeds therefrom, in an amount equal to
the lesser of (a) the Net Sales Price of such Pool C Property and (b)
the aggregate amount of the Investments made by the Loan Parties and
their respective Subsidiaries (including, without limitation, other
Pool C Subsidiaries) in such Pool C Subsidiary.
(vi) Acceleration Due to Reduction of the Facility Amount.
If at any time the aggregate amount of the Revolving Commitments is
less than $10,000,000, whether due to a prepayment or reduction in the
Commitments or otherwise, (a) the Commitments shall be automatically
terminated, (b) the Loans outstanding and all other Obligations of the
Company shall become immediately due and payable and (c) the Company
shall be required to deposit in Cash to be held pursuant to the terms
of the Collateral Account Agreement an amount equal to the maximum
amount that may at any time be drawn under all Letters of Credit then
outstanding (whether or not any beneficiary under any such Letter of
Credit shall have presented, or shall be entitled at such time
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to present, the drafts or other documents or certificates required to
draw under such Letter of Credit).
(vii) Application of Prepayments. Each prepayment of the
Loans shall be applied first to Base Rate Loans to the full extent
thereof before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made
by the Company pursuant to subsection 2.6D. Each prepayment of the
Loans shall be applied first to Swing Line Loans to the full extent
thereof before application to Revolving Loans.
C. APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. All
payments in respect of the principal amount of the Loans shall include payment
of accrued interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of unpaid interest before
application to principal.
D. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by the
Company of principal, interest, fees and other Obligations hereunder
and under the Notes and the other Loan Documents owed to Agent or any
Lender shall be made in same day funds and without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
the Agent not later than 2:00 P.M. (New York time) on the date due at
its office located at One Bankers Trust Plaza, New York, New York, for
the account of the Lenders; funds received by the Agent after that
time on such due date shall be deemed to have been paid by the Company
on the next succeeding Business Day. During the occurrence of an
Event of Default or Potential Event of Default, the Company hereby
authorizes the Agent to instruct the Cash Manager to charge its
accounts with the Cash Manager (including the Concentration Account
and the Operating Account) in order to cause timely payment to be made
to the Agent of all principal, interest, fees and expenses due
hereunder or under the Notes or the other Loan Documents (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to the
Lenders' respective Pro Rata Shares. The Agent shall promptly
distribute to each Lender, at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request, its Pro Rata Share of all such payments
received by the Agent and the facility fees and commitment fees of
such Lender when received by the Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4D(ii),
if, pursuant to the provisions of subsection 2.6C, any Affected Lender
makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans, the Agent shall give effect thereto in apportioning
payments received thereafter.
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(iii) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(iv) Notation of Payment. Each Lender agrees that before
disposing of the Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided, however, that the failure to make (or any error
in the making of) a notation of any Loan made under such Note shall
not limit or otherwise affect the obligations of the Company hereunder
or under such Note with respect to any Loan or any payments of
principal or interest on such Note.
2.5 USE OF PROCEEDS.
A. LOANS. Subject to the other provisions of this Agreement, the
proceeds of the Loans shall be applied by the Company for the general corporate
purposes of the Company and its Subsidiaries, which may include (i) the
reimbursement of Issuing Lender of any amounts drawn under any Letter of
Credit, (ii) the acquisition, ownership, renovation, restoration, management,
operation and disposition of upscale full service hotels, garden style hotels
and resort hotels located in the United States of America, (iii) the provision
of Investments in Joint Ventures formed to acquire such hotels, (iv) the
acquisition, extension, renewal or modification of Management Agreements,
Servicing Agreements and Other Management Agreements and the provision of
Investments in, and Guaranties of Indebtedness or other obligations of, any
payments to owners of Managed Properties, Additional Managed Properties and
Other Managed Properties and lessors of Pool B Properties, and (v) repayment of
any portion of any other Loan, including Swing Line Loans.
B. LETTERS OF CREDIT. Subject to subsections 2.5C, 7.3 and 7.4,
the Letters of Credit shall be issued for the purposes set forth in the
definitions of Commercial Letter of Credit and such other general corporate
purposes as may, in any instance, be approved in advance, in writing, by the
Agent.
C. RESTRICTIONS ON USE OF PROCEEDS. Notwithstanding anything to
the contrary contained in this Agreement or the other Loan Documents:
(i) if and so long as the sum of (a) Total Utilization of
Revolving Commitments, plus (b) the amount of Guaranties permitted by
subsection 7.4(ii)(a) plus (c) the aggregate amount of the Investments
in the Pool C Subsidiaries permitted by subsection 7.3(ii), in each
case to the extent that such amounts referred to in the preceding
clauses (a) and (b) shall have been used, issued, incurred or made for
or in connection with the Renovation or Restoration of the Properties
which have not been completed on the date of determination, shall
exceed $15,000,000, then, without the prior written approval of the
Agent, which may be granted, withheld, conditioned or delayed in its
sole discretion, the Loan Parties shall not, and shall cause their
respective
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Subsidiaries not to, apply any proceeds of any Loans or procure the
issuance of any Letter of Credit in connection with the Major
Renovation/Restoration of any Property; and
(ii) if and so long as the Total Utilization shall exceed
the Borrowing Base, then, without the prior written approval of the
Agent, which may be granted, withheld, conditioned or delayed in its
sole discretion, and subject to subsection 2.4(iv), the Loan Parties
shall not, and shall cause their respective Subsidiaries not to, apply
the proceeds of any Loan or procure the issuance of any Letter of
Credit for any purpose other than (a) paying or otherwise discharging
any of the Guaranties permitted by subsections 7.3 (v), (vi), (vii)
and (viii) and subsection 7.4(ii)(a), (b) paying or otherwise
discharging any of the Contingent Obligations set forth on Schedule
5.3 annexed hereto or Contingent Obligations otherwise permitted
hereunder or (c) paying or reimbursing costs in respect of the Major
Renovation/Restoration of Properties conducted pursuant to subsection
6.11G, in each case in an aggregate amount not greater than the amount
with respect thereto that shall have been included in such
determination of the Total Utilization.
D. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by any Loan Party or any of its
Subsidiaries in any manner that might cause the borrowing to violate Regulation
G, Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to the Eurodollar Rate Loans
as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, the Agent shall determine (which determination shall,
absent manifest error, be final, conclusive and binding upon all parties) the
interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that the Agent shall have determined in good faith (which determination shall
absent manifest error be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with the Company), on any
Interest Rate Determination Date with respect to any Eurodollar Rate Loans,
that by reason of circumstances affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of
Adjusted Eurodollar Rate, the Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to the Company and each
Lender of such determination, whereupon (i) no Loans may be made as, or
converted to
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Eurodollar Rate Loans until such time as the Agent notifies the Company and the
Lenders that the circumstances giving rise to such notice no longer exist and
(ii) any Notice of Borrowing or Notice of Continuation given by the Company
with respect to the Loans in respect of which such determination was made shall
be deemed to contain a request that such Loans be made as or converted to Base
Rate Loans.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined in good faith
(which determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with the Company and the
Agent) that the making, maintaining or continuation of its Eurodollar Rate
Loans (i) has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order
(or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful) or (ii) has become impracticable, or
would cause such Lender material hardship, as a result of contingencies
occurring after the date of this Agreement which materially and adversely
affect the interbank Eurodollar market, or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED LENDER"
and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to the Company and the Agent of such determination (which
notice the Agent shall promptly transmit to each other Lender). Thereafter (a)
the obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn
by the Affected Lender (which withdrawal shall be promptly accomplished by such
Affected Lender by notice to the Agent and the Company as soon as the
circumstances causing such Affected Lender to be so classified no longer
exist), (b) to the extent such determination by the Affected Lender relates to
a Eurodollar Rate Loan then being requested by the Company to be made or
continued hereunder, the Affected Lender shall make such Loan as, or convert
such Loan to, as applicable, a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the
terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. The Company shall compensate each Lender, upon written request by
that Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by
that Lender in connection with the liquidation or re-employment of such funds)
which that Lender may sustain: (i) if for any reason (other than a default by
that Lender or events described in 2.6C above with respect to such Lender) a
borrowing or continuation of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a Notice of Continuance, as
applicable, or a telephonic request for borrowing, or a
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conversion to or continuation of any Eurodollar Rate Loan does not occur on the
date specified therefor, (ii) if any prepayment or conversion of any of its
Eurodollar Rate Loans occurs on a date that is not the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment (including any
prepayment pursuant to subsection 2.4B(i)) or other principal payment of any of
its Eurodollar Rate Loans is not made by the Company on any date specified in a
notice of prepayment given by the Company or (iv) as a consequence of any other
default by the Company in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender located in the United
States of America; provided, however, that each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions
shall be utilized only for the purposes of calculating amounts payable under
this subsection 2.6 and under subsection 2.7A.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall in good faith
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a Governmental Authority, in each case that becomes
effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Governmental Authority or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net
income of such Lender or any franchise or doing business tax) with
respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
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(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities
in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, the Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Company (with a copy to the Agent)
a written statement within 120 days of such Lender obtaining knowledge of the
occurrence of any event resulting in such Lender's right to receive
compensation hereunder, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
the Company under this Agreement and the other Loan Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (excluding
in the case of each Lender and the Agent, Taxes imposed on its income,
and franchise and similar Taxes imposed on it, by a jurisdiction under
the laws of which such Lender is organized or in which its principal
executive office is located or in which its applicable lending office
for funding or booking its Loans hereunder is located) imposed,
levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made
by or on behalf of the Company or by any federation or organization of
which the United States of America or any such jurisdiction is a
member at the time of payment.
(ii) Grossing-up of Payments. If the Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by the Company to
the Agent or any Lender under any of the Loan Documents:
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(a) the Company shall notify the Agent of any
such requirement or any change in any such requirement as soon
as the Company becomes aware of it;
(b) the Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on the Company) for
its own account or (if that liability is imposed on the Agent
or such Lender, as the case may be) on behalf of and in the
name of the Agent or such Lender;
(c) the sum payable by the Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, the Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
the Company shall deliver to the Agent evidence satisfactory
to the other affected parties of such deduction, withholding
or payment and of the remittance thereof to the relevant
taxing or other authority;
provided, however, that no such additional amount shall be required to
be paid to any Lender under clause (c) above except to the extent that
any change after the date hereof (in the case of each Lender listed on
the signature pages hereof) or after the date such Lender became a
Lender pursuant to subsection 8.1 (in the case of each other Lender)
in any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of
this Agreement (in the case of each Lender listed on the signature
pages hereof) or at the date such Lender became a Lender pursuant to
subsection 8.1 (in the case of each other Lender) as the case may be,
in respect of payments to such Lender.
(iii) U.S. Tax Certificates. Each Lender that is organized
under the laws of any jurisdiction other than the United States of
America or any state or other political subdivision thereof shall
deliver to the Agent for transmission to the Company, on or prior to
the Funding Availability Date (in the case of each Lender listed on
the signature pages hereof) or on the date it becomes a Lender
pursuant to subsection 8.1 (in the case of each other Lender), and at
such other times as may be necessary in the determination of the
Company or the Agent (each in the reasonable exercise of its
discretion), such certificates, documents or other evidence, properly
completed and duly executed by such Lender (including Internal Revenue
Service Form 1001 or Form 4224 or any other certificate or statement
of exemption required by Treasury Regulations Section 1.1441-4(a) or
Section 1.1441-6(c) or any successor thereto) to establish that
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such Lender is not subject to deduction or withholding of United
States federal income tax under Section 1441 or 1442 of the Internal
Revenue Code or otherwise (or under any comparable provisions of any
successor statute) with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the
Loan Documents. The Company shall not be required to pay any
additional amount to any Lender under clause (c) or perform with
respect thereto under clause (d) of subsection 2.7B(ii) if such Lender
shall have failed to satisfy the requirements of the immediately
preceding sentence; provided, however, that if such Lender shall have
satisfied such requirements on the Funding Availability Date (in the
case of each Lender listed on the signature pages hereof) or on the
date it becomes a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii) shall relieve Company of its obligation
to pay any additional amounts pursuant to clause (c) or perform with
respect thereto under clause (d) of subsection 2.7B(ii) in the event
that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is
no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender
is not subject to withholding as described in the immediately
preceding sentence.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
reasonably determined that the adoption, effectiveness, phase-in or
applicability (after the date of this Agreement) of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or administration thereof by any Governmental Authority,
including any central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or its applicable
lending office) with any guideline, request or directive regarding capital
adequacy (whether or not having the force of law (after the date of this
Agreement)) of any such Governmental Authority, has or would have the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such
Lender's Loans or Commitment or Letters of Credit or participations herein or
other obligations hereunder with respect to the Loans or the Letters of Credit
to a level below that which such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time
to time, within five Business Days after receipt by the Company from such
Lender of the statement referred to in the next sentence, the Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to the Company (with a copy to the Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF THE LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans becomes aware of the
occurrence of an event or the
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existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under subsection
2.7, it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, fund or maintain the Commitment of such Lender or the
affected Loans of such Lender through another lending office of such Lender, or
(ii) take such other measures as such Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to subsection 2.7
would be materially reduced and if, as determined by such Lender in its
reasonable judgment, the making, funding or maintaining of such Commitment or
Loans through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect
such Commitment or Loans or the interests of such Lender; provided, however,
that such Lender will not be obligated to utilize such other lending office
pursuant to this subsection 2.8 unless the Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such
other lending office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by the Company pursuant to this subsection
2.8 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to the Company (with a copy to the Agent) shall be
conclusive absent manifest error.
2.9 RELEASES OF POOL A PROPERTIES, POOL B PROPERTIES, MANAGEMENT
AGREEMENTS AND SERVICING AGREEMENTS.
A. POOL A PROPERTIES. At any time and from time to time after
the Funding Availability Date, in connection with the sale or other permanent
disposition of any Pool A Property or mandatory prepayments made pursuant to
subsection 2.4B(iv) or otherwise, the Company may obtain a Release of the Lien
of the Security Documents in respect of all, but except as provided below not a
portion of, such Pool A Property, subject to the following terms and conditions
on the applicable Release Date:
(i) the Company shall have delivered written notice to
the Agent (a) not less than 30 days prior to the proposed Release Date
specifying the proposed Release Date and such Pool A Property and (b)
not less than 5 days prior to the actual Release Date specifying such
actual Release Date and such Pool A Property;
(ii) no Event of Default or Potential Event of Default
shall have occurred and be continuing as of the date of the delivery
of the notice pursuant to clause (i) above (other than an Event of
Default or Potential Event of Default that pertains solely to the Pool
A Property or portion thereof which is the subject of such Release or
which is cured by such Release) and no Event of Default or Potential
Event of Default shall be continuing as of the Release Date after
giving effect to such Release;
(iii) concurrently with such Release, the Borrowing Base
shall be reduced by an amount equal to the Pool A Property Amount with
respect to such Pool A Property in effect immediately prior to giving
effect to such Release;
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(iv) the Company shall concurrently prepay the Loans in an
amount equal to the Release Price in respect of such Pool A Property;
(v) the Company shall have delivered to the Agent for
distribution to the Lenders an Officers' Certificate dated the Release
Date, certifying as to the matters referred to in clause (ii) above
and a Borrowing Base Certificate setting forth in reasonable detail
the computation of the Borrowing Base as of the Release Date and
giving effect to such Release;
(vi) the Company, at its sole cost and expense, shall have
(a) with respect to any partial Release of the Lien of the Security
Documents in respect of such Pool A Property (other than the Rose Hall
Property), delivered to the Agent one or more endorsements to the
Title Policy in respect of such Pool A Property delivered to the Agent
on the date hereof and, to the extent generally available in each
state, insuring that, after giving effect to such partial Release and
with respect to the portion of such Pool A Property which is not being
Released, the Liens created by the applicable Mortgage and insured
under the such Title Policy are in full force and effect and
unaffected by such partial Release, (b) prepared any and all documents
and instruments necessary to effect such Release, all of which shall
be satisfactory in form and substance to the Agent, and (c) paid all
reasonable costs and expenses incurred by the Agent and its counsel in
connection with the review, execution and delivery of the release
documents; and
(vii) all other proceedings taken or to be taken in
connection with such Release and all documents incidental thereto
shall be satisfactory in form and substance to the Agent and the
Agent's counsel, the Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
the Agent may reasonably request and counsel for the Agent shall have
received such documents and evidence that such counsel shall require
in order to establish compliance with the conditions set forth in this
subsection.
The Company may obtain a Release of the Lien of the Security Documents in
respect of a portion of any Pool A Property, if title to such portion has been
permanently Taken, by complying with the foregoing terms and conditions on the
applicable Release Date.
B. POOL B PROPERTIES. At any time and from time to time after
the Funding Availability Date, in connection with the sale or other permanent
disposition of any Pool B Property or mandatory prepayments made pursuant to
subsection 2.4B(iv) or otherwise, the Company may obtain a Release of the Lien
of the Security Documents in respect of all, but except as provided below not a
portion of, such Pool B Property subject to the following terms and conditions
on the applicable Release Date:
(i) the Company shall have delivered written notice to
the Agent (a) not less than 30 days prior to the proposed Release Date
specifying the proposed Release Date and such Pool B Property and (b)
not less than 5 days prior to the actual Release Date specifying such
actual Release Date and such Pool B Property;
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(ii) no Event of Default or Potential Event of Default
shall have occurred and be continuing as of the date of the delivery
of the notice pursuant to clause (i) above (other than an Event of
Default or Potential Event of Default that pertains solely to the Pool
B Property or portion thereof which is the subject of such Release or
which is cured by such Release) and no Event of Default or Potential
Event of Default shall be continuing as of the Release Date after
giving effect to such Release;
(iii) the Company shall have prepaid the Loans in an amount
equal to the Release Price in respect of such Pool B Property;
(iv) the Company shall have delivered to the Agent an
Officers' Certificate dated the Release Date, certifying as to the
matters referred to in clause (ii) above;
(v) the Company, at its sole cost and expense, shall have
(a) prepared any and all documents and instruments necessary to effect
such Release, all of which shall be satisfactory in form and substance
to the Agent, and (b) paid all reasonable costs and expenses incurred
by the Agent and its counsel in connection with the review, execution
and delivery of the release documents; and
(vi) all other proceedings taken or to be taken in
connection with such Release and all documents incidental thereto
shall be satisfactory in form and substance to the Agent and the
Agent's counsel, the Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
the Agent may reasonably request and counsel for the Agent shall have
received such documents and evidence that such counsel shall require
in order to establish compliance with the conditions set forth in this
subsection.
The Company may obtain a Release of the Lien of the Security Documents in
respect of a portion of any Pool B Property, if title to such portion has been
permanently Taken, by complying with the foregoing terms and conditions on the
applicable Release Date.
C. MANAGEMENT AGREEMENTS, SERVICING AGREEMENTS, OTHER MANAGEMENT
AGREEMENTS, FRANCHISE AGREEMENTS AND OTHER COLLATERAL. At any time and from
time to time after the Funding Availability Date, in connection with the sale
or other permanent disposition of any Management Agreement, Servicing
Agreement, Other Management Agreement, Franchise Agreement or other item of
Collateral that is not subject to subsection 2.9A or 2.9B (including, without
limitation, the final payment of any obligation included in the Collateral) or
mandatory prepayments made pursuant to subsection 2.4B(iv) or otherwise, the
Company may obtain a Release of the Lien of the Security Documents in respect
of such Management Agreement, Servicing Agreement, Other Management Agreements,
Franchise Agreement or other item of Collateral that is not subject to
subsection 2.9A or 2.9B, as the case may be, subject to the following terms and
conditions on the applicable Release Date:
(i) the Company shall have delivered written notice to
the Agent (a) not less than 30 days prior to the proposed Release Date
specifying the proposed Release Date and such Management Agreement,
Servicing Agreement, Other Management
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Agreement, Franchise Agreement or other item of Collateral to the
extent practical and (b) not less than 5 days prior to the actual
Release Date specifying such actual Release Date and such Management
Agreement, Other Management Agreement, Servicing Agreement, Other
Management Agreement, Franchise Agreement or other item of Collateral
as the case may be;
(ii) no Event of Default or Potential Event of Default
shall have occurred and be continuing as of the date of the delivery
of the notice pursuant to clause (i) above (other than an Event of
Default or Potential Event of Default that pertains solely to the
Management Agreement, Servicing Agreement, Other Management Agreement,
Franchise Agreement or other item of Collateral which is the subject
of such Release or which is cured by such Release) and no Event of
Default or Potential Event of Default shall be continuing as of the
Release Date after giving effect to such Release;
(iii) in the case of a Management Agreement or Servicing
Agreement, the Company shall have prepaid the Loans in an amount equal
to the Release Price in respect of such Management Agreement, Other
Management Agreement, Franchise Agreement or other item of Collateral
as the case may be;
(iv) the Company shall have delivered to the Agent (a) an
Officers' Certificate dated the Release Date, certifying as to the
matters referred to in clause (ii) above, and (b) if the amount of the
Release Price payable by the Company pursuant to clause (iii) above
shall have been reduced pursuant to the proviso to clause (iii) or the
proviso to clause (iv) in the definition of Release Price by reason of
the Company's compliance with this subsection 2.9C(iv), a Borrowing
Base Certificate, in reasonable detail satisfactory to the Agent and
together with the financial statements and other information utilized
by the Company to calculate the Borrowing Base, and certified by the
Chief Executive Officer or Chief Financial Officer of the Company,
calculated as of the Release Date, and demonstrating that Total
Utilization does not exceed the Borrowing Base and that, without
giving effect to the limitations in subsection 2.1 with respect to the
frequency and minimum amounts of borrowings, the Company would then be
entitled to make a borrowing in an amount not less than $1.00;
(v) the Company, at its sole cost and expense, shall have
(a) prepared any and all documents and instruments necessary to effect
such Release, all of which shall be satisfactory in form and substance
to the Agent, and (b) paid all reasonable costs and expenses incurred
by the Agent and its counsel in connection with the review, execution
and delivery of the release documents; and
(vi) all other proceedings taken or to be taken in
connection with such Release and all documents incidental thereto
shall be satisfactory in form and substance to the Agent and the
Agent's counsel, the Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
the Agent may reasonably request and counsel for the Agent shall have
received such documents and evidence that such counsel shall require
in order to establish compliance with the conditions set forth in this
subsection.
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D. EFFECT OF RELEASE. Upon any Release of any Pool A Property,
Pool B Property, Management Agreement, Servicing Agreement, Other Management
Agreement, Franchise Agreement or other item of Collateral in accordance with
this subsection 2.9, such Property shall cease to be a Mortgaged Property or
other item of Collateral for the purposes of this Agreement (other than for
purposes of any indemnity contained herein or in any of the other Loan
Documents to the extent such indemnification applies to such Property,
Management Agreement, Servicing Agreement, Other Management Agreement,
Franchise Agreement or other item of Collateral prior to giving effect to such
Release, including subsections 5.2G and 6.8 (to the extent such subsections
apply to such Property, Management Agreement, Servicing Agreement, Other
Management Agreement, Franchise Agreement or other item of Collateral and
incorporate the Environmental Indemnity) and subsection 9.3).
E. REVISED SCHEDULES. (i) Upon the Release of any Pool A
Property or Pool B Property, (ii) within five days of the last day of each
month and (iii) concurrently with the delivery of each Notice of Borrowing, the
Company shall deliver to the Agent revised Schedules to this Agreement, the
Environmental Indemnity, the Security Agreement and the Omnibus Management and
Liquor License Agreement, as applicable, reflecting the Release of such
Property, Management Agreement, Other Management Agreement or Servicing
Agreement, which Schedules shall be satisfactory to the Agent and shall become
effective upon the date of such Release.
SECTION 3
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to the Company requesting that
the Lenders make Revolving Loans pursuant to subsection 2.1A(i) and that Swing
Line Lender make Swing Line Loans pursuant to subsection 2.1A(ii), the Company
may request, in accordance with the provisions of this subsection 3.1, from
time to time during the period from the Funding Availability Date to but
excluding the Revolving Commitment Conversion Date that one or more Lenders
issue Letters of Credit for the account of the Company for the purposes
specified in the definitions of Commercial Letters of Credit and Standby
Letters of Credit and such other general corporate purposes as may, in any
instance, be approved in advance, in writing, by the Agent. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of the Company herein set forth, any one or more Lenders may,
but (except as provided in subsection 3.1B(ii)) shall not be obligated to,
issue such Letters of Credit in accordance with the provisions of this
subsection 3.1; provided that the Company shall not request that any Lender
issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Commitments would exceed
the lesser of Revolving Commitments then in effect and the Borrowing
Base;
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(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the Maturity Date and (b) the date
which is one year from the date of issuance of such Standby Letter of
Credit; provided that the immediately preceding clause (b) shall not
prevent any Issuing Lender from agreeing that a Standby Letter of
Credit will automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing Lender elects
not to extend for any such additional period; and provided further,
that such Issuing Lender shall elect not to extend such Standby Letter
of Credit if it has knowledge that an Event of Default has occurred
and is continuing (and has not been waived in accordance with
subsection 9.6) at the time such Issuing Lender must elect whether or
not to allow such extension;
(iv) any Commercial Letter of Credit having an expiration
date (a) later than the earlier of (x) the date which is 30 days prior
to the Maturity Date and (y) the date which is 180 days from the date
of issuance of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion; or
(v) any Letter of Credit denominated in a currency other
than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever the Company desires the
issuance of a Letter of Credit, it shall deliver to Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit V
annexed hereto no later than 12:00 Noon (New York City time) at least
three Business Days (in the case of Standby Letters of Credit) or five
Business Days (in the case of Commercial Letters of Credit), or in
each case such shorter period as may be agreed to by the Issuing
Lender in any particular instance, in advance of the proposed date of
issuance. Each Notice of Issuance of Letter of Credit shall contain
the information indicated on the form thereof attached hereto as
Exhibit V; provided that the Issuing Lender, in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any such documents; and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made
thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such
draft is required to be presented is located) that such draft is
presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day.
The Company shall notify the applicable Issuing Lender
(and Agent, if Agent is not such Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any
Letter of Credit Company shall be deemed to have re-certified, as of
the date of such issuance, as to the
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matters to which the Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Agent of a Notice of Issuance of Letter of Credit pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, in
the event the Agent elects to issue such Letter of Credit, the Agent
shall promptly so notify the Company, and the Agent shall be the
Issuing Lender with respect thereto. In the event that the Agent, in
its sole discretion, elects not to issue such Letter of Credit, the
Agent shall promptly so notify the Company, whereupon the Company may
request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of Issuance of Letter
of Credit. Any Lender so requested to issue such Letter of Credit
shall promptly notify the Company and the Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and
any such Lender which so elects to issue such Letter of Credit shall
be the Issuing Lender with respect thereto. In the event that at
least two other Lenders shall have declined to issue such Letter of
Credit, notwithstanding the prior election of the Agent not to issue
such Letter of Credit, the Agent shall be obligated to issue such
Letter of Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Letter of Credit Usage with respect
to such Letter of Credit and with respect to all other Letters of
Credit issued by the Agent, when aggregated with Agent's outstanding
Revolving Loans and Swing Line Loans, may exceed the Agent's Revolving
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 9.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) Notification to Lenders. Upon the issuance or
amendment of any Standby Letter of Credit, the applicable Issuing
Lender shall promptly notify the Agent and each other Lender of such
issuance or amendment, which notice shall be accompanied by a copy of
such Standby Letter of Credit or amendment. Promptly after receipt of
such notice (or, if the Agent is the Issuing Lender, together with
such notice), the Agent shall notify each Lender of the amount of such
Lender's respective participation in such Standby Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of
each month ending after the Funding Availability Date, so long as any
Commercial Letter of Credit shall have been outstanding during such
month, each Issuing Lender shall deliver to each other Lender a report
setting forth for such month the daily aggregate amount available to
be drawn under the Commercial Letters of Credit issued by such Issuing
Lender that were outstanding during such month.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to,
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have irrevocably purchased from the Issuing Lender a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Lender's Pro Rata Share of the maximum amount which is or at any time may
become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
The Company agrees to pay the following amounts with respect
to Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, if any, payable directly to the applicable Issuing
Lender (other than Bankers) for its own account, equal to the amount
specified by written agreement between the Company and such Issuing
Lender, and (b) a letter of credit fee, payable to Agent for the
account of Lenders, equal to 2.00% per annum of the daily amount
available to be drawn under such Standby Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears on and
to (but excluding) each March 15, June 15, September 15 and December
15 of each year and computed on the basis of a 360-day year for the
actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a)
a fronting fee, payable directly to the applicable Issuing Lender
(other than Bankers) for its own account, equal to the amount
specified by written agreement between the Borrower and such Issuing
Lender and (b) a letter of credit fee, payable to the Agent for the
account of Lenders, equal to 1.75% per annum of the daily amount
available to be drawn under such Commercial Letter of Credit, each
such fronting fee or letter of credit fee to be payable in arrears on
and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year
for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with such
Issuing Lender's standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or payment, as the case may
be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by the Agent of any amount described in
clause (i)(b) or (ii)(b) of this subsection 3.2, the Agent shall distribute to
each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing
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Lender shall be responsible only to examine the documents delivered under such
Letter of Credit with reasonable care so as to ascertain whether they appear on
their face to be in accordance with the terms and conditions of such Letter of
Credit.
B. REIMBURSEMENT BY THE COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under
a Letter of Credit issued by it, such Issuing Lender shall immediately notify
the Company and the Agent, and the Company shall reimburse such Issuing Lender
on or before the Business Day immediately following the date on which such
drawing is honored (the "REIMBURSEMENT DATE") in an amount in Dollars and in
same day funds equal to the amount of such honored drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, (i)
unless the Company shall have notified the Agent and such Issuing Lender prior
to 10:00 A.M. (New York City time) on the date such drawing is honored that
Company intends to reimburse such Issuing Lender for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, the Company
shall be deemed to have given a timely Notice of Borrowing to the Agent
requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, the Lenders shall, on the Reimbursement Date, make
Revolving Loans that are Base Rate Loans in the amount of such honored drawing,
the proceeds of which shall be applied directly by the Agent to reimburse such
Issuing Lender for the amount of such honored drawing; and provided further
that if for any reason proceeds of Revolving Loans are not received by such
Issuing Lender on the Reimbursement Date in an amount equal to the amount of
such honored drawing, the Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of
such honored drawing over the aggregate amount of such Revolving Loans, if any,
which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and the Company shall retain any and
all rights it may have against any Lender resulting from the failure of such
Lender to make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY THE LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.
(i) Payment by the Lenders. In the event that the
Company shall fail for any reason to reimburse any Issuing Lender as
provided in subsection 3.3B in an amount equal to the amount of any
drawing honored by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall promptly notify each other Lender of
the unreimbursed amount of such honored drawing and of such other
Lender's respective participation therein based on such Lender's Pro
Rata Share. Each Lender shall make available to such Issuing Lender
an amount equal to its respective participation, in Dollars and in
same day funds, at the office of such Issuing Lender specified in such
notice, not later than 12:00 Noon (New York City time) on the first
business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available
to such Issuing Lender on such business day the amount of such
Lender's
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participation in such Letter of Credit as provided in this subsection
3.3C, such Issuing Lender shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right
of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received
From the Company. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of any drawing honored by such Issuing Lender under a
Letter of Credit issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other
Lender's Pro Rata Share of all payments subsequently received by such
Issuing Lender from the Company in reimbursement of such honored
drawing when such payments are received. Any such distribution shall
be made to a Lender at its primary address set forth below its name on
the appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. The Company agrees
to pay to each Issuing Lender, with respect to drawings honored under
any Letters of Credit issued by it, interest on the amount paid by
such Issuing Lender in respect of each such honored drawing from the
date such drawing is honored to but excluding the date such amount is
reimbursed by the Company (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date such drawing is honored to
but excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate
Loans and (b) thereafter, a rate which is 2% per annum in excess of
the rate of interest otherwise payable under this Agreement with
respect to Revolving Loans that are Base Rate Loans. Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of
a 360-day year for the actual number of days elapsed in the period
during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding
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the date on which such Issuing Lender is reimbursed for the amount of
such drawing (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B), the amount that such
other Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of such
Letter of Credit for such period pursuant to subsection 3.2 if no
drawing had been honored under such Letter of Credit, and (b) in the
event such Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such honored
drawing, such Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of
any interest received by such Issuing Lender in respect of that
portion of such honored drawing so reimbursed by other Lenders for the
period from the date on which such Issuing Lender was so reimbursed by
other Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by the Company. Any such distribution
shall be made to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of the Company to reimburse each Issuing Lender
for drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by the Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which the Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
the Company, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit
was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of
Credit;
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(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
the Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, the Company hereby agrees to protect, indemnify, pay and
save harmless each Issuing Lender from and against any and all losses, claims,
damages, liabilities, costs or expenses (including the reasonable fees, charges
and disbursements of counsel and the allocated costs and expenses of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith or recklessness of such
Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between the Company and
any Issuing Lender, the Company assumes all risks of the acts and omissions of,
or misuse of the Letters of Credit issued by such Issuing Lender by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit;
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(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, telefacsimile, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of such Issuing
Lender, including without limitation any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, the Company shall retain any and all rights it may have against
any Issuing Lender for any liability arising solely out of the gross negligence
or willful misconduct of such Issuing Lender, as determined by a final judgment
of a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall in good faith determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental
rule, regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or
compliance by any Issuing Lender or Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of such Issuing Lender
or Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any particular
Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by
any Lender; or
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(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section
3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender
or Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, the Company shall promptly pay to such Issuing
Lender or Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts as may be necessary to compensate
such Issuing Lender or Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Issuing Lender or Lender shall
deliver to the Company a written statement within 120 days of such Lender
obtaining knowledge of the occurrence of any event resulting in such Lender's
right to receive compensation hereunder, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Issuing Lender or
Lender under this subsection 3.6, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
SECTION 4
CONDITIONS PRECEDENT
4.1 CONDITIONS TO EFFECTIVENESS OF COMMITMENTS.
The effectiveness of the Commitments of the Lenders is conditioned
upon the prior or concurrent satisfaction, at the expense of the Company, of
the conditions specified in subsection 4.2 and in this subsection 4.1, in each
case as determined by the Agent:
A. CORPORATE DOCUMENTS. Each Loan Party (other than any
Partnership Subsidiary) shall deliver or cause to be delivered to the Agent
(with sufficient originally executed copies for each Lender and the Agent's
counsel) the following, each unless otherwise noted dated the Funding
Availability Date:
(i) executed originals of this Agreement, the Subsidiary
Guaranty, the Security Agreement, a Revolving Note in favor of each
Lender, the Swing Line Note in favor of Swing Line Lender and each
other Loan Document to which it is a party;
(ii) except with respect to the Payroll Subsidiaries,
certified copies of its Certificate of Incorporation, together with
(a) a good standing certificate (including verification, where
generally available, of tax good standing) from the Secretary of State
(or similar official) of its jurisdiction of incorporation and each
other state in which a Property owned or leased by such Loan Party is
located), each dated a recent date prior to the Funding Availability
Date and (b) a telegram from each such Secretary of State (or similar
official) or on-line verification from the official database
certifying as to the foregoing matters and dated the Funding
Availability Date;
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(iii) except with respect to the Payroll Subsidiaries,
copies of its Bylaws, certified as of the Funding Availability Date by
its corporate secretary or an assistant secretary;
(iv) resolutions of its Board of Directors approving and
authorizing (a) the execution, delivery and performance of each Loan
Document and Related Document to which it is a party, (b) the
consummation of the Formation and (c) in the case of the Company, the
issuance of the Common Stock pursuant to the Equity Offering Documents
and the issuance of the Senior Notes pursuant to the Debt Offering
Documents, in each case certified as of the Funding Availability Date
by its corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment; and
(v) signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents to which it is a
party.
B. PARTNERSHIP DOCUMENTS. Each Partnership Subsidiary shall
deliver to the Agent (with sufficient originally executed copies for each
Lender and the Agent's counsel) the following, each unless otherwise noted
dated the Funding Availability Date:
(i) executed originals of the Subsidiary Guaranty, the
Security Agreement and each other Loan Document to which it is a
party;
(ii) a conformed copy of the partnership agreement,
certified by each general partner of such partnership as of the
Funding Availability Date as being in full force and effect without
modification or amendment;
(iii) (a) its Certificate of Limited Partnership and
Statements of Partnership, certified by the Secretary of State (or
similar official) of its jurisdiction of formation and a certificate
of existence or good standing, as the case may be, from the Secretary
of State (or similar official) of such jurisdiction, each dated as of
a recent date prior to the Funding Availability Date, and (b) a good
standing certificate or certificate of existence, as the case may be,
from the Secretary of State (or similar official) of each state or
other jurisdiction in which a Property owned or leased by such entity
is located);
(iv) all documents of such Partnership Subsidiary and its
partners approving or authorizing (a) the execution, delivery and
performance of the Subsidiary Guaranty and any other Loan Documents to
which it is a party, and (b) the consummation of the Formation, each
certified as of the Funding Availability Date by the general partner
of such Partnership Subsidiary or other Loan Party; and
(v) signature and incumbency certificate of the Person(s)
executing, on behalf of such partnership, any Loan Documents to which
such Partnership Subsidiary is a party.
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C. FINANCIAL STATEMENTS; CERTIFICATES. The Company shall have
delivered to the Agent an Officers' Certificate of the Chief Executive Officer
and the Chief Financial Officer of the Company certifying as to the following:
(i) the delivery to the Agent of the financial statements
referred to in subsection 5.3 on or before the Funding Availability
Date;
(ii) as of the Funding Availability Date and for the year
ending December 31, 1995:
(a) the sum of the Property EBITDA in respect of
the Pool A Properties (other than the Rose Hall Property)
minus an amount equal to 3.50% of Property Gross Revenues from
such Pool A Properties for such period, was equal to or
greater than $__________;
(b) Property EBITDA for the Rose Hall Property
minus 3.50% of Property Gross Revenues from the Rose Hall
Property for such period, was equal to or greater than
$__________;
(c) the sum of Property EBITDA in respect of the
HPT Properties minus a reserve for FF&E for the HPT Properties
equal to the greater of (1) an amount equal to 3.50% of
Property Gross Revenues from the HPT Properties for such
period and (2) the aggregate amount that would have been
required to be reserved by GHALP Corp. pursuant to Section
5.1.2(b) of the HPT Leases (without regard to the amounts
required to be reserved by GHALP Corp. pursuant to Section
5.1.2(a) of the HPT Leases) for such period, was equal to or
greater than $__________;
(d) the Property EBITDA in respect of the Harbour
Island Property minus a reserve for FF&E for such Property
equal to the greater of (1) an amount equal to 3.50% of
Property Gross Revenues for such period and (2) the aggregate
amount reserved by the predecessor of WHI pursuant to the
Harbour Island Lease for such period, was equal to or greater
than $__________; and
(e) the sum of Management EBITDA in respect of
the Managed Properties for such period was equal to or
greater than $__________;
(iii) after giving effect to the Public Offerings:
(a) the Company has a minimum Market Equity
Capitalization of not less than $250,000,000; and
(b) each of the ratios of (1) Consolidated Total
Indebtedness to (2) the sum of Market Equity Capitalization
and Consolidated Total Indebtedness and (3) the sum of
Consolidated Total Indebtedness and Adjusted Stockholders'
Equity, respectively, expressed as a percentage, is not
greater than 50%.
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(iv) since December 31, 1995, no Material Adverse Effect
has occurred; and
(v) the delivery to the Agent of a Borrowing Base
Certificate and a Compliance Certificate, each as of the Funding
Availability Date and which shall be attached thereto.
D. NO MATERIAL ADVERSE EFFECT. Since December 31, 1995, in the
sole opinion of the Agent, no condition or event has occurred that has had or
could reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect.
E. SECURITY INTERESTS. The Company shall have taken or caused to
be taken all such actions as may be necessary or reasonably requested by the
Agent to give the Agent a valid, enforceable and perfected first priority Lien
on or first priority security interest in the Collateral as of the Funding
Availability Date, subject only to Permitted Encumbrances and Liens permitted
pursuant to subsection 7.2A(ii), (iii) and (iv), it being understood by each
Lender that perfection against Persons other than the Company of such Lien on
the Rents may in certain jurisdictions require the Agent to have possession of
the Rents. Such actions shall include the following:
(i) the delivery to the Agent of fully executed and
acknowledged counterparts of the Mortgage, the Assignment of Rents and
Leases, the Omnibus Management and Liquor License Agreement, the
Security Agreement, the Trademark Agreement and all other Security
Documents with respect to the Pool A Properties, the Pool B
Properties, the Management Agreements and the other Collateral as of
the Funding Availability Date, and the delivery of evidence
satisfactory to the Agent that counterparts of the Mortgage, the
Assignment of Rents and Leases and all other of such documents the
Agent desires to have recorded have been or will be recorded in all
places necessary or desirable to create and maintain (a) valid and
enforceable first priority Liens on the fee simple or leasehold
interests of the Company, as applicable, in the Pool A Properties and
Pool B Properties in favor of the Agent, as mortgagee (or as
beneficiary in those jurisdictions where the Lien is granted to a
trustee for the benefit of the Agent), (b) valid and enforceable first
priority Liens on the Rents and Leases in favor of the Agent, (c)
valid and enforceable first priority Liens in all fixtures at the Pool
A Properties and Pool B Properties, in favor of the Agent, as secured
party and (d) valid and enforceable first priority Liens in all other
items of Collateral as of the Funding Availability Date in favor of
the Agent;
(ii) (a) the delivery to the Agent for filing pursuant to
the Security Documents of properly executed financing statements under
the Uniform Commercial Code (or any equivalent or similar
legislation), or any other documents required to be filed by other
Applicable Laws, satisfactory in form and substance to the Agent in
each jurisdiction as may be necessary (in the Agent's reasonable
judgment) effectively to perfect and maintain the security interests
in the Collateral created by such Security Documents and (b) the
delivery of evidence that such financing statements or other documents
will have been or will be recorded in all places necessary or
desirable, in the reasonable judgment of the Agent, to create and
maintain valid and enforceable first
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priority Liens on the Collateral in favor of the Agent, subject only
to Permitted Encumbrances and Liens permitted pursuant to subsection
7.2A(ii), (iii) and (iv);
(iii) the delivery to the Agent of a title report or
commitment (together with copies of all documents listed therein as
exceptions to title) dated not more than 90 days prior to the Funding
Availability Date with respect to each Pool A Property (other than the
Rose Hall Property) and pro forma Title Policies dated not more than
30 days prior to the Funding Availability Date with respect to each
such Pool A Property, each satisfactory in form and substance to the
Agent;
(iv) the delivery to the Agent of an opinion of counsel in
each state or other jurisdiction in which each Pool A Property or Pool
B Property is located, dated the Funding Availability Date, addressed
to the Agent and the Lenders and in form and substance reasonably
satisfactory to the Agent;
(v) the delivery to the Agent of the Title Policies or
marked title commitments insuring fee simple title to each of the Pool
A Properties (other than the Rose Hall Property) vested in the Company
(or, as to those Pool A Properties, if any, in which the Company holds
a leasehold estate, insuring fee simple title to such Property vested
in the landlord and such leasehold estate vested in the Company) and
insuring the first priority of the Liens created under the Mortgages
in an aggregate amount not less than $88,854,000 with respect to the
Pool A Properties, in each case subject only to Permitted
Encumbrances, and such other title exceptions as are satisfactory to
the Agent. Such Title Policies shall be reinsured with title
insurance companies acceptable to the Agent in amounts as required by
the Agent subject to facultative reinsurance agreements in form
satisfactory to the Agent. Such Title Policies shall also contain
such endorsements and affirmative insurance provisions as the Agent
may reasonably require and to the extent the same are available in the
applicable jurisdiction, including "comprehensive" endorsements,
revolving credit endorsements, affirmative insurance against
mechanic's liens, survey exceptions, violations of covenants,
conditions and restrictions, encroachments, gap insurance, contiguity
endorsements, tie-in endorsements, access endorsements, "Last-dollar"
endorsements, survey endorsements, contingent loss/first loss
endorsements, variable rate mortgage endorsements, leasehold
endorsement for Pool A Properties that are leaseholds, and any other
endorsements required by the Agent to address issues raised by the
Agent's due diligence or as a matter of Applicable Law. In addition,
the Company shall have paid to the Title Company or to the appropriate
Governmental Authority all expenses and premiums of the Title Company
in connection with the issuance of such Title Policies or in
connection with any Loan hereunder and an amount equal to the
recording and stamp taxes (including mortgage recording, intangible
and similar taxes) payable in connection with recording each Mortgage
and the Assignment of Rents and Leases in the appropriate county land
offices or in connection with any Loans hereunder;
(vi) the delivery to the Title Company of such
certificates and affidavits as the Title Company may reasonably
require in connection with the issuance of the Title Policies;
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(vii) the delivery to the Agent of a Survey with respect to
each of the Pool A Properties and the Pool B Properties, dated or
re-dated to within 120 days prior to the Funding Availability Date,
which Surveys shall be reasonably satisfactory in form and substance
to the Agent;
(viii) the delivery to the Agent of a letter from the
applicable zoning authority with respect to each of the Pool A
Properties and the Pool B Properties and reasonably satisfactory to
the Agent stating that all Improvements on each such Property have
been constructed and are being used and operated in full compliance
with (a) all applicable zoning, subdivision, environmental and other
Applicable Laws of all Governmental Authorities or quasi-governmental
authorities having jurisdiction with respect to each such Property,
and (b) all building permits issued in respect of each such Property
and the certificate of occupancy (if available) for each such
Property;
(ix) the delivery to the Agent pursuant to the Security
Agreement of the stock certificates (which certificates shall be
accompanied by irrevocable undated stock powers duly endorsed in blank
and irrevocable proxies, all satisfactory in form and substance to the
Agent) and promissory notes or other instruments, including the DAB
Notes, the shares of Common Stock pledged to the Company by the
obligors as security for the payment thereof and the Affiliate Notes
(in each case duly endorsed to the order of the Agent, as secured
party), representing the capital stock, promissory notes and other
instruments to be pledged on the Funding Availability Date pursuant to
the Security Agreement;
(x) the delivery to the Agent (i) of the Trademark
Agreement, in a form suitable for filing with the United States
Trademark and Patent Office, (ii) of the Trademark Security Agreement
in a form suitable for filing with the Canadian Trademark Office,
(iii) Trademark Agreement in a form suitable for filing with the Trade
Marks Department of the Registrar of Companies in Jamaica for
registration in relation to the Jamaican trademarks and the Registrar
of Companies in Jamaica for registration as a charge in the charges
register of IP Corp.;
(xi) the delivery to the Agent of Cash Management Letters
for each financial institution at which a Deposit Account is located
pursuant to the Cash Management System, which Cash Management Letters
and the Cash Management System shall be in form and substance
reasonably satisfactory to the Agent; and
(xii) the delivery to the Agent of evidence satisfactory to
the Agent that all other filings, recordings and other actions the
Agent deems necessary or advisable to establish, perfect and preserve
the Liens granted to the Agent in the Collateral as of the Funding
Availability Date shall have been made.
F. CASUALTY, FLOOD INSURANCE AND WORKERS' COMPENSATION. The
Company shall have delivered to the Agent (i) duplicate originals or true and
complete copies of each policy or other evidence of insurance required by this
Agreement evidencing (a) the issuance of such policies, (b) the payment of all
premiums payable for the period ending not earlier than the first
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anniversary of the Funding Availability Date or as otherwise approved in
writing by Agent and (c) coverage which meets all of the requirements set forth
in this Agreement; (ii) an Officers' Certificate dated the Funding Availability
Date to the effect that the insurance coverage required by this Agreement is in
full force and effect, that all monthly premiums therefor have been paid and
that the amount of each limit of property insurance provided for in the
policies of insurance delivered to the Agent which evidence such coverage are
sufficient to cover all cost of replacing the property and Improvements covered
thereby; and (iii) evidence satisfactory to the Agent that the Company is
insured for workers' compensation liability with a maximum deductible of
$500,000.
To the extent permitted by law, the Company hereby irrevocably waives,
releases and discharges any and all rights of action, demands and other claims
of any kind or nature against the Agent and the Lenders arising from any
failure of the Agent or the Lenders to comply with the National Flood Insurance
Act of 1968 (42 U.S.C. Sections 4001, et seq.), the Flood Disaster Protection
Act of 1973 or the National Flood Insurance Reform Act of 1994, including any
failure of the Agent or the Lenders to provide the Company with written
notification within ten days prior to the Funding Availability Date whether any
Pool A Property or Pool B Property is in a special flood hazard area or whether
federal disaster relief assistance will be available in the event of flood
damage to any Pool A Property or Pool B Property.
G. POOL A GROUND LEASES; LANDLORD ESTOPPEL CERTIFICATES. The
Company shall have delivered to the Agent (i) executed or conformed, certified
copies of each of the Pool A Ground Leases and all amendments thereto entered
into on or prior to the Funding Availability Date, as listed on Schedule 4.1G
annexed hereto, which Pool A Ground Leases shall be satisfactory in form and
substance to the Agent, in its sole discretion; the Pool A Ground Leases, as so
amended, shall be in full force and effect and no term or condition thereof
shall have been further amended or modified, or waived after the execution
thereof; and no Person shall have failed in any material respect to perform any
material obligation or covenant or satisfy any material condition required by
the Pool A Ground Leases to be performed or complied with on or before the
Funding Availability Date; and (ii) original counterparts of estoppel
certificates and agreements with respect to each of the Pool A Ground Leases,
satisfactory in form and substance to the Agent, and duly executed and
acknowledged by each lessor under such Pool A Ground Lease.
H. POOL B DOCUMENTS; LANDLORD AND LENDER ESTOPPEL CERTIFICATES.
The Company shall have delivered to the Agent (i) executed or conformed,
certified copies of each of the Pool B Documents (including, without
limitation, the Pool B Ground Leases) and all amendments thereto entered into
on or prior to the Funding Availability Date, as listed on Schedule 4.1H
annexed hereto, which documents shall be satisfactory in form and substance to
the Agent, in its sole discretion; such documents, as so amended, shall be in
full force and effect and no term or condition thereof shall have been further
amended or modified, or waived after the execution thereof; and no Person shall
have failed in any material respect to perform any material obligation or
covenant or satisfy any material condition required thereunder to be performed
or complied with on or before the Funding Availability Date; and (ii) original
counterparts of estoppel certificates and consent agreements with respect to
each of the Pool B Obligations specified on Schedule 4.1H, satisfactory in form
and substance to the Agent, and
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duly executed by the lessor under the Ground Lease with respect to the related
Pool B Property or by each lender with respect to the Pool B Properties
specified on such schedule, as the case may be.
I. MANAGEMENT AGREEMENTS; OWNER AND LENDER ESTOPPEL CERTIFICATES.
The Company shall have delivered to the Agent (i) executed or conformed,
certified copies of each of the Management Agreements and all amendments
thereto entered into on or before the Funding Availability Date, as listed on
Schedule 4.1I annexed hereto, which Management Agreements shall be satisfactory
in form and substance to the Agent; the Management Agreements, as so amended,
shall be in full force and effect and no term or condition thereof shall have
been further amended or modified, or waived after the execution thereof; and no
Person shall have failed in any material respect to perform any material
obligation or covenant or satisfy any material condition required by the
Management Agreements to be performed or complied with on or before the Funding
Availability Date; (ii) original counterparts of estoppel certificates and
consent agreements with respect to each Management Agreement specified on
Schedule 4.1I having ranking 1, 2 or 3, satisfactory in form and substance to
the Agent, and duly executed by each owner of the related Managed Property or
by each lender with respect to the Managed Properties specified on such
schedule, as the case may be; and (iii) a Management Agreement Report for each
Management Agreement.
J. SERVICING AGREEMENTS. On or before the Funding Availability
Date, the Company shall have delivered to the Agent executed or conformed,
certified copies of the Property Servicing Agreement with respect to each
Property and, if a Liquor License exists with respect to such Property, the
Liquor Operation Service Agreement with respect to such Property, in each case
with all amendments thereto entered into on or before the Funding Availability
Date, as listed on Schedule 4.1J annexed hereto, which Servicing Agreements
shall be satisfactory in form and substance to the Agent, in its sole
discretion; the Servicing Agreements, as so amended, shall be in full force and
effect and no term or condition thereof shall have been further amended or
modified, or waived after the execution thereof; and no Person shall have
failed in any material respect to perform any material obligation or covenant
or satisfy any material condition required by the Servicing Agreements to be
performed or complied with on or before the Funding Availability Date.
K. FRANCHISE AGREEMENTS; FRANCHISE ESTOPPEL CERTIFICATES. The
Company shall have delivered to the Agent (i) executed or conformed, certified
copies of each of the Franchise Agreements and all amendments thereto entered
into on or before the Funding Availability Date, as listed on Schedule 4.1K
annexed hereto, which Franchise Agreements shall be satisfactory in form and
substance to the Agent; the Franchise Agreements, as so amended, shall be in
full force and effect and no term or condition thereof shall have been further
amended or modified, or waived after the execution thereof; and no Person shall
have failed in any material respect to perform any material obligation or
covenant or satisfy any material condition required by the Franchise Agreements
to be performed or complied with on or before the Funding Availability Date;
and (ii) original counterparts of estoppel certificates and consent agreements
with respect to each Franchise Agreement specified on Schedule 4.1K,
satisfactory in form and substance to the Agent, and duly executed by the
franchisee with respect to each Franchise Agreement.
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L. MATERIAL LEASES; TENANT ESTOPPEL CERTIFICATES; TENANT
SUBORDINATION AGREEMENTS. The Company shall have delivered to the Agent (i)
executed or conformed, certified copies of each Material Lease with respect to
each Property and all amendments thereto entered into on or before the Funding
Availability Date, as listed on Schedule 4.1L annexed hereto, which Material
Leases shall be satisfactory in form and substance to the Agent; the Material
Leases, as so amended, shall be in full force and effect and no term or
condition thereof shall have been further amended or modified, or waived after
the execution thereof; and no Person shall have failed in any material respect
to perform any material obligation or covenant or satisfy any material
condition required by the Material Leases to be performed or complied with on
or before the Funding Availability Date; and (ii) original counterparts of
estoppel certificates with respect to each of the Material Leases specified on
Schedule 4.1L, satisfactory in form and substance to the Agent, duly executed
and delivered by each Tenant party to such Material Lease; and (iii) a Tenant
Subordination Agreement with respect to such Material Leases.
M. ENVIRONMENTAL AUDITS. The Company shall have delivered to the
Agent evidence satisfactory to the Agent, in its sole discretion, that (i)
there are no material pending or threatened claims, suits, actions or
proceedings arising out of or relating to the existence of any Hazardous
Materials at, in, on, from, around or under any of the Pool A Properties and
Pool B Properties; (ii) each such Property is in compliance in all material
respects with all applicable Environmental Laws with respect to such Property;
and (iii) no Hazardous Materials exist at, in, on, from, around or under any
such Property, except in compliance in all material respects with applicable
Environmental Laws and all other Hazardous Materials have been removed from
each Property to the extent required by Applicable Law. Such evidence shall
include (a) a comprehensive environmental audit (which shall include a Phase I
environmental audit and, if necessary or desirable in the Agent's opinion, a
Phase II environmental audit), satisfactory in form and substance to the Agent,
conducted and certified by an Approved Environmental Consultant (the Company
shall certify as of the Funding Availability Date that, as to any environmental
audit delivered by the Company prior to the Funding Availability Date, to the
Company's knowledge, the information contained in such audit remains true,
correct and complete), (b) a reliance letter from such Approved Environmental
Consultant with respect to each such environmental audit addressed to the Agent
and Lenders, which reliance letter shall be satisfactory in form and substance
to the Agent, (c) certification that all required approvals from all
Governmental Authorities having jurisdiction with respect to the environmental
condition of the Pool A Properties and the Pool B Properties, if any, have been
obtained, and (d) such other environmental reports, inspections and
investigations as the Agent shall in its sole discretion require, prepared, in
each instance, by an Approved Environmental Consultant, which approvals,
reports, inspections and investigations shall be satisfactory in form and
substance to the Agent, in its sole discretion. On or before the Funding
Availability Date, the Company shall have delivered to the Agent evidence
satisfactory to the Agent, in its sole discretion, that the Company has
complied (or has made arrangements to comply) with the recommendations and
suggestions of all environmental consultant(s) referred to above.
N. ENGINEERING REPORTS. The Company shall have delivered to the
Agent (i) a written Engineering Report with respect to each Property dated not
more than 45 days prior to the Funding Availability Date and prepared by an
Engineer acceptable to the Agent, which
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Engineering Report shall contain repair recommendations for the first five
years, and shall in all other respects be satisfactory in form and substance to
the Agent; and (ii) a reliance letter from such Engineer with respect to each
such Engineering Report addressed to the Agent and Lenders, which letter shall
be in form and substance reasonably satisfactory to the Agent.
O. APPRAISALS. The Agent shall have received (i) an Appraisal of
each Pool A Property dated not more than 60 days prior to the Funding
Availability Date and prepared by an Appraiser designated by the Agent, which
Appraisal shall be satisfactory in form and substance to the Agent; and (ii)
copies of all appraisals, market studies, and similar information with respect
to each of the Pool A Properties and Pool B Properties in the possession or
under the control of the Company or any of its Subsidiaries.
P. OPINIONS OF THE COMPANY'S COUNSEL; AUDITOR'S LETTER. On the
Funding Availability Date the Company shall have delivered to the Agent, its
counsel and the Lenders (i) executed copies of each of the favorable written
opinions of Locke Purnell Rain Harrell (A Professional Corporation), counsel
for the Company, substantially in the form of Exhibit XV annexed hereto, with
such changes as the Agent may approve and dated the Funding Availability Date;
(ii) executed copies of a letter prepared by Coopers & Lybrand, independent
accountants for the Company, as to such matters as the Agent and its counsel
may reasonably request, addressed to the Agent and Lenders and satisfactory in
form and substance to the Agent; (iii) executed copies of a reliance letter
from Locke Purnell Rain Harrell (A Professional Corporation), counsel to
Company, and each other counsel to the Company delivering an opinion in
connection with the issuance of the Common Stock in the Equity Offering, in
each case addressed to the Agent and Lenders and satisfactory in form and
substance to the Agent and stating that the Agent and Lenders may rely on such
opinions as if they were original addressees thereof, and in each case
attaching an executed original thereof; (iv) executed copies of a reliance
letter from Locke Purnell Rain Harrell (A Professional Corporation), counsel to
the Company, and each other counsel to the Company delivering an opinion in
connection with the Debt Offering, in each case addressed to the Agent and
Lenders and satisfactory in form and substance to the Agent stating that the
Agent and Lenders may rely on such opinions as if they were original addressees
thereof, and in each case attaching an executed original thereof; and (v)
evidence satisfactory to the Agent that the Company has requested such counsel
and auditor to deliver such opinions and letter to the Agent and its counsel
and the Lenders.
Q. OPINION OF AGENT'S COUNSEL. The Lenders shall have received
executed copies of the favorable written opinion of O'Melveny & Myers, counsel
to the Agent, dated as of the Funding Availability Date.
R. APPROVED CAPITAL POLICY. The Company shall have delivered to
the Agent a copy of the Company's stated policy for the capitalization of
expenditures on the financial statements of the Company and its Subsidiaries,
which stated policy shall be reasonably acceptable to the Agent.
S. FORMATION DOCUMENTS; FORMATION; PAYMENT OF CERTAIN
INDEBTEDNESS. The Company shall have delivered to the Agent (i) an executed or
conformed, certified copy of
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each of the Formation Documents entered into on or prior to the Formation Date,
which documents shall be satisfactory in form and substance to the Agent; such
documents, as so amended, shall be in full force and effect and no term or
condition thereof shall have been further amended or modified, or waived after
the execution thereof; and no Person shall have failed in any material respect
to perform any material obligation or covenant or satisfy any material
obligation or covenant or satisfy any material condition required thereunder to
be performed or complied with on or before the Funding Availability Date; (ii)
a copy of each agreement, legal opinion, accountant's letter, certificate and
each other document or instrument delivered in connection with the formation of
the Company and the Formation; (iii) an Officers' Certificate of the Company
certifying that, as of the Funding Availability Date, each transaction
constituting the Formation has been duly authorized by all necessary action of
the Loan Parties, the applicable current and former Subsidiaries of the Loan
Parties and all other Persons and has been consummated in accordance with, and
is enforceable pursuant to, all Applicable Laws; (iv) evidence satisfactory to
the Agent that the proceeds of the Public Offerings have been applied to
refinance all outstanding Indebtedness secured by the Pool A Properties or
ownership interests therein as set forth on Schedule 4.1S annexed hereto and,
upon such refinancing, any commitments to lend in connection with such
Indebtedness shall terminate or shall have terminated; and (v) the Company
shall have caused the holders of such Indebtedness to deliver properly executed
termination statements under the Uniform Commercial Code and any and all
releases of mortgages and subordination agreements benefitting such Persons.
On or before the Funding Availability Date, each of the transactions
constituting the Formation shall have been consummated in accordance with all
Applicable Laws.
T. ISIS 2000 AGREEMENTS; CWS AGREEMENTS; WYNRIGHT AGREEMENTS;
GREYSTAR AGREEMENTS. The Company shall have delivered to the Agent such drafts
as are available of the CWS Agreements and Greystar Agreements and executed or
conformed, certified copies of each of the ISIS 2000 Agreements and the
Wynright Agreements, in each case with all amendments thereto entered into on
or before the Funding Availability Date, which drafts, agreements and
amendments shall be satisfactory in form and substance to the Agent, in its
sole discretion; the ISIS 2000 Agreements and Wynright Agreements, as so
amended, shall be in full force and effect and no term or condition thereof
shall have been further amended or modified, or waived after the execution
thereof; and no Person shall have failed in any material respect to perform any
material obligation or covenant or satisfy any material condition required by
such agreements to be performed or complied with on or before the Funding
Availability Date.
U. EQUITY OFFERING; GE OPTION. The Company shall have delivered
to the Agent (i) evidence satisfactory to the Agent that the Equity Offering
shall have been consummated pursuant to the Equity Offering Documents; (ii)
executed or conformed, certified copies of each of the Equity Offering
Documents and all satisfactory in form and substance to the Agent, which
documents shall be in full force and effect; (iii) evidence satisfactory to the
Agent that the exercise of the GE Option, and the issuance of shares of Common
Stock pursuant thereto, shall have been consummated pursuant to the GE Option;
(iv) evidence satisfactory to the Agent that, after giving effect to the
Formation, the Public Offerings and the issuance, sale and delivery of shares
of Common Stock pursuant to the GE Option, the Market Equity
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Capitalization of the Company is not less than $250,000,000; and (v) evidence
satisfactory to the Agent that, after giving effect to the Formation, the
Equity Offering and the issuance, sale and delivery of shares of Common Stock
pursuant to the GE Option, Bedrock, the Crow Interests and the Senior
Executives beneficially and of record own not less than the numbers of shares
of Common Stock set forth on Schedule 4.1U annexed hereto, which shall not be
less than 11.5%, 47.0% and 14.5%, respectively, of the equity Securities of the
Company then outstanding and shall not include any equity Securities of the
Company beneficially or of record owned by WEL; provided, however, that shares
of Common Stock may be pledged by the Senior Executives to the Company to
secure the payment of the DAB Notes, as more particularly indicated on Schedule
4.1U annexed hereto. All other matters with respect to the Equity Offering and
the exercise of the GE Option shall be satisfactory to the Agent.
V. DEBT OFFERING. The Company shall have delivered to the Agent
(i) evidence satisfactory to the Agent that the Debt Offering shall have been
consummated pursuant to the Debt Offering Documents; (ii) the Agent and Lenders
shall have received executed or conformed, certified copies of each of the Debt
Offering Documents, all satisfactory in form and substance to the Agent, which
documents shall be in full force and effect; and (iii) evidence satisfactory to
the Agent that the Company shall have issued not less than $100,000,000 in
aggregate principal amount of Senior Notes pursuant to the Indenture. No
Person shall have failed in any material respect to perform any material
obligation or covenant or satisfy any material condition required by the Debt
Offering Documents to be performed or complied with on or before the Funding
Availability Date. All other matters with respect to the Debt Offering shall
be satisfactory to the Agent.
W. NO ADVERSE LITIGATION. There shall not be pending or, to the
knowledge of the Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries that has not been disclosed by the Company in writing pursuant to
subsection 4.5 prior to the execution of this Agreement and that is reasonably
likely to have a Material Adverse Effect, and there shall have occurred no
development not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in the
opinion of the Agent, is reasonably likely to have a Material Adverse Effect;
and no injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued shall be
pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this Agreement
or the making of the Loans hereunder.
X. ORIGINAL ACQUISITION DOCUMENTS. The Company shall have
delivered to the Agent executed certified copies of each of the Original
Acquisition Agreements and all amendments thereto entered into on or prior to
the Funding Availability Date.
Y. PAYMENT OF FEES AND EXPENSES. The Company shall have paid to
the Agent, for distribution (as appropriate) to the Lenders and the Agent, the
fees payable pursuant to subsection 2.3 and the expenses payable pursuant to
subsection 9.2.
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Z. DEFERRED MAINTENANCE ACCOUNT. The Company shall have
deposited into the Deferred Maintenance Account an amount not less than
$__________ in the aggregate, and shall have delivered to the Agent an
Officers' Certificate with respect to the allocation of such amount among the
Properties, which allocation shall be satisfactory to the Agent.
AA. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto and the Formation not
previously found acceptable by the Agent and its counsel shall be reasonably
satisfactory in form and substance to the Agent and such counsel, and the Agent
and such counsel shall have received all such counterpart originals or
certified copies of such documents as the Agent may reasonably request.
AB. OTHER DOCUMENTS. Each Loan Party shall have delivered to the
Agent such other information and documents as the Agent may reasonably request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. NOTICE OF BORROWING. The Agent shall have received before
that Funding Date, in accordance with the provisions of subsection 2.1B, (i) an
originally executed Notice of Borrowing, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of the Company
or by any executive officer of the Company designated by any of the
above-described officers on behalf of the Company in a writing delivered to the
Agent and (ii) if any of the proceeds of such Loan are to be applied to the
Restoration or Renovation of any Property, waivers of lien satisfactory to the
Agent covering that part of the Renovation or Restoration for which payment or
reimbursement is being requested and by a search prepared by the Title Company
satisfactory to the Agent establishing that there has not been filed with
respect to such Property any mechanics' or other lien or instrument for the
retention of title in respect of any part of the Renovation or Restoration not
discharged of record or bonded to the reasonable satisfaction of the Agent and
evidencing the continued priority of the Mortgage and Assignment of Rents and
Leases on such Property.
B. OTHER CONDITIONS PRECEDENT. As of that Funding Date:
(i) the representations and warranties of the Loan
Parties as contained herein and in the other Loan Documents shall be
true and correct in all material respects on and as of that Funding
Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate
to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of
such earlier date;
(ii) no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default, including a breach or
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violation of Section 4.3 of the Indenture with respect to the
consummation of such borrowing;
(iii) each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) no order, judgment or decree of any arbitrator or
Governmental Authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) the making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System;
(vi) there shall not be pending or, to the knowledge of
the Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Company of its
Subsidiaries that has not been disclosed by the Company in writing
pursuant to subsection 5.5 or 6.1(xv) prior to the making of such
Loans and that would be reasonably likely to have a Material Adverse
Effect, and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of the
Agent, would be reasonably likely to have a Material Adverse Effect;
and no injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder;
(vii) after giving effect to the proposed borrowing, the
Borrowing Base shall not be less than the Total Utilization of
Revolving Commitments and the Company shall have delivered to the
Agent the Borrowing Base Certificate for the most recent calendar
month as required pursuant to subsection 6.1(ii); and
(viii) since December 31, 1995, no condition or event shall
have occurred that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
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A. INITIAL LOANS. On or before the date of issuance of the
initial Letter of Credit pursuant to this Agreement, the conditions set forth
in subsection 4.1 for the making of the initial Loans shall have been
satisfied.
B. NOTICE OF ISSUANCE OF LETTER OF CREDIT. On or before the date
of issuance of such Letter of Credit, Agent shall have received, in accordance
with the provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Agent, together with all other
information specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C. OTHER CONDITIONS PRECEDENT. On the date of issuance of such
Letter of Credit, all conditions precedent described in subsection 3.2B shall
be satisfied to the same extent as if the issuance of such Letter of Credit
were the making of a Loan and the date of issuance of such Letter of Credit
were a Funding Date.
SECTION 5
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce other Lenders to purchase participations therein, the
Company represents and warrants to the Agent and the Lenders that the following
statements in this Section 5 are true, correct and complete on the Effective
Date, on the Funding Availability Date, on each Funding Date and on the date of
issuance of each Letter of Credit.
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party and each of its
Subsidiaries (other than any Partnership Subsidiary) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation (which jurisdiction is set forth on Schedule 5.1A
annexed hereto). Each such Loan Party and each such Subsidiary has the
requisite corporate power and authority to own and operate its properties
(including the Properties identified as being owned or leased by such Loan
Party or such Subsidiary on Schedule 5.4A1, Schedule 5.4A2 and Schedule 5.4A3
annexed hereto), to carry on its business as now conducted and as proposed to
be conducted, to enter into the Loan Documents and the Related Documents to
which it is a party, to carry out the transactions contemplated thereby and, in
the case of the Company, to issue and pay the Notes and the Senior Notes
pursuant to the Senior Note Documents. Each Partnership Subsidiary is a
limited partnership duly formed and validly existing under the laws of its
jurisdiction of organization (which jurisdiction is set forth on Schedule 5.1A)
and each Partnership Subsidiary has all requisite partnership power and
authority to own and operate its properties (including the Properties
identified on Schedule 5.4A1, Schedule 5.4A2 and Schedule 5.4A3 as being owned
or leased by such Partnership
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Subsidiary), to carry on its business as now conducted and proposed to be
conducted, to enter into each Loan Document and Related Document to which it is
a party and to carry out the transactions contemplated thereby. The books and
records of each Loan Party and each of its Subsidiaries reflect the properties
and assets purported to be owned by such Loan Party or Subsidiary, as
applicable.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party and each of
its Subsidiaries is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.
The jurisdictions in which each Loan Party and each of its Subsidiaries owns
property or otherwise conducts business as of the Funding Availability Date are
set forth on Schedule 5.1B annexed hereto.
C. CONDUCT OF BUSINESS. The Company and each of its Subsidiaries
are engaged only in the businesses permitted to be engaged in by them pursuant
to subsection 7.14.
D. SUBSIDIARIES. The capital stock of each of the Subsidiaries
(other than any Partnership Subsidiary) is duly authorized, validly issued and
fully paid and nonassessable. All of the Subsidiaries of each Loan Party are
identified on Schedule 5.1A annexed hereto, as Schedule 5.1A may be
supplemented from time to time pursuant to subsection 7.7(iii). The capital
stock of each Person identified on Schedule 5.1A (as so supplemented) is not
Margin Stock. Schedule 5.1A correctly sets forth the ownership interests in
each Loan Party (other than the Company) and each of its Subsidiaries, as
Schedule 5.1A may be supplemented from time to time pursuant to the provisions
of subsection 7.7(iii). Each Subsidiary of the Company is a Wholly Owned
Subsidiary.
E. ACQUISITIONS. Each Pool B Subsidiary or Pool C Subsidiary, as
the case may be, shall have the corporate power to consummate each Acquisition
to be consummated by it upon the consummation thereof, on the terms set forth
in any applicable Acquisition Agreement or other operative agreement. Upon the
consummation of any Acquisition, such Acquisition shall have been duly
authorized by all necessary action of such Pool B Subsidiary or Pool C
Subsidiary, as the case may be.
F. FORMATION. Schedule 5.1F annexed hereto specifies (i) each of
the transactions constituting the Formation, (ii) each of the parties to each
such transaction, (iii) each registration or filing with, consent or approval
of, or notice to, or other action to, with or by, any Governmental Authority or
any other Person that is required or proposed to be made, taken or obtained, as
the case may be, in connection therewith the absence of which could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect and (iv) the respective dates on which such transactions are proposed to
be effected and such filings, registrations, consents, approvals, notices and
other actions are proposed to be made, taken or obtained, as the case may be,
in connection therewith. Each of the transactions constituting the Formation
has been duly authorized by all necessary corporate or partnership action of
the Company and the applicable current and former Subsidiaries of the Loan
Parties and other
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Persons. As of the Funding Availability Date, each of the transactions
constituting the Formation shall have been consummated in accordance with, and
shall be effective under, all Applicable Laws.
G. PUBLIC OFFERINGS; GE OPTION. Each of the transactions
constituting the issuance, sale and delivery of up to 3,852,500 shares of
Common Stock in the Equity Offering pursuant to the Equity Offering Documents,
the issuance, sale and delivery of the Senior Notes in the Debt Offering
pursuant to the Debt Offering Documents and the payment thereof pursuant to the
terms thereof and of the Indenture and the issuance, sale and delivery of
approximately 537,634 shares of Common Stock pursuant to the GE Option has been
duly authorized by all necessary action of the Company. As of the Funding
Availability Date, each of such transactions shall have been consummated in
accordance with, and shall be effective under, all Applicable Laws.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of this Agreement and the other Loan Documents and the Related
Documents to which each Loan Party is a party and the issuance, delivery and
payment of the Notes have been duly authorized by all necessary corporate or
partnership action on the part of each Loan Party, as the case may be.
B. NO CONFLICT. The execution, delivery and performance by each
Loan Party of each Loan Document and each Related Document to which it is a
party and the consummation of the transactions contemplated hereby and thereby,
the consummation of the transactions constituting the Formation, the issuance,
sale and delivery by the Company of __________ shares of Common Stock in the
Formation pursuant to the Formation Documents, the issuance, sale and delivery
by the Company of up to 3,852,500 shares of Common Stock in the Equity Offering
pursuant to the Equity Offering Documents, the issuance, sale and delivery by
the Company of the Senior Notes in the Debt Offering pursuant to the Debt
Offering Documents and the payment thereof pursuant to the terms thereof and of
the Indenture, the issuance, sale and delivery of __________ shares of Common
Stock pursuant to the GE Option and the consummation of each Acquisition and
the other transactions contemplated by this Agreement, the other Loan Documents
and the Related Documents do not and will not (i) violate any provision of law
applicable to any Loan Party or any of its Subsidiaries, the Certificate of
Incorporation or Bylaws or partnership agreement of any Loan Party or any of
its Subsidiaries or any order, judgment or decree of any court or other agency
of government binding on any Loan Party or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any material Contractual Obligation of any Loan
Party, which default, individually or in the aggregate, could have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of any Loan Party or any of its
Subsidiaries (other than Liens securing the Obligations), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
material Contractual Obligation of any Loan Party the absence of which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, other than approvals or consents which will be or have been
obtained on or before the
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Funding Availability Date (or, in the case of an Acquisition, on or before the
date such Acquisition is consummated) and disclosed in writing to the Agent and
the Lenders.
C. GOVERNMENTAL CONSENTS. Except as set forth on Schedules 5.1F
and 5.2 annexed hereto, the execution, delivery and performance by each Loan
Party of each Loan Document and each Related Document to which it is a party,
the consummation of each of the transactions constituting the Formation, the
issuance, sale and delivery by the Company of __________ shares of Common Stock
in the Formation pursuant to the Formation Documents, the issuance, sale and
delivery by the Company of up to 3,852,500 shares of Common Stock in the Equity
Offering pursuant to the Equity Offering Documents, the issuance, sale and
delivery by the Company of the Senior Notes in the Debt Offering pursuant to
the Debt Offering Documents and the payment thereof in accordance with the
terms thereof and of the Indenture, the issuance, sale and delivery by the
Company of __________ shares of Common Stock pursuant to the GE Option and the
consummation of each Acquisition and the other transactions contemplated by
this Agreement, the other Loan Documents and the Related Documents do not and
will not require any registration with, consent or approval of, or notice to,
or other action to, with or by, any Governmental Authority, except for (i) such
of the foregoing which will have been made or obtained on or before the Funding
Availability Date (or, in the case of any Related Document relating to an
Acquisition, on or before the date of the closing of such Acquisition), (ii)
such of the foregoing which, if not made or obtained, could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect and (iii) the recordings and filings required to perfect the Liens
granted pursuant to the Security Documents. As of the Funding Availability
Date, all consents or approvals from or notices to or filings with any federal,
state, or other (domestic or foreign) regulatory authorities required to be
obtained on or before such date in connection with the documents or
transactions described or referred to in the preceding sentence will have been
accomplished in all material respects in compliance in all material respects
with all Applicable Laws except for those referred to in clause (ii) above.
None of the transactions constituting the Formation, the issuance, sale and
delivery of such shares of Common Stock in the Formation pursuant to the
Formation Documents, the issuance, sale and delivery of such shares of Common
Stock in the Equity Offering pursuant to the Equity Offering Documents, the
issuance, sale and delivery of the Senior Notes in the Debt Offering pursuant
to the Debt Offering Documents, the issuance, sale and delivery of such shares
of Common Stock pursuant to the GE Option or the consummation of the other
transactions contemplated by this Agreement, the other Loan Documents and the
Related Documents violates any Applicable Law or regulation in any respect,
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
D. BINDING OBLIGATION. This Agreement is, and the other Loan
Documents when executed and delivered hereunder will be, the legally valid and
binding obligations of the applicable Loan Parties, enforceable against the
applicable Loan Parties in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally, and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or law) and subject to other qualifications,
exceptions and assumptions such as are
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set forth in the various legal opinions delivered to the Agent in connection
with such documents or other documents.
E. VALID ISSUANCE OF COMMON STOCK. All the issued and
outstanding Common Stock is duly and validly issued, fully paid and
nonassessable. No other Securities of the Company are issued and outstanding,
and no Person has any rights to acquire Securities of the Company other than
shares of Common Stock pursuant to the Formation, the Equity Offering, the GE
Option, the 1996 Long-Term Incentive Plan and the Non-Employee Directors
Retainer Stock Plan, as the case may be, and the Senior Notes pursuant to the
Debt Offering. The issuance and sale of such shares of Common Stock or Senior
Notes, as the case may be, upon issuance and sale, will either (i) have been
registered under applicable federal and qualified under state securities laws
or (ii) be exempt therefrom.
F. NEW YORK STOCK EXCHANGE LISTING; NASDAQ/NMS. All outstanding
shares of each class of Capital Stock of the Company shall at all times be duly
listed on the New York Stock Exchange, Inc. or on NASDAQ/NMS. The Company
shall timely file all reports required to be filed by it with the New York
Stock Exchange, Inc. or by the National Association of Securities Dealers,
Inc., as the case may be, and the Securities and Exchange Commission.
G. RELATED DOCUMENTS; REPRESENTATIONS AND WARRANTIES IN OTHER
LOAN DOCUMENTS. Each Related Document to which any Loan Party or any of its
Subsidiaries is a party is in full force and effect and no term or condition
thereof has been amended or modified in any material respect except as in
accordance with this Agreement. Each Related Document is the legally valid and
binding obligation of such parties, enforceable against such parties in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally, and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or law) and subject
to other qualifications, exceptions and assumptions such as are set forth in
the various legal opinions delivered to Agent in connection with such documents
or other documents. Each Loan Party has delivered to the Agent complete and
correct copies of all Related Documents to which such Loan Party or any of its
Subsidiaries is a party (including in each case all exhibits and schedules
thereto), as amended, modified or waived to date, and of all material notices
or other material writings delivered to or by such Loan Party or such
Subsidiary in connection therewith.
5.3 FINANCIAL CONDITION; NO MATERIAL ADVERSE EFFECT; CONTINGENT
OBLIGATIONS.
A. FINANCIAL CONDITION. The Company has heretofore delivered to
the Agent, at the Agent's request, the following financial statements and
information: (i) the audited consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1995 and the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its Subsidiaries
for such calendar year, (ii) the unaudited statements of Property Gross
Revenues and Operating Expenses for each of the Pool A Properties and the Pool
B Properties for the calendar year ended December 31, 1993, December 31, 1994
and December 31, 1995, respectively, and (iii) the financial statements of the
Company and its Subsidiaries
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required to be delivered to the Agent pursuant to subsections 6.1(i), (ii),
(iii), (v), (vi) and (vii). The statements referred to in clause (i) of the
preceding sentence were prepared in conformity with GAAP and fairly present, in
all material respects, the financial position of the Company and its
Subsidiaries as at the date thereof and the results of operations of the
Company and its Subsidiaries for the period then ended, subject to changes
resulting from audit and normal year end adjustments. The Company and its
Subsidiaries do not (and will not following the initial extension of credit
hereunder) have any Contingent Obligation, contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the foregoing financial statements, the notes thereto or
Schedule 5.3C annexed hereto or permitted pursuant to subsection 7.4 and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries.
B. CONTINGENT OBLIGATIONS. After giving effect to the Formation,
the Loan Parties and their respective Subsidiaries will not be directly or
indirectly liable with respect to any Contingent Obligations other than as set
forth on Schedule 5.3C annexed hereto or, with respect to such Contingent
Obligations, in amounts greater than the respective maximum estimated amounts
specified thereon. Schedule 5.3C sets forth all Investments made by the Loan
Parties and their respective Subsidiaries and all Guaranties with respect to
which the Loan Parties and their respective Subsidiaries are liable as of the
Funding Availability Date, including all such Investments and Guaranties that
would be subject to subsections 7.3 and 7.4 if the same were made or incurred
on or after the Effective Date.
5.4 PROPERTIES; DAB NOTES AND AFFILIATE NOTES; AGREEMENTS; LICENSES.
A. TITLE TO PROPERTIES; LIENS. Each of Schedule 5.4A1, Schedule
5.4A2 and Schedule 5.4A3 correctly sets forth the interest of each Loan Party
and each of its Subsidiaries in each of the Pool A Properties, Pool B
Properties and Pool C Properties, respectively, in each case after giving
effect to the Formation. There are no outstanding options, rights of first
refusal, rights of first offer or similar rights to purchase or otherwise
acquire such fee interest or leasehold interest, as the case may be, in any
such Property, other than options and rights owned by Loan Party or Subsidiary
thereof, as applicable. After giving effect to the Formation, such Loan Party
or Subsidiary thereof, as applicable, will have good and marketable fee simple
title to, or a valid leasehold interest in, the Properties and good title to
the remainder of the Collateral purported to be owned by it, free and clear of
all Liens, in each case except Permitted Encumbrances and Liens permitted
pursuant to subsection 7.2A (ii) and (iii). All material fixtures,
furnishings, attachments and equipment necessary for the operation, use and
occupancy of each such Property have been installed or incorporated into such
Property and, after giving effect to the Formation, each Loan Party or
Subsidiary thereof, as applicable, will be the sole owner of all of the same,
free and clear of all chattel mortgages, conditional vendor's liens and other
liens, and security interests other than (i) Permitted Encumbrances and Liens
Permitted pursuant to subsections 7.2A(ii), (iii) and (iv), and (ii) in respect
of each Pool C Property, Liens securing any related Pool C Indebtedness.
Except as heretofore disclosed in writing by the Company to the Agent, no tax
liens have been filed against the Company or any of its Subsidiaries and/or any
of their respective properties, including any Property, other than Liens for
non-delinquent real property taxes.
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B. DAB NOTES AND AFFILIATE NOTES. After giving effect to the
Formation, the Company will be a purchaser of each of the DAB Notes and the
Affiliate Notes for value and good faith and without notice of any adverse
claim, and the Company will be the sole owner of all the DAB Notes and the
Affiliate Notes free of any adverse claim or restriction on transfer imposed by
any obligor with respect to any of the DAB Notes and the Affiliate Notes.
Schedule 5.4B sets forth a true and complete list of each of the DAB Notes that
will be outstanding on the Funding Availability Date.
C. POOL A GROUND LEASES. Each of the Pool A Ground Leases and
all amendments thereto that have been or will be entered into on or prior to
the Funding Availability Date are listed on Schedule 4.1G annexed hereto.
After giving effect to the Formation, the Pool A Ground Leases, as so amended,
will be in full force and effect and no term or condition thereof will have
been further amended or modified, or waived after the execution thereof except
in accordance with this Agreement; and no Person will have failed in any
respect to perform any obligation or covenant or satisfy any condition required
by the Pool A Ground Leases to be performed or complied with on or before the
Funding Availability Date except where failure to so comply will not then have
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
D. POOL B DOCUMENTS. Each of the Pool B Documents and all
amendments thereto that have been or will be entered into on or prior to the
Funding Availability Date are listed on Schedule 4.1H annexed hereto. After
giving effect to the Formation, such documents, as so amended, will be in full
force and effect and no term or condition thereof will have been further
amended or modified, or waived after the execution thereof except in accordance
with this Agreement, and no Person will have failed in any respect to perform
any obligation or covenant or satisfy any condition required thereunder to be
performed or complied with on or before the Funding Availability Date except
where failure to so comply will not then have had and could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
E. MANAGEMENT AGREEMENTS. Each of the Management Agreements and
all amendments thereto that have been or will be entered into on or before the
Funding Availability Date are listed on Schedule 4.1I annexed hereto. After
giving effect to the Formation, the Management Agreements, as so amended, will
be in full force and effect and no term or condition thereof will have been
further amended or modified, or waived after the execution thereof except in
accordance with this Agreement; and no Person will have failed in any respect
to perform any obligation or covenant or satisfy any condition required by the
Management Agreements to be performed or complied with on or before the Funding
Availability Date except where failure to so comply will not then have had and
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. No party to a Management Agreement is in
default on the Funding Availability Date in its obligations to pay Management
Fees in accordance with the provisions of such Management Agreement.
F. SERVICING AGREEMENTS. The Property Servicing Agreement with
respect to each Property and, if a Liquor License exists with respect to such
Property, the Liquor Operation
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Service Agreement with respect to such Property, in each case with all
amendments thereto that have been or will be entered into on or before the
Funding Availability Date, are listed on Schedule 4.1J annexed hereto. After
giving effect to the Formation, the Servicing Agreements, as so amended, will
be in full force and effect and no term or condition thereof will have been
further amended or modified, or waived after the execution thereof except in
accordance with this Agreement; and no Person will have failed in any respect
to perform any obligation or covenant or satisfy any condition required by the
Servicing Agreements to be performed or complied with on or before the Funding
Availability Date except where failure to so comply will not then have had and
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
G. FRANCHISE AGREEMENTS. Each of the Franchise Agreements and
all amendments thereto entered into on or before the Funding Availability Date
are listed on Schedule 4.1K annexed hereto. After giving effect to the
Formation, the Franchise Agreements, as so amended, will be in full force and
effect and no term or condition thereof will have been further amended or
modified, or waived after the execution thereof except in accordance with this
Agreement; and no Person will have failed in any respect to perform any
obligation or covenant or satisfy any condition required by the Franchise
Agreements to be performed or complied with on or before the Funding
Availability Date except where failure to so comply will not then have had and
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
H. MATERIAL LEASES. Each Material Lease with respect to each
Property and all amendments thereto that have been or shall be entered into on
or before the Funding Availability Date are listed on Schedule 4.1L annexed
hereto. After giving effect to the Formation, the Material Leases, as so
amended, shall be in full force and effect and no term or condition thereof
will have been further amended or modified, or waived after the execution
thereof except in accordance with this Agreement; and no Person will have
failed in any respect to perform any obligation or covenant or satisfy any
condition required by the Material Leases to be performed or complied with on
or before the Funding Availability Date except where failure to so comply will
not then have had and could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
I. LIQUOR LICENSES. Each Liquor License issued in connection
with each Property is set forth on Schedule 5.4I annexed hereto, each such
Liquor License is validly issued and in full force and effect and the holder of
each such Liquor License is a party to the Omnibus Management and Liquor
License Agreement. The holder of each Liquor License has the legal right to
utilize each such Liquor License in connection with the operation of any
restaurant, bar or other alcoholic beverage service located at the applicable
Property. All cash and other revenues and receipts from the operation of any
owner of a Liquor License of an alcoholic beverage service at any Property are
collected either by the licensee thereof or Management Corp. and are then
deposited directly into Deposit Accounts subject to the Cash Management System.
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5.5 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.5 annexed hereto, as amended or
supplemented from time to time with the consent of the Agent, there is no
action, suit, proceeding, arbitration or governmental investigation (whether or
not purportedly on behalf of the Company or any of its Subsidiaries) at law or
in equity or before or by any Governmental Authority, or changes to Applicable
Law, pending or, to the knowledge of the Company, threatened against or
affecting any Loan Party or any of its Subsidiaries, any Property or any other
property of the Company or any of its Subsidiaries that has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. No Loan Party nor any of its Subsidiaries is (i) in
violation of any Applicable Law that has had, or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect or
(ii) subject to or in default with respect to any Applicable Law that has had,
or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. To the knowledge of the Company, there
are no pending or threatened actions, suits or proceedings to revoke, attack,
invalidate, rescind or modify the zoning affecting any Property or any
Authorizations heretofore issued with respect to any Property or asserting that
such Authorizations or the zoning affecting any Property or any other property
of any Loan Party or any of its Subsidiaries do not permit the continued use of
such Property or property as contemplated by the Loan Documents. Except as set
forth on Schedule 5.5, to the knowledge of the Company, no Person has asserted
any claimed violation of Applicable Laws arising from the operation, use or
occupancy of the Properties which has not been cured which has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
5.6 TAXES.
A. PAYMENT OF TAXES. Except to the extent permitted by
subsection 6.4 and as set forth on the financial statements delivered pursuant
to subsections 4.1C and 5.3, all federal, state and material local Tax returns
and reports relating to any Loan Party or any of its Subsidiaries or the
Properties required to be filed have been timely filed, and all Taxes,
Impositions, assessments, fees and other governmental charges upon any Loan
Party or any of its Subsidiaries or upon the Properties which are due and
payable have been paid prior to delinquency. The Company does not know of any
proposed Tax assessment against any Loan Party or any of its Subsidiaries or
the Properties that could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect. Neither any Loan Party nor any
of its Subsidiaries (i) has executed or filed with the Internal Revenue Service
or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or collection of
any Taxes, assessments, fees or other governmental charges or (ii) has any
obligation under any written Tax sharing agreement or agreement regarding
payments in lieu of Taxes.
B. CHARACTERIZATION OF FORMATION FOR FEDERAL INCOME TAX PURPOSES.
The transactions contemplated by the Formation Agreement, the Hampstead
Exchange Agreement and the Rose Hall Transfer Agreement collectively qualify as
a contribution of property for shares under Section 351 of the Internal Revenue
Code. Each Loan Party and each of its
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Subsidiaries shall report the transactions contemplated by the Formation
Agreement, the Hampstead Exchange Agreement and the Rose Hall Transfer
Agreement consistently with the provisions of such section and the Treasury
Regulations promulgated thereunder. There is no plan or intention of the
Company to issue additional shares of Common Stock or shares of a stock of a
different class of Capital Stock of the Company, such that the parties
receiving shares of Common Stock pursuant to the Formation Agreement or the
Hampstead Exchange Agreement or the Equity Offering would no longer satisfy the
control requirement of Sections 351(a) and 368(c) of the Internal Revenue Code.
C. TAX CLASSIFICATION OF PREDECESSOR ENTITIES. With respect to
each Existing Entity (as defined in the Formation Agreement) that is a
partnership, for the period of its existence, such entity was properly
classified as a partnership for federal income tax purposes. With respect to
each Existing Entity that has elected to be treated as an S corporation for
federal income tax purposes, such corporation made a valid S corporation
election under Section 1362 of the Internal Revenue Code and at all times
during the period of its existence satisfied the eligibility criteria under the
Internal Revenue Code for such treatment. Each of the Existing Entities paid
all income taxes to which it was subject, except where the failure to so pay
would not have a Material Adverse Effect.
5.7 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any Contractual Obligation, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.
Except as disclosed on Schedule 5.7, no Loan Party nor any of its Subsidiaries
is a party to or otherwise subject to any agreement or instrument (other than
the Loan Documents and the HPT Agreements), any charge or other internal
restriction or any Contractual Obligation which by its terms or effect (i)
prohibits or restricts such Loan Party or Subsidiary from acquiring, loaning or
disposing of any Property or other asset, or any interest therein, or acquiring
or entering into, or providing any services under any Management Agreement or
other management agreement or (ii) otherwise restricts the conduct by such Loan
Party or any of its Subsidiaries of any business, except in each case where the
consequences, direct or indirect, of any violation thereof could not reasonably
be expected to have, either individually or in the aggregate, a Material
Adverse Effect. No Loan Party nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument, any charter or other internal
restriction or any Contractual Obligation which has had, or could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
5.8 GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES.
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or
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regulation which could limit its ability to incur Indebtedness or which could
otherwise render all or any portion of the Obligations unenforceable. No Loan
Party nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
5.9 EMPLOYEE BENEFIT PLANS.
A. ERISA. Each Loan Party, each of its Subsidiaries and each of
their respective ERISA Affiliates are in compliance in all material respects
with all applicable provisions and requirements of ERISA and the regulations
and published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed in all material respects their respective obligations
under each Employee Benefit Plan. The sponsor of each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
has received a determination letter from the Internal Revenue Service
concluding that such Employee Benefit Plan is so qualified, or has timely filed
an application for a determination letter with the IRS for such employee
benefit plan and has not received an unfavorable determination, and to the
knowledge of each Loan Party, each of its Subsidiaries and each of their
respective ERISA Affiliates, no event has occurred, amendment been adopted or
action been taken that would cause such Employee Benefit Plan to lose its
qualified status.
B. ERISA EVENT. No ERISA Event has had or which could reasonably
be expected to result in liability in excess of $100,000 has occurred or is
reasonably expected to occur.
C. HEALTH AND WELFARE BENEFITS. Except to the extent required
under Section 4980B of the Internal Revenue Code, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of any Loan Party, any of its
Subsidiaries or any of their respective ERISA Affiliates.
D. UNFUNDED BENEFIT LIABILITIES. As of the most recent valuation
date for any Pension Plan, the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities), does not exceed
$1,000,000.
E. POTENTIAL WITHDRAWAL LIABILITY. As of the most recent
valuation date for each Multiemployer Plan for which the actuarial report is
available, the potential liability of the Loan Parties, their Subsidiaries and
their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.
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5.10 CERTAIN FEES.
No broker's or finder's fee or commission will be payable by any Loan
Party or any of its Subsidiaries with respect to this Agreement or the offer,
issue and sale of the Common Stock and the Senior Notes pursuant to the Public
Offerings or any of the transactions contemplated hereby or thereby (other than
the fees payable pursuant to this Agreement and the underwriters' discounts
with respect to the Public Offerings), and the Company hereby indemnifies the
Agent and the Lenders against, and agrees that it will hold the Agent and the
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees or commissions payable by the Company alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.11 SOLVENCY.
As of the date of this Agreement, and after giving effect to the
Formation and the consummation of the other transactions contemplated by this
Agreement, the other Loan Documents and the Related Documents, as of the
Funding Availability Date, with respect to each Loan Party and each of its
Subsidiaries, (i) (a) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such person; (b)
such Person's capital is (or will be, as the case may be), not unreasonably
small in relation to its business or any contemplated or undertaken
transaction; and (c) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (ii) such Person is (or will be, as the
case may be), "solvent" within the meaning given that term and similar terms
under Applicable Laws relating to fraudulent transfers and conveyances. For
purposes of clause (i) of the preceding sentence, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
5.12 DISCLOSURE.
No representation or warranty of any Loan Party contained in this
Agreement, the other Loan Documents and the Related Documents to which it is a
party or in any other document, certificate or written statement furnished to
the Agent or the Lenders by or on behalf of any Loan Party for use in
connection with the transactions contemplated by the Loan Documents and the
Related Documents (as from time to time superseded by subsequent materials
furnished to the Agent) contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact (known to such
Loan Party, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made or will be made, as the case may
be. The projections and pro forma financial information contained in such
materials (as from time to time superseded by subsequent materials furnished to
the Agent) are based
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or will be based upon good faith estimates and assumptions believed to be
reasonable at the time made, it being recognized by the Agent and the Lenders
that such projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any such
projections may differ materially from the projected results. There is no fact
known to the Company (other than matters of a general economic nature) that has
had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect and that has not been disclosed in any of
the Loan Documents and the Related Documents to which any Loan Party is a party
as of the date hereof or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
5.13 LIENS ON THE COLLATERAL.
A. GENERAL. The provisions of this Agreement and the Security
Documents are effective to create and maintain, upon proper filing or recording
or taking of possession, as applicable, in favor of the Agent on behalf of the
Lenders valid and legally enforceable Liens on in all of the Pool A Properties,
all of the Pool B Properties and all of the remainder of the Collateral and,
when all necessary and appropriate recordings and filings have been effected in
all necessary and appropriate public offices, and payment is made of any
applicable mortgage recording, intangible and/or similar taxes, this Agreement
and the Security Documents will constitute perfected Liens on all of such
Properties and all of the remainder of the Collateral prior and superior to all
other Liens except Permitted Encumbrances; provided, however, that the
perfection against Persons other than the Company of such a Lien on the Rents
in respect of such Properties may in certain jurisdictions require the Agent to
have possession of such Rents and/or control of such Properties.
B. MORTGAGES. Each Mortgage upon execution and delivery of such
Mortgage by the applicable Loan Party will be a valid and enforceable first
priority Lien on the Pool A Property or Pool B Property that such Mortgage
purports to encumber, and such Mortgage, when such Mortgage is recorded in the
real property records of the county in which such Property encumbered by such
Mortgage is located and upon payment of any applicable mortgage recording,
intangible and/or similar taxes, will be a perfected, valid and enforceable
first priority Lien on such Property in favor of the Agent, which Property will
then be free and clear of all Liens having priority over the first Lien of such
Mortgage, except for Permitted Encumbrances (which shall include, in the case
of each Pool B Property other than the Harbour Island Property, certain first
priority Liens in favor of HPTWN more particularly described in Section 8.25 of
the Mortgages affecting such Pool B Properties).
C. ASSIGNMENTS OF RENTS AND LEASES. Each Assignment of Rents
and Leases, upon execution and recordation of such Assignment of Rents and
Leases in the real property records of the county in which the Pool A Property
or Pool B Property affected by such Assignment of Rents and Leases is located
and upon payment of any applicable recording or intangible taxes, will be, (i)
as to each Pool A Property and the Harbour Island Property, a perfected, valid
and enforceable first priority present assignment of or Lien on the Leases
affecting such Property and of the Rents of and from such Property, and (ii) as
to each Pool B Property (other than the Harbour Island Property), a perfected,
valid and enforceable second
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priority present assignment of the Leases affecting such Property and of the
Rents of and from such Property (subject and subordinate only to the first Lien
of a certain Collateral Assignment of Leases, Contracts and Agreements dated as
of __________, 1996 in favor of HPTWN); which Properties will then otherwise be
free and clear of all Liens having priority over the Assignment of Rents and
Leases, except for Permitted Encumbrances. As of the Funding Availability
Date, the Company represents that upon recordation of each Assignment of Rents
and Leases the Agent has taken all actions necessary to obtain, and as of the
Funding Availability Date the Agent has, a valid and perfected first priority
(or, to the extent described in the immediately preceding sentence, second
priority) assignment of or Lien on the Rents from the Pool A Properties and the
Pool B Properties and of all security for the Leases affecting such Properties,
including cash or securities deposited as security under such Leases subject to
the prior right of the Tenants making such deposits; provided, however, that
the perfection against Persons other than the Company of such a Lien on the
Rents in respect of such Properties may in certain jurisdictions require the
Agent to have possession of such Rents and/or control of such Properties.
D. MECHANICS' LIENS. Except as being contested in accordance
with the provisions of subsection 6.9, no rights of mechanics, contractors,
subcontractors, materialmen or suppliers are outstanding that under law could
give rise to any mechanics' liens affecting any Property. Except as being
contested in accordance with the provisions of subsection 6.9, the cost of all
completed work that has been performed at or about any Property has been paid
in full, no work is currently being performed at or about any Property for
which the Company or any of its Subsidiaries or such Property is or could under
any circumstance become liable.
E. FILINGS AND RECORDINGS. All filings (including all financing
statements and all assignments of financing statements under the Uniform
Commercial Code) have been delivered to the Agent for filing in each public
office in which such filings and recordings are required or advisable to
perfect the Liens on each of the Pool A Properties, the Pool B Properties and
the other Collateral granted by the Loan Parties pursuant to the Security
Documents and, except for the filing of continuation statements with respect to
such financing statements as may be required or advisable to be filed at
periodic intervals, no periodic refiling or periodic recording is presently
required to protect and preserve such Liens and security interests.
5.14 ZONING; AUTHORIZATIONS.
A. ZONING. Except as set forth on Schedule 5.14A annexed hereto,
the use and operation by each Loan Party or any of its Subsidiaries, as
applicable, of each Property as a commercial hotel with related uses, separate
and apart from any other properties, constitutes a legal use under applicable
zoning regulations (as the same may be modified by special use permits or the
granting of variances) and complies in all material respects with all
Applicable Laws and all applicable Insurance Requirements, and does not violate
any Authorizations or other material approvals, material restrictions of record
or any material agreement affecting any Property (or any portion thereof) to
which such Loan Party or such Subsidiary is a party or by which such Loan
Party, such Subsidiary or such Property (or portion thereof) is bound, except
where the consequences, direct or indirect, of any violation thereof has not
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse
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Effect. Except as set forth on Schedule 5.14A, neither the zoning nor any
right of access to or use of any Property is to any extent dependent upon or
related to any real property other than such Property.
B. AUTHORIZATIONS. Except as set forth with respect to the
temporary liquor licenses on Schedule I-A to the Omnibus Management and Liquor
License Agreement, there have been issued in respect of each Property all
Authorizations necessary to own, operate, use and occupy such Property in the
manner operated by the Loan Parties and their respective Subsidiaries, and
their respective predecessors in interest, as of the Effective Date and
contemplated by the Loan Parties and their respective Subsidiaries to be
operated on and after the Formation Date (including any required permits
relating to Hazardous Materials), other than any such Authorizations which, if
not obtained, could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. To the knowledge of the Company,
there have been issued in respect of each Property all Authorizations necessary
or required to own, operate, use and occupy such Property in the manner
currently operated by the Tenants under any Material Lease and contemplated to
be operated by the Tenants on and after the Funding Availability Date
(including any required permits relating to Hazardous Materials), other than
any such Authorizations which, if not obtained, could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. Each such Authorization is in full force and effect, and no Loan Party
nor any of its Subsidiaries nor, to the knowledge of the Company, any prior
owner thereof, has received any notice of violation or revocation thereof.
5.15 PHYSICAL CONDITION; ENCROACHMENT; CAPITAL EXPENDITURES.
A. PHYSICAL CONDITION; ENCROACHMENT. Except as disclosed on the
Engineering Reports delivered pursuant to subsection 4.1L, or 7.15A(i), (ii) or
(iii), each Property is free of structural defects and is in good repair
(normal wear and tear excepted) and all building systems contained therein and
all other material items of Collateral are in good working order subject to
ordinary wear and tear, except as disclosed in the Engineering Reports, and is
free and clear of any damage that would affect materially and adversely the
value of such Property or the use of such Property for its intended purposes.
To the knowledge of the Company, other than as described in the Title Policy
and in any Survey, no Improvement at any Property encroaches upon any building
line, setback line, side yard line or any recorded or visible easement.
B. CAPITAL EXPENDITURES. Schedule 5.15B annexed hereto, as
supplemented from time to time by a written notice delivered to the Agent, sets
forth a complete and accurate list of the capital expenditure or similar
reserves required in respect of any Property pursuant to a Ground Lease, any
agreement pursuant to which any of the Loan Parties and their respective
Subsidiaries shall have incurred or may incur any Indebtedness or any other
agreement, instrument or other document.
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5.16 INSURANCE.
All insurance required to be maintained by the Loan Parties and their
respective Subsidiaries pursuant to this Agreement or any other Loan Document
is in full force and effect in accordance with the terms thereof. As to each
Property located in an area identified by the Federal Emergency Management
Agency as having special flood hazards, if flood insurance is available, a
flood insurance policy is in effect. All premiums have been paid with respect
to each insurance policy required to be maintained by the Company and its
Subsidiaries pursuant to this Agreement or any other Loan Document. Schedule
5.16 annexed hereto contains a complete and accurate description of all
policies of insurance that will be in effect as of the Formation Date.
5.17 LEASES.
There is no default or event which with notice or lapse of time or
both would constitute a default under any of the provisions of any Material
Lease affecting any Property that has had, or could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. No
litigation is currently pending or has been threatened by any Tenant in
connection with any Material Lease affecting any Property that has had, or
could reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect. All Material Leases and other Leases material to
the operation of the Properties as hotels are in full force and effect, except
to the extent such failure could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
5.18 ENVIRONMENTAL REPORTS; ENGINEERING REPORTS; APPRAISALS; MARKET
STUDIES.
To the knowledge of the Company, the Company has delivered to the
Agent and the Lenders correct and complete copies of all environmental audits,
engineering reports, appraisals and market studies with respect to each
Property that any Loan Party or any of its Subsidiaries has in its possession.
5.19 NO CONDEMNATION OR CASUALTY.
No condemnation or other like proceedings (including relocation of any
roadways abutting any Property or change in grade of such roadways or denial of
access to any Property) that has had, or could reasonably be expected to result
in, a Material Adverse Effect, are pending and served nor, to the knowledge of
the Company, threatened against any Property in any manner whatsoever. No
casualty has occurred to any Property that has had or could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
5.20 UTILITIES AND ACCESS.
To the extent necessary for the full utilization of each Property in
accordance with its current use, telephone services, gas, steam, electric
power, storm sewers, sanitary sewers and water facilities and all other utility
services are available to each Property, are adequate to
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serve each such Property, exist at the boundaries of the Land and are not
subject to any conditions, other than normal charges to the utility supplier,
which would limit the use of such utilities. All streets and easements
necessary for the occupancy and operation of each Property are available to the
boundaries of the Land. All necessary rights-of-way for all roads, which are
sufficient to permit each Property to be utilized fully for its current use,
have been completed and are serviceable, and, to the knowledge of the Company,
all public rights-of-way through or adjacent to the Properties have been
acquired and dedicated and accepted for maintenance and public use by the
applicable Governmental Authorities.
5.21 INTELLECTUAL PROPERTY.
A. OWNERSHIP; IP LICENSE AGREEMENTS. The Loan Parties and their
respective Subsidiaries own, or are licensed to use or otherwise have the
lawful right to use, the Intellectual Property and except as set forth on
Schedule 5.21A annexed hereto, all such Intellectual Property is fully
protected and duly and properly registered, filed or issued in the appropriate
office and jurisdictions for such registrations, filing or issuances. All
registered Intellectual Property and all pending applications and the
jurisdictions in which such Intellectual Property is registered or will be
registered on or before the Funding Availability Date, and in each case the
Loan Party holding rights therein, are identified in Schedule 5.21A annexed
hereto. Each of the license agreements (together with any such agreements
entered into after the Funding Availability Date, the "IP LICENSE AGREEMENTS")
pursuant to which any Loan Party or any of its Subsidiaries has rights or will
have rights on or before the Funding Availability Date to use any material
Intellectual Property as of the Funding Availability Date is identified in
Schedule 5.21A. Each Loan Party and each of its Subsidiaries is in compliance
with the material terms of each IP License Agreement to which it is a party and
each such IP License Agreement is in full force and effect, except where the
failure to be in compliance or the failure to be in full force and effect (i)
has not had and could not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect or (ii) result in an Event of
Default hereunder.
B. NO ADVERSE CLAIMS. Except as disclosed in the Registration
Statements, (i) no claim has been asserted by any Person with respect to the
use of any such Intellectual Property, or challenging or questioning the
validity or effectiveness of any such Intellectual Property and the Company
does not know of any valid basis for any such claim which, in either case, has
had or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect; and (ii) the use of such Intellectual
Property by each Loan Party and each of its Subsidiaries does not infringe on
the rights of any Person, subject to such claims and infringements as do not,
in the aggregate, give rise to any liability on the part of any Loan Party or
any of its Subsidiaries that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement will not in any
manner or to any extent impair the ownership of (or the license to use, as the
case may be) any of such Intellectual Property by any Loan Party or any of its
Subsidiaries.
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5.22 WETLANDS.
To the knowledge of the Company and except as disclosed on Schedule
5.22 annexed hereto, none of the Improvements on any Property are constructed
on land designated by any Governmental Authority having land use jurisdiction
as wetlands.
5.23 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System attached hereto as Schedule
5.23 is accurate and complete in all material respects, after giving effect to
the Formation, and does not omit to state any material fact necessary to make
the statements set forth therein not misleading. No Loan Party nor any of its
Subsidiaries owns any Deposit Account which is not described in Schedule 5.23
or otherwise permitted pursuant to subsection 6.15. After the Funding
Availability Date, there will be no change to the Cash Management System (other
than as permitted by subsection 6.15) except such changes as have been
disclosed to the Agent in writing and approved by the Agent in writing. A Cash
Management Letter covering each Deposit Account included in the Cash Management
System has been delivered to the Agent.
5.24 LABOR MATTERS.
There are no strikes or other labor disputes against any Loan Party or
any of its Subsidiaries, pending or, to the knowledge of the Company,
threatened that have had or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Hours worked by
and payments made by any Loan Party or any of its Subsidiaries to their
respective employees are not in violation of the Fair Labor Standards Act or
any other applicable law dealing with such matters, except to the extent such
violation could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.25 EMPLOYMENT AND LABOR AGREEMENTS.
Except as disclosed on Schedule 5.25 annexed hereto, there are no
employment agreements covering management employees of any Loan Party or any of
its Subsidiaries and there are no collective labor agreements covering any
employees of any Loan Party or any of its Subsidiaries. Each Loan Party and
each of its Subsidiaries is in compliance with the terms and conditions of all
such collective bargaining agreements except where failure to so comply has not
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
5.26 AFFILIATES.
A. AGREEMENTS WITH AFFILIATES. As of the Funding Availability
Date, each of the ISIS 2000 Agreements and the Wynright Agreements will be in
full force and effect and no Person shall have failed in any material respect
to perform any material obligation or covenant or satisfy any material
condition required by such agreements to be performed or complied with on or
before the Funding Availability Date.
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B. AFFILIATE INTERESTS. Set forth on Schedule 5.26B annexed
hereto are the equity and debt interests of Bedrock, the Crow Interests and the
Senior Executives, respectively, in (i) each of the Managed Properties or the
respective owners thereof as of the Effective Date and (ii) Persons that
provided goods or services with respect to any of the Properties or to the
respective owners thereof having a purchase price or value of more than $60,000
during the 12 most recently completed calendar months ending before the
Effective Date.
SECTION 6
COMPANY'S AFFIRMATIVE COVENANTS
The Company covenants and agrees that, from and after the Effective
Date and so long thereafter as the Commitments hereunder shall remain in effect
and until payment in full of the Loans and the other Obligations and the
cancellation or expiration of all Letters of Credit, the Company shall perform
and shall cause each of its Subsidiaries to perform all covenants in this
Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
The Company shall maintain and cause each of its Subsidiaries to
maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated and
consolidating financial statements in conformity with GAAP. The Company shall
deliver to the Agent:
(i) Monthly Property Operating Statements: as soon as
available and in any event within 30 days after the end of each
calendar month of each calendar year, commencing with respect to the
calendar month ending April 30, 1996, a statement of Property Gross
Revenues and Operating Expenses and any other expenses with respect to
each Property separately and all Properties collectively (without
duplication), in each case for the 12 month period ending on the last
day of such calendar month, in reasonable detail satisfactory to the
Agent and certified by the Chief Executive Officer, Chief Financial
Officer or Chief Accounting Officer of the Company stating that (x)
such statements of Property Gross Revenues and Operating Expenses and
other expenses fairly present, in all material respects, the results
of operations of the Properties indicated for the periods indicated
and (y) all Operating Expenses and any other expenses with respect to
each Property which have become due and payable as of the last day of
the calendar month next preceding the delivery of such income
statement have been fully paid or otherwise provided for by the
Company or any of its Subsidiaries;
(ii) Monthly Management Statements: as soon as available
and in any event within 30 days after the end of each calendar month
of each calendar year, commencing with respect to the calendar month
ending April 30, 1996, a statement of Approved Management Fees and
other Management Fees, in each case for the 12 month period ending on
the last day of such calendar month, in reasonable detail satisfactory
to the Agent and certified by the Chief Executive Officer, the Chief
Financial Officer or Chief
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Accounting Officer of the Company stating that such statements of
Approved Management Fees and other Management Fees fairly present, in
all material respects, such information for the periods indicated;
(iii) Management Agreement Reports: as soon as available
and in any event (a) within 30 days after the end of each calendar
month of each calendar year, commencing with respect to the calendar
month ending April 30, 1996, a Management Agreement Report certified
by the Chief Executive Officer, the Chief Financial Officer or Chief
Accounting Officer of the Company as of the last day of such calendar
month, together with the information utilized by the Company to
prepare such Management Agreement Report, (b) within 5 days after the
delivery of a written notice pursuant to subsection 7.16B(i) (but in
no event later than the occurrence of effectiveness of the event or
condition required to be specified in such written notice), a
Management Agreement Report certified by the Chief Executive Officer,
Chief Financial Officer or the Chief Accounting Officer of the Company
as of the date of the occurrence or effectiveness of the event or
condition specified therein, together with the information used by the
Company to prepare such Management Agreement Report, (c) within 5 days
after the delivery of a Notice of Renovation/Restoration pursuant to
subsection 7.16B(ii) (but in no event later than the commencement of
any Major Renovation/Restoration), a Management Agreement Report
certified by the Chief Executive Officer, Chief Financial Officer or
the Chief Accounting Officer of the Company with respect to the
Management Agreements as of the date of commencement of any related
Major Renovation/Restoration, together with the information utilized
by the Company to prepare such Management Agreement Report, (d) within
5 days after the expiration (without renewal or extension),
cancellation or termination of a Management Agreement, a Management
Agreement Report certified by the Chief Executive Officer, Chief
Financial Officer or Chief Accounting Officer of the Company with
respect to the Management Agreements as of such date of expiration,
cancellation or termination, and (e) upon written request from the
Agent or at the option of the Company, a Management Agreement Report
certified by the Chief Executive Officer, Chief Financial Officer or
the Chief Accounting Officer of the Company with respect to the
Management Agreements as of the date requested by the Agent in such
request or selected by the Company, as the case may be, together with
the information utilized by the Company to prepare such Management
Agreement Report;
(iv) Borrowing Base Certificates: from and after the
Funding Availability Date, as soon as available and in any event (a)
within 30 days after the end of each calendar month of each calendar
year, a Borrowing Base Certificate, in the form attached hereto as
Exhibit VII and together with the financial statements and other
information utilized by the Company to calculate the Borrowing Base,
and certified by the Chief Executive Officer or Chief Financial
Officer of the Company, calculated as of the last day of such calendar
month, (b) within 5 days after the delivery of a written notice
pursuant to subsection 2.9A(v), 7.15B or 7.16B (but in no event later
than the occurrence or effectiveness of the event or condition
required to be specified in such written notice), a Borrowing Base
Certificate calculated as of the date of the occurrence or
effectiveness of the event or condition specified therein, and
together with the
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financial statements and other information used by the Company to
calculate the Borrowing Base, (c) within 5 days after the delivery of
a Notice of Renovation/Restoration pursuant to subsection 6.11A,
6.11C, 6.12A, 7.15C or 7.16C (but in no event later than the
commencement of a Major Renovation/Restoration), a Borrowing Base
Certificate calculated as of the date of commencement of any related
Major Renovation/Restoration, and together with the financial
statements and other information used by the Company to calculate the
Borrowing Base, (d) within 5 days after a casualty or Taking with
respect to, or the Release of, any Pool A Property (or any portion
thereof) or after the expiration (without renewal or extension),
cancellation or other termination of a Management Agreement, a
Borrowing Base Certificate calculated as of the date of such casualty,
Taking, Release, expiration, cancellation or other termination, as the
case may be, and together with the financial statements and other
information used by the Company to calculate the Borrowing Base, and
(e) at the option of the Company, a Borrowing Base Certificate
calculated as of the date requested by the Agent in such request or
selected by the Company, as the case may be, in reasonable detail
satisfactory to the Agent and together with the financial statements
and other information used by the Company to calculate the Borrowing
Base;
(v) Quarterly Management Statements: as soon as
available and in any event within 30 days after the end of each
calendar quarter of each year, commencing with respect to the calendar
quarter ending March 31, 1996, (a) a statement of Approved Management
Fees and other Management Fees, and (b) summaries of Approved
Management Fees and other Management Fees, in each case for such
calendar quarter, for the 12 month period ending on the last day of
such calendar quarter, and for the then current calendar year to the
end of such calendar quarter, all of the foregoing in reasonable
detail satisfactory to the Agent and certified by the Chief Executive
Officer, the Chief Financial Officer or Chief Accounting Officer of
the Company stating that (x) such statements of Approved Management
Fees and other Management Fees fairly present, in all material
respects, such information for the periods indicated;
(vi) Monthly Financial Statements: as soon as available
and in any event within 30 days after the end of each calendar month
of each calendar year, commencing with respect to the calendar month
ending April 30, 1996, (a) the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such calendar month and
the related consolidated statements of income, stockholders' equity
and cash flows of the Company and its Subsidiaries for such calendar
month for the 12 months ending on the last day of such calendar month
and certified by the Chief Executive Officer, the Chief Financial
Officer or Chief Accounting Officer of the Company stating that they
fairly present, in all material respects, the financial condition of
the Company and its Subsidiaries as at the date indicated and the
results of their operations and their cash flows for the period
indicated, subject to changes resulting from audit and normal year-end
adjustments; provided that financial statements shall not be required
to be delivered pursuant to this subdivision (vi) unless the
Management Margin shall be determined in accordance with clause (ii)
of the definition of Management EBITDA;
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(vii) Quarterly Financial Statements: as soon as available
and in any event within 45 days after the end of each calendar quarter
of each calendar year, commencing with respect to the calendar quarter
ending March 31, 1996, (a) the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such calendar quarter
and the related consolidated statements of income, stockholders'
equity and cash flows of the Company and its Subsidiaries for such
calendar quarter and for the period from the beginning of the then
current calendar year to the end of such calendar quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous year and the corresponding
figures from the plan and financial forecast for the current year
delivered pursuant to this subsection, and (b) the consolidating
financial statements of the Company and its Subsidiaries (including
balance sheets and income statements segmenting any Subsidiaries of
the Company or groups of Subsidiaries of the Company, as requested by
the Agent in its reasonable discretion) together with any adjustments
and/or eliminations needed to reconcile such Subsidiary financial
statements to the consolidated financial statements of the Company,
all in reasonable detail (it being understood and agreed that, to the
extent the Company's quarterly report filed on Form 10-Q with the
Securities and Exchange Commission for such period contains the
foregoing information, such quarterly report shall be deemed to comply
with the foregoing requirements) and certified by the Chief Executive
Officer, the Chief Financial Officer or Chief Accounting Officer of
the Company stating that they fairly present, in all material
respects, the financial condition of the Company and its Subsidiaries
as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments;
(viii) Year-End Financial Statements: as soon as available
and in any event within 90 days after the end of each calendar year,
commencing with respect to the calendar year ending December 31, 1996,
(a) the consolidated balance sheet of the Company and its Subsidiaries
as at the end of such calendar year and the related consolidated
statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for such calendar year, setting forth in
each case in comparative form the corresponding figures for the
previous calendar year and the corresponding figures from the plan and
financial forecast delivered pursuant to this subsection for the
calendar year covered by such consolidated financial statements, (b)
the consolidated balance sheets of each Property, (c) the
consolidating financial statements of the Company and its Subsidiaries
(including balance sheets and income statements segmenting any
Subsidiaries of the Company or groups of Subsidiaries of the Company,
as requested by the Agent in its reasonable discretion) together with
any adjustments and/or eliminations needed to reconcile such
Subsidiary financial statements to the consolidated financial
statements of the Company, all of the foregoing in reasonable detail
(it being understood and agreed that, to the extent the Company's
annual report filed on Form 10-K with the Securities and Exchange
Commission for such period contains the foregoing information, such
annual report shall be deemed to comply with the foregoing
requirements) and certified by the Chief Executive Officer or Chief
Financial Officer of the Company stating that they present fairly, in
all material respects, the financial condition of the Company and its
Subsidiaries as at the dates
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indicated and the results of their operations and their cash flows for
the periods indicated, and (d) in the case of the consolidated
financial statements referred to in clause (a), a report thereon of
Coopers & Lybrand or other independent accountants of recognized
national standing selected by the Company and reasonably satisfactory
to the Agent, which report shall be unqualified, shall express no
doubts about the ability of the Company and its Subsidiaries to
continue as a going concern and shall state that such consolidated and
consolidating financial statements fairly present, in all material
respects, the financial position of the Company and its Subsidiaries
as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards;
(ix) Officers' and Compliance Certificates: together with
each delivery of financial statements of the Company and its
Subsidiaries pursuant to subdivisions (i), (ii), (v), (vi), (viii)
above, (a) an Officers' Certificate of the Company stating that the
signers have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Company and its
Subsidiaries and the Collateral during the accounting period covered
by such financial statements and state that such review has not
disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as
at the date of such Officers' Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Company has
taken, is taking and proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
covenants set forth in Section 6;
(x) Accountants' Certification: together with each
delivery of financial statements of the Company pursuant to
subdivision (ix) above, a written statement by Coopers & Lybrand or
other independent accountants of recognized national standing selected
by the Company and reasonably satisfactory to the Agent giving the
report thereon (a) stating in substance that their audit examination
has included a review of the terms of this Agreement and the other
Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of
Default has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of
existence thereof; provided, however, that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such
Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating in
substance that based on their audit examination nothing has come to
their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant
to subdivision (viii) above with respect to the annual financial
statements delivered pursuant to
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subdivision (viii) above is not correct or that the matters set forth
in the Compliance Certificates delivered therewith pursuant to
subdivision (viii) above for the applicable calendar year are not
stated in accordance with the terms of this Agreement;
(xi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports submitted to the Company by Coopers & Lybrand or any other
independent accountants in connection with each annual, interim or
special audit of the consolidated financial statements of the Company
and its Subsidiaries made by such accountants, including any comment
letter submitted by such accountants to management in connection with
their annual audit;
(xii) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of the Company
and its Subsidiaries delivered pursuant to subdivisions (vi), (vii) or
(viii) of this subsection 6.1 differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (vi), (vii)
or (viii) of this subsection 6.1 following such change, consolidated
financial statements of the Company and its Subsidiaries for (1) the
current calendar year to the effective date of such change and (2) the
two full calendar years immediately preceding the calendar year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (vi), (vii) or (viii) of this subsection 6.1 following
such change, a written statement of the Chief Accounting Officer or
Chief Executive Officer of the Company setting forth the differences
which would have resulted in the calculation of the covenants set
forth in Section 6 if such financial statements had been prepared
without giving effect to such change;
(xiii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by the
Company to its security holders, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by the Company with the New York
Stock Exchange, Inc., NASDAQ/NMS, any other securities exchange or
with the Securities and Exchange Commission or any Governmental
Authority or private regulatory authority, and (c) all press releases
and other statements made available generally by the Company or any of
its Subsidiaries to the public or to the securityholders of the
Company;
(xiv) Events of Default, etc.: promptly upon the Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that
the Agent or any Lender has given any notice or taken any other action
with respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any notice to the Company or
taken any other action with respect to a claimed default or event or
condition of the
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type referred to in subsection 8.1B, 8.1C, 8.1D, 8.1E, 8.1F, 8.1H or
8.1I (c) of any condition or event that constitutes or may (upon the
giving or receiving of notice or the lapse of time, later, or
otherwise) a default, a potential event of default, an event of
default (in each case, as defined in the agreement or instrument
creating, evidencing or governing any such Indebtedness) under or with
respect to any Indebtedness (other than the Indebtedness hereunder),
any Pool B Obligation or any Related Document, or becoming aware that
any agent, trustee, lender or security holder with respect thereto has
given any notice or taken any other action with respect to such
condition or event, (d) of any condition or event that would be
required to be disclosed in a current report filed by the Company with
the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, and
6 of such Form as in effect on the date hereof) if the Company were
required to file such reports under the Exchange Act, (e) that there
has commenced, or is intended to be commenced, a Major
Renovation/Restoration of any Property, Managed Property or Other
Managed Property with respect to which a Notice of
Renovation/Restoration shall not previously have been delivered to the
Agent or (f) of the occurrence of any event or change that has had, or
could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event
or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential
Event of Default, default, event or condition, and what action the
Company has taken, is taking and proposes to take with respect
thereto;
(xv) Indenture: concurrently with their delivery to or
receipt from the Trustee or any holder of the Senior Notes, copies of
all notices, certificates and other documents delivered by the Company
or any of its Subsidiaries to, or received by the Company or any of
its Subsidiaries from, the Trustee or such Holder, as the case may be,
pursuant to the Indenture or the Senior Notes, including, without
limitation, notices, certificates and other documents delivered to the
Trustee pursuant to Sections 3.2, 3.4, 4.9, 4.12, 4.16, 4.17, 8.2,
8.3, 9.1, 9.2, 10.2 and 10.3 of the Indenture and notices received
from the Trustee pursuant to Sections 6.2 and 7.5 of the Indenture;
(xvi) Litigation or Other Proceedings: (a) promptly upon
the Company obtaining knowledge of (x) the institution of any action,
suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the
Company or any of its Subsidiaries, or any property of the Company or
such Subsidiary (collectively, "PROCEEDINGS") not previously disclosed
in writing by the Company to the Lenders or (y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, could reasonably be
expected to have, either individually or in the aggregate, a
Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
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written notice thereof together with such other information as may be
reasonably available to the Company to enable the Agent and its
counsel to evaluate such matters; and (b) within 20 days after the end
of each calendar quarter of the Company, a schedule of all Proceedings
involving an alleged liability of, or claims against or affecting, the
Company and its Subsidiaries equal to or greater than $1,000,000
individually or $5,000,000 in the aggregate, and promptly after
request by the Agent, such other information as may be reasonably
requested by the Agent to enable the Agent and its counsel to evaluate
any of such Proceedings;
(xvii) ERISA Events and Notices: (a) promptly upon becoming
aware of the occurrence of or forthcoming occurrence of any ERISA
Event, a written notice specifying the nature thereof, what action the
Company or any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto; and (b) with reasonable promptness, copies of (x)
each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by the Company or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan; (y)
all notices received by the Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (z)
copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as the Agent shall reasonably
request;
(xviii) Financial Plans: as soon as practicable and in any
event no later than November 30 of each year, projected financial
statements for each Property for the three next succeeding calendar
years setting forth in detail each line item appearing in the form of
financial statement set forth in Schedule 6.1 annexed hereto, together
with an explanation of the assumptions on which such forecasts are
based, and such other information and projections as the Agent may
reasonably request for any Property, all the Properties or the Company
or any of its Subsidiaries;
(xix) Insurance: as soon as practicable and in any event
by the last day of each calendar year, a report in form and substance
reasonably satisfactory to the Agent outlining all material insurance
coverage maintained as of the date of such report by the Company and
its Subsidiaries or, in lieu thereof, copies of such policies, and a
report as to all material insurance coverage planned to be maintained
by the Company and its Subsidiaries in the next succeeding calendar
year to the extent varying from the description of that delivered or
described;
(xx) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of the Company or
any of its Subsidiaries or by independent consultants, with respect to
material environmental matters at any Property or which relate to an
Environmental Claim which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;
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(xxi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of the Company;
(xxii) Ownership by Bedrock, the Crow Interests and the
Senior Executives: with reasonable promptness, written notice of any
change in the ownership of equity Securities of the Company by
Bedrock, the Crow Interests or the Senior Executives;
(xxiii) Change in Name or Chief Place of Business: (a)
notification of any change in any Loan Party's name, identity or
corporate structure within 30 days of such change and (b) 30 days'
prior written notice of any change in any Loan Party's executive
office or chief place of business;
(xxiv) UCC Search Report: as soon as practicable after the
date of delivery to the Agent of any UCC financing statement executed
by any Loan Party pursuant to subsection 4.1D(ii) or 6.9A, copies of
completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statements and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not
previously delivered to the Agent by or on behalf of the Company or
such Loan Party;
(xxv) Approved Capital Policy: promptly upon any change in
the Approved Capital Policy, written notice of such change; and
(xxvi) Other Information: with reasonable promptness, (a)
information and other data revised to correct any erroneous
information and other data previously delivered by the Company to the
Agent pursuant to this subsection 6.1 or included in any statement,
report or certificate previously delivered by the Company to the Agent
pursuant to this subsection 6.1, together with such statement, report
or certificate that shall have been revised to reflect such revised
information and data and (b) such other information and data with
respect to the Loan Parties and their respective Subsidiaries, the
Properties (separately and for all Properties), the Ground Leases and
Leases, the Management Agreements, the other Collateral and the other
assets and liabilities of the Loan Parties and their respective
Subsidiaries, all in form satisfactory to the Agent, as from time to
time may be reasonably requested by the Agent.
6.2 COMMON STOCK.
The Company shall (i) cause the Common Stock, and each class of
preferred stock of the Company permitted by subsection 7.19B, to be duly listed
on the New York Stock Exchange, Inc. or NASDAQ/NMS and (ii) file timely all
reports required to be filed by the Company with the New York Stock Exchange,
Inc. or the National Association of Securities Dealers, Inc., as the case may
be, and the Securities and Exchange Commission.
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6.3 CORPORATE EXISTENCE; CORPORATE SEPARATENESS ETC.
A. CORPORATE EXISTENCE. Except as permitted pursuant to
subsection 7.7, each Loan Party shall, and shall cause each of its Subsidiaries
to, at all times preserve and keep in full force and effect its corporate or
partnership existence and all Authorizations, rights and franchises material to
its business.
B. FINANCIAL MATTERS. The Company shall cause each of its
Subsidiaries to (i) maintain financial statements, payroll records, accounting
records and other corporate records and other documents separate from each
other and any other Person; (ii) maintain its own bank accounts in its own name
(or, in the case of the Company, in the names of its Subsidiaries), separate
from each other and any other Person; (iii) pay its own expenses and other
liabilities from its own assets and incur (or endeavor to incur) obligations to
other Persons based solely upon its own assets and creditworthiness and not
upon the creditworthiness of each other or any other Person; and (iv) file its
own tax returns or, if part of a consolidated group, join in the consolidated
tax return of such group as a separate member thereof.
C. CORPORATE FORMALITIES. The Company shall take all actions
reasonably necessary to keep the Company and its Subsidiaries separate from
Bedrock and the Crow Interests and their respective Affiliates, including,
without limitation, (i) the taking of action under the direction of the Board
of Directors of the Company and, if so required by the Certificate of
Incorporation or the Bylaws of the Company or by law, the approval or consent
of the stockholders of the Company; (ii) the preparation of corporate minutes
for or other appropriate evidence of each significant transaction engaged in by
the Company; and (iii) the observance of separate approval procedures for the
adoption of resolutions by the Board of Directors of the Company, on the one
part, and of Bedrock and the Crow Interests and their respective Affiliates, on
the other part.
D. INDEPENDENT BUSINESS. The Company shall manage the business
of the Company and its Subsidiaries independently from the business of Bedrock
and the Crow Interests and their respective Affiliates and any other Person and
in accordance with the best interest of the Company; provided that Management
Corp. may manage hotels owned by Bedrock and the Crow Interests, respectively,
and by their respective Affiliates pursuant to Management Agreements or Other
Management Agreements. The Company shall conduct the administrative activities
of the Company and its Subsidiaries separately from the administrative
activities of Bedrock and the Crow Interests and their respective Affiliates
and any other Person; provided the Company may enter into asset management
services agreements with either Bedrock or Crow Interests pursuant to which it
may provide certain administrative services. Any moneys earned by the Company
or its Subsidiaries on their assets or proceeds of the sale of any of their
assets shall be deposited in bank accounts separate from any of the assets of
any other Person, and no assets of the Company and its Subsidiaries shall
become commingled with assets of such Persons. The Company shall use
reasonable efforts to correct any known misunderstanding or misrepresentation
regarding the independence of the Company and its Subsidiaries from Bedrock and
the Crow Interests and their respective Affiliates.
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E. BUSINESS DEALINGS. The Company shall hold itself out, and
shall continue to hold itself out, to the public and to its creditors as a
legal entity, separate and distinct from all other entities, and shall continue
to take all steps reasonably necessary to avoid (i) misleading any other Person
as to the identity of the entity with which such Person is transacting business
or (ii) implying that the Company is, directly or indirectly, absolutely or
contingently, responsible for the Indebtedness or other obligations of Bedrock
or the Crow Interests and their respective Affiliates or any other Person.
6.4 TAXES AND CLAIMS; TAX CONSOLIDATION.
A. TAXES AND CLAIMS. Each Loan Party shall, and shall cause each
of its Subsidiaries to, pay or discharge or cause to be paid or discharged all
Taxes and Impositions imposed upon any Loan Party or any of its Subsidiaries,
or payable by any Loan Party or any of its Subsidiaries with respect to any
Property or other assets or in respect of any of the franchises, business,
income or other property of any Loan Party or any of its Subsidiaries before
the same shall become delinquent and before any penalty accrues thereon, and
will pay, discharge or otherwise satisfy or cause to be paid, discharged or
otherwise satisfied at or before maturity or before they become delinquent, all
Indebtedness, obligations and other claims (including claims for labor,
supplies, materials and services that, if unpaid, might become a Lien on the
property of any Loan Party or any of its Subsidiaries) of any Loan Party and
its Subsidiaries; provided, however, that if, by law, any such Imposition is
payable, or may at the option of the taxpayer be paid, in installments, the
Company or such other party may pay the same or cause it to be paid, together
with any accrued interest on the unpaid balance of such Imposition, in
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto for the nonpayment of any such installment and
interest; provided further, however, that no such charge or claim needs to be
paid if (i) such charge or claim is being diligently contested in good faith by
appropriate proceedings, (ii) reserves consistent with GAAP or otherwise
consented to by the Agent shall have been made therefor by such Loan Party or
such Subsidiary, (iii) none of the Collateral is in jeopardy of being sold,
forfeited or lost during or as a result of such contest, (iv) none of any Loan
Party, or any of its Subsidiaries, the Agent or any Lender could become subject
to any civil fine or penalty not adequately reserved against (in the case of
any Loan Party or Subsidiary thereof) or criminal fine or penalty, in each case
as a result of non-payment of such charge or claim and (v) such contest has not
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Upon written request by the Agent, each
Loan Party shall, and shall cause each of its Subsidiaries to, deliver to the
Agent all receipts evidencing the payment of all such Taxes, Impositions,
assessments, levies, permits, fees, rents and other public charges imposed upon
or in respect of or assessed against any Loan Party, any of its Subsidiaries or
any of their respective properties or assets except for those being paid or
contested as described in the provisos above.
B. TAX CONSOLIDATION. Each Loan Party will not, and will not
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person other than the Company and its
Subsidiaries.
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6.5 MAINTENANCE OF PROPERTIES; REPAIR; ALTERATION.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
(i) maintain or cause to be maintained each Property and all other items of
Collateral in a manner consistent for hotel properties and related property,
and other property and assets constituting the Collateral, in each case of the
same quality and character, and shall keep or cause to be kept every part
thereof in good condition and repair, reasonable wear and tear excepted, and
make all reasonably necessary repairs, renewals or replacements thereto as may
be reasonably necessary to conduct the business of such Loan Party and its
Subsidiaries; (ii) not remove, demolish or structurally alter, or permit or
suffer the removal, demolition or structural alteration of, any of the
Improvements except as expressly permitted hereunder or in connection with a
Renovation or Restoration with the prior written consent of the Agent; (iii)
complete promptly and in a good and workmanlike manner any Improvements which
may be now or hereafter constructed on any Property and, subject to subsection
6.11, promptly restore in like manner any portion of the Improvements which may
be damaged or destroyed thereon from any cause whatsoever, and pay when due all
claims for labor performed and materials furnished therefor (subject to the
right to contest the amount of validity thereof in good faith); (iv) comply in
all material respects with all Applicable Laws, applicable Insurance
Requirements and all covenants, conditions and restrictions now or hereafter
affecting any Property or other item of Collateral or any part thereof or
requiring any alterations or improvements; and (v) not commit, or permit, any
waste of the Collateral (provided that demolition or other work in connection
with renovation, expansion or repair shall not be considered waste); (vi) not
remove any item of the Collateral (other than in accordance with subsection 2.9
or otherwise in the ordinary course of business) without replacing it with a
comparable item of equal or greater quality, value and usefulness, except that
such Loan Party or Subsidiary thereof, as applicable, may sell or dispose of in
the ordinary course of business any property which is obsolete or no longer
useful in its business; provided, however, that the determination of
obsolescence or uselessness of any material property shall be determined by the
senior management of such Loan Party or such Subsidiary.
6.6 INSPECTION; LENDERS' MEETING; APPRAISALS.
A. INSPECTION AND LENDER MEETING. Each Loan Party shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by the Agent to visit and inspect any Property, including its and
their financial and accounting records, tenant leasing files and other
management books and records, and to make copies and take extracts therefrom,
and to discuss its and their affairs, operations, finances and accounts with
its and their officers, property managers and independent accountants (provided
that any Loan Party or any such Subsidiary may, if it so chooses, be present at
or participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours, with as little disruption of
such party's business and operations as is reasonably practical, and as often
as may be reasonably requested. Without in any way limiting the foregoing, the
Company will, upon the request of the Agent, participate in a meeting with the
Agent and the Lenders once during each calendar year to be held at the
Company's corporate offices (or such other location as may be agreed to by the
Company and the Agent) at such time as may be agreed to by the Company and the
Agent.
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B. APPRAISALS. If the Agent shall advise the Company by written
notice that the Agent believes that the value of one or more Pool A Properties
has been adversely affected, for any reason, since the date of the most recent
Appraisal thereof, promptly thereafter the Loan Parties shall, or shall cause
each of their respective Subsidiaries to, at their expense, cause the
preparation and delivery to the Agent of an Appraisal of each such Pool A
Property dated not more than 30 days prior to the date of such delivery, which
Appraisal shall be prepared by an Appraiser designated by the Agent and shall
be satisfactory in form and substance to the Agent; provided that the Company
shall not be required to pay the expense of more than one such Appraisal of any
such Pool A Property during any period of 12 consecutive months commencing
after the Funding Availability Date. If any Loan Party or any of its
Subsidiaries obtains an appraisal of one or more of the Pool A Properties other
than pursuant to this subsection, the Company shall deliver a copy of such
appraisal to the Agent promptly upon the completion thereof and the Agent may
elect, in its sole discretion and subject to Applicable Laws, to treat such
appraisal as an "Appraisal." In the event that the Agent obtains an Appraisal
of one or more of the Pool A Properties, the Agent shall deliver a copy of such
Appraisal to the Company upon the completion thereof.
6.7 COMPLIANCE WITH LAWS, AUTHORIZATIONS, ETC.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all Applicable Laws, noncompliance with which
could reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect. Each Loan Party shall, and shall cause each of its
Subsidiaries to, keep all Authorizations which are from time to time required
for the use and operation of each Property in full force and effect except
where the failure to keep such Authorizations in effect would not individually
or in the aggregate materially and adversely affect any Property, individually,
or all Properties, collectively.
6.8 PERFORMANCE OF LOAN DOCUMENTS AND RELATED DOCUMENTS.
A. LOAN DOCUMENTS. Each Loan Party shall, and shall cause each
of its Subsidiaries to, observe and perform, or cause to be observed and
performed, all its covenants, agreements, conditions and requirements contained
in each of the Loan Documents to which it is or will be a party in accordance
with the terms thereof and will maintain the validity and effectiveness of such
Loan Documents.
B. RELATED DOCUMENTS. Each Loan Party shall, and shall cause
each of its Subsidiaries to, observe and perform, or cause to be observed and
performed, all its material covenants, agreements, conditions and requirements
contained in each of the Related Documents to which it is a party in accordance
with the terms thereof and will maintain the validity and effectiveness of such
Related Documents, the violation or invalidity of which could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. Each Loan Party shall take no action, nor permit any action to be
taken, which will release any party to the Related Documents from any of such
party's obligations or liabilities thereunder, or will result in the
termination, modification or amendment, or will materially impair the validity
or effectiveness, of any Related Document except as expressly
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provided for herein and therein, which release, invalidity or ineffectiveness
could reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect. The Company shall give the Agent written notice of
any default by any party to any Related Document promptly after such default
becomes known to the Company if such default could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
C. ENFORCEMENT. At the request of the Agent and also following
the occurrence of a breach or default under any Related Document to which any
Loan Party or any of its Subsidiaries is a party, such Loan Party or such
Subsidiary, as applicable, will, at its expense but subject to the direction
and control of the Agent, take such action, or at the Agent's request furnish
funds sufficient to enable the Agent to take such action, as the Agent may
reasonably request in connection with enforcing such Related Document.
6.9 PAYMENT OF LIENS.
A. REMOVAL BY LOAN PARTIES. In the event that, notwithstanding
the covenants contained in subsection 7.2, a Lien not otherwise permitted under
subsection 7.2 may encumber any Property or other item of Collateral or any
portion thereof, the Company shall promptly discharge or cause to be discharged
by payment to the lienor or lien claimant or promptly secure removal by bonding
or deposit with the county clerk or otherwise or, at the Agent's option,
promptly obtain insurance against, any such Lien or mechanics' or materialmen's
claims of lien filed or otherwise asserted against any Property or any other
item of Collateral or any portion thereof within 30 days after the date of
notice thereof. The Company shall exhibit to the Agent upon request all
receipts or other satisfactory evidence of payment, bonding, deposit of taxes,
assessments, Liens or any other item which may cause any such Lien to be filed
against any Property or other item of Collateral of any Loan Party or any of
its Subsidiaries. Each Loan Party and each of its Subsidiaries shall fully
preserve the Lien and the priority of each of the Mortgages and the other
Security Documents without cost or expense to the Agent or the Lenders.
B. REMOVAL BY THE AGENT. If any Loan Party or any of its
Subsidiaries fails to promptly discharge, remove or bond off any such Lien or
mechanics' or materialmen's claim of lien as described above within 30 days
after the receipt of notice thereof, then the Agent may, but shall not be
required to, procure the release and discharge of such Lien, mechanics' or
materialmen's claim of lien and any judgment or decree thereon, and in
furtherance thereof may, in its sole discretion, effect any settlement or
compromise with the lienor or lien claimant or post any bond or furnish any
security or indemnity as the Agent, in its sole discretion, may elect. In
settling, compromising or arranging for the discharge of any Liens under this
subsection, the Agent shall not be required to establish or confirm the
validity or amount of the Lien. The Company agrees that all costs and expenses
expended or otherwise incurred pursuant to this subsection 6.9 (including
reasonable attorneys' fees and disbursements) by the Agent shall be paid by the
Company in accordance with the terms hereof.
C. TITLE SEARCHES. In the event that the Agent reasonably
believes that a Lien not otherwise permitted under subsection 7.2 may encumber
any Property or Collateral or any
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portion thereof, the Agent may, at the expense of the applicable Loan Party or
Subsidiary thereof, obtain an updated title and/or lien search regarding such
Property or Collateral.
6.10 INSURANCE.
A. RISKS TO BE INSURED. With respect to each Property, each Loan
Party shall procure or cause to be procured, and each Loan Party shall maintain
or cause to be maintained continuously in effect, insurance coverage issued by
an insurer (i) authorized to issue such insurance in all applicable
jurisdictions, (ii) rated "A" (or its equivalent) or better by Alfred M. Best
Company, Inc., (iii) with a financial size rating of [**VIII**] (or its
equivalent) or better, by Alfred M. Best Company, Inc., and (iv) otherwise
satisfactory to the Agent; provided, however, that the requirements set forth
in clauses (ii) and (iii) above with respect to any Property shall be subject
to any requirements of any related Ground Lease or any requirements of any
mortgage or deed of trust securing any related Pool C Indebtedness; provided
further, however, that (1) __________, the insurer of the Company's umbrella
indemnity insurance policy as of the Funding Availability Date (and any renewal
thereof by such insurer), may be rated "A-" (or its equivalent) by Alfred M.
Best Company, Inc.; it being understood and agreed that, in the event the
Company procures first loss indemnity insurance from a carrier other than
__________, such carrier shall comply with the requirement set forth in clause
(ii) above, and (2) as of the Funding Availability Date, the insurers of the
Company's earthquake, flood and wind insurance policies (and any renewals
thereof by such insurers, respectively) may be rated "A-" (or its equivalent)
by Alfred M. Best Company, Inc. and have a financial size rating of "VII" (or
its equivalent) by Alfred M. Best Company, Inc.; it being understood and
agreed that, in the event the Company procures any earthquake, flood or wind
insurance from a carrier other than the carrier providing such insurance on the
Funding Availability Date, such carrier shall comply with the requirements set
forth in clauses (ii) and (iii) above unless otherwise approved by the Agent.
Each Loan Party shall pay, and shall cause each of its Subsidiaries to pay, in
a timely manner all premiums due in connection therewith. All insurance
policies shall be issued by insurers doing business as admitted licensed
carriers in the state where such Property is located, and shall be authorized
and licensed to issue insurance in such state unless otherwise approved by the
Agent in its sole discretion. The insurance to be procured and maintained by
the Company is the following:
(i) Casualty. The Company shall keep, or shall cause its
Subsidiaries to keep, each Property insured for the benefit of the
Agent, in each case, as follows:
(a) All Risk of Physical Loss. Insurance with
respect to the Improvements now or hereafter located on the
Properties and any alterations or additions thereto and the
furniture, fixtures and equipment against any peril included
within the classification "All Risks of Physical Loss" with
extended coverage (including fire, lightning, windstorm,
sprinkler, hail, explosion, riot, riot attending a strike,
civil commotion, vandalism, malicious mischief, terrorist
acts, aircraft, vehicle and smoke) in an amount equal to the
full insurable value of such Improvements and such furniture,
fixtures and equipment. The term "FULL INSURABLE VALUE" shall
mean the actual replacement cost of such Improvements and such
furniture, fixtures and equipment (without taking into
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account any depreciation, and exclusive of excavations,
footings and foundations, landscaping and paving) determined
by an insurer upon the request of the Agent, a recognized
independent insurance broker or an appraiser selected (and
approved by the Agent) and paid by the applicable Loan Party
or its Subsidiary; provided, however, that such amount shall
be sufficient to prevent such Loan Party or such Subsidiary
from becoming a co-insurer, and the policy shall contain a
stated value endorsement to that effect.
(b) Builder's Risk. During any period of
construction of Improvements and any repair, restoration,
Renovation or replacement thereof, a standard builder's all
risk policy (completed value non-reporting form) for an amount
at least equal to the full insurable value of the work to be
performed and equipment, supplies and materials to be
furnished, as shall be reasonably approved by the Agent for
such purpose, the coverage of which shall include the hazards
described in subsection 6.10A(i)(a) and building collapse;
provided, however, that such policy may be obtained by a
contractor if it names the Agent and the Company as additional
named insureds and if it otherwise complies with this
Agreement. Such policy shall contain a stated value
endorsement so that no co-insurance provision shall be
applicable to any loss thereunder. Such policy shall contain
the provision that "permission is hereby granted to complete
and/or occupy" upon the earlier to occur of substantial
completion of any discrete increment of the work or a Tenant
taking occupancy of any Property (or portion thereof) as to
which work was being performed.
(c) Flood. Insurance against damage or loss by
flood as to any Property that is located in an area now or
subsequently designated as an area having special flood
hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973,or the National Flood
Insurance Reform Act of 1994, as such Acts may be amended,
modified, supplemented or replaced from time to time, on such
basis and not less than such amounts as shall be reasonably
approved by the Agent, but not less than the amount required
by law. If any Loan Party or any of its Subsidiaries fails to
obtain flood insurance as required, the Agent may purchase
such flood insurance, and the Company shall pay all premiums
and other costs and expenses incurred by the Agent.
(d) Boilers. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all
boilers, boiler tanks, heating and air conditioning equipment,
pressure vessels, auxiliary piping and similar apparatus,
machinery and equipment located in, on or about each Property
insuring against damage or loss from boilers, boiler tanks,
heating and air conditioning equipment, pressure vessels,
auxiliary piping and similar apparatus, machinery and
equipment and insurance against loss of occupancy or use
arising from any such breakdown in such amounts as are
generally available at reasonable premiums and are generally
required by institutional lenders for properties comparable to
the Properties.
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(e) Business Interruption or Rental Income
Insurance. Business interruption and/or loss of rental value
or use and occupancy insurance insuring against business
interruption at and against loss of rental income from each
Property due to any of the hazards listed in subsection
6.10A(i)(a) above in an amount sufficient to avoid any
co-insurance penalty and to provide proceeds for a period not
less than one year of loss.
(f) Earthquake Insurance. With respect to any
Property located in California or other area at high risk for
earthquakes, as reasonably determined by the Agent, and at the
reasonable discretion of the Agent, earthquake insurance on
such basis and in such amounts as shall be reasonably required
by the Agent.
(ii) Worker's Compensation. Each Loan Party shall
maintain, and shall cause each of its Subsidiaries to maintain, for
itself and for each Property at which such Loan Party or such
Subsidiary maintains employees, statutory workers' compensation
insurance (to the extent the risks to be covered thereby are not
already covered by other policies of insurance maintained by such Loan
Party or such Subsidiary), in statutory amounts as required by law.
(iii) Liability. The Company shall procure and maintain:
(a) Comprehensive General Liability Insurance.
Comprehensive general liability insurance, on an occurrence
basis in the amount of $1,000,000 per occurrence per Property
and $3,000,000 in the aggregate per Property covering each
Loan Party, each of its Subsidiaries and the Agent against
claims for bodily injury, death and property damage (including
claims and legal liability to the extent insurable imposed
upon the Agent and all court costs and attorneys' fees and
expenses), arising out of or connected with the possession,
use, leasing, operation, maintenance or condition of each
Property or occurring in, upon or about or resulting from each
Property, or any drive, sidewalk, curb or passageway adjacent
thereto (to the extent insurable), which insurance shall
include blanket contractual liability coverage which insures
contractual liability (to the extent insurable) under the
indemnification set forth in subsection 9.3 of this Agreement
(but such coverage or the amount thereof shall in no way limit
such indemnification), garage liability (if applicable),
products liability (if applicable) and elevator liability (if
applicable) coverage and during any period of construction of
any Improvements, owner's and contractor's protective
liability coverage, including completed operations liability
coverage.
(b) Employer's Liability. Employer's liability
insurance on such basis and in such amounts as shall be
reasonably required by the Agent.
(c) General Liability and Property Damage. Broad
form public liability and property damage insurance on an
occurrence basis in connection with any Renovation being
performed at any Property, to be carried by any
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contractor or construction manager or by any Person, including
any Loan Party or any of its Subsidiaries, performing a
similar function, including "Builders Risk" coverage in the
amount of $1,000,000 per occurrence and $3,000,000 in the
aggregate.
(d) Liquor Liability and Dram Shop Insurance.
Liquor liability and dram shop insurance on such basis and in
such amounts as shall be required by the Agent.
(iv) Additional Insurance. Each Loan Party shall procure
and maintain, and shall cause each of its Subsidiaries to procure and
maintain, such other insurance with respect to the Properties against
loss or damage of the kinds from time to time customarily insured
against and in such amounts as are generally available at reasonable
premiums and are generally required by institutional lenders for
properties comparable to the Properties.
B. POLICY PROVISIONS. Each policy of insurance maintained in
respect of any Loan Party, any of its Subsidiaries and/or any Property pursuant
to this subsection 6.10 shall (a) in the case of each category of public
liability insurance, name such Loan Party or such Subsidiary, as the case may
be, as insured and name the Agent (for the benefit of the Lenders) as an
additional insured, and in the case of all other insurance required under this
Agreement (other than any such policy maintained solely in respect of one or
more Pool B Properties and Pool C Properties), name the Agent (for the benefit
of the Lenders) as an additional insured or as a loss payee, as Agent shall
require; (b) except in the case of public liability insurance and workers'
compensation insurance, provide that all proceeds thereunder shall be payable
to the Agent pursuant to a standard first mortgagee endorsement, without
contribution, that all losses with respect to each Property shall be paid
directly to the Agent, without contribution by any similar insurance carried by
the Agent and that adjustment and settlement of any material loss shall be
subject to the reasonable approval of the Agent; (c) include effective waivers
by the insurer of all rights of subrogation against any loss payee, additional
insured or named insured; (d) permit the Agent to pay the premiums and continue
any insurance upon failure of such Loan Party or such Subsidiary, as the case
may be, to pay premiums when due, upon the insolvency of such Loan Party or
such Subsidiary, as the case may be, or through foreclosure; (e) to the extent
such provisions are reasonably obtainable, provide that such insurance shall
not be impaired or invalidated by virtue of (1) any act, failure to act,
negligence of, or violation of declarations, warranties or conditions contained
in such policy by such Loan Party or such Subsidiary, as applicable, the
Company, the Agent, the Lenders or any other named insured, additional insured
or loss payee, except for the willful misconduct of the Agent or the Lenders
knowingly in violation of the conditions of such policy, (2) the occupation or
use of such Property for purposes more hazardous than permitted by the terms of
the policy, (3) any foreclosure or other proceeding or notice of sale relating
to such Property or (4) any change in the possession of such Property without a
change in the identity of the holder of actual title to such Property (provided
that with respect to items (3) and (4) any notice requirements of the
applicable policies are satisfied); (f) be subject to a deductible, if any, not
greater than $100,000 (or, with respect to coverage for wind damage or
earthquake damage, such greater amount as shall not exceed 2% or 5%,
respectively, of the affected Property's
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agreed value); (g) contain an endorsement providing that none of the Agent, the
Lenders or such Loan Party or such Subsidiary, as applicable, shall be, or
shall be deemed to be, a co-insurer with respect to any risk insured by such
policy; and (h) provide that if all or any part of such policy shall be
canceled or terminated, or shall expire, the insurer will forthwith give notice
thereof to each named insured, additional insured and loss payee and that no
cancellation, termination, expiration, reduction in amount of, or material
change (other than an increase) in, coverage thereof shall be effective until
at least 30 days (or 10 days in the case of non-payment for premiums) after
receipt by each named insured, additional insured and loss payee of written
notice thereof; provided, however, that the requirements set forth in this
subsection 6.10B with respect to any Property shall be subject to any
requirements of any Ground Lease affecting such Property or any requirements of
any mortgage or deed of trust securing any related Pool C Indebtedness.
C. INCREASES IN COVERAGE. The policy limits of any policy of
insurance required hereunder shall be increased from time to time to reflect
what a reasonable prudent owner of land and improvements similar in type and
locality to each Property would carry.
D. PAYMENT OF PROCEEDS. If any such insurance proceeds required
to be paid to the Agent are instead made payable to the Company or any Loan
Party or Subsidiary thereof, the Company hereby appoints the Agent as its
attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
transfer any such payment to the Agent.
E. DELIVERY OF COUNTERPART POLICIES; EVIDENCE. Each Loan Party
shall deliver, and shall cause each of its Subsidiaries to deliver, to the
Agent on or before the Funding Availability Date valid evidence acceptable to
the Agent for the policies of insurance required by this Agreement or any other
Loan Document to be carried evidencing (i) the issuance of such policies, (ii)
the payment of all premiums payable for the period ending not earlier than the
first anniversary of the Funding Availability Date and (iii) coverage which
meets all of the requirements set forth in this Agreement. At each time after
the Funding Availability Date that any Loan Party or any of its Subsidiaries is
required by this Agreement or by any Security Document or any other Loan
Document to deliver evidence of insurance, such Loan Party shall deliver, or
shall cause such Subsidiary to deliver, such evidence of valid policies of
insurance acceptable to the Agent evidencing (a) the issuance of the policies
of insurance required by this Agreement or other Loan Document to be carried,
(b) the payment of all premiums then due to the applicable insurer, (c)
coverage which meets all of the requirements set forth in this Agreement or
other Loan Document, and (d) that the required policies are in full force and
effect.
F. REPLACEMENT OR RENEWAL POLICIES. Not less than 20 days prior
to the expiration, termination or cancellation of any insurance policy which
any Loan Party or any of its Subsidiaries is required to maintain hereunder,
such Loan Party shall obtain, or shall cause such Subsidiary to obtain, a
replacement or renewal policy or policies (or a binding commitment for such
replacement or renewal policy or policies), which shall be effective no later
than the date of the expiration, termination or cancellation of the previous
policy, and shall deliver to the Agent a valid binder in respect of such policy
or policies in the same form and containing the same information as the
expiring policy or policies required to be delivered
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by each Loan Party and its Subsidiaries pursuant to subsection 6.10E or a copy
of the binding commitment for such policy complying with all the requirements
of this subsection, followed by a certified true copy of the policy or policies
when issued.
G. MATERIAL CHANGE IN POLICY. Each Loan Party shall deliver, and
shall cause each of its Subsidiaries to deliver, to the Agent concurrently with
each material change in any insurance policy covering any part of the
Properties required to be maintained by each Loan Party and its Subsidiaries
hereunder, a valid binder or policy endorsement with respect to such changed
insurance policy certified by the insurance company issuing such policy, in the
same form and containing the same information as the original evidence of
insurance required to be delivered by each Loan Party and its Subsidiaries
pursuant to subsection 6.10E.
H. SEPARATE INSURANCE. Each Loan Party will not take out, nor
will it permit any of its Subsidiaries to take out, separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained pursuant to this subsection unless such insurance complies with
all of the requirements of this subsection.
6.11 CASUALTY AND CONDEMNATION; RESTORATION.
A. NOTICE OF CASUALTY. Upon the occurrence of any damage to or
loss or destruction of all or any portion of any Property, whether or not
covered by insurance, which will cost (or may reasonably be expected to cost)
more than $100,000 to Restore, as determined by the Company and so certified in
an Officers' Certificate delivered to the Agent, (i) the Company shall promptly
deliver to the Agent written notice of the same which shall, among other
things, describe such casualty, and (ii) as soon as practicable but in any
event prior to the commencement of Restoration of such Property, the Company
shall deliver to the Agent a Notice of Renovation/Restoration in the form
attached hereto as Exhibit XVII.
B. INSURANCE PROCEEDS. All Insurance Proceeds in respect of a
Pool A Property or a Pool B Property (other than Insurance Proceeds
attributable to insurance required pursuant to subsection 6.10A(ii) and (iii))
and the right thereto are hereby irrevocably assigned and pledged by each Loan
Party to the Agent for the benefit of the Lenders, and the Agent on behalf of
the Lenders is authorized, at its option, to collect and receive all of the
same and to give proper receipts and acquittances therefor; provided, however,
that such assignment and pledge with respect to any such Property is subject to
any requirements of any Ground Lease affecting such Property; provided further,
however, that such Loan Party shall have the right to cause the Agent to apply
Insurance Proceeds in accordance with subsections 6.11E and 6.11F. Each Loan
Party agrees to execute and to cause each of its Subsidiaries to execute such
further assignments and pledges of any Insurance Proceeds in respect of Pool A
Properties and Pool B Properties as the Agent may reasonably require and shall
otherwise cooperate with the Agent in obtaining for the Agent and the Lenders
the benefit of any Insurance Proceeds lawfully or equitably payable in respect
of any such Property, subject to the provisos above. If, prior to the receipt
by the Agent of such Insurance Proceeds, any Pool A Property or Pool B Property
shall have been transferred upon foreclosure of the applicable Mortgage (or by
deed in lieu thereof), the Agent shall have the right to receive such Insurance
Proceeds to the extent (x) such Insurance Proceeds are attributable to a
casualty occurring prior to foreclosure or
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delivery of any deed in lieu thereof and (y) of any deficiency found to be due
upon such sale, with legal interest thereon, and reasonable counsel fees, costs
and disbursements incurred by the Agent in connection with the collection of
such Insurance Proceeds. The Agent may, but shall not be obligated to, make
proof of loss if not made promptly by the applicable Loan Party or Subsidiary
thereof. During the continuance of an Event of Default (but not otherwise),
the Agent is hereby authorized and empowered by the Company to settle, adjust
or compromise any claims for damage, destruction or loss thereunder, with or
without the consent of any Loan Party or any of its Subsidiaries (and the
Company hereby irrevocably appoints and constitutes the Agent as the Company's
lawful attorney-in-fact, coupled with an interest and with full power of
substitution, for such purpose). In no event shall any Loan Party or any of
its Subsidiaries settle, adjust or compromise any claim for Insurance Proceeds
in respect of any Pool A Property or Pool B Property in excess of $100,000
without the prior written consent of the Agent, which shall not be unreasonably
withheld, conditioned or delayed; provided, however, that this provision shall
not restrict the right of the lessor under any applicable Ground Lease (1) to
settle, adjust or compromise any claim for Insurance Proceeds to the extent
such lessor is granted the power to do so under such Ground Lease or (2) to
approve any settlement, adjustment or compromise of any claim for Insurance
Proceeds to the extent the approval of such lessor is required under such
Ground Lease. Subject to the requirements of any Ground Lease affecting any
Pool A Property or Pool B Property, each insurance company concerned is hereby
authorized and directed to make payment of all Insurance Proceeds in respect of
each of the Pool A Properties and Pool B Properties payable by it directly to
the Agent. If any Loan Party or any of its Subsidiaries receives any Insurance
Proceeds resulting from such casualty in respect of any Pool A Property or Pool
B Property, such Loan Party shall (subject to the requirements of any Ground
Lease affecting such Property) promptly endorse and transfer, or cause such
Subsidiary to endorse and transfer, such Insurance Proceeds to the Agent and
each Loan Party covenants that until so paid over to the Agent, such Loan Party
or such Subsidiary, as applicable, shall hold such Insurance Proceeds in trust
for the benefit of the Agent and shall not commingle such Insurance Proceeds
with any other funds or assets of such Loan Party or Subsidiary or any other
Person.
C. NOTICE OF CONDEMNATION; NEGOTIATION AND SETTLEMENT OF CLAIMS.
The Loan Parties shall, and shall cause their respective Subsidiaries to,
promptly deliver written notice to the Agent upon obtaining knowledge of the
institution, or the proposed institution, of any bona fide action or proceeding
for the Taking of all or any portion of any Property. The Agent shall have the
right to participate in any negotiation, action or proceeding relating to any
such action or proceeding affecting any Pool A Property or Pool B Property, and
no settlement or compromise of any claim in connection with any such action or
proceeding shall be made without the consent of the Agent, which consent shall
not be unreasonably withheld, conditioned or delayed; provided, however, that
this provision shall not restrict the right of the lessor under any applicable
Ground Lease (1) to settle or compromise any such claim to the extent such
lessor is granted the power to do so under such Ground Lease or (2) to approve
any settlement or compromise of any such claim to the extent the approval of
such lessor is required under such Ground Lease. Upon the occurrence of any
Taking with respect to a Property which will cost (or may reasonably be
expected to cost) more than $100,000 to Restore, as determined by the Company
and so certified in an Officers' Certificate delivered to the Agent, as soon as
practicable thereafter but in any event prior to the commencement of
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any Restoration of such Property, the Company shall deliver to the Agent a
Notice of Renovation/Restoration in the form attached hereto as Exhibit XVII.
D. CONDEMNATION PROCEEDS. All Condemnation Proceeds in respect
of each of the Pool A Properties and Pool B Properties and the right thereto
are hereby irrevocably assigned and pledged by each Loan Party to the Agent for
the benefit of the Lenders, and the Agent on behalf of the Lenders is
authorized, at its option, to collect and receive all such Condemnation
Proceeds and to give proper receipts and acquittances therefor; provided,
however, that such assignment and pledge with respect to any such Property is
subject to any requirements of any Ground Lease affecting such Property;
provided further, however, that such Loan Party shall have the right to cause
the Agent to apply Condemnation Proceeds in accordance with subsections 6.11E
and 6.11F. Each Loan Party agrees to execute, and to cause each of its
Subsidiaries to execute, such further assignments of any Condemnation Proceeds
in respect of any Pool A Property or Pool B Property as the Agent may
reasonably require and shall otherwise cooperate with the Agent in obtaining
for the Agent and the Lenders the benefit of any Condemnation Proceeds lawfully
or equitably payable in respect of such Property, subject to the provisos
above. If, prior to the receipt by the Agent of such Condemnation Proceeds,
the portion of the Pool A Property or Pool B Property, as the case may be,
subject to such action or proceeding shall have been sold on foreclosure of the
applicable Mortgage (or by deed in lieu thereof), the Agent shall have the
right to receive such Condemnation Proceeds to the extent (x) such Condemnation
Proceeds are attributable to a Taking occurring prior to foreclosure or
delivery of any deed in lieu thereof and (y) of any deficiency found to be due
upon such sale, with legal interest thereon, and reasonable counsel fees, costs
and disbursements incurred by the Agent in connection with the collection of
such Condemnation Proceeds. The Agent may, but shall not be obligated to, make
proof of loss if not made promptly by the applicable Loan Party or Subsidiary
thereof. Upon the occurrence and during the continuance of an Event of Default
(but not otherwise), the Agent is hereby authorized and empowered by each Loan
Party to settle, adjust or compromise any claims for Condemnation Proceeds with
or without the consent of such Loan Party or any of its Subsidiaries (and the
Company hereby irrevocably appoints and constitutes the Agent as the Company's
lawful attorney-in-fact, coupled with an interest and with full power of
substitution, for such purpose). In no event shall any Loan Party or any of
its Subsidiaries settle, adjust or compromise any claim for Condemnation
Proceeds in respect of any Pool A Property or Pool B Property without the prior
written consent of the Agent, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that this provision shall not
restrict the right of the lessor under any applicable Ground Lease (1) to
settle or compromise any claim for Condemnation Proceeds to the extent such
lessor is granted the power to do so under such Ground Lease or (2) to approve
any settlement or compromise of any claim for Condemnation Proceeds to the
extent the approval of such lessor is required under such Ground Lease.
Subject to the requirements of any Ground Lease affecting any Pool A Property
or Pool B Property, each condemnor concerned is hereby authorized and directed
to make payment of all Condemnation Proceeds in respect of each of the Pool A
Properties and Pool B Properties payable by it directly to the Agent. If any
Loan Party or any of its Subsidiaries receives any Condemnation Proceeds
resulting from such condemnation in respect of any Pool A Property or Pool B
Property, such Loan Party or such Subsidiary shall (subject to the requirements
of any Ground Lease affecting such Property) promptly endorse and transfer such
Condemnation
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Proceeds to the Agent and each Loan Party covenants that until so paid over to
the Agent, such Loan Party or Subsidiary, as the case may be, shall hold such
Condemnation Proceeds in trust for the benefit of the Agent and shall not
commingle such Condemnation Proceeds with any other funds or assets of such
Loan Party or Subsidiary or any other Person.
E. REDUCTION OF BORROWING BASE; PAYMENT OF RELEASE PRICE. In the
event of any casualty or Taking with respect to a Pool A Property, a Pool B
Property or a Pool C Property, which will cost (or may reasonably be expected
to cost) more than $100,000 to Restore, as determined by the Company and so
certified in an Officers' Certificate delivered to the Agent, the Company shall
elect by written notice delivered to the Agent as soon as practicable
thereafter, but in any event before the earlier of (x) 10 days after the
occurrence of such casualty or Taking and (y) the commencement of the
Restoration of such Property, either:
(i) to reduce the Borrowing Base as provided in
subsection 2.4B(iii), if applicable, prepay the Loans in an amount
equal to the Release Price with respect to such Property and Restore
such Property pursuant to subsection 6.11G; or
(ii) if all the following conditions shall be satisfied,
to Restore such Property pursuant to subsection 6.11F:
(a) the Maturity Date shall then not have
occurred;
(b) no Potential Event of Default (other than any
Potential Event of Default caused solely by an event or
condition with respect to another Property) or Event of
Default shall have occurred and be continuing or would be
caused by such Restoration;
(c) the Company is in compliance in all respects
with the provisions of subsection 6.11F;
(d) the Agent shall have determined, in its
reasonable discretion, that Restoration of such Property is,
under the circumstances then existing, physically and
economically feasible and can be completed in accordance with
subsection 6.11F on or before a date not less than six months
prior to the Maturity Date;
(e) the Loan Parties and their respective
Subsidiaries shall have business interruption insurance
complying with subsection 6.10 in an amount at least equal to
the reduction in Property EBITDA with respect to such
Property, if any, which the Company reasonably expects to
suffer during the period of Restoration;
(f) the Loan Parties and their respective
Subsidiaries shall have complied with all notice and other
requirements under any Ground Lease affecting such Property
that must be satisfied in respect of such Restoration, the
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Restoration is permitted under the terms of such Ground Lease,
the Ground Lease remains in full force and effect; and
(g) either (1) the Net Insurance/Condemnation
Proceeds shall be sufficient to complete the costs of such
Restoration, as determined by the Agent in its reasonable
discretion, or (2) the Loan Parties and their respective
Subsidiaries shall have provided, at the Company's option, a
cash deposit or a letter of credit satisfactory to the Agent
(other than a Letter of Credit), in its reasonable discretion
(or other collateral reasonably satisfactory to the Agent),
for the amount of any shortfall in the amount of Net
Insurance/Condemnation Proceeds necessary to cover the costs
to complete such Restoration.
If the Loan Parties and their respective Subsidiaries shall fail to satisfy the
conditions set forth in clause (ii) of the preceding sentence or in subsection
6.11F with respect to the related Property, or shall fail to diligently and
continuously prosecute the Work to completion (other than as a result of
Excusable Delay), as determined by the Agent, in its reasonable discretion,
then, subject to the requirements of any Ground Lease affecting such Property,
the Borrowing Base shall be reduced as provided in subsection 2.4B(iii), the
Company shall prepay the Loans in an amount equal to the Release Price with
respect to such Property and the Agent shall apply any or all remaining
Insurance Proceeds or Condemnation Proceeds, as applicable, towards such
prepayment, and execute and deliver a Release with respect to such Property.
F. RESTORATION WITH NET INSURANCE/CONDEMNATION PROCEEDS. In the
event of any casualty or Taking with respect to a Pool A Property, a Pool B
Property or a Pool C Property, which will cost (or may reasonably be expected
to cost) more than $100,000 to Restore, as determined by the Company and so
certified in an Officers' Certificate delivered to the Agent, if any of the
Loan Parties and their respective Subsidiaries elects to Restore a Pool A
Property, a Pool B Property or a Pool C Property pursuant to this subsection
6.11F and the conditions set forth in clause (ii) of the first sentence of
subsection 6.11E are satisfied, all Net Insurance/Condemnation Proceeds shall
be held by the Agent (subject to the requirements of any Ground Lease affecting
such Property) in an interest-bearing account at the Agent, with all interest
to be held therein until completion and final inspection of the Work, and shall
be applied by the Agent to the payment of the cost of Restoring such Property
so damaged or destroyed or of the portion or portions of such Property not so
Taken (the "WORK") and shall be paid out from time to time to the Company as
the Work progresses, subject to retainage as determined by the Agent and
otherwise in accordance with any conditions reasonably imposed by the Agent but
subject to each of the following conditions:
(i) Subject to Excusable Delays, the Company shall
promptly (and in any event within 90 days after the applicable
casualty or Taking) commence, or cause the commencement of,
Restoration of such Property.
(ii) If the Work is structural or if the cost of the Work,
as estimated by the Company, shall exceed (a) with respect to a Pool A
Property, the lesser of 10% of the Pool A Property Amount with respect
to such Property and $500,000 and (b) with respect to a Pool B
Property or a Pool C Subsidiary, $500,000, the Work shall be in the
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charge of an architect or Engineer (who may be an employee or
Affiliate of the Company only if the cost of the Work does not exceed
the amount specified with respect to such Property pursuant to the
preceding clause (a) or (b), as the case may be), and before any Loan
Party or any of its Subsidiaries commences any Work, other than
temporary work to protect property or prevent interference with
business, the Agent shall have approved the plans and specifications
and the general contract for the Work to be submitted by such Loan
Party or such Subsidiary. Such plans and specifications shall provide
for such Work that, upon completion thereof, the Improvements shall
(x) be in compliance in all material respects with all legal
requirements such that all representations or warranties of the Loan
Parties relating to the compliance of such Property with Applicable
Laws in this Agreement or any of the other Loan Documents would then
be true and correct, and (y) be at least equal in value and general
utility to the Improvements which were on such Property prior to the
damage, destruction or Taking. Such plans and specifications shall be
accompanied by (1) a signed estimate of the Company, or, if an
architect or Engineer is required to supervise the Work, such
architect or Engineer, stating the estimated cost of completing the
Work, which estimate shall bear the architect's or Engineer's seal if
not made by the Company and (2) to the extent necessary at such stage
of the Work, certified copies of all Authorizations required in
connection with the commencement and performance of the Work.
(iii) Each request for payment shall be made on seven days'
prior notice to the Agent and shall be accompanied by paid invoices
and by a certificate to be made by such architect or Engineer, if one
be required under clause (ii) above, otherwise by an Officers'
Certificate of the Company, stating (a) that all of the Work completed
has been done in substantial compliance with the approved plans and
specifications, if any be required under said clause (ii) above, (b)
that the sum requested is justly required to reimburse any of the Loan
Parties and their respective Subsidiaries for payments made by the
applicable Loan Party or Subsidiary thereof to, or is justly due to,
the contractor, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the
Work (giving a brief description of such services and materials), and
that when added to all sums previously paid out by the Agent does not
exceed the cost of the Work done to the date of such certificate, and
(c) that either (x) the amount of such proceeds remaining in the
hands of the Agent, or (y) the amount of such funds, plus funds in the
hands of the applicable Loan Party or Subsidiary thereof from other
sources irrevocably committed to the completion of the Work in a
manner satisfactory to the Agent (including delivery of such funds to
the Agent for application to pay the costs of the Restoration), will
be sufficient on completion of the Work to pay for the same in full
(giving in such reasonable detail as the Agent may require an estimate
of the cost of such completion). The Agent may require that any such
statements be independently verified by an inspector approved by the
Agent.
(iv) Each request shall be accompanied by waivers of lien
satisfactory to the Agent covering that part of the Work for which
payment or reimbursement has been made and by a search prepared by the
Title Company satisfactory to the Agent establishing that there has
not been filed with respect to such Property any mechanics'
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or other lien or instrument for the retention of title in respect of
any part of the Work not discharged of record or bonded to the
reasonable satisfaction of the Agent and evidencing the continued
priority of the Mortgage and Assignment of Rents and Leases on such
Property.
(v) The available Insurance Proceeds or Condemnation
Proceeds which are paid or will be payable by the insurance company
(together with any cash, irrevocable letter of credit, payment or
performance bond or United States government obligation assigned to
the Agent as collateral, in each case acceptable to the Agent as to
amount, obligor and maturity) are, in the judgment of the Agent,
sufficient to pay in full the costs of the Restoration.
(vi) There shall be no Event of Default or Potential Event
of Default (other than any Potential Event of Default caused solely by
an event or condition with respect to another Property).
(vii) The request for any payment after the Work has been
completed shall be accompanied by (a) a copy of any certificate or
certificates required by law to render occupancy of the improvements
being rebuilt, repaired or restored legal; and (b) final lien waivers
for all labor, materials and supplies from all contractors,
subcontractors and materialmen.
(viii) After commencing the Work, the Company shall, subject
to Excusable Delays, perform, or shall cause the applicable Loan Party
or Subsidiary thereof to perform, the Work diligently and in good
faith in a good and workmanlike manner to completion in accordance
with the approved plans and specifications, if any.
(ix) The Agent shall have received "agreements to
complete" of the general contractor, any independent architects or
Engineers, and such subcontractors as the Agent reasonably deems
necessary or desirable, which agreements to complete shall be in form
and substance reasonably satisfactory to the Agent.
(x) The Company shall have obtained and maintained, or
shall have caused the applicable Loan Party or Subsidiary thereof to
obtain and maintain, completed value builders' risk (all risk)
insurance with an insurer reasonably satisfactory to the Agent, and
with loss payable to the Agent.
All costs and expenses of any Restoration, including, without
limitation, any Work, Engineer's fees, architect's fees or contractors fees and
the cost and expenses of complying with this subsection 6.11F, shall be for the
account of the Company. Upon completion of the Work and payment in full
therefor, the Agent will return to the Company the amount of any unspent
Insurance Proceeds or Condemnation Proceeds then or thereafter in the hands of
the Agent on account of the casualty or Taking that necessitated such Work,
together with all undisbursed accrued interest thereon. Nothing in this
subsection shall prevent the Agent from applying at any time all or any part of
the Insurance Proceeds or Condemnation Proceeds to the curing of any Event of
Default under this Agreement or any other Loan Document.
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G. OTHER RESTORATIONS. In the event of any casualty or Taking
with respect to a Property, which will cost (or may reasonably be expected to
cost) more than $100,000 to Restore, as determined by the Company and so
certified in an Officers' Certificate delivered to the Agent, and either (x)
the Company or any of its Subsidiaries elects to Restore a Property pursuant to
subsection 6.11F but the conditions set forth in clause (ii) of the first
sentence of subsection 6.11E are not satisfied or (y) the Company or any of its
Subsidiaries elects to Restore any Property pursuant to this subsection 6.11G,
the Company shall:
(i) prepay the Loans in the amount of the sum of (a) the
aggregate Insurance Proceeds or Condemnation Proceeds, as the case may
be, plus (b) if such Restoration constitutes a Major Renovation/
Restoration, the additional amount that may be required to be paid
pursuant to subsection 2.3B(iv) after taking into account any required
recalculation of the Borrowing Base; and
(ii) together with the delivery of the Notice of
Renovation/Restoration pursuant to subsection 6.11A or 6.11C, deliver
to the Agent the following: (a) a project budget (as revised and
supplemented from time to time in accordance with this subsection
6.11G, the "RESTORATION BUDGET") satisfactory in form to the Agent and
setting forth, among other things, the aggregate costs for such
Restoration, and the aggregate cost for each line item in such budget;
(b) an estimated time schedule for such Restoration, satisfactory in
form to the Agent and setting forth, among other things, the projected
completion date; (c) the final plans and specifications for the
Restoration (as revised and supplemented from time to time in
accordance with this subsection 6.11G, the "RESTORATION PLANS") which,
with respect to any Pool A Property or Pool B Property, shall provide
for the restoration of the related Improvements such that, upon
completion thereof, the Improvements shall (x) be in compliance in all
material respects with all legal requirements such that all
representations or warranties of the Loan Parties relating to the
compliance of such Property with Applicable Laws in this Agreement or
any of the other Loan Documents would then be true and correct, and
(y) be at least equal in value and general utility to the Improvements
which were on such Property prior to the related damage, destruction
or Taking, as the case may be; and (d) all such other information or
materials with respect to the Restoration that the Agent may
reasonably request.
If the Company or any applicable Subsidiary materially changes the scope of the
intended Restoration, materially revises the Restoration Budget (including the
estimated amounts contained therein), or materially revises or modifies the
Restoration Plans, the Company shall promptly deliver to the Agent a supplement
to the Restoration Budget or Restoration Plans or a revised Restoration Budget
or revised Restoration Plans, as applicable, which, with respect to any Pool A
Property or Pool B Property, shall be satisfactory in form and substance to the
Agent. Subject to Excusable Delays, the Company shall, and shall cause each
applicable Subsidiary to, commence such Restoration as soon as practicable, and
in any event within 90 days of the applicable casualty or Taking, and complete
the Restoration promptly, in a good and workmanlike manner and in accordance
with the Restoration Plans. Upon completion of the Restoration, the Company
shall promptly deliver to the Agent a Completion Certificate with respect
thereto. All costs and expenses of any Restoration, including, without
limitation, the
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cost and expenses of complying with this subsection 6.11G, shall be for the
account of the Company. If the Agent determines at any time that the Company
is not in compliance with the provisions of this subsection 6.11G or that the
Property cannot be Restored as contemplated by this subsection 6.11G, the Agent
shall provide the Company written notice of such determination and, within 10
Business Days after delivery of such notice, the Company shall prepay the Loans
(net of any prior prepayments made by the Company in respect of such casualty
or Taking pursuant to this subsection) and the Borrowing Base shall be reduced
as provided in subsection 6.11E.
6.12 RENOVATIONS.
A. NOTICE OF RENOVATION; RENOVATION PLANS. If the Company or any
of its Subsidiaries intends to Renovate any Property, the cost of which will
exceed (or may reasonably be expected to exceed) $100,000, as determined by the
Company and as so certified in an Officers' Certificate delivered to the Agent,
the Company shall, prior to the commencement of any such Renovation, deliver to
the Agent the following: (i) a Notice of Renovation/Restoration with respect
thereto, in the form of Exhibit XVII attached hereto; (ii) a project budget (as
revised and supplemented from time to time in accordance with this subsection
6.12A, the "RENOVATION BUDGET") satisfactory in form to the Agent and setting
forth, among other things, the aggregate costs for such Renovation, and the
aggregate cost for each line item in such budget; (iii) an estimated time
schedule for such Renovation, satisfactory in form to the Agent and setting
forth, among other things, the projected completion date, the number of rooms
that will be unavailable for business as a result of such Renovation and the
duration of such unavailability; (iv) the final plans and specifications for
the Renovation (as revised and supplemented from time to time in accordance
with this subsection 6.12A, the "RENOVATION PLANS") which, with respect to any
Pool A Property or Pool B Property, shall be satisfactory in form and substance
to the Agent; and (v) all such other information or materials with respect to
the Renovation that the Agent may reasonably request. In the event the
Company, or any applicable Subsidiary changes the scope of the intended
Renovation, materially revises the Renovation Budget (including the estimated
amounts contained therein), or materially revises or modifies the Renovation
Plans, the Company shall promptly deliver to the Agent a supplement to the
Renovation Budget or Renovation Plans or a revised Renovation Budget or revised
Renovation Plans, as applicable, which with respect to any Pool A Property or
Pool B Property, shall be satisfactory in form and substance to the Agent.
B. CONDUCT OF RENOVATION; COSTS. Subject to Excusable Delays,
the Company shall, or shall cause its Subsidiaries to, complete the Renovation
promptly, in a good and workmanlike manner and in accordance with the
Renovation Plans. All costs and expenses of any Renovation, including, without
limitation, the cost and expenses of complying with this subsection 6.12, shall
be for the account of the Company.
C. COMPLETION CERTIFICATE. Upon completion of the Renovation,
the Company shall promptly deliver to the Agent a Completion Certificate with
respect thereto.
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6.13 BRUNDAGE CLAUSE.
In the event of the enactment of or change in (including a change in
interpretation of) any Applicable Law (i) deducting or allowing any Loan Party
or any of its Subsidiaries to deduct from the value of any Property for the
purpose of taxation any Lien thereon, (ii) subjecting any Lender to any tax in
respect of, or changing the basis of taxation in respect of, the Mortgages, or
the manner of collection of such taxes (other than Taxes on net income,
franchise taxes and doing business taxes), or (iii) for the taxation of
mortgages or debts secured by mortgages or in the means of collection of any
such tax, in each such case, so as to affect any Lender or the Notes or the
Mortgages or any other Loan Document, and the result is to increase the taxes
imposed upon or the cost to any Lender of maintaining the Loans, or to reduce
the amount of any payments receivable under the Notes, the Mortgages or any
other Loan Document, or to invalidate the Lien created by any Security
Document, then, in any such event, the Company shall, within ten Business Days
of receipt of a request therefor, accompanied by documentation verifying the
nature, amount and due date, pay to such Lender additional amounts to
compensate for such increased costs or reduced amounts; provided, however, that
if any Lender makes such a request, or if the Lien created by any Security
Document may be invalidated, then the Company shall have the right, and, in the
case of such invalidation, shall have the obligation, to reduce the Commitments
and prepay the Loans, in accordance with the provisions of this Agreement and
the Notes; provided further, however, that if any such payment or reimbursement
shall be unlawful or would constitute usury or render the Loans wholly or
partially usurious under Applicable Law, then the Agent may, in its sole
discretion, declare the Loans so affected immediately due and payable (without
premium or penalty) and/or require the Company to pay or reimburse the Lenders
for payment of the lawful and non-usurious portion thereof not less than 180
days after notice of such declaration.
6.14 INTEREST RATE PROTECTION.
If at any time the aggregate principal amount of the Indebtedness of
the Loan Parties and their respective Subsidiaries bearing interest or
requiring other payments (other than principal payments) to be made based on a
rate that is not fixed through maturity exceeds the sum of (i) an amount equal
to 50% of all Indebtedness of the Loan Parties and their respective
Subsidiaries plus (ii) the aggregate notional amount of interest rate
protection then maintained by the Loan Parties and their respective
Subsidiaries provided under an interest rate protection agreement obtained
pursuant to this subsection 6.14 or otherwise on terms and with counterparties
approved by the Agent, which approval shall not be unreasonably withheld,
conditioned or delayed (the amount of such excess being referred to as "EXCESS
FLOATING RATE DEBT"), then, within five Business Days from the day such excess
occurs, the Loan Parties and their respective Subsidiaries shall obtain and
thereafter shall maintain (until such time as no such Excess Floating Rate Debt
is outstanding) interest rate protection through the Maturity Date in a
notional amount at least equal to the Excess Floating Rate Debt as in effect
from time to time and on terms and with counterparties approved by the Agent,
which approval shall not be unreasonably withheld, conditioned or delayed.
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6.15 CASH MANAGEMENT SYSTEM; AGENT RIGHTS; APPLICATION OF CASH FLOW;
DEPOSITORY ACCOUNT NAMES.
A. CASH MANAGEMENT SYSTEM. Each Loan Party shall, and shall
cause each of its Subsidiaries to, maintain the Cash Management System as
described in Schedule 5.23; provided, however, that each Loan Party may open
and close Local Accounts and make other changes to the Cash Management System
in the ordinary course of business upon prior written notice to the Agent and
as long as (i) no Event of Default or monetary default has occurred and is
continuing or would result therefrom, (ii) such changes, either individually or
in the aggregate are not adverse to either the Agent or any Lender (in its
capacity as a Lender) or impair any rights, priority or perfection of the Agent
under the Security Documents, (iii) in the case of any closing of any Local
Account, a replacement Local Account satisfactory to the Agent is opened by
such Loan Party or such Subsidiary, as the case may be, and a Cash Management
Letter is entered into with respect to such replacement Deposit Account prior
to the closing of such Local Account and (iv) all Receipts of each Loan Party
continue to be collected and distributed pursuant to procedures subject to Cash
Management Letters at all times, except as described on Schedule 5.23.
B. AGENT RIGHTS. All funds on deposit in the Local Accounts of
each Loan Party and each of its Subsidiaries shall be transferred on a daily
basis to the Concentration Account, and each Loan Party agrees to perform and
comply and to cause each of their respective Subsidiaries to perform and comply
with the following covenants and agreements:
(i) Receipts shall be received and held by the Company
and such Subsidiary and any of their respective officers, employees,
agents, managers or other Persons acting for or in concert with the
Company or such Subsidiary to make collections for or on behalf of the
Company or such Subsidiary (collectively, "COLLECTING AGENTS"), in
trust for the Agent as Collateral. Notwithstanding any other
provision of this Agreement or any other Loan Document, except as
described on Schedule 5.23, all Receipts shall be deposited daily into
the Deposit Accounts subject to the Cash Management System. On a
daily basis, except as described on Schedule 5.23, each Loan Party, or
any Collecting Agent, shall deposit or shall cause to be deposited,
all Receipts into the Concentration Account or other Deposit Accounts
included in the Cash Management System and subject to Cash Management
Letters on or before the first Business Day following receipt thereof
in the accounting office of the Company or such Subsidiary, as
applicable, and as soon as practical in the case of Receipts received
in any other manner.
(ii) As long as no Event of Default or monetary default
shall have occurred and be continuing, the Company may request that
the Agent instruct the Cash Manager to either apply Receipts on
deposit in the Concentration Account to prepay Loans or transfer such
Receipts to the Operating Accounts in such amounts as the Company may
require, in each case by delivering such a request to the Agent. As
long as no Event of Default or monetary default shall have occurred
and be continuing, upon receipt by the Agent of such a request, the
Agent shall instruct the Cash Manager to apply the Receipts on deposit
in accordance with such request; provided that the Agent may
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instruct the Cash Manager to automatically apply Receipts on deposit
in the Concentration Account in accordance with the Company's
instructions unless the Agent notifies the Cash Manager that an Event
of Default or monetary default has occurred and is continuing subject
to the availability of funds on deposit in the Concentration Account.
(iii) During the continuance of an Event of Default without
the need of any further action by Loan Parties, each Loan Party
irrevocably makes, constitutes and appoints the Agent, and all Persons
designated by Agent for that purpose (including the Cash Manager), at
any time, as such Loan Party's true and lawful attorney-in-fact to
endorse such Loan Party's name on any checks, notes, drafts or any
other form of payment relating to Collateral or Receipts or proceeds
of Collateral or Receipts that come into the Agent's or the Cash
Manager's possession or under the Cash Manager's or the Agent's
control; provided, however, that such appointment by such Loan Party
of the Agent as such Loan Party's attorney-in-fact shall in no case
impose upon the Agent or any such Person any obligation or duty to
take any actions on behalf of such Loan Party or any fiduciary
obligations with respect to such Loan Party.
C. APPLICATION OF CASH FLOW. Notwithstanding anything herein to
the contrary, each Loan Party shall, and shall cause each of its Subsidiaries
to, pay the following from funds provided in the Operating Accounts or
otherwise:
(i) all Operating Expenses for the Properties;
(ii) all scheduled payments of rent, principal or interest
with respect to the Pool B Obligations, the Pool C Indebtedness and
the FF&E Financing Indebtedness;
(iii) federal, state and local taxes; and
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing, Permitted Junior Payments;
it being understood and agreed that, during the continuance of an Event of
Default or Potential Event of Default the Agent may, in its sole discretion in
accordance with subsection 6.15B(iii), apply funds on deposit in the Deposit
Accounts and other Receipts received by the Agent, (i) to the payment of the
foregoing expenses and/or (ii) to the payment of the Obligations. In the event
that the Agent determines, during the continuance of an Event of Default or
Potential Event of Default, to apply funds or Receipts to the payment of the
foregoing expenses, promptly after being notified of such determination by the
Agent, the Company shall deliver to the Agent (x) within five Business Days of
the first day of each calendar month during the continuance of an Event of
Default or Potential Event of Default, a budget setting forth the estimated
Operating Expenses and other amounts set forth above for such calendar month
(y) within three Business Days of the date on which the Company desires a
disbursement to be made, but not more frequently than once in any calendar
week, a written request for disbursements with respect to Operating Expenses
and amounts set forth above for such calendar week and (z) such other budgets
and related information as the Agent may reasonably
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request. Upon receipt of any such request for disbursements, the Agent may, in
its sole discretion, instruct the Cash Manager to transfer funds on deposit in
the Concentration Account to the Operating Accounts to be applied to the
payment of amounts set forth in such request for disbursements and approved by
the Agent.
D. NAMES ON DEPOSIT ACCOUNTS. The Company shall cause each Local
Account listed on Schedule 5.23 annexed hereto in respect of a Pool A Property
or Pool B Property to be changed to the extent necessary so that such Deposit
Account is, at all times on and after the Formation Date, maintained by and in
the name of the Company or any of its Wholly Owned Subsidiaries.
E. CASH MANAGEMENT LETTER. Notwithstanding anything in this
Agreement or in any of the other Loan Documents to the contrary, including any
Cash Management Letter, except during the continuation of an Event of Default
or monetary default, the Agent shall not withdraw any funds from, close or take
any other actions in connection with any Deposit Account (other than cause such
funds to be transferred to the Concentration Account) pursuant to any Cash
Management Letter without the Company's prior written consent or written
joinder. During the continuation of an Event of Default or monetary default,
the Agent shall have the same rights with respect to any Deposit Account as are
expressly provided in this Agreement with respect to the Concentration Account
during the continuance of an Event of Default or monetary default.
6.16 CAPITAL EXPENDITURES.
A. CAPITAL RESERVE ACCOUNT. On the thirtieth day of each
calendar month, commencing on the first such day to occur after the Funding
Availability Date, the Company shall do the following:
(i) deposit or cause to be deposited into the Capital
Reserve Account an amount equal to the remainder, which shall not be
less than zero, of (a) 3.50% of Property Gross Revenues for each of
the Properties for the immediately preceding calendar month minus (b)
if such Property is a Pool B Property or a Pool C Property, the
aggregate amount, if any, that shall then have been deposited with
respect to such Property in Other Capital Reserve Accounts pursuant to
the requirements of the related Pool B Obligation or Pool C Obligation
for such calendar quarter; and
(ii) deliver to the Agent an Officers' Certificate with
respect to (a) the allocation of such amount among the Properties,
which allocation shall reflect the amounts determined with respect to
the Properties pursuant to the preceding clause (i), (b) the
allocation of the resulting balance in the Capital Reserve Account
among the Properties, which allocation shall reflect the allocation of
all deposits in the Capital Reserve Account pursuant to this
subsection 6.16A and all transfers therefrom pursuant to this
subsection 6.16A and (c) the deposits in and withdrawals from each of
the Other Capital Reserve Accounts during the preceding calendar month
and the respective closing balances thereof.
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So long as no Event of Default or Potential Event of Default has occurred and
is continuing, upon the Company's written request and not more frequently than
once each month, the Agent shall transfer funds to the Company then on deposit
in the Capital Reserve Account for the payment of costs of Capital Items or for
the deposit of funds into Other Capital Reserve Accounts, in each case in
amounts not greater than the amount of funds then required by the terms of the
related Pool B Obligation or Pool C Obligation, as the case may be, to be so
deposited; provided, however, that the aggregate amount of such funds applied
towards Capital Items from the Capital Reserve Accounts in respect of any
Property shall not exceed the aggregate amount of funds deposited in the
Capital Reserve Account in respect of such Property. Together with each such
request, the Company shall deliver to the Agent copies of bills and other
documentation as may be reasonably required by the Agent to establish that such
Capital Items or such deposits in such Other Capital Reserve Accounts, as the
case may be, are then due.
B. RENOVATION AND REMEDIATION OF ROSE HALL PROPERTY. Rose Hall
Partnership shall undertake and complete, in accordance with the budget and
time schedule set forth on Schedule 6.16B annexed hereto, and in a manner
satisfactory to the Agent, (i) the Renovation of the Rose Hall Property and
(ii) the remediation of the Rose Hall Property and implementation of monitoring
programs in accordance with the recommendations and suggestions specified in
the Report of Environmental Site Assessment dated April 1996 for the Rose Hall
Property that shall have been approved in writing by the Agent, which approval
may be granted, withheld, conditioned or delayed in its sole discretion. Each
of the Company and Rose Hall Partnership shall promptly provide the Agent with
copies of all monitoring data and reports that it receives from time to time in
connection with the monitoring programs implemented in accordance with clause
(ii) of the preceding sentence.
6.17 DEFERRED MAINTENANCE.
A. DEFERRED MAINTENANCE ACCOUNT. So long as no Event of Default
or Potential Event of Default has occurred and is continuing upon the Company's
written request and not more frequently than once each month, the Agent shall
transfer funds to the Company then on deposit in the Deferred Maintenance
Account for the payment of costs and expenses paid or incurred by any of the
Loan Parties and their respective Subsidiaries in connection with the
completion of Deferred Maintenance; provided, however, that the aggregate
amount of funds applied towards Deferred Maintenance in respect of any Property
shall not exceed the aggregate amount of funds deposited in the Deferred
Maintenance Account in respect of such Property. Together with such request,
the Company shall deliver to the Agent (i) an Officers' Certificate of the
Company, satisfactory to the Agent, certifying as to (a) the completion of the
Deferred Maintenance described therein, (b) the amount budgeted therefor on
Schedule 6.17A annexed hereto and (c) the actual amount of the costs and
expenses therefor incurred or paid by the Loan Parties and their respective
Subsidiaries, and (ii) copies of bills and other documentation as may be
reasonably requested by the Agent to establish that payments in respect of the
related Deferred Maintenance have been made or are then due, as the case may
be.
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B. COMPLETION. Subject to Excusable Delay, the Loan Parties
shall, or shall cause their respective Subsidiaries to, undertake and complete
the Deferred Maintenance in a good and workmanlike manner and in accordance
with the budgets and time schedules set forth on Schedule 6.17A annexed hereto
and, in any event, within 6 months after the Effective Date.
6.18 MANAGEMENT OF PROPERTIES; SERVICING AGREEMENTS.
The Company shall, or shall cause Management Corp. or any of the
Wholly Owned Subsidiaries of Management Corp. to, (i) manage and operate each
of the Properties pursuant to Servicing Agreements in a commercially reasonable
and prudent manner and (ii) maintain worker's compensation insurance as
required by Governmental Authorities. No Person other than the Company,
Management Corp. or such Wholly Owned Subsidiary shall have substantial
authority over the management and operation of any Property.
6.19 INTELLECTUAL PROPERTY.
The Company shall cause each Subsidiary (other than any Pool C
Subsidiary) owning, licensed to use or otherwise having the lawful right to use
any Intellectual Property to execute and deliver the Trademark Agreement for
the purposes of becoming bound thereby, and the Company shall deliver
supplements to the Schedules to this Agreement, the Security Agreement and the
Trademark Agreement, which Schedules shall be acceptable to the Agent.
6.20 FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to the Agent or the
Lenders, each Loan Party shall, and shall cause each of its Subsidiaries to,
from time to time hereafter execute, acknowledge, file, record, do and deliver
all and any further acts, deeds, conveyances, mortgages, deeds of trust, deeds
to secure debt, security agreements, hypothecations, pledges, charges,
assignments, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as the
Agent may from time to time reasonably require and which do not involve a
material expansion of the Company's obligations or liabilities hereunder in
order to carry out more effectively the purposes of this Agreement or the other
Loan Documents, including to subject any Pool A Property, Pool B Property or
other items of Collateral, intended to now or hereafter be covered, to the
Liens created by the Security Documents, to perfect and maintain such Liens,
and to assure, convey, assign, transfer and confirm unto the Agent the property
and rights hereby conveyed and assigned or intended to now or hereafter be
conveyed or assigned or which any Loan Party or any such Subsidiary may be or
may hereafter become bound to convey or to assign to the Agent or for carrying
out the intention of or facilitating the performance of the terms of this
Agreement, or any other Loan Documents or for filing, registering or recording
this Agreement or any other Loan Documents. Without limiting the foregoing,
the Company shall, and shall cause each other Loan Party to, deliver to Agent,
promptly upon receipt thereof, all instruments received by the Company or any
such Loan Party after the Effective Date and take all actions and execute all
documents necessary or reasonably requested by the Agent to perfect the Agent's
security interest in any such instrument or any other Investment acquired by
the Company or any other Loan Party. Promptly upon request or, in an
emergency, upon demand,
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each Loan Party shall execute and deliver, and hereby authorizes the Agent to
execute and file in the name of such Loan Party, to the extent the Agent may
lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments to evidence more effectively the Lien hereof
upon the Collateral.
B. FILING AND RECORDING OBLIGATIONS. Each Loan Party shall pay
all filing, registration and recording fees and all expenses incident to the
execution and acknowledgement of any Mortgage or other Loan Document, including
any instrument of further assurance described in subsection 6.21A, and shall
pay all mortgage recording taxes, transfer taxes, general intangibles taxes and
governmental stamp and other taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution, delivery, filing, recording
or registration of any Mortgage or other Loan Document, including any
instrument of further assurance described in subsection 6.21A, or by reason of
its interest in, or measured by amounts payable under, the Notes, the Mortgages
or any other Loan Document, including any instrument of further assurance
described in subsection 6.21A (including all Georgia Intangible Tax, but
excluding income, franchise and doing business taxes), and shall pay all stamp
taxes and other taxes required to be paid on the Notes or any other Loan
Document; provided, however, that such Loan Party may contest in good faith and
through appropriate proceedings, any such taxes, duties, imposts, assessments
and charges; provided further, however, that such Loan Party shall pay all such
taxes, duties, imposts and charges when due to the appropriate taxing authority
during the pendency of any such proceedings if required to do so to stay
enforcement thereof. If any Loan Party fails to make any of the payments
described in the preceding sentence within 10 days after notice thereof from
the Agent (or such shorter period as is necessary to protect the loss of or
diminution in value of any Collateral by reason of tax foreclosure or
otherwise, as determined by the Agent, in its sole discretion) accompanied by
documentation verifying the nature and amount of such payments, the Agent may
(but shall not be obligated to) pay the amount due and such Loan Party shall
reimburse all amounts in accordance with the terms hereof. If Applicable Law
prohibits any Loan Party from paying such taxes, charges, filing, registration
and recording fees, excises, levies, stamp taxes or other taxes, then the Agent
may declare the Pool A Property Amount with respect to the applicable Pool A
Property in accordance with the terms of this Agreement to be immediately due
and payable without premium or penalty not less than 30 days after such
declaration.
C. COSTS OF DEFENDING AND UPHOLDING THE LIEN. The Agent may,
upon at least five days' prior notice to the Company, (i) appear in and defend
any action or proceeding, in the name and on behalf of the Agent, the Lenders,
any Loan Party or any of its Subsidiaries, in which the Agent or any Lender is
named or which the Agent in its sole discretion determines is reasonably likely
to materially adversely affect any Pool A Property, any Pool B Property, any
Management Agreement or other Collateral, any Mortgage, the Lien thereof or any
other Loan Document and (ii) institute any action or proceeding which the Agent
reasonably determines should be instituted to protect the interest or rights of
the Agent and the Lenders in any Pool A Property, any Pool B Property, any
Management Amount or other Collateral or under this Agreement or any other Loan
Document. The Company agrees that all reasonable costs and expenses expended
or otherwise incurred pursuant to this subsection (including reasonable
attorneys' fees and disbursements) by the Agent shall be paid by the Company or
reimbursed to the Agent, as the case may be, promptly after demand.
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D. COSTS OF ENFORCEMENT. The Company agrees to bear and shall
pay or reimburse the Agent and the Lenders in accordance with the terms of
subsection 8.2 for all reasonable sums, costs and expenses incurred by the
Agent and the Lenders (including reasonable attorneys' fees and the expenses
and fees of any receiver or similar official) of or incidental to the
collection of any of the Obligations, any foreclosure (or Transfer in lieu of
foreclosure) of this Agreement, any Mortgage or any other Loan Document or any
sale of all or any portion of any Pool A Property, any Pool B Property, all or
any interests under the Management Agreements or all or any portion of the
other Collateral.
E. FURNISHING OF DOCUMENTS. The Company shall, at its sole cost
and expense, furnish to the Agent all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
Appraisals (but only to the extent required to be paid by the Company pursuant
to subsection 6.6B), title and other insurance reports and agreements, and each
and every other document, certificate, agreement and instrument required to be
furnished pursuant to the terms of the Loan Documents.
SECTION 7
COMPANY'S NEGATIVE COVENANTS
The Company covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of the Loans and the
other Obligations and the cancellation or expiration of all Letters of Credit,
the Company shall perform and shall cause each of its Subsidiaries to perform
all covenants in this Section 7.
7.1 INDEBTEDNESS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create, incur, assume,
Guarantee, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to the Obligations;
(ii) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to (a) the Senior Notes
pursuant to the Indenture and (b) with the prior written approval of
the Agent, which approval may be granted, withheld, conditioned or
delayed in its sole discretion, any refinancing, exchange or refunding
of the Senior Notes; provided, however, that in no event shall the
Indebtedness for which the Loan Parties and their respective
Subsidiaries may become and remain liable pursuant to the preceding
clause (b) shall (x) have an aggregate principal amount greater than
the principal amount of the Senior Notes so refinanced, exchanged or
refunded or (y) have terms that are more burdensome either to the Loan
Parties and their respective Subsidiaries or to the rights and
obligations of the Agent and Lenders hereunder and under the other
Loan Documents in any material respect, as determined by the Agent in
its sole discretion.
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(iii) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to FF&E Financing
Indebtedness in aggregate principal amounts at any time outstanding
not to exceed (a) $5,000,000 in the aggregate, (b) $600,000 with
respect to each Property that is an upscale full service hotel or a
resort hotel and (c) $300,000 for each Property that is a garden style
hotel, or in each case such lesser amount as shall be permitted under
the Pool B Documents or the Pool C Documents with respect to each of
the Pool B Properties and the Pool C Properties, as the case may be;
provided that all FF&E Financing Indebtedness shall be secured solely
by the FF&E financed with such FF&E Indebtedness;
(iv) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to Indebtedness in respect
of the Pool B Obligations indicated on Schedule 7.1(iv) annexed hereto
as being owed thereby;
(v) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to Indebtedness in respect
of the Letters of Credit;
(vi) the Loan Parties and their respective Subsidiaries
may become and remain liable with respect to Interest Rate Agreements
required pursuant to subsection 6.14 or otherwise approved by the
Agent, which approval shall not be unreasonably withheld, conditioned
or delayed;
(vii) so long as at the time of incurrence thereof no Event
of Default or Potential Event of Default has occurred and is
continuing or would be caused thereby, each Pool C Subsidiary may
incur and remain liable with respect to Indebtedness to Persons in
connection with the Acquisition or ownership of a Pool C Property, and
may refinance, exchange or refund the same (as so incurred,
refinanced, exchanged or refunded, "POOL C INDEBTEDNESS"), in each
case as incurred, refinanced, exchanged or refunded on terms and
conditions approved in writing by the Agent, which approval shall not
be unreasonably withheld, conditioned or delayed; provided, however,
that (r) the aggregate outstanding principal amount of any such Pool C
Indebtedness shall not at any time exceed 50% of the sum of the
aggregate cash purchase price of such Pool C Property plus the
aggregate amount of expenditures actually made by such Pool C
Subsidiary in connection with the Renovation of such Pool C Property,
(s) such Pool C Indebtedness of any Pool C Subsidiary shall not
require the scheduled payment of principal, interest and other amounts
during any period that in the aggregate exceeds an amount equal to 50%
of the Property EBITDA for such period with respect to such Pool C
Property, provided that this clause (s) shall not be given effect with
respect to any Pool C Property during the period from the commencement
of a Renovation with respect thereto to the last day of 12 complete
calendar months after the completion of such Renovation if and so long
as the Pool C Subsidiary either, at the written election made by the
Company or such Pool C Subsidiary and delivered to the Agent before
the date of such commencement, (1) shall have deposited and maintained
funds in a segregated account in an amount not less than the aggregate
amount of interest that shall be required to be paid during the
remainder of the period with respect to which this clause (s) shall
not be given effect, (2) in the absence of a default under such
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Pool C Indebtedness, have the unrestricted right to add to the
principal amount thereof the aggregate amount of such interest or to
make one or more additional borrowings thereunder to pay the aggregate
amount of such interest, or (3) shall have directed the Agent by
Officers' Certificate to include an amount equal to such aggregate
amount of interest in clause (iv) of the definition of Total
Utilization during the remainder of the period with respect to which
this clause (s) will not be given effect, (t) such Pool C Indebtedness
shall be non-recourse to any Loan Party or any of its Subsidiaries
(other than for any Guaranties provided with respect to customary
carve-outs for environmental and "bad deed" indemnities), provided
that such Pool C Indebtedness may be recourse to any Pool C Subsidiary
so long as such Pool C Indebtedness is secured by first priority Liens
on all material assets (including all the capital stock of its
Subsidiaries and all such Subsidiaries' assets) owned by each such
Pool C Subsidiary (which Pool C Subsidiary shall have no other
material assets or Indebtedness), (u) such Pool C Indebtedness shall
not be secured by (1) the assets of any Loan Party or any of its
Subsidiaries (other than the Pool C Subsidiary that is the obligor
with respect thereto, in accordance with the preceding clause (v)) or
(2) the Transfer of or Lien on any Intellectual Property, (v) so long
as (1) such Pool C Indebtedness has not been accelerated, (2) a
receiver has not been appointed with respect to the related Pool C
Property or (3) no other remedy is being exercised with respect to any
collateral securing, or other property subject to, such Pool C
Indebtedness, such financing does not preclude or limit the
distribution of Excess Cash Flow (after reserves for Capital Items) to
the Company for the purposes set forth herein, (w) a Potential Event
of Default or an Event of Default or a default or event of default
under the Senior Notes shall not constitute a default or event of
default thereunder, (x) after giving affect to such transaction, the
Company is in compliance with all of the provisions set forth herein
and the other Loan Documents, (y) the Company shall have delivered to
the Agent any Officers' Certificate demonstrating compliance with the
provisions of this subsection 7.1(vii) by any Pool C Subsidiary in
connection with such Acquisition, and (z) the Company shall provide
Bankers with a request for proposal regarding the provision of such
Pool C Indebtedness and will consider Bankers' proposal, if any, in
accordance with the Company's usual practice;
(viii) so long as at the time of assumption or incurrence
thereof no Event of Default has occurred and is continuing or would be
caused thereby, the Vinings Subsidiary may assume or incur and remain
liable with respect to Indebtedness to Persons other than the Company
and its Wholly Owned Subsidiaries in connection with the Acquisition
or ownership of the Vinings Property, and may refinance, exchange or
refund the same (as so assumed, incurred, refinanced, exchanged or
refunded, "VININGS INDEBTEDNESS"), in each case assumed, incurred,
refinanced, exchanged or refunded on terms and conditions approved in
writing by the Agent, which approval shall not be unreasonably
withheld, conditioned or delayed; provided that (x) without the
approval of the Agent, the Vinings Subsidiary may assume the
Indebtedness of the seller of the Vinings Property under or with
respect to the Vinings Bond Documents in a principal amount not
greater than $9,675,000, (y) the Vinings Subsidiary shall not
refinance, exchange or refund any amount of such Indebtedness so
assumed, or amend or otherwise modify any of the terms thereof,
without the prior written approval of the
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Agent, which approval may be withheld, conditioned or delayed in its
sole discretion, provided, however, that (1) without the approval of
the Agent, the Vinings Subsidiary may refinance, exchange or refund
such Indebtedness, or amend or otherwise modify any of the terms
thereof, if, after giving effect to such refinancing, exchange,
refund, amendment or other modifications, the principal amount of such
Indebtedness and all other Indebtedness of the Vinings Subsidiary
shall not exceed 50% of the value of the Vinings Property specified in
an Appraisal of the Vinings Property dated as of a date not more than
60 days before the effectiveness of such refinancing, exchange,
refunding, amendment or other modification and approved by the Agent
in its sole discretion and (2) all Indebtedness assumed or incurred by
the Vinings Subsidiary at any time shall be non-recourse to the
Company or any of its other Subsidiaries (other than for any
Guaranties provided with respect to customary carve-outs for
environmental and "bad deed" indemnities) and shall not be secured by
(1) the assets of any Loan Party or any of its Subsidiaries (other
than the Vinings Subsidiary) or (2) the Transfer of or Lien on any
Intellectual Property;
(ix) the Loan Parties and their respective Subsidiaries may
become and remain liable with respect to the Indebtedness that
consists of Contingent Obligations otherwise permitted by subsection
7.4, subject to the terms and conditions thereof; and
(x) other Indebtedness in an aggregate principal amount not
to exceed $250,000 at any time.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect
of goods, furniture, fixtures, equipment or accounts receivable) of the Company
or any of its Subsidiaries, whether now owned or hereafter acquired, or any
income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens granted to secure FF&E Financing Indebtedness
as permitted by subsections 7.1(iii); provided, however, that such
Liens encumber only the assets purchased, financed or refinanced with
such FF&E Financing Indebtedness;
(iii) Liens granted or assumed by a Pool B Subsidiary to
secure the Pool B Obligations owed by the Pool B Subsidiary; provided,
however, that such Liens encumber only the assets purchased, financed
or refinanced with, or leased or otherwise used pursuant to the terms
of, such Pool B Obligations; and
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(iv) Liens granted by a Pool C Subsidiary to secure Pool C
Indebtedness owed by the Pool C Subsidiary, as permitted by subsection
7.1(vii); provided, however, that, other than with respect to Liens
specifically permitted by subsection 7.1(vii), such Liens encumber
only the Property purchased, financed or refinanced with such Pool C
Indebtedness;
(v) a Lien granted to Bank One, Texas, N.A., against a
deposit account balance in the amount of $2,637,045 to collateralize a
letter of credit issued in connection with the refurbishment of the
Wyndham Hotel at Los Angeles Airport, as such deposit account balance
may from time to time be reduced in connection with reductions in the
face amount of such letter of credit;
(vi) Liens granted by the Company to HPTWN to secure the
obligations of GHALP Corp. under the HPT Leases pursuant to the HPT
Stock Pledge covering all issued and outstanding stock of GHALP Corp.,
which Liens shall at all times remain junior, subject and subordinate
to the Liens against such stock granted to the Agent and the Lenders,
as more particularly set forth in the HPT Estoppel; and
(vii) Liens against certain Tenant's Personal Property, the
FF&E Reserve, the Retained Funds and related Records (as such
capitalized terms are defined in the HPT Leases) and Liens against the
Assigned Leases, the Contracts and the Agreements (as such capitalized
terms are defined in the HPT Collateral Documents) granted to HPTWN
pursuant to the HPT Collateral Documents to secure the obligations of
GHALP Corp. under the HPT Leases; which Liens shall at all times be
subject to the Lien priority provisions contained in the HPT Estoppel.
; provided, however, that this covenant shall not be breached by any
involuntary Lien, claimed or assumed, so long as the provisions of subsection
6.9 are being complied with.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Loan Party or any
of its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted
by the provisions of subsection 7.2A or which are the subject of subsection 6.9
so long as the Company is in compliance with the provisions thereof, the
Company shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided, however, that, notwithstanding the foregoing, this covenant
shall not be construed as a consent by the Agent or any Lender to the creation
or assumption of any such Lien not permitted by the provisions of subsection
7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a sale or other
disposition of assets permitted hereunder, (ii) specific property subject to a
Ground Lease and (iii) Other Management Agreements (to the extent that the
terms thereof prohibit the assignment of rights thereunder, consistent with
industry practices) and (iv) for the Senior Note Documents and any agreement
which by its terms
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restricts the assignment of such agreement (but not any other Property) as
security for the Obligations or otherwise, the Loan Parties shall not and shall
not permit any of their respective Subsidiaries to, directly or indirectly,
enter into any agreement prohibiting the creation or assumption of any Lien
upon any of its properties or assets (including, without limitation, any
interest in, or right to receive payments under, any of the Other Management
Agreements), whether now owned or hereafter acquired except to the extent that
Liens to secure the Obligations are excluded therefrom.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO THE COMPANY OR
OTHER SUBSIDIARIES. Except as provided in this Agreement, the Pool B Documents
(with respect to the related Pool B Subsidiaries) and the Pool C Documents
(with respect to the related Pool C Subsidiaries), the Loan Parties shall not,
and shall not permit any of their respective Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
such Subsidiary to (i) pay dividends or make any other distributions on any of
such Subsidiary's capital stock owned by the Company or any other Subsidiary of
the Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
the Company or any other Subsidiary of the Company, (iii) make loans or
advances to the Company or any other Subsidiary of the Company, or (iv)
transfer any of its property or assets to the Company or any other Subsidiary
of the Company, except for specific property encumbered to secure the payment
of particular Indebtedness permitted hereunder.
7.3 INVESTMENTS, GUARANTIES AND CERTAIN PAYMENTS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, make any Investment in any
Person, including any Affiliate or Joint Venture, or, in each case for the
purpose of or otherwise in connection with securing, extending, renewing or
modifying any Management Agreement or Other Management Agreement, become liable
for, any Guaranty for the benefit of any Person, including any Affiliate or
Joint Venture, or make any payment to such Person, except as follows:
(i) each Loan Party and its Subsidiaries may make
Investments in Cash Equivalents;
(ii) each Loan Party and its Subsidiaries may make equity
or debt Investments in the Company or any of its Wholly Owned
Subsidiaries for the purposes set forth in subsection 7.14; provided
that, as of any date of determination, (a) except to the extent
provided to the contrary in subsection 7.3(viii), the aggregate amount
of such Investments by the Company and its Subsidiaries in any Pool B
Subsidiary (other than an Investment not to exceed $1,150,000 in GHALP
Sub made on or before the Effective Date for reserves for Capital
Items) shall not exceed the aggregate amount of dividends and other
distributions made by such Pool B Subsidiary to the Company and its
other Wholly Owned Subsidiaries (other than other Pool B Subsidiaries
and Pool C Subsidiaries) plus, with respect to GHALP Sub and WHI, an
aggregate amount not greater than $250,000 in the aggregate during the
period from the Effective Date to December 31, 1996 and (b) the
aggregate amount of Investments in the Pool C
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Subsidiaries for the Major Renovation/Restoration of Pool C Properties
shall not exceed the amount by which $15,000,000 is greater than the
sum of (1) the Total Utilization of Revolving Commitments as of such
date of determination plus (2) the amount of the Guaranties permitted
by subsection 7.4(ii)(a) as of such date of determination, in each
case to the extent that such amounts referred to in the preceding
clauses (1) and (2) shall have been used, issued or incurred for or in
connection with the Major Renovation/Restoration of the Properties
which have not been completed on or before such date of determination;
(iii) the Company may acquire the DAB Notes and the
Affiliate Notes and may acquire the collateral securing any Affiliate
Notes and/or DAB Notes upon a foreclosure;
(iv) GHALP Corp. may acquire the rights to the Retained
Funds under and as defined in the HPT Sale Agreement;
(v) [**WYNDHAM TO PROVIDE INFORMATION:**] [**subject to
subsection 7.10B(viii), until December 31, 1996, so long as no Event
of Default or Potential Event of Default has occurred and is
continuing, the Company may (a) make equity or debt Investments in
ISIS 2000 in an aggregate amount not to exceed $750,000 at any time
and (b) become liable with respect to Guaranties of Indebtedness or
other obligations of ISIS 2000 in an aggregate principal amount not to
exceed $3,500,000 at any time;**]
(vi) so long as No Event of Default or Potential Event of
Default is continuing, each Loan Party and its Subsidiaries may,
subject to subsection 7.10, (a) make equity or debt Investments in one
or more Joint Ventures (other than ISIS 2000, CWS and Wynright) and
(b) become liable with respect to Guaranties of Indebtedness or other
obligations of such Joint Ventures; provided that (1) the sole purpose
of each such Joint Venture is to acquire, renovate, restore, manage,
operate and dispose of Managed Properties that are upscale full
service hotels, garden style hotels and resort hotels located in the
United States of America; (2) Management Corp. or any of its Wholly
Owned Subsidiaries shall have entered into an Additional Management
Agreement with such Joint Venture or a Wholly Owned Subsidiary thereof
that owns or leases such Managed Property pursuant to subsection
7.16A(i); (3) the aggregate amount of such Investments in and
Guaranties for the benefit of such Joint Venture and its Wholly Owned
Subsidiaries shall not at any time exceed the lesser of (x)
$20,000,000 and (y) the amount by which the aggregate amount of
outstanding Investments, outstanding Guaranties and payments made by
the Loan Parties and their respective Subsidiaries permitted by
subsections 7.3(vii)(3) and 7.3(viii) is less than $50,000,000, (4)
the aggregate amount of such Guaranties for the benefit of such Joint
Venture and its Wholly Owned Subsidiaries shall not at any time exceed
the amount by which the aggregate amount of outstanding Guaranties of
the Loan Parties and their respective Subsidiaries permitted by
subsections 7.3(vi), (vii) and (ix) and subsection 7.4(ii) is less
than $25,000,000; (5) as of the date of each such Investment in each
such Joint Venture after the Effective Date and at all times
thereafter, the Company's Adjusted Equity Interest therein shall be
equal to or greater than 20% and less than or
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equal to 49% of the Total Adjusted Equity Interests of such Joint
Venture, provided that (X) the Company's Adjusted Equity Interest in
such Joint Venture may be less than 20% of the Total Adjusted Equity
Interests of such Joint Venture as of any date of determination to the
extent that such deficiency has resulted from an increase in the
outstanding amount of equity Securities of such Joint Venture owned by
Persons other than the Loan Parties and their respective Subsidiaries
and Affiliates and such increase was not reasonably foreseen by the
Company on the date of the most recent investment in such Joint
Venture by the Loan Parties and their respective Subsidiaries and (Y)
the Company's Adjusted Equity Interest in such Joint Venture may be
greater than 49% of the Total Adjusted Equity Interests of such Joint
Venture as of any date of determination to the extent that such excess
has resulted from the breach by any Person (other than the Loan
Parties and their respective Subsidiaries and Affiliates) of an
obligation to make an additional equity Investment in such Joint
Venture after the date of the most recent Investment therein by the
Loan Parties and their respective Subsidiaries; (6) the greater of (1)
the undepreciated book value of properties and other assets owned or
leased by such Joint Ventures or their respective Wholly Owned
Subsidiaries and (2) the fair market value of such properties and
other assets, in each case determined as of the respective dates of
acquisition thereof, shall not exceed $145,000,000 at any time, as
reasonably determined by the Company and certified to the Agent in an
Officers' Certificate of the Chief Executive Officer or the Chief
Financial Officer of the Company to such effect, together with the
information utilized by the Company to make such determination; and
(7) assuming for the purpose of this clause (7) that the principal
amount of any obligation so Guaranteed is Indebtedness of such Joint
Venture and its Subsidiaries, the sum of (A) the aggregate principal
amount of the Indebtedness of such Joint Venture and its Subsidiaries
plus (B) the purchase price of any equity Securities issued by such
Joint Venture and its Subsidiaries that are preferred in right or
priority of payment (including any mandatory redemption or redemption
at the option of the holder) to any such equity or debt Investment
(other than a priority right to receive a preferred return on
investment of up to 25% per annum) shall not exceed 60% of the amount
determined in accordance with the preceding clause (6) from time to
time, as determined by the Company and certified to the Agent in an
Officers' Certificate of the Chief Executive Officer or the Chief
Financial Officer of the Company to such effect, together with the
information utilized by the Company to make such determination,
provided that this clause (7) shall not be given effect with respect
to Investments made by the Loan Parties and their respective
Subsidiaries to, or Guaranties made by the Loan Parties and their
respective Subsidiaries for the benefit of, Joint Ventures formed
pursuant to the Bedrock Investment Program Agreements to acquire,
renovate, restore, manage, operate and dispose of Managed Properties
that are upscale full service hotels, garden style hotels and resort
hotels located in the United States of America;
(vii) so long as no Event of Default or Potential Event of
Default is continuing, if the Company shall have determined that
making such Investment, becoming liable with respect to such Guaranty
or making such payment, in each case pursuant to this subsection
7.3(vii), is necessary to secure one or more Additional Management
Agreements pursuant to subsection 7.16A(i) or Other Management
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Agreements pursuant to subsection 7.16A(ii), or to secure an
extension, renewal or modification thereof, the Company and its
Subsidiaries may, subject to subsection 7.10, (a) make equity or debt
Investments in one or more Persons (other than ISIS 2000, CWS and
Wynright) owning or leasing the related Managed Properties or Other
Managed Properties, as the case may be, (b) become liable with respect
to Guaranties of Indebtedness or other obligations of such Persons and
(c) make payments to such Persons or their respective Affiliates;
provided that (1) the sole purpose of each such Person shall be to
acquire, own, renovate, operate and dispose of a Managed Property or
Other Managed Properties, as the case may be, that is an upscale full
service hotel, a garden style hotel or a resort hotel; (2) Management
Corp. or one of its Wholly Owned Subsidiaries shall have entered into
an Additional Management Agreement with such Person with respect to
such Managed Property pursuant to subsection 7.16(i) or an Other
Management Agreement with such Person with respect to such Other
Managed Property pursuant to subsection 7.16(ii), as the case may be
(or an extension, renewal or modification thereof, as the case may
be); (3) if the aggregate amount of outstanding Investments,
outstanding Guaranties and payments made by the Loan Parties and their
respective Subsidiaries, in each case as permitted by subsections
7.3(vi), (vii) and (viii), does not (and after giving effect to any
proposed additional Investment, Guaranty or payment pursuant to this
subsection 7.3(vii) would not) exceed $50,000,000, then (A) the Person
in which or for whose benefit each such additional Investment,
Guaranty or payment shall be made, shall not be an Affiliate of more
than 4 other Affiliated Owners, and the aggregate amount of such
Investments in, Guaranties for the benefit of and payments to such 5
or fewer Affiliated Owners shall not exceed $7,500,000 at any time,
(B) if the Managed Property or Other Managed Property, as the case may
be, is an upscale full service hotel or a resort hotel, the aggregate
amount of such Investments in, Guaranties for the benefit of and
payments to the Person in which or for whose benefit such additional
Investment, Guaranty or payment shall be made, shall not exceed
$5,000,000 at any time and (C) if the Managed Property or Other
Managed Property, as the case may be, is a garden style hotel, the
aggregate amount of such outstanding Investments in, outstanding
Guaranties for the benefit of and payments to the Person in which or
for whose benefit such additional Investment, Guaranty or payment
shall be made, shall not exceed $2,000,000 at any time; (4) if the
aggregate amount of outstanding Investments, outstanding Guaranties
and payments made by the Loan Parties and their respective
Subsidiaries, in each case as permitted by subsections 7.3(vi), (vii)
and (viii), then exceeds (or after giving effect to any proposed
additional Investment, Guaranty or payment pursuant to this subsection
7.3(vi) would exceed) $50,000,000, then (A) the Person in which or for
whose benefit such additional Investment, Guaranty or payment shall be
made, shall not be an Affiliate of more than two other Affiliated
Owners, and the aggregate amount of such Investments in, Guaranties
for the benefit of and payments to such 3 or fewer Affiliated Owners
shall not exceed $2,500,000 at any time, (B) if the Managed Property
or Other Managed Property, as the case may be, is an upscale full
service hotel or a resort hotel, the aggregate amount of such
outstanding Investments in, outstanding Guaranties for the benefit of
and payments to the Person in which or for whose benefit such
additional Investment, Guaranty or payment shall be made, shall not
exceed $2,000,000 at any time and (C) if the Managed Property or Other
Managed Property, as the case may be,
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is a garden style hotel, the aggregate amount of such outstanding
Investments in, outstanding Guaranties for the benefit of and payments
to the Person in which or for whose benefit such additional
Investment, Guaranty or payment shall be made, shall not exceed
$500,000 at any time; (5) the aggregate amount of outstanding
Guaranties made by the Loan Parties and their respective Subsidiaries
pursuant to subsections 7.3(vi), (vii) and (ix) and subsection 7.4(ii)
shall not exceed $25,000,000 at any time; and (6) as of the date of
each such Investment and at all times thereafter, the Company's
Adjusted Equity Interest in the Person in which or for whose benefit
such additional Investment, Guaranty or payment shall be made shall be
less than 20% of the Total Adjusted Equity Interests of such Person,
provided that the Company's Adjusted Equity Interest in such Person
may be greater than 20% of the Total Adjusted Equity Interests of such
Person as of any date of determination to the extent that such excess
has resulted from the breach by any Person (other than the Loan
Parties and their respective Subsidiaries and Affiliates) of an
obligation to make an additional equity investment of such entity
after the date of the most recent investment therein by the Loan
Parties and their respective subsidiaries; and certified to the Agent
in a certificate of the Chief Executive Officer or the Chief Financial
Officer of the Company to such effect, together with the information
utilized by the Company to make such determination;
(viii) so long as no Event of Default or Potential Event of
Default is continuing, if the Company shall have determined that
making such Investment or payment permitted by this subsection
7.3(viii) is necessary to secure an Additional Management Agreement
with respect to an Additional Pool B Property that is an upscale full
service hotel, garden style hotel or resort hotel located in the
United States of America, or to secure an extension, renewal or
modification of such Additional Management Agreement, the Loan Parties
and their respective Subsidiaries may, subject to subsection 7.10, (a)
make equity or debt Investments in the Pool B Subsidiary that shall
lease such Additional Pool B Property and (b) make payments to the
lessor of such Additional Pool B Property or its Affiliates on behalf
of, or for the benefit of, such Pool B Subsidiary, provided that (1)
the Loan Parties and their respective Subsidiaries shall comply with
subsection 7.15A(ii); (2) the aggregate amount of the outstanding
Investments, outstanding Guaranties and payments made by the Loan
Parties and their respective Subsidiaries, in each case as permitted
by subsections 7.3(vi), (vii) and (viii), does not (and after giving
effect to such additional investment pursuant to this subsection
7.3(viii) would not) exceed $50,000,000; (3) the sum of (A) the
aggregate amount of outstanding Investments, outstanding Guaranties
and payments made by the Loan Parties and their respective
Subsidiaries in, to or for the benefit of the lessor of such
Additional Pool B Property and its Affiliates (which lessor and its
Affiliates together shall not number more than 5 Affiliated Owners)
pursuant to subsections 7.3(vi) and (vii) and (vii) plus (B) the
aggregate amount of outstanding Investments in Pool B Subsidiaries
that shall have leased Pool B Properties directly or indirectly from
such lessor and its Affiliates (which lessor and its Affiliates
together shall not number more than 5 Affiliated Owners), shall not
exceed $7,500,000 at any time; (4) if such Additional Pool B Property
is an upscale full service hotel or a resort hotel, such investment
shall not exceed $5,000,000; (5) if such Additional Pool B Property is
a garden style hotel, such investment shall not exceed $2,500,000; (6)
the aggregate
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amount of payments to all lessors with respect to Additional Pool B
Properties and their respective Affiliates pursuant to this subsection
7.3(viii) shall not exceed $5,000,000 in the aggregate;
(ix) Investments, Guaranties and payments made by the Loan
Parties and their respective Subsidiaries pursuant to, and in amounts
not greater than the maximum estimated amounts of, the respective
contingent liabilities and obligations specified on Schedule 5.3
annexed hereto; and
(x) the Company and its Subsidiaries may become liable
with respect to such Guaranties as the Agent shall have approved in
writing, which approval may be granted, withheld, conditioned or
delayed in its sole discretion;
provided that (x) for purposes of clauses (vi), (vii) and (viii) above, (1) the
amount of the Investment in and payments to HPTWN pursuant to the HPT Sale
Agreements shall be deemed to be zero, (2) HPTWN shall be deemed to be an
Affiliate Owner with respect to any Affiliate thereof that is an Affiliate
Owner and (3) at least 30 days before the proposed closing date of the
acquisition by any Affiliate Owner of a fee or leasehold interest in any real
property, the Company, at its expense, shall deliver to the Agent copies of the
documents set forth in subsection 4.1M, mutatis mutandis, with respect to such
real property, in each case subject to the satisfaction of the Agent specified
in subsection 4.1M, (y) except as provided to the contrary in subsection
7.4(v)(b), Investments, Guaranties and payments made by the Loan Parties and
their respective Subsidiaries pursuant to, and in amounts not greater than the
maximum estimated amounts of, the respective contingent liabilities and
obligations specified on Schedule 5.3 annexed hereto, shall not be subject to
subsections 7.3(vi), (vii) and (viii) above and (z) the Company and its
Subsidiaries shall not enter into, make or become liable with respect to any
Investment, Guaranty or payment referred to in this subsection 7.3 if the
Company or any of its Subsidiaries shall become (or may reasonably be expected
to become), by law, contract, ownership of Securities or otherwise, directly or
indirectly, obligated or liable to pay to any Person any amount in addition to
the maximum amount thereof specified in an Officers' Certificate delivered to
the Agent not later than the date of such Investment, Guaranty or payment, as
the case may be, or have any other liability for the assets, liabilities or
operations of any other Person.
For the purpose of this subsection 7.3 and without limiting any other
method of making an Investment, the Company and its Subsidiaries shall be
deemed to make an Investment in each Investment owned by a Person at the time
such Person becomes a Subsidiary of the Company or any of its Subsidiaries.
7.4 CONTINGENT OBLIGATIONS.
The Loan Parties shall not and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create or become liable
with respect to any Contingent Obligation, except that, so long as no Event of
Default or Potential Event of Default has occurred and is continuing:
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(i) the Company and its Subsidiaries may become liable
with respect to Contingent Obligations in respect of Letters of
Credit;
(ii) the Company and its Subsidiaries may become liable
with respect to indemnification agreements and Guaranties with
respect to (a) performance, surety and similar bonds or guaranties of
completion provided in the ordinary course of business consistent with
past practices in respect of the Restoration or Renovation of any
Property, but excluding any such bonds with respect to any hotel
property that is not then a Property, in an aggregate amount not at
any time exceeding the amount by which $15,000,000 is greater than the
sum of (1) the aggregate principal amount of Loans, plus (2) the
amount of all Letters of Credit plus (3) the aggregate amount of
Investments in Pool C Subsidiaries, in each case to the extent that
such amounts referred to in the preceding clauses (1), (2) and (3)
shall have been used, issued or made for or in connection with the
Renovation or Restoration of the Properties, (b) other performance,
surety and appeal bonds provided in the ordinary course of business
consistent with past practices or contemplated by subsection 6.9, (c)
with respect to indemnification or contribution obligations in respect
of agreements providing for indemnification, adjustment of purchase
price or similar obligations or for Guaranties or letters of credit,
surety bonds and performance bonds securing any obligations of the
Company or any of its Subsidiaries pursuant to such agreements, in any
case incurred in connection with the Transfer of a business, asset or
Subsidiary (other than Guaranties of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or
Subsidiary for the purpose of financing such acquisition) in a
principal amount not to exceed the gross proceeds actually received by
the Company or any Subsidiary in connection with such Transfer, (d)
environmental and "bad-deed" indemnification obligations, (e)
indemnification and contribution obligations pursuant to the Formation
Documents and the Public Offering Documents and (f) other ordinary
course indemnification obligations in connection with Indebtedness,
Management Agreements, Servicing Agreements, Other Management
Agreements, service contracts, Leases and partnership agreements, in
each case on customary terms and to the extent that such Indebtedness
or agreements are permitted by this Agreement;
(iii) the Company and its Subsidiaries may become liable
with respect to the Guaranties permitted by subsections 7.3(v), (vi),
(vii), (viii), (ix) and (x);
(iv) the Company and its Subsidiaries may become liable to
make Investments and payments, in each case with respect to Guaranties
permitted by, and in accordance with the terms of, subsection 7.3(v),
(vi), (vii), (viii), (ix) and (x);
(v) such of the Company and its Subsidiaries as are
specified on Schedule 5.3 annexed hereto may be liable (a) with
respect to the Contingent Obligations set forth on such Schedule, in
each case in the aggregate amount not greater than the maximum
estimated amount specified thereon with respect to such Contingent
Liability and (b) with respect to modifications to any such Guaranty
either (1) that do not increase either the maximum possible amount, or
the maximum estimated amount
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thereof, or both, in each case as specified on each list, add any
obligors with respect thereto or increase, decrease or otherwise vary
the liabilities of the existing obligors with respect thereto or (2)
that increase either the maximum possible amount or the maximum
estimated amount thereof, or both, in each case as specified on such
list, add any obligors with respect thereto or increase, decrease or
otherwise vary the liabilities of the existing obligors, provided
that, with respect to the modification of a Guaranty subject to the
preceding clause (2), (A) if such Guaranty shall have been made, or
such modification thereof is being made, to secure a Management
Agreement or Other Management Agreement or an extension, renewal or
modification thereof, or otherwise shall have been made in connection
therewith, then for all purposes of subsections 7.3 (vi), (vii) and
(viii), (x) the modification shall be deemed to be a Guaranty subject
to the restrictions of such clauses, (y) an amount equal to the
greater increase referred to in the preceding clause (2) shall be
included in the calculation of amounts referred to in subsections 7.3
(vi), (vii) and (viii) (including, without limitation, in clause (4)
to the proviso to subsection 7.3(vi) and in clause (5) to the proviso
to subsection 7.3(vi)) and (z) the Person for whose benefit such
Guaranty or modification shall have been made shall be deemed to be an
Affiliated Owner and (B) if such Guaranty shall not have been made,
and such modification thereof is not proposed to be made, to secure a
Management Agreement, Additional Management Agreement or Other
Management Agreement or an extension, renewal or modification thereof,
or otherwise shall not have been made and is not being proposed to be
made in connection therewith, then (x) the Company and its
Subsidiaries shall not effect such modification without the prior
written approval of the Agent, which approval shall not be
unreasonably withheld, conditioned or delayed, and (y) for purposes of
subsections 7.3 (vi) and (vii), an amount equal to the amount of the
greater increase referred to in the preceding clause (2) shall be
included in the calculation of amounts referred to in clause (4) in
the proviso to subsection 7.3(vi) and in clause (5) to the proviso to
subsection 7.3(vii); and
(vi) the Subsidiaries of the Company may become liable
with respect to a Guaranty of the Senior Notes pursuant to the Senior
Note Subsidiary Guaranty.
7.5 RESTRICTED JUNIOR PAYMENTS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make,
give or publish notice or fix a date in respect of or set apart any sum for any
Restricted Junior Payment, enter into an agreement or make any commitment to
effect any of the foregoing or take any other similar action in furtherance of
or otherwise in connection with the foregoing; provided, however, that the Loan
Parties may make any of the following payments (the "PERMITTED JUNIOR
PAYMENTS"): (i) the Company may acquire shares of Common Stock pledged to
secure payment of one or more of the DAB Notes in connection with the
foreclosure of such pledge or the exercise of other remedies with respect
thereto and (ii) so long as no Event of Default or Potential Event of Default
has occurred and is continuing or would result therefrom, (a) the Company may
make scheduled payments of interest on account of the Senior Notes pursuant to
the terms thereof as in effect on the date of the initial closing of the Debt
Offering and (b) unless and until the aggregate consideration paid therefor by
the Loan Parties and their respective Subsidiaries after the
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Effective Date shall exceed $200,000 in any period of 12 consecutive calendar
months commencing on the Effective Date or on any anniversary thereof, as the
case may be, with amounts unused in any such 12-month period being available
for such purpose in any subsequent 12-month period, the Loan Parties and their
respective Subsidiaries may purchase, redeem, acquire, cancel or otherwise
retire for value shares of Capital Stock of the Company, options on any such
shares or related stock appreciation rights or similar Securities held by
officers and employees of the Loan Parties and their respective Subsidiaries or
former officers and employees thereof (or their estates or beneficiaries under
their estates), upon death, disability, retirement, severance or termination of
employment or pursuant to any agreement or plan under which such Shares of
Capital Stock, options or related rights were issued, (iii) during the
continuance of a Potential Event of Default or Event of Default, the Agent may
permit the Company to make payments on account of the Senior Notes pursuant to
subsection 6.15, which permission may be granted, withheld, conditioned or
delayed in the Agent's sole discretion.
7.6 FINANCIAL COVENANTS.
A. MINIMUM NET WORTH. The Company shall not permit at any time
the Net Worth of the Company and its Subsidiaries to be less than $48,500,000.
B. MINIMUM MARKET EQUITY CAPITALIZATION. The Company shall not
permit at any time its Market Equity Capitalization to be less than the lesser
of (i) 50% of the Market Equity Capitalization of the Company as of the date of
the initial closing under the Public Offerings and (i) an amount equal to the
Market Equity Capitalization of the Company as of such date of determination
that bears the same percentage relationship to the Market Equity Capitalization
of the Company as of the Funding Availability Date as the percentage
relationship that the aggregate Market Capitalization of the Comparable
Companies as of such date of determination bears to the aggregate Market Equity
Capitalization of such Comparable Companies as of the Funding Availability
Date. For the purposes of this subsection 7.6B, the term "Comparable
Companies" means Persons that own or operate hotels as one of their primary
business activities and have common stock listed on a national securities
exchange or admitted for trading on NASDAQ/NMS, as such Persons shall be
selected from time to time by the Agent and approved by the Company, which
approval shall not be unreasonably withheld, conditioned or delayed.
C. MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS. The Company shall
not permit at any time Consolidated Total Indebtedness to exceed the lesser of
(i) 50% of the sum of (a) Consolidated Total Indebtedness plus (b) the Market
Equity Capitalization of the Company and (ii) 50% of the sum of Consolidated
Total Indebtedness and Adjusted Stockholders' Equity provided that, as of any
date of determination, the preceding clause (a) shall not be given effect if
the aggregate Market Equity Capitalization of the Comparable Companies as of
such date is less than 50% of the Market Equity Capitalization of such
Comparable Companies as of the date of the initial closing under the Public
Offerings.
D. MINIMUM FIXED CHARGE RATIO. As of the last day of any
calendar quarter (or, if and so long as the Total Utilization of Revolving
Commitments shall then be equal to or
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greater than $50,000,000 and if the Agent shall then so elect, on the last day
of the calendar month) ending during any of the periods set forth below, the
Company shall not permit the ratio of (i) the sum of (a) Consolidated EBITDA
plus (b) the amount calculated pursuant to clause (viii) of the definition of
Consolidated Fixed Charges for such period plus (c) one-third of the rental
expense attributable to Operating Leases with respect to real property and
one-third of the rental expense attributable to Operating Leases with respect
to personal property with an initial term, including any renewals at the option
of either party, in excess of one year to (ii) the sum of Consolidated Fixed
Charges, to be less than the correlative ratio indicated for the periods set
forth below (such amounts to be determined with reference to the preceding
12-month period ending on such last day and to be adjusted to the extent
required by the respective provisos to the definitions of Property EBITDA and
Management EBITDA):
MINIMUM
FIXED CHARGE
PERIOD COVERAGE RATIO
----------------------- --------------
F.A. Date-06/30/96 1.75 to 1.00
07/01/96-12/31/96 1.85 to 1.00
01/01/97-12/31/97 2.25 to 1.00
01/01/98-12/31/98 2.50 to 1.00
01/01/99-12/31/99 2.75 to 1.00
01/01/00-Maturity Date 3.00 to 1.00
E. MINIMUM FIXED CHARGE RATIO (EXCLUDING CAPITAL EXPENDITURES).
As of the last day of the calendar quarter or, as so provided in subsection
7.7D, on the last day of the calendar month) ending during any of the periods
set forth below, the Company shall not permit the ratio of (i) the sum (a) of
Consolidated EBITDA-Cap Ex plus (b) the amount calculated pursuant to clause
(viii) of the definition of Consolidated Fixed Charges for such period plus (c)
one-third of the rental expense attributable to Operating Leases with respect
to real property and one-third of the rental expense attributable to Operating
Leases with respect to personal property with an initial term, including any
renewals at the option of either party, in excess of one year to (ii)
Consolidated Fixed Charges, to be less than the correlative ratio indicated for
the periods set forth below (such amounts to be determined with reference to
the preceding 12-month period ending on such last day and to be adjusted to the
extent required by the respective provisos to the definitions of Property
EBITDA and Management EBITDA):
MINIMUM
FIXED CHARGE
PERIOD COVERAGE RATIO
---------------------------- --------------
F.A. Date-06/30/96 1.50 to 1.00
07/01/96-12/31/96 1.60 to 1.00
01/01/97-12/31/97 2.00 to 1.00
01/01/98-12/31/98 2.25 to 1.00
01/01/99-12/31/99 2.50 to 1.00
01/01/00-Maturity Date 2.75 to 1.00
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F. MAXIMUM TOTAL DEBT LEVERAGE RATIO. As of the last day of the
calendar quarter or, as so provided in subsection 7.7D, on the last day of the
calendar month) ending during any of the periods set forth below, the Company
shall not permit the ratio of (i) Consolidated Total Indebtedness to (ii) the
sum of Consolidated EBITDA plus the amount calculated pursuant to clause (viii)
of the definition of Consolidated Fixed Charges for such period to exceed the
correlative ratio indicated for the periods set forth below (Consolidated Total
Indebtedness to be determined as of such last day, Consolidated EBITDA to be
determined with reference to the preceding 12-month period ending on such day
and each to be adjusted to the extent required by the respective provisos to
the definitions of Property EBITDA and Management EBITDA):
MAXIMUM
LEVERAGE
PERIOD RATIO
---------------------------- ------------
F.A. Date-06/30/96 5.50 to 1.00
07/01/96-12/31/96 5.50 to 1.00
01/01/97-12/31/97 5.00 to 1.00
01/01/98-12/31/98 4.50 to 1.00
01/01/99-12/31/99 4.00 to 1.00
01/01/00-Maturity Date 3.50 to 1.00
G. MAXIMUM TOTAL DEBT LEVERAGE RATIO (EXCLUDING CAPITAL
EXPENDITURES). As of the last day of the calendar quarter or, as so provided
in subsection 7.7D, on the last day of the calendar month) ending during any of
the periods set forth below, the Company shall not permit the ratio of (i)
Consolidated Total Indebtedness to (ii) the sum of Consolidated EBITDA-Cap Ex
plus the amount calculated pursuant to clause (viii) of the definition of
Consolidated Fixed Charges for such period to exceed the correlative ratio
indicated for the periods set forth below (Consolidated Total Indebtedness to
be determined as of such last day, Consolidated EBITDA-Cap Ex to be determined
with reference to the preceding 12-month period ending on such day and each to
be adjusted to the extent required by the respective provisos to the
definitions of Property EBITDA and Management EBITDA):
MAXIMUM
LEVERAGE
PERIOD RATIO
---------------------------- ------------
F.A. Date-06/30/96 6.55 to 1.00
07/01/96-12/31/96 6.45 to 1.00
01/01/97-12/31/97 5.75 to 1.00
01/01/98-12/31/98 5.25 to 1.00
01/01/99-12/31/99 4.75 to 1.00
01/01/00-Maturity Date 4.25 to 1.00
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7.7 FUNDAMENTAL CHANGES.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, alter the corporate, capital or legal structure of
any Loan Party or any of its Subsidiaries, to incorporate or otherwise organize
any Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or make or permit any Transfer or acquire by purchase or
otherwise, directly or indirectly, all or substantially all the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person, make any Acquisition, acquire or enter into any management
agreement or other agreement with respect to the management or operation of a
hotel property or Transfer any Property or Management Agreement, except that,
from time to time after the Funding Availability Date:
(i) the Loan Parties and their Subsidiaries may lease
space in Improvements and may sell or otherwise dispose of in the
ordinary course of business any property which is obsolete or no
longer useful in accordance with subsection 6.5(vi);
(ii) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
with the prior approval of the Agent, which approval may be granted,
withheld, conditioned or delayed in the Agent's sole discretion, any
Wholly Owned Subsidiary of the Company may be merged with or into the
Company or any Wholly Owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to the
Company or any Wholly Owned Subsidiary Guarantor; provided however,
that, in the case of such a merger, the Company or such Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation;
(iii) the Company and any Subsidiary (other than a Pool A
Subsidiary or a Pool B Subsidiary) may create one or more Subsidiaries
(including, without limitation, Pool B Subsidiaries and Pool C
Subsidiaries); provided that (a) each such Subsidiary shall be Wholly
Owned Subsidiary of the Company and (b) the legal and tax structure of
each such Subsidiary shall be approved by the Agent, which approval
shall not be unreasonably withheld, conditioned or delayed, provided
that, with respect to the restrictions on the tax and legal structure
of a Pool B Subsidiary or a Pool C Subsidiary, such structure may
include features intended by the Company to make one or more of the
Pool B Subsidiaries and the Pool C Subsidiaries "bankruptcy-remote";
(iv) the Loan Parties and their respective Subsidiaries
may make Acquisitions to the extent permitted by, and in accordance
with, subsection 7.15A;
(v) the Loan Parties and their respective Subsidiaries
may Transfer Properties to the extent permitted by, and in accordance
with, subsection 7.15B;
(vi) the Loan Parties and their respective Subsidiaries
may acquire or enter
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into Management Agreements, Servicing Agreements and Other Management
Agreements with respect to hotel properties to the extent permitted
by, and in accordance with, subsection 6.18 or 7.16A;
(vii) the Loan Parties and their respective Subsidiaries
may Transfer Management Agreements, Servicing Agreements and Other
Management Agreements to the extent permitted by, and in accordance
with, subsection 7.16B; and
(viii) the Loan Parties and their respective Subsidiaries
may dissolve one or more Pool C Subsidiaries, Pool B Subsidiaries,
Subsidiaries of Management Corp. and "payroll" Subsidiaries upon the
Transfer of the assets to which they relate.
7.8 ZONING AND CONTRACT CHANGES AND COMPLIANCE.
The Loan Parties shall not and shall not permit any of their
respective Subsidiaries to initiate or consent to any zoning reclassification
of any property or seek any variance under any existing zoning ordinance or use
or permit the use of any Property in any manner that could result in such use
becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation. The Loan Parties shall not and
shall not permit any of their respective Subsidiaries to initiate or consent to
any change in any laws, requirements of Governmental Authorities or obligations
created by private contracts and Material Leases which now or hereafter could
reasonably be likely to materially and adversely affect the ownership,
occupancy, use or operation of any Property without the prior written consent
of the Agent; provided, however, that this covenant shall not apply to
emergency situations in which any Loan Party or such Subsidiary exercises its
prudent judgment and notifies the Agent promptly thereafter of such emergency
and the actions taken in response thereto.
7.9 NO JOINT ASSESSMENT; SEPARATE LOTS.
The Loan Parties shall not suffer, permit or initiate, and shall not
permit any of their respective Subsidiaries to suffer, permit or initiate, the
joint assessment of any Property (i) with any other real property constituting
a separate tax lot (other than another Property) and (ii) with any portion of
any Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any Taxes which may be levied against any such
personal property shall be assessed or levied or charged to any Property as a
single lien. Each Property is comprised of one or more parcels, each of which,
to the knowledge of the Company, constitutes a separate tax lot (except with
respect to any lot constituting another Property) and none of which constitutes
a portion of any other tax lot.
7.10 TRANSACTIONS WITH AFFILIATED PERSONS.
A. RESTRICTIONS GENERALLY. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property, the rendering of any
service or the making of any Investment or Guaranty, or the amendment,
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restatement, supplement or other change of, or waiver or failure to enforce any
obligations under any agreement) with Bedrock, the Crow Interests, any holder
of 5% or more of any class of equity Securities of the Company or any Affiliate
of any of the foregoing or of the Company unless (1) the terms thereof are not
less favorable to such Loan Party or Subsidiary, as the case may be, than those
that might be obtained in a comparable transaction at the time on an arms-
length basis from Persons who are not such a holder or Affiliate and (2) if the
value of such transaction or series of related transactions has an aggregate
value of $500,000 or more, a majority of the members of the Board of Directors
of the Company who are not officers, employees, partners, beneficiaries,
principals or holders of 5% or more of any class of equity Securities of the
Company, Bedrock or the Crow Interests or any of their respective Affiliates
shall have made a determination to the effect referred to in the preceding
clause (1); provided, however, that this subsection 7.10A shall not apply to
(i) any transaction between the Company and any of its Wholly Owned
Subsidiaries or between any of its Wholly Owned Subsidiaries, (ii) reasonable
and customary fees paid to members of the Boards of Directors of the Company
and its Subsidiaries, (iii) reasonable compensation payable or paid to senior
management personnel of the Company, (iv) so long as no Event of Default or
Potential Event of Default has occurred and is continuing, any transaction
between Management Corp. and any of its Wholly Owned Subsidiaries, on the one
part, and any Affiliate of Bedrock or the Crow Interests, on the other part,
pursuant to an asset management agreement with respect to a Managed Property
that requires the other party to pay to Management Corp. or such Wholly Owned
Subsidiary a reimbursement (or make similar payments measured by or
attributable to the cost (direct or allocated) of providing a good or service),
in lieu of the payment of a fee, as consideration for providing a good or
service to such other party pursuant to such asset management agreement and (v)
so long as no Event of Default or Potential Event of Default has occurred and
is continuing, any transaction described in Schedule 7.10A annexed hereto.
B. SPECIFIC RESTRICTIONS. Without limiting the generality of
subsection 7.10A, except as provided to the contrary below, without the prior
written approval of the Agent, which approval may not be unreasonably withheld,
conditioned or delayed, the Loan Parties shall not, and shall not permit any of
their respective Subsidiaries to, do any of the following, directly or
indirectly:
(i) become or remain liable with respect to any FF&E
Financing Indebtedness or Pool C Indebtedness owed to Bedrock, the
Crow Interests, holders of 5% or more of any class of equity
Securities of the Company or any of Affiliate of any of the foregoing;
or
(ii) acquire, directly or indirectly, any fee or leasehold
or other interest in any Additional Pool A Property, Additional Pool B
Property or Pool C Property from Bedrock, the Crow Interests, holders
of 5% or more of any class of equity Securities of the Company or any
Affiliate of any of the foregoing;
(iii) Transfer, directly or indirectly, any Property,
Management Agreement or Servicing Agreement to Bedrock, the Crow
Interests, holders of 5% or more of any class of equity Securities of
the Company or any of their respective Affiliates;
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(iv) make Investments in or Guaranties for the benefit of
Bedrock, the Crow Interests, holders of 5% or more of any class of
equity Securities of the Company or any Affiliate of any of the
foregoing, whether pursuant to subsection 7.3 or otherwise;
[**provided that, without the prior approval of the Agent, the Loan
Parties and their respective Subsidiaries may make the Investments and
Guaranties referred to in subsection 7.3(v)**];
(v) enter into any agreement or other arrangement with,
or acquire goods or services from or provide goods or services to,
ISIS 2000; provided that (x) the Company may (A) enter into the ISIS
2000 Agreements in the respective forms approved by the Agent, which
approval may be granted, withheld, conditioned or delayed in its sole
discretion, and (B) enter into such amendments, restatements,
supplements or other modifications thereof as the Agent shall have
approved in writing, which approval shall not be unreasonably
withheld, conditioned or delayed, (y) the Company shall exercise its
rights thereunder and enforce the obligations of ISIS 2000 thereunder
in the manner and to the extent that the Company would exercise such
rights and enforce such obligations under the ISIS 2000 Agreements if
the other parties thereto were not Affiliates of Bedrock, the Crow
Interests or any holder of 5% or more of any class of equity
Securities of the Company and (z) the Company shall advise the Agent
in writing, reasonably in advance of the action contemplated by the
Company to be taken, with respect to any determination by the Company
to waive, surrender or fail to exercise any material right of the
Company under any ISIS 2000 Agreement or to waive, surrender or fail
to enforce any material obligation of ISIS 2000 thereunder;
(vi) enter into any agreement or other arrangement with,
or acquire goods or services from or provide goods or services to,
CWS; provided that (x) the Company may (A) enter into the CWS
Agreements in the respective forms approved by the Agent, which
approval may be granted, withheld, conditioned or delayed in its sole
discretion, and (B) enter into such amendments, restatements,
supplements or other modifications thereof as the Agent shall have
approved in writing, which approval shall not be unreasonably
withheld, conditioned or delayed, (y) the Company shall exercise its
rights thereunder and enforce the obligations of CWS thereunder in the
manner and to the extent that the Company would exercise such rights
and enforce such obligations under the CWS Agreements if the other
parties thereto were not Affiliates of Bedrock, the Crow Interests or
any holder of 5% or more of any class of equity Securities of the
Company and (z) the Company shall advise the Agent in writing,
reasonably in advance of the action contemplated by the Company to be
taken, with respect to any determination by the Company to waive,
surrender or fail to exercise any material right of the Company under
any CWS Agreement or to waive, surrender or fail to enforce any
material obligation of CWS thereunder;
(vii) enter into any agreement or other arrangement with,
or acquire goods or services from or provide goods or services to,
Wynright; provided that (x) the Company may (A) enter into the
Wynright Agreements in the respective forms approved by the Agent,
which approval may be granted, withheld, conditioned or delayed in its
sole discretion, and (B) enter into such amendments, restatements,
supplements or other
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modifications thereof as the Agent shall have approved in writing,
which approval shall not be unreasonably withheld, conditioned or
delayed, (y) the Company shall exercise its rights thereunder and
enforce the obligations of Wynright thereunder in the manner and to
the extent that the Company would exercise such rights and enforce
such obligations under the Wynright Agreements if the other parties
thereto were not Affiliates of Bedrock, the Crow Interests or any
holder of 5% or more of any class of equity Securities of the Company
and (z) the Company shall advise the Agent in writing, reasonably in
advance of the action contemplated by the Company to be taken, with
respect to any determination by the Company to waive, surrender or
fail to exercise any material right of the Company under any Wynright
Agreement or to waive, surrender or fail to enforce any material
obligation of Wynright thereunder;
(viii) enter into any agreement or other arrangement with,
or acquire goods or services from or provide goods or services to,
Greystar Partnership or its Affiliates; provided that (x) the Company
may (A) enter into the Greystar Agreements that certain terms
consistent with the description thereof in the Debt Prospectus in the
second paragraph in the section entitled "Growth Strategy -- II.
Additional Growth Opportunities -- New Lodging Products" and enter
into Other Management Agreements with Greystar Partnership or its
Affiliates and (B) enter into such amendments, restatements,
supplements or other modifications thereof as shall be consistent with
such description, (y) the Company shall exercise its rights thereunder
and enforce the obligations of Greystar Partnership thereunder in the
manner and to the extent that the Company would exercise such rights
and enforce such obligations under the Greystar Agreements if the
other parties thereto were not Affiliates of Bedrock, the Crow
Interests or any holder of 5% or more of any class of equity
Securities of the Company and (z) the Company shall advise the Agent
in writing, reasonably in advance of the action contemplated by the
Company to be taken, with respect to any determination by the Company
to amend, modify, waive, surrender or fail to exercise any material
right of the Company under any Greystar Agreement or to amend, modify,
waive, surrender or fail to enforce any material obligation of
Greystar Partnership thereunder.
7.11 SALES AND LEASE-BACKS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, enter into any arrangement
with any Person providing for the leasing by any Loan Party or any of its
Subsidiaries of any real or tangible personal property, which property has been
or is to be sold or transferred by any Loan Party or any of its Subsidiaries to
such Person in contemplation of such leasing, unless (i) the Loan Parties and
their respective Subsidiaries shall comply with the conditions set forth in
subsection 7.15A(ii) with respect thereto, (ii) the Company would not be in
default, as of the date of such leasing, of any of paragraphs C, D, E, F and G
of subsection 7.6 if Consolidated Total Indebtedness were to increase by an
amount equal to the Attributable Indebtedness with respect to such sale and
lease-back arrangement, (iii) the gross proceeds of any such sale are at least
equal to the fair market value of such property (including the fair market
value of the related leasehold interest), (iv) the Company or such Subsidiary
shall apply the cash proceeds of such sale as required by subsections 2.4B and
2.9 and (v) the aggregate amount of Attributable Indebtedness with
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respect to all sale and lease-back transactions permitted by this subsection
7.11 does not exceed $75,000,000 at any time. A sale and lease-back
transaction with respect to a Property permitted by this subsection 7.11 shall
be deemed to be a sale or other permanent disposition of such Property for all
purposes of this Agreement.
7.12 SALE OR DISCOUNT OF RECEIVABLES.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable. Nothing in this subsection 7.12 shall be
construed to permit anything not permitted by any other provision of any Loan
Document.
7.13 TRANSFER OF SUBSIDIARY STOCK.
Except as expressly permitted pursuant to subsection 7.7(ii), the HPT
Agreements and the Loan Documents , the Loan Parties shall not, and shall not
permit any of their respective Subsidiaries to directly or indirectly Transfer
any shares of capital stock or other equity Securities of any of its
Subsidiaries, except to qualify directors if required by Applicable Laws or
permit Investments by foreign nationals mandated by Applicable Law.
7.14 CONDUCT OF BUSINESS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, do the following:
(i) engage in any business other than (a) the
acquisition, ownership, renovation, restoration, management, operation
and disposition of Properties, Managed Properties and Other Managed
Properties that are upscale full service hotels, garden style hotels
and resort hotels located in the United States of America and
Properties and Managed Properties that are upscale full service
hotels, garden style hotels and resort hotels in other jurisdictions
on the Effective Date; (b) the management of Other Managed Properties
that are upscale full service hotels, garden style hotels and resort
hotels in Canada and the Caribbean; (c) the management of Other
Managed Properties that are (1) extended stay hotels located in the
United States of America, (2) not operated under the service marks
"Wyndham" or "Wyndham Garden" or any similar brand, (3) owned or
leased by Greystar Partnership and managed by Management Corp. or its
Wholly Owned Subsidiaries pursuant to the Greystar Agreements and (4)
managed pursuant to Other Management Agreements that have terms
substantially the same as these in the form of Other Management
Agreement to which hotels referred to in the preceding clause (b) are
subject; and (d) any business that is ancillary, in purpose and
extent, to any business referred to in the preceding clauses (a), (b)
and (c);
(ii) enter into any Material Lease or other agreement, or
take any other action, that would materially change the business
conducted at any Property, including any such Material Lease,
agreement or other action, that would convert or reposition
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any Property into any hotel other than an upscale full service hotel,
garden style hotel or resort hotel; or
(iii) make any Investment in, Guaranty for the benefit of
or make any payment to the Person owning or leasing any Other Managed
Property referred to in clause (i)(b) or (i)(c) above (other than
payments of revenues generated by the Other Managed Property).
7.15 PROPERTIES.
A. ACQUISITION OF PROPERTIES. The Loan Parties shall not, and
shall not permit any of their respective Subsidiaries to, make an Acquisition
of a fee or leasehold interest in any hotel property after the Formation Date,
except that, from time to time:
(i) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
without the approval of the Agent (except as provided to the contrary
in subsection 7.10 and this subsection 7.15A(i)), the Company or a
Wholly-Owned Subsidiary thereof may make Acquisitions of the fee
interests or leasehold interests in additional Pool A Properties;
provided that, in any event, (a) each additional Pool A Property (an
"ADDITIONAL POOL A PROPERTY") subject to such Acquisition shall
include the entire fee interest or leasehold interest, as the case may
be, in an upscale full service hotel, garden style hotel or resort
hotel, as the case may be, located in the United States of America and
otherwise be of a type, quality and character consistent with the
Company's business plan and strategy, as described in the Debt
Prospectus in the section entitled "Business -- Growth Strategy -- I.
Primary Growth Opportunities" or, if not consistent, as approved by
the Agent, which approval may be granted, withheld, conditioned or
delayed in its sole discretion; (b) the fair market value of such
Additional Pool A Property (as reasonably determined by the Company,
which determination shall be evidenced by an Officers' Certificate
delivered to the Agent) shall be equal to or greater than the purchase
price for such Property; (c) all Investments and Guaranties to be made
by the Company and its Subsidiaries in connection with the proposed
Acquisition shall be permitted pursuant to subsections 7.3 and 7.4;
(d) on or before such closing date, Management Corp. or any of its
Wholly Owned Subsidiaries shall have entered into a Property Servicing
Agreement with the Company and, if a Liquor License exists with
respect to such Additional Pool A Property or is required thereafter,
the holders thereof shall have entered into a Liquor Operation
Servicing Agreement, in each case substantially in the form delivered
on or before the Funding Availability Date pursuant to subsection 4.1J
or in such other form as may be reasonably acceptable to the Agent,
which shall provide for Management Fees in amounts and on other terms
substantially similar to those obtained in the initial Servicing
Agreements or, if different, on terms satisfactory to the Agent; (e)
on or before such closing date, the Company, at its expense, shall
deliver to the Agent (1) an Officers' Certificate of the Company
setting forth a schedule of insurance with respect to each of the
insurance policies required pursuant to subsection 6.10, and the Agent
shall be satisfied that such insurance policies comply with the
requirements of Section 6.10, and each such insurance policy shall
name the Agent on behalf of the Lenders,
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as loss payee, (2) supplements to the Schedules to this Agreement, the
Environmental Indemnity, the Security Agreement, the Omnibus
Management and Liquor License Agreement and, if so required by the
Agent, the Trademark Agreement reflecting the acquisition of such
Additional Pool A Property, which Schedules shall be acceptable to the
Agent, (3) if such Pool A Property is being acquired by a Wholly-Owned
Subsidiary of the Company, originally executed counterparts to the
Environmental Indemnity, the Security Agreement, the Omnibus
Management and Liquor License Agreement and the Subsidiary Guaranty,
together with such other Security Documents as the Agent may require
which do not enlarge the scope of any party's obligations as compared
to similar Security Documents previously executed, (4) each of the
other documents and satisfy each of the other conditions set forth in
paragraphs E, F, G, J(i), M and N(i) (provided that Agent shall not be
required to approve such Engineering Report) of subsection 4.1,
mutatis mutandis, with respect to such Additional Pool A Property, in
each case subject to the satisfaction of the Agent specified in such
subsections, (5) executed or certified, conformed copies of the
related Acquisition Agreements, Pool A Ground Lease, if any, and such
other documents, certificates and opinions executed and delivered by
or on behalf of the Company and any of its Subsidiaries as the Agent
may reasonably request, and (7) payment pursuant to subsection 9.2 of
the reasonable expenses incurred by the Agent in connection with the
matters subject to this subsection 7.15A(i); (f) at least 30 days
before the proposed Addition Date with respect to such Additional Pool
A Property, the Company, at its expense, shall deliver to the Agent
the Property Information with respect to such Additional Pool A
Property, which Property Information shall be satisfactory in form and
substance to the Agent, in its sole discretion; (g) on or before the
proposed Addition Date with respect to such Additional Pool A
Property, the Company, at its expense, shall deliver to the Agent (1)
a statement of Property Gross Revenues and Operating Expenses and any
other expenses with respect to such Additional Pool A Property for the
12 most recently completed calendar months before such Addition Date,
in reasonable detail satisfactory to the Agent and certified by the
Chief Executive Officer or the Chief Financial Officer of the Company
to the effect provided in subsection 6.1(i), mutatis mutandis, (2) an
Addition Certificate in reasonable detail satisfactory to the Agent
and together with the financial statements and other information used
by the Company to calculate the Borrowing Base and certified by the
Chief Executive Officer or Chief Financial Officer of the Company, (3)
payment pursuant to subsection 9.2 of the reasonable expenses incurred
by the Agent in connection with the matters subject to this subsection
7.15A(iii) and not previously paid pursuant to clause (e)(7) above,
(4) an Appraisal with respect to such Additional Pool A Property,
which Appraisal shall be satisfactory in form and substance to the
Agent and shall indicate that the fair market value of such additional
Pool A Property is equal to or greater than the purchase price for
such Property, and (5) each of the other documents set forth in
paragraphs K, L, and N (provided that, without limiting any other
consent or approval rights, the Engineering Report and relative
Reliance letter shall be satisfactory in form and substance to the
Agent and (6) projections of property Gross Revenues for 5 years for
such Additional Pool A Property; (h) the Addition Date with respect to
such Additional Pool A Property shall not occur without the prior
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written approval of the Agent, which approval may be granted,
withheld, conditioned or delayed in the Agent's sole discretion;
(ii) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
without the approval of the Agent (except as provided to the contrary
in subsection 7.10 and this subsection 7.15A(ii)), any of the Pool B
Subsidiaries may make Acquisitions of leasehold interests in
additional Pool B Properties (each, an "ADDITIONAL POOL B PROPERTY");
provided that, in any event, (a) each additional Pool B Property
subject to such Acquisition shall include the entire leasehold
interest in an upscale full service hotel, garden style hotel or
resort hotel, as the case may be, located in the United States of
America and otherwise be of a type, quality and character consistent
with the Company's business plan and strategy, as described in the
Debt Prospectus in the section entitled "Business -- Growth Strategy
-- I. Primary Growth Opportunities" or, if not consistent, as
approved by the Agent, which approval may be granted, withheld,
conditioned or delayed in its sole discretion; (b) either (1) the
Acquisition of such leasehold interest shall be made in a sale and
lease-back transaction permitted by subsection 7.11 and the aggregate
amount of Attributable Indebtedness with respect to all leasehold
interests so acquired in such sale and lease- back transactions shall
not exceed $75,000,000 or (2) the Company or Management Corp. shall
have determined that such Acquisition is necessary to secure an
Additional Management Agreement with respect to such Additional Pool B
Property and the aggregate fair market value of the Additional Pool B
Properties leased by Pool B Subsidiaries pursuant to this subsection
7.15A(ii), in each case determined as of the respective dates of
acquisition thereof, shall not exceed $75,000,000, as reasonably
determined by the Company and certified to the Agent in an Officers'
Certificate of the Chief Executive Officer or the Chief Financial
Officer of the Company to such effect, together with the information
utilized by the Company to make such determination; (c) at least 30
days before the proposed closing date of each such Acquisition, the
Company, at its expense, shall deliver to the Agent the Property
Information with respect to such Additional Pool B Property; (d) the
terms and conditions of the Pool B Obligations of the Loan Parties and
their respective Subsidiaries, including such Pool B Subsidiary, under
the related Pool B Ground Lease and the other related Pool B Documents
(including, without limitation, provisions with respect to cure rights
and obligations with respect to Capital Items) shall be approved by
the Agent, which approval shall not be unreasonably withheld,
conditioned or delayed; (e) all Indebtedness and other obligations
incurred by such Pool B Subsidiary at any time, whether under such
Pool B Documents or otherwise (including, without limitation, lease
payments), shall not be recourse to any of the Loan Parties or any of
their respective Subsidiaries (other than such Pool B Subsidiary) and
shall otherwise be approved by the Agent, which approval shall not be
unreasonably withheld, delayed or conditioned; (f) the lessor of such
Additional Pool B Property shall not be affiliated with more than 4
Affiliated Owners, and all Investments by the Loan Parties and their
respective Subsidiaries in such Pool B Subsidiary shall be permitted
by subsection 7.3(ii) or (viii); (g) the Loan Parties and their
respective Subsidiaries shall not make any Guaranties for the benefit
of any such Pool B Subsidiary; (h) on or before such closing date,
Management Corp. or any of its Wholly Owned Subsidiaries shall have
entered
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into a Property Servicing Agreement with such Subsidiary and in the
event a Liquor License exists with respect to such Additional Pool B
Property or is acquired thereafter, the holders thereof shall have
entered into a Liquor Operation Servicing Agreement, in each case
substantially in the form delivered on the Funding Availability Date
pursuant to subsection 4.1J or in such other form as may be reasonably
acceptable to the Agent, which shall provide for Management Fees in
amounts and on other terms substantially similar to those obtained in
the Servicing Agreements which relate to the initial Pool B Properties
or, if different, on terms satisfactory to the Agent; (i) on or before
such closing date, the Company, at its expense, shall deliver to the
Agent (1) an Officers' Certificate of the Company setting forth a
schedule of insurance with respect to each of the insurance policies
required pursuant to any Pool B Document with respect to such
Additional Pool B Property or subsection 6.10, and to the extent not
conforming to the provisions governing such insurance as specified in
subsection 6.10, the Agent shall be satisfied with the nature and
scope of such insurance policies and each such insurance policy shall
name the holder of any applicable beneficiary of any related Pool B
Obligation (if and so long as any shall be outstanding) or the Agent
on behalf of the Lenders, as loss payee, (2) a statement of Property
Gross Revenues and Operating Expenses and any other expenses with
respect to such Additional Pool B Property for the 12 most recently
completed calendar months ending not less than 30 days before such
closing date, in reasonable detail satisfactory to the Agent and
certified by the Chief Executive Officer or the Chief Financial
Officer of the Company to the effect provided in subsection 6.1(i),
mutatis mutandis, (3) an Addition Certificate, in reasonable detail
satisfactory to the Agent and together with the financial statements
and other information used by the Company to calculate the Borrowing
Base and certified by the Chief Executive Officer or Chief Financial
Officer of the Company, (4) supplements to the Schedules to this
Agreement, the Environmental Indemnity, the Security Agreement, the
Omnibus Management and Liquor License Agreement and, if so required by
the Agent, the Trademark Agreement reflecting the acquisition of such
Additional Pool B Property, which Schedules shall be acceptable to the
Agent, (5) originally executed counterparts to the Environmental
Indemnity, the Security Agreement, the Omnibus Management and Liquor
License Agreement and the Subsidiary Guaranty, together with such
other Security Documents as the Agent may require which do not enlarge
the scope of any party's obligations as compared to similar Security
Documents previously executed, (6) executed or certified, conformed
copies of the related Acquisition Agreements and such other documents,
certificates and opinions executed and delivered by or on behalf of
the Company and any of its Subsidiaries as the Agent may reasonably
request, (6) copies of each of the documents set forth in paragraphs
E, F, H, J, K, L and M of subsection 4.1, mutatis mutandis, with
respect to such Additional Pool B Property, in each case subject to
the satisfaction of the Agent specified in such subsections, and (8)
payment pursuant to subsection 9.2 of the expenses incurred by the
Agent in connection with the matters subject to this subsection
7.15A(ii); and (j) within 45 days after the applicable Addition Date,
the Company, at its expense, shall deliver to the Agent an Appraisal
with respect to such Additional Pool B Property;
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(iii) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
without the approval of the Agent (except as provided to the contrary
in subsection 7.10 and this subsection 7.15(A)(iii)), any of the Pool
C Subsidiaries may make Acquisitions of Pool C Properties; provided,
however, that (a) each Pool C Property subject to such Acquisition
shall include the entire fee interest in an upscale full service
hotel, garden style hotel or resort hotel, as the case may be, located
in the United States of America and otherwise be of a type, quality
and character consistent with the Company's business plan and
strategy, as described in the Debt Prospectus in the section entitled
"Business -- Growth Strategy -- I. Primary Growth Opportunities" or,
if not consistent, as approved by the Agent, which approval may be
granted, withheld, conditioned or delayed in its sole discretion; (b)
after giving effect to such Acquisition, the greater of (x) the
aggregate undepreciated book value of the Pool C Properties and all
other properties and other assets (including, without limitation,
additions and improvements thereto and FF&E provided that the
aggregate cost of FF&E installed at any Pool C Property in a period of
12 complete calendar months that is less than 5.0% of the Gross
Property Revenues from such Pool C Property shall be excluded from the
calculation of any amount referred to in this clause (b)) then owned
or leased by the Company and the Pool C Subsidiaries in connection
therewith and (y) the aggregate fair market value of such Pool C
Properties and such other properties and assets (including, without
limitation, such additions, improvements and FF&E), in each case of
the respective dates of acquisition thereof, shall not exceed
$75,000,000, as reasonably determined by the Company and certified to
the Agent in an Officers' Certificate of the Chief Executive Officer
or the Chief Financial Officer of the Company to such effect, together
with the information utilized by the Company to make such
determination; (c) at least 30 days before the proposed closing date
of each such Acquisition, the Company, at its expense, shall deliver
to the Agent the Property Information with respect to such Pool C
Property; (d) the Loan Parties and their respective Subsidiaries,
including each such Pool C Subsidiary, shall not assume or otherwise
become liable for any liabilities or other obligations secured by or
otherwise relating to any such Pool C Property except those incurred
in the ordinary course of business (which liabilities and obligations
shall not include Indebtedness); (e) all Indebtedness assumed or
incurred by such Pool C Subsidiary at any time shall be Pool C
Indebtedness permitted by subsection 7.1(vii); (f) all Investments and
Guaranties to be made by the Company and its other Subsidiaries in
each such Pool C Subsidiary shall be permitted by subsections 7.3(ii)
and 7.4; (g) on or before such closing date, Management Corp. shall
have entered into a Property Servicing Agreement with the Company or
such Pool C Subsidiary, as the case may be, and in the event a Liquor
License exists with respect to such Pool C Property or is acquired
thereafter, the holders thereof shall have entered into a Liquor
Operation Servicing Agreement, in each case substantially in the form
delivered on the Funding Availability Date pursuant to subsection 4.1J
or in such other form as may be reasonably acceptable to the Agent,
which shall provide for Management Fees in amounts and on other terms
substantially similar to those obtained in the Servicing Agreements
that related to the initial Pool A Properties or, if different, on
terms satisfactory to the Agent; and (h) on or before such closing
date, the Company, at its expense, shall deliver to the Agent (1) an
Officers' Certificate of the Company setting
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forth a schedule of insurance with respect to each of the insurance
policies required pursuant to any applicable Pool C Document or
subsection 6.10, and to the extent not conforming to the provisions
governing such insurance as specified in subsection 6.10, the Agent
shall be satisfied with the nature and scope of such insurance
policies and each such insurance policy shall name the holder of any
applicable beneficiary of any related Pool C Obligation (if and so
long as any shall be outstanding) or the Agent on behalf of the
Lenders, as loss payee, (2) a statement of Property Gross Revenues and
Operating Expenses and any other expenses with respect to such Pool C
Property for the 12 most recently completed calendar months ending not
less than 30 days before such closing date, in reasonable detail
satisfactory to the Agent and certified by the Chief Executive Officer
or the Chief Financial Officer of the Company to the effect provided
in subsection 6.1(i), mutatis mutandis, (3) an Addition Certificate,
in reasonable detail satisfactory to the Agent and together with the
financial statements and other information used by the Company to
calculate the Borrowing Base and certified by the Chief Executive
Officer or Chief Financial Officer of the Company, (4) supplements to
the Schedules to this Agreement and,if the Company shall be required
pursuant to the following clause(s) to execute and deliver
counterparts to the Environmental Indemnity and the Subsidiary
Guaranty, Schedules thereto, reflecting the acquisition of such Pool C
Property, which Schedules shall be acceptable to the Agent, (5)
originally executed counterparts to the Environmental Indemnity and
the Subsidiary Guaranty, if permitted by the provider of the Pool C
Indebtedness, together with such other Security Documents as the Agent
may require, (6) executed or certified, conformed copies of the
related Acquisition Agreements and such other documents, certificates
and opinions executed and delivered by or on behalf of the Company and
any of its Subsidiaries as the Agent may reasonably request and (7)
copies of each of the documents set forth in paragraphs F, J, L
(excluding clause (iii) and M of subsection 4.1, mutatis mutandis,
with respect to such Pool C Property, in each case subject to the
satisfaction of the Agent specified in such subsections, and (8)
payment pursuant to subsection 9.2 of the expenses incurred by the
Agent in connection with the matters subject to this subsection
7.15A(iii); and
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
without the approval of the Agent (except as provided to the contrary
in subsection 7.10 and this subsection 7.15(A)(iii)), a Wholly Owned
Subsidiary of the Company (the "VININGS SUBSIDIARY") may make an
Acquisition of the Vinings Property; provided, however, that (a) the
Vinings Property shall include the entire fee interest in an upscale
full service hotel, garden style hotel or resort hotel, as the case
may be, located in the United States of America and otherwise be of a
type, quality and character consistent with the Company's business
plan and strategy, as described in the Debt Prospectus in the section
entitled "Business -- Growth Strategy -- I. Primary Growth
Opportunities" or, if not consistent, as approved by the Agent, which
approval may be granted, withheld, conditioned or delayed in its sole
discretion; (b) after giving effect to such Acquisition, the greater
of (x) the aggregate undepreciated book value of the Pool C
Properties, the Vinings Property and all other properties and other
assets (including, without limitation, additions and improvements
thereto and FF&E, provided that the aggregate cost of
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FF&E installed at any Pool C Property or the Vinings Property in a
period of 12 complete calendar months ending not less than 30 days
before the date of determination that is less than 5.0% of the Gross
Property Revenues from such Pool C Property or the Vinings Property
for such period shall be excluded from the calculation of any amount
referred to in this clause (b) then owned or leased by the Company,
the Pool C Subsidiaries and the Vinings Subsidiary in connection
therewith and (y) the aggregate fair market value of such Pool C
Properties, the Vinings Property and such other properties and assets
(including, without limitation, such additions, improvements and
FF&E), in each case as of the respective dates of acquisition thereof,
shall not exceed $75,000,000, as reasonably determined by the Company
and certified to the Agent in an Officers' Certificate of the Chief
Executive Officer or the Chief Financial Officer of the Company to
such effect, together with the information utilized by the Company to
make such determination; (c) at least 30 days prior to the proposed
closing date of such Acquisition, the Company, at its expense, shall
deliver to the Agent the Property Information with respect to the
Vinings Property; (d) the Indebtedness assumed by the Vinings
Subsidiary in connection with the Acquisition of the Vinings Property
shall be permitted by subsection 7.1(viii); (e) all Investments and
Guaranties to be made by the Company and its other Subsidiaries in the
Vinings Subsidiary shall be permitted by subsections 7.3(ii) and 7.4;
(f) on or before such closing date, Management Corp. shall have
entered into a Property Servicing Agreement with the Vinings
Subsidiary, and in the event a Liquor License exists with respect to
the Vinings Property or is acquired thereafter, the holders thereof
shall have entered into a Liquor Operation Servicing Agreement, in
each case substantially in the form delivered on the Funding
Availability Date pursuant to subsection 4.1J or in such other form as
may be reasonably acceptable to the Agent, which shall provide for
Management Fees in amounts and on other terms substantially similar to
those obtained in the Servicing Agreements that related to the initial
Pool A Properties or, if different, on terms satisfactory to the
Agent; and (g) on or before such closing date, the Company, at its
expense, shall deliver to the Agent (1) an Officers' Certificate of
the Company setting forth a schedule of insurance with respect to each
of the insurance policies required pursuant to any applicable Vinings
Bond Document or subsection 6.10, and to the extent not conforming to
the provisions governing such insurance as specified in subsection
6.10, the Agent shall be satisfied with the nature and scope of such
insurance policies and each such insurance policy shall name the
holder of any applicable beneficiary of any related obligation under
the Vinings Bond Documents (if and so long as any shall be
outstanding) or the Agent on behalf of the Lenders, as loss payee, (2)
a statement of Property Gross Revenues and Operating Expenses and any
other expenses with respect to the Vinings Property for the 12 most
recently completed calendar months ending not less than 30 days before
such closing date, in reasonable detail satisfactory to the Agent and
certified by the Chief Executive Officer or the Chief Financial
Officer of the Company to the effect provided in subsection 6.1(i),
mutatis mutandis, (3) an Addition Certificate, in reasonable detail
satisfactory to the Agent and together with the financial statements
and other information used by the Company to calculate the Borrowing
Base and certified by the Chief Executive Officer or Chief Financial
Officer of the Company, (4) supplements to the Schedules to this
Agreement and, if the Company shall be required pursuant to the
following clause(s) to execute and deliver counterparts to the
Environmental
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Indemnity and the Subsidiary Guaranty, Schedules thereto, reflecting
the acquisition of the Vinings Property, which Schedules shall be
acceptable to the Agent, (5) originally executed counterparts to the
Environmental Indemnity and the Subsidiary Guaranty to the extent
permitted by the Vinings Bond Documents, (6) executed or certified,
conformed copies of the related Acquisition Agreements and such other
documents, certificates and opinions executed and delivered by or on
behalf of the Company and any of its Subsidiaries as the Agent may
reasonably request, (7) copies of each of the documents set forth in
paragraphs E, F, J, L (excluding clause (iii)) and M of subsection
4.1, mutatis mutandis, with respect to the Vinings Property, in each
case subject to the satisfaction of the Agent specified in such
subsections, and (8) payment pursuant to subsection 9.2 of the
expenses incurred by the Agent in connection with the matters subject
to this subsection 7.15A(iv). The Vinings Subsidiary shall be deemed
to be a Pool C Subsidiary and the Vinings Property shall be deemed to
be a Pool C Property for all purposes of this Agreement, including,
without limitation, for purposes of the application to the Vinings
Subsidiary and the other Pool C Subsidiaries of the restrictions set
forth in clause (b) in the proviso to subsection 7.15A(iii), but
excluding the application to the Vinings Subsidiary of the
restrictions set forth in subsection 7.1(vii) and in clause (e) in the
proviso to subsection 7.15A(iii); provided that, the Vinings
Subsidiary shall be deemed to be a Pool B Subsidiary and the Vinings
Property shall be deemed to be a Pool B Property if and so long as (w)
the Lenders shall elect, in their sole discretion, to provide a Letter
of Credit as the sole credit enhancement for the payment of the
Vinings Bonds, (x) the Vinings Subsidiary shall execute and record a
Mortgage on the Vinings Property that is junior or subordinate in
priority only to the lien of the mortgage securing the payment of the
Vinings Bonds pursuant to the Vinings Indenture and to such other
liens and encumbrances as shall be approved by the Agent in its sole
discretion, such Mortgage shall secure a portion of the Facility that
shall be acceptable to the Agent in its sole discretion and such
Mortgage shall be cross-defaulted with the Mortgages on the Pool A
Properties and the Pool B Properties, (y) the Trustee under the
Vinings Indenture, as the first lienholder, and the Agent shall have
entered into an intercreditor agreement in form and substance
acceptable to the Agent in its sole discretion, and (z) the other
agreements, instruments and other documents evidencing or effecting
such amendment or refinancing, and all other matters in connection
therewith, shall be acceptable to the Agent in its sole discretion.
B. TRANSFER OF PROPERTIES. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, Transfer any Property;
provided that, subject to subsection 7.10B, (i) the Loan Parties and their
respective Subsidiaries may create, incur, assume or permit to exist Liens in
accordance with subsection 7.2 and subsection 6.9, and (ii) each Loan Party and
each of its Subsidiaries may sell or otherwise permanently dispose of any
Property if (a) each such sale or other permanent disposition of such Property
is made on an arms-length basis for the fair market value of such Property, (b)
not less than 100% of the consideration received by such Loan Party or
Subsidiary in any such transaction (net of any Pool B Obligations or Pool C
Indebtedness forgiven or paid in connection therewith) shall be Cash and shall
be received on the date of such sale or other permanent disposition, (c) with
respect to any Pool A Property, the Borrowing Base shall be reduced as provided
in subsection 2.4B(iii) and (d) with respect to any Pool A Property or Pool B
Property, the Company complies with
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the provisions set forth in subsection 2.9 with respect to such Property,
including the payment of any Release Price required thereby.
C. NOTICES WITH RESPECT TO PROPERTIES. The Company shall
deliver, or shall cause to be delivered, the following written notices to the
Agent:
(i) promptly after the Company's acquiring actual
knowledge of the same, an Officers' Certificate with respect to the
occurrence or effectiveness of any event or condition that could
reasonably be expected to cause the Property Amount or Property EBITDA
with respect to any Property, as of any date of determination
thereafter, to be reduced as of such later date of determination or
for any period pursuant to the provisos contained in the definitions
of Property Amount and Property EBITDA, respectively; and
(ii) at least 20 days prior to the commencement of any
Material Restoration/Renovation of any Property, a Notice of
Renovation/Restoration with respect thereto and upon the completion of
such Major Renovation/Restoration, a Completion Certificate with
respect thereto.
7.16 MANAGEMENT AGREEMENTS, SERVICING AGREEMENTS AND OTHER MANAGEMENT
AGREEMENTS.
A. EXECUTION OF MANAGEMENT AGREEMENTS, SERVICING AGREEMENTS AND
OTHER MANAGEMENT AGREEMENTS. The Loan Parties shall not, and shall not permit
any of their respective Subsidiaries to, enter into or otherwise become
obligated with respect to, any agreement regarding the management or operation
of any hotel property after the Funding Availability Date, except that, from
time to time:
(i) with the prior written approval of the Agent, which
approval may be granted, withheld, conditioned or delayed in the
Agent's sole discretion, Management Corp. or any of its Wholly Owned
Subsidiaries may acquire or enter into proposed Management Agreements
with respect to the management and operation of hotel properties, the
related land and the improvements thereof (each an "ADDITIONAL
MANAGEMENT AGREEMENT"); provided that, in any event, (a) each proposed
Managed Property shall be an upscale full service hotel, garden style
hotel or resort hotel, as the case may be, located in the United
States of America and otherwise be of a type, quality and character
consistent with the Company's business plan and strategy, as described
in the Debt Prospectus in the section entitled "Business -- Growth
Strategy -- I. Primary Growth Opportunities" or, if not as so
described, as approved by the Agent, which approval may be granted,
withheld, conditioned or delayed in its sole discretion; (b) at least
30 days before the proposed date of each such closing or the proposed
effective date of such Additional Management Agreement, the Company,
at its expense, shall deliver to the Agent a copy of such Additional
Management Agreement with respect to the proposed Managed Property;
(c) each Investment in, Guaranty for the benefit of or payment to any
Person that may be required to be made by the Loan Parties and their
respective Subsidiaries pursuant to the terms of or in
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connection with the Additional Management Agreement shall be permitted
under subsection 7.3(vi), (vii) or (viii); and (d) on or before such
closing date or effective date, the Company, at its expense, shall
deliver to the Agent (1) execution or conformed copies of the
Additional Management Agreement, including any amendments,
modifications and supplements thereto and all other documents
delivered therewith as of such closing date or effective date, as the
case may be, which documents shall be satisfactory in form and
substance to the Agent, in its sole discretion, (2) a statement of
Approved Management Fees and other Management Fees with respect to
such Additional Management Agreement, for the 12 month period ending
on the last day of the most recently completed calendar month ending
not less than 30 days before such closing date or effective date, as
the case may be, in reasonable detail satisfactory to the Agent and
certified by the Chief Executive Officer or the Chief Financial
Officer of the Company to the effect provided in subsection 6.1(ii),
mutatis mutandis, (3) an Addition Certificate, (4) supplements to the
Schedules to this Agreement, the Security Agreement and the Omnibus
Management and Liquor License Agreement, which schedules shall be
acceptable to the Agent, (5) payment pursuant to subsection 9.2 of the
expenses incurred by the Agent in connection with the matters subject
to this subsection 7.16A(i), provided, however, that the Loan Parties
and their respective Subsidiaries shall not at any time make any
Investment in, become liable with respect to any Guaranty for the
benefit of or make any payment to any Person owning or leasing the
Other Managed Property or otherwise in connection with such Other
Management Agreement, pursuant to subsections 7.3(vii) and (viii) or
otherwise, unless and until the Company, at its expense, shall have
delivered to the Agent copies of each of the documents set forth in
subsection 4.1M, mutatis mutandis, with respect to such Additional
Management Agreement, in each case subject to the satisfaction of the
Agent specified in subsection 4.1M;
(ii) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
without the approval of the Agent (except as provided to the contrary
in subsections 7.10 and 7.16D and this subsection 7.16A(ii)),
Management Corp. or any of its Wholly Owned Subsidiaries may enter
into management agreements (other than Management Agreements and
Servicing Agreements) with respect to the management and operation of
hotel properties, the related land and the improvements thereof (each
an "OTHER MANAGEMENT AGREEMENT"); provided, however, that (a) each
hotel property subject to such Other Management Agreement shall be
either (1) an upscale full service hotel, garden style hotel or resort
hotel located in the United States of America, Canada or the Caribbean
or (2) an extended stay hotel in the United States of America that is
owned or leased by the Greystar Partnership and managed, under a
service mark other than "Wyndham" or "Wyndham Garden" (or any other
brand under which any of the Properties or Managed Properties are
operated from time to time) pursuant to the Greystar Agreements and an
Other Management Agreement that has terms substantially the same as
those in the form of Other Management Agreement to which hotels
referred to in the preceding clause (1) are subject, and in either
case the related Other Managed Property shall be of a type, quality
and character consistent with the Company's business plan and
strategy, as described in the Debt Prospectus in the section entitled
"Business --
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Growth Strategy -- I. Primary Growth Opportunities" or, if not
consistent, as approved by the Agent, which approval may be granted,
withheld, conditioned or delayed in its sole discretion; (b) at least
30 days before the proposed date of each such closing or the proposed
effective date of such Other Management Agreement, the Company, at its
expense, shall deliver to the Agent a copy of such Other Management
Agreement with respect to the proposed Other Managed Property; (c)
each Investment in, Guaranty for the benefit of or payment to any
Person owning or leasing the related Other Managed Property that may
be required to be made by the Loan Parties and their respective
Subsidiaries for the purpose of or otherwise in connection with
securing, extending, renewing or modifying such Other Management
Agreement shall be permitted under subsection 7.3(vii), provided,
however, that the Loan Parties and their respective Subsidiaries shall
not at any time make any Investment in, become liable with respect to
any Guaranty for the benefit of or make any payment to any Person
owning or leasing the Other Managed Property or otherwise in
connection with such Other Management Agreement, pursuant to
subsections 7.3(vii) and (viii) or otherwise, (1) if such Other
Managed Hotel is not an upscale full service hotel, garden style hotel
or resort hotel located in the United States of America and (2) unless
and until the Company, at its expense, shall have delivered to the
Agent copies of each of the documents set forth in subsection 4.1M,
mutatis mutandis, with respect to such Other Management Agreement, in
each case subject to the satisfaction of the Agent specified in
subsection 4.1M; (d) such Other Management Agreement shall not
constitute, have the form of or contain provisions creating a
leasehold interest in any Other Managed Property or other real or
personal property; and (e) on or before such effective date, the
Company, at its expense, shall deliver to the Agent (1) execution or
conformed copies of the Other Management Agreement, including any
amendments, modifications and supplements thereto and all other
documents delivered therewith as of such closing date or effective
date, as the case may be, which documents shall be satisfactory in
form and substance to the Agent, in its sole discretion, (2) a
statement of Approved Management Fees and other Management Fees, with
respect to such Other Management Agreement, for the 12 month period
ending on the last day of the most recently completed calendar month
ending not less than 30 days before such closing date or effective
date, as the case may be, in reasonable detail satisfactory to the
Agent and certified by the Chief Executive Officer or the Chief
Financial Officer of the Company to the effect provided in subsection
6.1(ii), mutatis mutandis, (3) an Addition Certificate and (4)
supplements to the Schedules to this Agreement and the Security
Agreement, which schedules shall be acceptable to the Agent, and (5)
payment pursuant to subsection 9.2 of the reasonable expenses incurred
by the Agent in connection with the matters subject to this subsection
7.16A(ii) and (f) by the end of the calendar month following the month
in which such closing date or effective date occurs, and from time to
time thereafter as the same becomes available,the Company at its
expense, shall deliver to the Agent, such portion of the Management
Information as shall not previously have been delivered by the Company
to the Agent; and
(iii) Management Corp. and any of its Wholly Owned
Subsidiaries shall enter into Servicing Agreements with respect to the
management and operation of the Properties as contemplated by
subsection 4.1J or pursuant to subsection 7.15A.
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B. TRANSFER OR TERMINATION OF MANAGEMENT AGREEMENTS, SERVICING
AGREEMENTS AND OTHER MANAGEMENT AGREEMENTS. The Loan Parties shall not, and
shall not permit any of their respective Subsidiaries to, Transfer any
Management Agreement, Servicing Agreement or Other Management Agreement;
provided that, subject to subsection 7.10, (i) the Loan Parties and their
respective Subsidiaries may create, incur, assume or permit to exist Liens in
accordance with subsection 7.2 and subsection 6.9; (ii) Management Corp. and
each of its Wholly Owned Subsidiaries may sell or otherwise permanently dispose
of any Management Agreement or Servicing Agreement if (a) each such sale or
other permanent disposition of such Management Agreement or Servicing
Agreement, as the case may be, is made on an arms-length basis for the fair
market value of such Management Agreement or Servicing Agreement, as the case
may be, (b) not less than 100% of the consideration received by such Loan Party
or Subsidiary in any such transaction shall be Cash and shall be received on
the date of such sale or permanent disposition, (c) the Borrowing Base shall be
reduced as provided in subsection 2.4B(iii) and (d) the Company complies with
the provisions set forth in subsection 2.9 with respect to such Management
Agreement or Servicing Agreement, as the case may be, including the payment of
any Release Price required thereby; and (iii) Management Corp. and each of its
Wholly Owned Subsidiaries may sell or otherwise permanently dispose of an Other
Management Agreement. Upon the expiration (without renewal or extension),
cancellation or other termination of any Management Agreement, Servicing
Agreement or Other Management Agreement, as the case may be, the Borrowing Base
shall be reduced in accordance with the provisions of subsection 2.4B(iii), and
the Company shall pay the amounts, if any, that may be required to be paid
pursuant to subsection 2.4B(iii) or 2.4B(iv) after taking into account any
required reduction or recalculation of the Borrowing Base.
C. NOTICES WITH RESPECT TO MANAGEMENT AGREEMENTS, SERVICING
AGREEMENTS AND OTHER MANAGEMENT AGREEMENTS. The Company shall deliver, or
shall cause to be delivered, the following written notices to the Agent:
(i) promptly after the Company's acquiring actual
knowledge of the same, a written notice with respect to the occurrence
or effectiveness of any event or condition that could reasonably be
expected to cause the Management Amount or Management EBITDA with
respect to any Management Agreement, Servicing Agreement or Other
Management Agreement, as of any date of determination thereafter, to
be reduced as of such date of determination or for any period pursuant
to the provisos contained in the definition of Management Amount or
Management EBITDA, as the case may be; and
(ii) at least 20 days prior to the commencement of any
Material Restoration/Renovation of any Managed Property or Other
Managed Property, a Notice of Renovation/Restoration with respect
thereto and upon the completion of such Major Renovation/Restoration,
a Completion Certificate with respect thereto.
D. CERTAIN INVESTMENTS, GUARANTIES AND PAYMENTS. Except as
permitted by subsections 7.3(vi), (vii) and (viii), the Loan Parties shall not,
and shall not permit any of their respective Subsidiaries to, make any
Investments in, become liable with respect to any Guaranties for the benefit of
or make any other payment to any Person, including any Affiliate
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or any Joint Venture, for the purpose of or otherwise in connection with
securing, extending, renewing or modifying any Management Agreement, Servicing
Agreement or Other Management Agreement.
7.17 INTELLECTUAL PROPERTY; FRANCHISE AGREEMENTS; OTHER JURISDICTIONS.
A. INTELLECTUAL PROPERTY. Except as provided to the contrary in
subsection 7.17B, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries, to Transfer any Intellectual Property unless the
Company shall have determined that the Intellectual Property so Transferred is
no longer material to the business, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries.
B. FRANCHISE AGREEMENTS. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to, enter into or otherwise
become obligated with respect to, any franchise agreement, license agreement or
similar agreement with respect to the operation of any hotel property as a
"Wyndham" or "Wyndham Garden" hotel (each an "ADDITIONAL FRANCHISE AGREEMENT"),
except that, from time to time after the Funding Availability Date, without the
prior approval of the Agent, but subject to subsection 7.10A, IP Corp. may
enter into Franchise Agreements and Management Corp. may enter into Management
Agreements, Servicing Agreements, Other Management Agreements and sublicenses
of licenses from IP Corp. pursuant to which they grant rights in Intellectual
Property; provided, however, that (i) each hotel property subject to each such
Additional Franchise Agreement shall be of a type, quality and character
consistent with the Company's business plan and strategy as described in the
Debt Prospectus in the section entitled "Business -- Growth Strategy -- II.
Additional Growth Opportunities" or, if not consistent, as approved by the
Agent in its sole discretion, (ii) the Loan Parties and their respective
Subsidiaries may not make any Investment in, or become liable with respect to
any Guaranty for the benefit of, or make any payment to any Person owning or
leasing the hotel property subject to such Additional Franchise Agreement or
otherwise in connection with such Additional Franchise Agreement, and (iii)
such Additional Franchise Agreement shall not constitute, have the form of or
contain provisions creating a leasehold interest in any real or personal
property.
C. OTHER JURISDICTIONS. The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries to acquire any Property, as
permitted by subsection 7.15A, secure any Additional Management Agreement or
Other Management Agreement with respect to any Managed Property or Other
Managed Property, as permitted by subsection 7.16A, or enter into any
Additional Franchise Agreement with respect to any Property, Managed Property,
Other Managed Property or other hotel property, as permitted by subsection
7.17B, if such Property, Managed Property, Other Managed Property or other
hotel property is located in any jurisdiction other than the United States of
America, unless the Company, at its expense, shall have (i) prepared and
delivered to the Agent for filing in the appropriate offices such instruments
as may be necessary or appropriate, in the determination of the Agent, to
perfect under the laws of such other jurisdiction a first priority security
interest in favor of the Agent or the Lenders, as the Agent shall determine, in
the Intellectual Property of the Loan Parties and their respective Subsidiaries
that may be used or useful in the ownership, management or operation of such
Property, Managed Property, Other Managed Property or other hotel or
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hospitality property and (ii) caused to be prepared and delivered to the Agent
an opinion of counsel with respect to the perfection of such security interest,
which counsel and opinion shall be reasonably satisfactory to the Agent.
7.18 MATERIAL LEASES.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, (i) enter into any Lease other than Leases
incidental to the operation of the Properties as hotels or (ii) enter into any
Material Lease or any advanced booking of more than 51% of the rooms at any
Property for a period in excess of 30 days without the prior written approval
of the Agent, which approval shall not be unreasonably withheld, conditioned or
delayed; it being understood and agreed that if after the Effective Date any
Loan Party or any of its Subsidiaries enters into a Material Lease or any such
advanced booking, the Agent may require that the Tenant thereunder enter into a
Tenant Subordination Agreement satisfactory in form and substance to the Agent.
In the event any Lease necessary to the operation of any Property as a hotel is
terminated, the applicable Loan Party or Subsidiary thereof shall replace such
Lease with a suitable comparable Lease within a reasonable period of time
following such termination.
7.19 AMENDMENTS OF CREDIT AGREEMENT, OTHER INDEBTEDNESS, OBLIGATIONS,
CERTAIN DOCUMENTS.
A. CREDIT AGREEMENT. Without the prior written approval of the
Agent, which approval may granted, withheld, conditioned or delayed in its sole
discretion, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, enter into any agreement prohibiting or restricting
the ability of any of the Loan Parties and any of their respective Subsidiaries
to amend or otherwise modify this Agreement or any other Loan Document.
B. COMPANY PREFERRED STOCK AND OTHER STOCK. Without the prior
written approval of the Agent, which approval may be granted, withheld,
conditioned or delayed in its sole discretion, the Company shall not amend,
restate, supplement or otherwise change its articles of incorporation if the
effect of such amendment, restatement, supplement or change is to provide for
the issuance of any preferred stock of the Company or the filing of any
certificate of designation with respect thereto, except that the Company may
amend, restate, supplement or change its certificate of incorporation to
provide for the issuance of non-cumulative preferred stock; provided, however,
that (i) the certificate of incorporation of the Company, as so amended,
restated, supplemented or changed, and any prospectus, certificate of
designation or other document delivered in connection with such issuance shall
be in form and substance reasonably satisfactory to the Agent, (ii) such
preferred stock shall be Qualified Capital Stock and (iii) such preferred stock
shall be subordinate in right and time of payment to the Obligations.
C. ORGANIZATION DOCUMENTS. Without the prior written approval of
the Agent, which approval may be granted, withheld, conditioned or delayed in
its sole discretion, except as expressly permitted hereunder, the Loan Parties
shall not, and shall not permit any of their respective Subsidiaries to, amend
or otherwise modify their respective charters or partnership
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agreements in any material respect except in connection with an activity
permitted by subsection 7.7(viii).
D. OTHER INDEBTEDNESS. Without the prior written approval of the
Agent, which approval be granted, withheld, conditioned or delayed in its sole
discretion, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, (i) amend, restate, supplement or otherwise change
the terms of, or waive or fail to enforce any provision of, any Senior Note
Document or any Pool C Indebtedness in any material respect, (ii) except as
provided to the contrary in subclause (x) of and proviso (1) to subsection
7.1(viii), amend, restate, supplement or otherwise change the terms of, or
waive any provision of, any of the Vinings Bond Documents in any material
respect, or (iii) pay or prepay any principal amount of the Senior Notes or
defease, or make any payments the effect of which is to defease the Senior
Notes in whole or in part (whether pursuant to the defeasance provisions of the
Indenture or otherwise).
E. POOL A GROUND LEASES; POOL B GROUND LEASES; OTHER POOL B
DOCUMENTS. Without the prior written approval of the Agent, which approval may
be granted, withheld, conditioned or delayed in its sole discretion, the Loan
Parties shall not, and shall not permit any of their respective Subsidiaries
to, (i) amend, restate, supplement or otherwise change, or waive or fail to
enforce any provision of, any of the Pool A Ground Leases, the Pool B Ground
Leases and the other Pool B Documents in any material respect or (ii) exercise
any option or other right under or with respect to any Pool B Obligation or
Pool C Obligation (other than to request advances and elect interest rate
options under the Pool C Indebtedness to the extent permitted by subsection
7.17) if the result of such exercise is, or may reasonably be expected to be,
an increase in the amount of rent, principal, interest or any other payment
required to be made by such Loan Party or Subsidiary to the holder of such Pool
B Obligation or Pool C Obligation, as the case may be.
F. MANAGEMENT AGREEMENTS. Without the prior written approval of
the Agent, which approval may be not be unreasonably withheld, conditioned or
delayed, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, amend, restate, supplement or otherwise change, or
waive or fail to enforce any provision of, any of the Management Agreements and
the Additional Management Agreements (but not Other Management Agreements) in
any material respect.
G. OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT; SERVICING
AGREEMENTS. Without the prior written approval of the Agent, which approval
may be granted, withheld, conditioned or delayed in its sole discretion, the
Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, amend, restate, supplement or otherwise change, or waive or
fail to enforce any provision of, the Omnibus Management and Liquor License
Agreement or any Servicing Agreement in any material respect.
H. AFFILIATE AGREEMENTS. Without the prior written approval of
the Agent, which approval may be granted, withheld, conditioned or delayed in
its sole discretion, and subject to subsection 7.10B, the Loan Parties shall
not, and shall not permit any of their respective Subsidiaries to, amend,
restate, supplement or otherwise change, or waive or fail to enforce any
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provision of, any of the ISIS 2000 Agreements, the CWS Agreements and the
Wynright Agreements in any material respect.
7.20 FISCAL YEAR.
The Company shall not change its fiscal year-end from December 31.
SECTION 8
EVENTS OF DEFAULT; REMEDIES
8.1 EVENTS OF DEFAULT.
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
A. FAILURE TO MAKE PAYMENTS WHEN DUE. Failure to pay any
installment of principal of any Loan, any reimbursement obligation in respect
of a Letter of Credit or any Release Price when due, whether at stated
maturity, by acceleration in accordance with the provisions of the applicable
Loan Document, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; or failure to pay interest or any other amount due under this
Agreement (including any other amounts owed in respect of the Letters of
Credit) within five days after the date due; or
B. DEFAULT ON SENIOR NOTES. Failure of the Company to pay when
due any principal of or interest on or any other amount payable in respect of
the Senior Notes, in each case beyond the end of any grace period provided
therefor; or
C. DEFAULT IN OTHER AGREEMENTS. (i) Failure of any Loan Party or
any of its Subsidiaries to pay when due any principal of or interest on any
Indebtedness (other than Indebtedness referred to in subsection 8.1A or 8.1B,
but including, without limitation, any Indebtedness included in the Pool B
Obligations and any Pool C Indebtedness), in each case beyond the end of any
grace period provided therefor (which shall not exceed 5 days); or (ii)
occurrence of any other event or condition (other than an event or condition
expressly described in another subsection of this 8.1) which, with the giving
of notice or the lapse of time or both, with respect to (a) any Indebtedness
(including, without limitation, the Senior Notes, any Indebtedness included in
the Pool B Obligations and any Pool C Indebtedness) or any Contingent
Obligation or (b) any loan agreement, mortgage, indenture or other agreement
relating to such Indebtedness or Contingent Obligation(s), would cause, or
would permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable (upon the giving or receiving of notice, lapse of time, both, or
otherwise) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be, in each case beyond the end of any
cure period therefor (which shall not exceed 5 days); provided that, with
respect to Pool C Indebtedness, either (x) such Indebtedness shall consist of
two or more independent obligations secured by two or more Pool C Properties
that shall not be cross-defaulted or cross-collateralized or (y) the principal
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amount of such Indebtedness, together with the aggregate principal amount of
other Indebtedness of the Loan Parties and their respective Subsidiaries that
is cross-defaulted or cross-collateralized or both with such Indebtedness,
shall be greater in the aggregate than the lesser of (1) $7,500,000 and (2) an
amount equal to 50% of the minimum aggregate principal amount of any
Non-Recourse Indebtedness (as defined in the Indenture) of the Loan Parties and
their respective Subsidiaries, the default in the payment of which, or the
acceleration of the maturity of which, accelerates, or permits the holders of
the Notes to cause the acceleration of, the maturity of all or any portion of
the Notes; provided further, that, for purposes of calculating any amount
pursuant to this clause (y), the principal amount of the Vinings Indebtedness
shall be zero if and so long as no Person shall have the right, by law,
contract, ownership of Securities or otherwise, and whether upon or without
regard to the giving of notice or the lapse of time or both (it being agreed
that, for purposes of this further proviso, the election by the parties to the
Vinings Forbearance Agreement to effect one or more forbearance periods in the
Vinings Forbearance Agreement shall not be deemed to be the "giving of notice"
or the "lapse of time"), (A) to exercise any default remedy under the Vinings
Bond Documents, (B) to take any other action to enforce against any other
Person the obligation to pay any principal amount of, interest on or other
amount in respect of the Vinings Bond Documents or any other Indebtedness or
other obligations created or evidenced thereby or (C) to exercise any right to
foreclose, draw or otherwise realize on any letter of credit, Guaranty, other
credit enhancement, mortgage, pledge or other security for the Vinings Bond
Documents or any such other Indebtedness or other obligations; or
D. BREACH OF CERTAIN COVENANTS. Failure of the Company to
perform or comply with any term or condition contained in subsection 2.5, 6.14,
6.15, 6.16A, 7.1, 7.3, 7.5, 7.6, 7.10, 7.11, 7.14 and 7.19F; or
E. DEFAULT UNDER SUBSECTION 7.2. Any Loan Party or any of its
Subsidiaries shall default in the performance of or compliance with the terms
and conditions of subsection 7.2 (other than any such default which is caused
by the imposition of a Lien created or evidenced by an agreement, instrument or
other document signed by or filed at the direction of any Loan Party or any of
its Subsidiaries), and such default shall not have been remedied or waived on
or before the 30th day after the earlier of (i) such Loan Party's or such
Subsidiary's obtaining knowledge of such default or (ii) receipt by such Loan
Party or such Subsidiary of notice from the Agent of such default; provided,
however, that if such default cannot be cured solely by the payment of money
and the cure of such default requires a period in excess of 30 days, and if
such Loan Party or such Subsidiary, as applicable, is diligently and
continuously prosecuting such cure, then such default shall not be an Event of
Default unless such Loan Party or such Subsidiary fails to cure such default
before the later of (x) the 90th day after such Loan Party or such Subsidiary
obtains knowledge or notice thereof, as the case may be, and (y) the last day
of a Voluntary Removal Period relating to a Property if (1) such default shall
have occurred only with respect to such Property (and not also with respect to
any other Property) and (2) such Voluntary Removal Period shall have commenced
on or before the 90th day after such Loan Party or such Subsidiary obtains
knowledge or notice thereof, as the case may be; and provided further that so
long as any Lien is the subject of a bond, deposit or insurance so that the
subject Property or portion thereof cannot be foreclosed on or otherwise
forfeited, no Event of Default shall exist with respect to such Lien; or
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F. BREACH OF WARRANTY. Any representation, warranty,
certification or other statement of any Loan Party or any of its Subsidiaries
made in this Agreement or in any other Loan Document or in any Related Document
to which such Loan Party or such Subsidiary is a party or in any statement or
certificate at any time given in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made and such default shall not have been remedied or waived
within 30 days after the earlier of (i) such Loan Party's or such Subsidiary's
obtaining knowledge of such default and (ii) receipt by such Loan Party or such
Subsidiary of notice from the Agent of such default; provided, however, that
if such default cannot be cured solely by the payment of money and the cure of
such default requires a period in excess of 30 days, and if such Loan Party or
such Subsidiary, as applicable, is diligently and continuously prosecuting such
cure, then such default shall not be an Event of Default unless such Loan Party
or such Subsidiary fails to cure such default within 90 days, after such Loan
Party or such Subsidiary obtain knowledge or notice thereof, as the case may
be; or
G. INVALIDITY OF LOAN DOCUMENT; FAILURE OF SECURITY; REPUDIATION
OF OBLIGATIONS. At any time after the execution and delivery thereof, (i) any
Loan Document (other than a Security Document) or any material provision
thereof shall cease to be in full force and effect (other than in accordance
with its terms) or shall be declared null and void; (ii) any Security Document
or any material provision thereof shall cease to be in full force and effect
(other than by reason of a release of Collateral thereunder in accordance with
the terms hereof or thereof or any other termination of such Security Document
in accordance with the terms hereof or thereof) or shall be declared null and
void, or the Agent shall not have or shall cease to have a valid and perfected
first priority Lien or security interest in any Collateral purported to be
covered, in each case for any reason other than the failure of the Agent to
take any action within its control; (iii) any Loan Party shall contest in
writing the validity or enforceability of any Loan Document in writing or deny
in writing that it has any further liability, including with respect to future
advances by the Lenders, under any Loan Document to which it is a party; or
(iv) the Trustee or any holder of the Senior Notes or representative or agent
thereof shall contest the validity or enforceability of Article Ten or Section
11.2 of the Indenture; or
H. POOL A GROUND LEASES. (i) Failure by any Loan Party or any of
its Subsidiaries to pay when due any monetary obligation contained in any Pool
A Ground Lease, in each case beyond the end of any grace period provided
therefor; (ii) occurrence of any other event or condition which, with the
giving of notice or lapse of time or both, would cause, or would permit the
landlord under any Pool A Ground Lease to cause, a cancellation or termination,
as against any Loan Party or any of its Subsidiaries party thereto, of such
Pool A Ground Lease; (iii) election by any Loan Party or any of its
Subsidiaries party to a Pool A Ground Lease to terminate such Pool A Ground
Lease in accordance with the terms thereof or to reject such Pool A Ground
Lease in any bankruptcy proceeding; or (iv) failure by any Loan Party or any of
its Subsidiaries to permit the Agent and/or its representatives at all
reasonable times upon reasonable prior written notice to make investigation or
examination concerning such Loan Party's or such Subsidiary's performance and
observance of the terms, covenants and conditions of a Pool A Ground Lease; or
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I. POOL B OBLIGATIONS. (i) Failure by any Loan Party or any of
its Subsidiaries to pay when due any monetary obligation contained in any Pool
B Document (other than the principal of or interest on any Indebtedness
included in the Pool B Obligations, as the case may be), in each case beyond
the end of any grace period provided therefor; (ii) the occurrence of any event
or condition which, with the giving of notice or lapse of time or both, would
cause, or would permit the holder or holders of the related Pool B Obligation,
as the case may be (including, without limitation, a landlord under any related
Pool B Ground Lease), to cause, (a) such Pool B Obligation to become or be
declared due and payable (upon the giving or receiving of notice, lapse of
time, both, or otherwise) prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be, or (b) a cancellation or
termination, as against any Loan Party or any of its Subsidiaries party
thereto, of such Pool B Ground Lease; (iii) election by any Loan Party or any
of its Subsidiaries party to a Pool B Ground Lease to terminate such Pool B
Ground Lease in accordance with the terms thereof or reject such Ground Lease
in any bankruptcy proceeding; or (iv) failure by any Loan Party or any of its
Subsidiaries to permit the Agent and/or its representatives at all reasonable
times upon reasonable prior written notice to make investigation or examination
concerning such Loan Party's or such Subsidiary's performance and observance of
the terms, covenants and conditions of the Pool B Documents; or
J. PROHIBITED TRANSFERS. If any Loan Party attempts to assign
its rights under this Agreement or any other Loan Document or any interest
herein or therein; or
K. OTHER DEFAULTS UNDER LOAN DOCUMENTS OR RELATED DOCUMENTS. Any
Loan Party or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in this Agreement or any other Loan Document
or any material term of any Related Document to which such Loan Party or such
Subsidiary is a party (other than Related Documents pertaining to Pool C
Obligations) if the default thereunder could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, other than any
such term in this Agreement, other Loan Document or Related Document that is
referred to in any other clause of this subsection 8.1, and such default shall
not have been remedied or waived within 30 days after the earlier of (i) such
Loan Party's or such Subsidiary's obtaining knowledge of such default or (ii)
receipt by such Loan Party or such Subsidiary of notice from the Agent of such
default; provided, however, that if such default cannot be cured solely by the
payment of money and the cure of such default requires a period in excess of 30
days, and if such Loan Party or such Subsidiary is diligently and continuously
prosecuting such cure, then such default shall not be an Event of Default
unless such Loan Party or such Subsidiary fails to cure such default before the
later of (x) the 90th day after any Loan Party or any of its Subsidiaries
obtains knowledge or notice thereof, as the case may be, or (y) the last day of
a Voluntary Removal Period relating to a Property if (1) such default shall
have arisen under subsections [**WYNDHAM TO PROPOSE:**] _____, _____, _____ and
_____ of __________ (but no other provision of any other Loan Document) with
respect to such Property (and not also with respect to any other Property) and
(2) such Voluntary Removal Period shall have commenced on or before the 90th
day after such Loan Party or such Subsidiary obtains knowledge or notice
thereof, as the case may be; or
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L. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of any Loan Party or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against any Loan Party or any of its Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Loan Party or any of
its Subsidiaries, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of any Loan Party or any of its
Subsidiaries for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of any Loan Party or any of its Subsidiaries,
and any such event described in this clause (ii) shall continue for 60 days
unless dismissed, bonded or discharged; or
M. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Any
Loan Party or any of its Subsidiaries shall have an order for relief entered
with respect to it or commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or any Loan Party or any of its Subsidiaries shall make
any assignment for the benefit of creditors; or (ii) any Loan Party or any of
its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of any Loan Party or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to in clause (i) above or this clause (ii);
or
N. JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or
warrant of attachment or similar process involving individually or in the
aggregate at any time an amount in excess of $1,000,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
the Company or any of its Subsidiaries or any of their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of 60
days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
O. DISSOLUTION. Any order, judgment or decree shall be entered
against any Loan Party or any of its Subsidiaries decreeing the dissolution or
split up of such Loan Party or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
P. EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA
Events which individually or in the aggregate results in or could reasonably be
expected to result in liability
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of the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $1,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans,
which exceeds $1,000,000; or
Q. MATERIAL ADVERSE EFFECT. Any event or change shall occur that
has caused or evidences, either in any case or in the aggregate, (i) a material
adverse effect upon the business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, and (ii) the
impairment of the ability of the Company and its Subsidiaries, taken as a
whole, to perform, or of the Agent or the Lenders to enforce, monetary
Obligations or the material impairment of the ability of any Loan Party to
perform, or of the Agent or the Lenders to enforce, non- monetary Obligations,
including the obligations of any Loan Party to perform, or of the Agent or the
Lenders to enforce, any Security Document; or
R. CONTINGENT OBLIGATIONS. Payments by the Loan Parties or any
of their Subsidiaries with respect to any of the Contingent Obligations set
forth on Schedule 5.3 annexed hereto in an aggregate amount greater than the
maximum estimated amount specified on Schedule 5.3 with respect thereto; or
S. CHANGE IN CONTROL. (i) Either Bedrock, the Crow Interests or
the Senior Executives, collectively (the "LARGER GROUP"), or the Senior
Executives, collectively (the "SMALLER GROUP"), shall Transfer, or otherwise
cease for any reason to maintain, beneficial or record ownership of 50% or more
of the numbers of shares of Common Stock owned by them, respectively, after
giving effect to the Formation as of the Formation Date (excluding equity
Securities of the Company beneficially or of record owned by WEL), as each such
number may be adjusted by reason of stock splits, reverse stock splits,
reclassifications and similar transactions or events affecting all shares of
Common Stock or all shares of any other class of Capital Stock of the Company;
provided, however, that (a) the pledge of shares of Common Stock (prior to the
foreclosure thereof) by Bedrock, the Crow Interests or the Senior Executives to
secure the payment of indebtedness owed by the members of the Larger Group or
the Smaller Group, as the case may be, shall not be deemed to be a Transfer or
other cessation of beneficial ownership of such shares by the respective
pledgors thereof if, as of the date of determination, the aggregate principal
amount of the indebtedness owned by members of the Larger Group or the Smaller
Group, as the case may be, and so secured by pledges of such shares shall not
be greater than an amount equal to 50% of the product obtained by multiplying
the number of shares of Common Stock owned beneficially and of record by the
members of the Larger Group or the Smaller Group, as the case may be, by the
average of the closing bid prices of the Common Stock on the principal national
securities exchange on which the Common Stock is listed or, if the Common Stock
is not so listed, on NASDAQ/NMS, as the case may be, for each of the 30
consecutive trading days next preceding such date of determination (or such
shorter period during which the Common Stock shall have been publicly traded
until such time as it has been so traded for 30 consecutive trading days); and
(b) if Donald J. McNamara, Robert A. Whitman and Daniel A. Decker, or any of
them, shall cease at any time to control the business and affairs of Bedrock,
including the voting and disposition of the equity Securities of the Company
owned beneficially or of record by Bedrock then for purposes of this clause (i)
Bedrock shall be deemed to have ceased owning any shares of
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Common Stock; (ii) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable),
other than Bedrock, the Crow Interests and the Senior Executives and the
Affiliates of each of the foregoing), is or becomes the "beneficial owner" (as
such term is used in Rule 14d-3 promulgated pursuant to the Exchange Act),
directly or indirectly, of more then 35% of the total voting power in the
aggregate of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors; (iii) a majority of the
board of directors of the Company shall not consist of nominees of Bedrock or
the Crow Interests; or (iii) there shall occur a Change of Control (within the
meaning of the Indenture); or
T. EMPLOYMENT OF JAMES A. CARREKER, LESLIE V. BENTLEY AND ERIC A.
DANZIGER. The lapse of 30 days after any two or more of James A. Carreker,
Leslie V. Bentley and Eric A. Danziger cease to be employed by the Company by
reason of death or disability; or
U. OWNERSHIP OF SUBSIDIARIES. The Company shall cease to own,
directly or indirectly, all the equity Securities of Management Corp. and its
other Subsidiaries, subject to the provisions of subsection 7.7(ii);
THEN (i) upon the occurrence of any Event of Default described in subsection
8.1L or 8.1M, each of (a) the unpaid principal amount of and accrued interest
on the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without notice,
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by the Company and the obligations of each Lender
to make any Loan, the obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) during the continuance of any other Event of Default, the
Agent may, in its sole discretion, by written notice to the Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable and the
obligation of each Lender to make any Loan, the obligation of Agent to issue
any Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders under subsection 3.3C(i) or the
obligations of Lenders to purchase participations in any unpaid Swing Line
Loans as provided in subsection 2.1A(ii).
Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms of the Collateral Account
Agreement and shall be applied as therein provided.
The occurrence of any condition or event may constitute an
Event of Default (or a Potential Event of Default) under more than one
provision of this subsection 8.1.
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8.2 CERTAIN REMEDIES.
A. During the continuance of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to the
Agent or the Lenders against the Company under this Agreement, the Notes, the
Mortgages, the Security Documents or any of the other Loan Documents, or at law
or in equity, may be exercised by the Agent, acting in its own sole discretion
at any time and from time to time, whether or not all or any portion of the
Obligations shall be declared due and payable, and whether or not the Agent
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to any Property or all or any portion of the Mortgaged Property. Any
such actions taken by the Agent shall be cumulative and concurrent and may be
pursued independently, singly, successively, together or otherwise, at such
time and in such order as the Agent in its sole discretion may determine, to
the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of the Agent or the Lenders permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
B. In the event of the foreclosure or other action by the Agent
to enforce its remedies in connection with one or more of the Pool A
Properties, the Ground Leases, the Pool B Properties, the Management Agreements
or any other Collateral or all or any portion of the Mortgaged Property,
whether such foreclosure (or other remedy) yields net proceeds in an amount
less than, equal to or more than the Pool A Property Amount with respect to
such Property or Mortgaged Property, the Agent shall apply all net proceeds
received to repay the Obligations, the Obligations shall be reduced to the
extent of such net proceeds and the remaining portion of the Obligations shall
remain outstanding and secured by the Mortgages and the other Loan Documents,
it being understood and agreed by the Company that the Company is liable for
the repayment of the Obligations and that any "excess" foreclosure proceeds are
part of the cross- collateralized and cross-defaulted security granted to the
Agent on behalf of the Lenders pursuant to the Mortgages; provided, however,
that, if the Agent so elects, the Loans and the Notes shall be deemed to have
been accelerated only to the extent of the net proceeds actually received by
the Lenders with respect to any individual Property (or, in the event that the
Agent on behalf of the Lenders is the purchaser of such Property by Credit Bid
at a foreclosure sale, the Loans and the Notes shall be deemed to have been
accelerated only at such time as the Agent subsequently disposes of such
Property and then only to the extent of the amount of such Credit Bid) and
applied in reduction of the Obligations in accordance with the provisions of
this Agreement and the Notes, after payment by the Company of all transaction
costs and expenses and costs of enforcement.
C. It is intended that the Liens of the Mortgages shall each be
construed and treated as a separate, distinct Lien for the purpose of securing
the entire Obligations secured thereby in the same manner as though each
Property was mortgaged and transferred to the Agent on behalf of the Lenders by
a separate and distinct mortgage and security agreement, so that if it should
at any time appear or be held that any Mortgage fails to mortgage, and transfer
to the Agent on behalf of the Lenders a Lien upon and the title to any
Property, or any part thereof, as against creditors of the Company other than
the Lenders or otherwise, such failure shall not operate to affect in any way
the transfer of the other Properties or Mortgaged Property or any
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part thereof to the Agent on behalf of the Lenders; but nothing contained
herein or in the Mortgages shall be construed as requiring the Agent on behalf
of the Lenders to resort to any Property for the satisfaction of the
Obligations secured thereby in preference or priority to any other Mortgaged
Property thereby conveyed, but the Agent, acting in its sole discretion may
seek satisfaction out of all of the Mortgaged Property or any part thereof.
D. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default the Agent is
hereby authorized by the Company at any time or from time to time, without
notice to the Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by the Agent to or for the
credit or the account of the Company against and on account of the obligations
and liabilities of the Company to the Agent under this Agreement and the Notes,
including all claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
(i) the Agent shall have made any demand hereunder or (ii) the principal of or
the interest on the Loan or any other amounts due hereunder shall have become
due and payable pursuant to subsection 8.1 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
E. During the continuance of an Event of Default, the Agent, in
its sole discretion, shall have the right, to the extent permitted by law, to
impound and take possession of books, records, notes, and other documents
evidencing the Company's Deposit Accounts, accounts receivable and other claims
for payment of money (including Rents) arising in connection with the
Properties, to give notice to the obligors thereunder of the Agent's interest
therein, and to make direct collections on such Deposit Accounts, accounts
receivable and claims.
F. During the occurrence of an Event of Default and upon the
occurrence and during the continuance of a default in the payment of any
principal or interest of any Indebtedness owed or alleged to be owed by the
Company or any Subsidiary, and following the initiation of any proceeding or
the taking of any other action to collect the payment thereof by the Person
entitled to such payment, the Agent may, in its sole discretion, advance either
to such Person or to the Company, for payment to such Person, all or any
portion of the amount of such payment, whether or not the existence of such
obligation or amount thereof shall be disputed by the Company or such
Subsidiary. Each such advance, to the extent not paid out of Excess Cash Flow,
shall deemed a Loan hereunder and shall be subject to the provisions of this
Agreement.
G. The rights, powers and remedies of the Agent and the Lenders
under this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which the Agent or the Lenders may have against the Company
pursuant to this Agreement or the other Loan Documents executed by or with
respect to the Company, or existing at law or in equity or otherwise. The
rights, powers and remedies of the Agent and the Lenders may be pursued singly,
concurrently or otherwise, at such time and in such order as the Agent, acting
in its own sole discretion, may determine. No delay or omission to exercise
any remedy, right
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or power accruing upon an Event of Default shall impair any such remedy, right
or power or shall be construed as a waiver thereof, but any such remedy, right
or power may be exercised from time to time and as often as may be deemed
expedient. A waiver of any Event of Default or Potential Event of Default with
respect to the Company shall not be construed to be a waiver of any subsequent
Event of Default or Potential Event of Default by the Company or to impair any
remedy, right or power consequent thereon.
SECTION 9
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Each Lender shall have the right at any time to (i)
sell, assign, transfer or negotiate to any Eligible Assignee (provided that
such Eligible Assignee complies with the requirements of subsection 2.7B(iii)
as of the date it becomes a Lender hereunder, to the extent applicable), or
(ii) sell to any Eligible Participant participations to any Person in, all or
any part of its Commitment or any Loan or Loans made by it or its Letters of
Credit or participations therein or any other interest herein or in any other
Obligations owed to it; provided, however, that (w) no such sale, assignment,
transfer or participation shall, without the consent of the Company, require
the Company to file a registration statement with the Securities and Exchange
Commission or apply to qualify such sale, assignment, transfer or participation
under the securities laws of any state, (x) no such sale, assignment, transfer
or participation of any Letter of Credit or any participation therein may be
made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Lender effecting such sale, assignment, transfer or participation, (y)
no such sale, assignment or transfer of an interest in the Revolving Loan
Commitment of such Lender shall be made in an amount less than $5,000,000 (or,
if less, the aggregate amount of the Revolving Loan Commitment of such Lender)
and (z) unless Bankers shall be removed as Agent, Bankers shall not make any
such sale, assignment or transfer if, after giving effect thereto, the
Revolving Loan Commitment of Bankers would be less than $15,000,000. In the
case of any assignment authorized under this subsection 9.1, (i) the Agent
shall notify the Company of the effective date of such assignment, (ii) as of
such effective date, the assignee shall be a party hereto and, to the extent
that an interest hereunder have been assigned to it, shall have the rights and
obligations of a Lender hereunder and (iii) the assigning Lender shall, to the
extent that its rights and obligations hereunder have been assigned by it,
relinquish its rights and be released from its obligations under this
Agreement. In the event of an assignment hereunder, the Commitments shall be
modified to reflect the Commitments of such assignee. Except with respect to
the portion of the Loans and Commitments assigned pursuant to this subsection
9.1, no Lender shall, as between the Company and such Lender, be relieved of
any of its obligations hereunder as a result of any sale, assignment, transfer
or negotiation of, or any granting of participations in, all or any part of its
Commitment or the Loans, the Letters of Credit or participations therein, or
other Obligations owed to such Lender.
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B. PARTICIPATIONS. The Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 2.6, 2.7, and
9.5, (i) any participation will give rise to a direct obligation of the Company
to the participant and (ii) the participant shall be considered to be a
"Lender".
C. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 9.1, any Lender may assign and pledge all or any portion of its
Loans and the other Obligations owed to such Lender to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank. No Lender shall, as between the Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge.
D. INFORMATION. Each Lender may furnish any information
concerning the Company and its Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective
assignees and participants who have executed a confidentiality agreement
substantially in the form attached as Exhibit XXI hereto and otherwise meeting
the criteria of an Eligible Assignee or Eligible Participant, as the case may
be).
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to pay promptly, and, with respect to the
expenses referred to in clauses (iv) and (v) below, on or before the date of
the initial closing of the Public Offerings, (i) all the costs of furnishing
all opinions of counsel for the Company and the other Loan Parties (including
any opinions reasonably requested by the Agent) as to any legal matters arising
hereunder and of each Loan Party's performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements
and with respect to the Security Documents and the Liens created pursuant
thereto; (ii) actual costs and expenses of creating, perfecting and maintaining
Liens in favor of the Agent for the benefit of the Lenders pursuant to any Loan
Document, including filing and recording fees and expenses, mortgage recording
taxes, intangible taxes and transfer and stamp taxes, title searches, title
insurance premiums, UCC searches and UCC filing charges; (iii) all the
reasonable out-of-pocket expenses incurred by the Agent and payable to
auditors, accountants, architects, engineers or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
the Agent or its counsel (but excluding the fees of counsel for the Agent) in
connection with performing due diligence, including obtaining and reviewing any
Appraisals, any environmental audits or reports, market surveys, title reports,
surveys and similar information; (iv) up to $20,000 in the aggregate of
out-of-pocket expenses incurred by the Agent and its Affiliates for travel in
connection with the negotiation, preparation and execution of the Loan
Documents, the syndication of the Loans and due diligence; (v) all the
reasonable fees, expenses and disbursements of counsel for the Agent and its
Affiliates in connection with the negotiation, preparation and execution of the
Loan Documents, the closing and syndication of the Loans and due diligence;
provided that
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(x) if the Funding Availability Date hereof occurs on or before the fifth
Business Day after the date of the initial closing of the Public Offerings (the
"TARGET DATE") the fees of O'Melveny & Myers for such purposes shall not exceed
[**$515,000**] (plus additional fees for legal services after April 26, 1996
that are attributable to the proposed Acquisition and refinancing of the
Vinings Property) and (y) if the Funding Availability Date hereof occurs after
the Target Date the fees of O'Melveny & Myers for such purposes will be the
amount referred to in clause (x) plus all reasonable fees incurred after the
Target Date; (vi) all reasonable expenses incurred by the Agent, including,
without limitation, the reasonable fees, expenses and disbursements of counsel
for the Agent (including allocated costs of internal counsel) in connection
with (a) the administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto, (b) any Acquisition, any acquisition or
addition of a Management Agreement or Other Management Agreement, and any
Transfer or release of any Property, Management Agreement, Servicing Agreement
or Other Management Agreement or any proposal with respect to any of the
foregoing and (c) the preparation or review of other documents or matters
requested by any Loan Party; and (vii) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees and costs
of settlement, incurred by the Agent and the Lenders in enforcing any
Obligations of or in collecting any payments due from the Company hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings. Anything in this Agreement to the
contrary notwithstanding, the Company shall not be liable for the payment of
expenses incurred or payable by the Agent and its Affiliates in the performance
of the activities referred to in clauses (iv) and (v) of the preceding sentence
in excess of the amounts specified therein with respect to the periods, if any,
specified therein. Provisions contained in this Agreement or in any of the
other Loan Documents requiring the Company to pay or reimburse any costs or
expenses, which are modified by the term "reasonable", shall require the
Company to pay the costs or expenses that are "reasonably" incurred and that
are in a "reasonable" amount. Except as expressly provided to the contrary in
this Agreement or any other Loan Document, such costs or expenses that are
payable after the Effective Date shall be payable by the Company within five
Business Days after the Company's receipt of written demand from the Agent to
pay same, accompanied by documentation in reasonable detail sufficient to
verify the nature and amount.
9.3 INDEMNITY.
A. INDEMNITY. In addition to the payment of expenses as required
by subsection 9.2, whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to defend, indemnify and hold harmless the
Agent, Lenders and Bankers and their respective Affiliates and Persons deemed
to be "controlling persons" thereof within the meaning of the Securities Act or
the Exchange Act and the respective directors, officers, employees, agents,
attorneys and representatives of the foregoing (collectively, "INDEMNIFIED
PERSONS" and individually, an "INDEMNIFIED PERSON"), to the full extent
lawful, from and against any and all losses, claims, damages, liabilities,
costs and expenses or other obligations of any kind or nature whatsoever
incurred by each such Indemnified Person (including fees, charges and
disbursements of counsel and the allocated costs and expenses of internal
counsel
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for such Indemnified Person) which are related to, arise out of or result from
(a) any untrue statements or alleged untrue statements or omissions or alleged
omissions to state therein a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case made or, to the extent contemplated by the Loan Documents, to be
made, by or on behalf of any Loan Party or any of its Affiliates, (x) in the
representations and warranties of the Loan Parties contained in the Loan
Documents, (y) in or pursuant to the Original Financing Letter, the Loan
Documents or the Related Documents or (z) otherwise in connection with the
Original Financing Letter, the Loan Documents or the Related Documents, (b)
information provided by or on behalf of any Loan Party or any of their
Affiliates for use in connection with any syndication, assignment or
participation of any portion of the Commitments, the Loans, the Notes, the
other Loan Documents or the Obligations, or in connection with the Original
Financing Letter, any Loan Document or any Related Document or any transactions
contemplated hereby or thereby, (c) the transactions contemplated by the Loan
Documents (including the Lenders' agreements to make the Loans or the use or
intended use of the proceeds thereof) or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon
any of the Collateral or the enforcement of the Subsidiary Guaranty), (d) any
actions taken or omitted to be taken by an Indemnified Person with the consent
of the Company or in conformity with the instructions of the Company, or (e)
any other transactions contemplated by the Original Financing Letter, the Loan
Documents or the Related Documents, and the Company will reimburse each
Indemnified Person for all reasonable costs and expenses, including fees and
disbursements of both outside and internal counsel for such Indemnified Person,
as they are incurred, in connection with investigating, preparing for, or
defending any formal or informal claim, action, suit, investigation, inquiry or
other proceeding, whether or not in connection with pending or threatening
litigation, caused by or arising out of or in connection with the foregoing,
whether or not such Indemnified Person is named as a party thereto and whether
or not any liability results therefrom. The Company shall not, however, be
responsible for any losses, claims, damages, liabilities, costs or expenses
pursuant to clauses (c), (d) or (e) of the preceding sentence which have
resulted primarily from the bad faith or recklessness of such Indemnified
Person as determined by a final judgment of a court of competent jurisdiction.
Neither the Agent nor any other Indemnified Person shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to any of the
Loan Parties and their respective Affiliates or any director, officer,
employee, agent or representative of any of the foregoing, or any other person,
for or in connection with the foregoing, or otherwise arising out of or in any
way relating to the matters contemplated by the Original Financing Letter, the
Loan Documents, the Related Documents or any commitment to lend except for such
liability for losses, claims, damages, liabilities, costs or expenses of any
Indemnified Person pursuant to clauses (c), (d) or (e) of the preceding
sentence to the extent they are determined to have resulted primarily from the
bad faith or recklessness of such Indemnified Person as determined by a final
judgment of a court of competent jurisdiction and in no event shall the Agent
or any other Indemnified Person be responsible for or liable to any of the Loan
Parties or any of their respective Affiliates or any other Person for
consequential, punitive or exemplary damages. The Company further agrees that
the Loan Parties shall not, nor shall they permit their respective Subsidiaries
to, without the prior written consent of the Agent and Bankers, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit, investigation, inquiry or other proceeding in respect of
which indemnification is
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actually sought hereunder unless such settlement, compromise or consent
includes an unconditional release of the Agent and each other Indemnified
Person hereunder from all liability arising out of such claim, action, suit,
investigation, inquiry or other proceeding.
B. PROCEDURE. If any action, suit, investigation, inquiry or
other proceeding is commenced, as to which an Indemnified Person proposes to
demand indemnification hereunder, such Indemnified Person shall notify the
Company with reasonable promptness; provided, however, that any failure by such
Indemnified Person to notify the Company shall not relieve the Company or any
of its Affiliates from its obligations hereunder (except to the extent that the
Company or such Affiliate is prejudiced by such failure to so promptly notify).
The Company shall be entitled to assume the defense of any such action, suit,
investigation, inquiry or other proceeding, including the employment of counsel
reasonably satisfactory to the Indemnified Person and the payment of all
reasonable fees and expenses incurred in connection therewith. The Indemnified
Person shall have the right to employ separate counsel in any such action,
suit, investigation, inquiry or other proceeding, or to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Person unless (i) the Company has agreed to pay such
fees and expenses, (ii) the Company shall have failed promptly upon written
demand therefor to assume the defense of such action, suit, investigation,
inquiry or other proceeding, and employ counsel reasonably satisfactory to the
Indemnified Person in connection therewith or (iii) such Indemnified Person
shall have been advised by counsel that there exists actual or potential
conflicting interests between the Company and such Indemnified Person,
including situations in which one or more legal defenses may be available to
such Indemnified Person that are different from or additional to those
available to the Company, in which case, if such Indemnified Person notifies
the Company in writing that it elects to employ separate counsel at the expense
of the Company, the Company shall not have the right to assume the defense of
such action or proceeding on behalf of such Indemnified Person; provided,
however, that the Company shall not, in connection with any one such action,
suit, investigation, inquiry or other proceeding or separate but substantially
similar or related actions, suits, investigations, inquiries or other
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all such Indemnified Persons (in
addition to local counsel), which firm shall be designated in writing by the
Agent.
C. CONTRIBUTION. In order to provide for just and equitable
contribution with respect to matters subject to subsection 9.3A, if a claim for
indemnification is made pursuant to these provisions but is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification is not available for any reason (except, with respect
to indemnification sought solely pursuant to subsection 9.3A, for the reasons
specified in the second sentence of subsection 9.3A), even though the express
provisions hereof provide for indemnification in such case, or is insufficient
to hold an Indemnified Party harmless, then the Company, on the one hand, and
the Agent, the Lenders or Bankers, on the other hand, shall contribute to such
loss, claim, damage, liability, cost or expense for which such indemnification
or reimbursement is held unavailable or is insufficient in such proportion as
is appropriate to reflect the relative benefits to the Loan Parties and their
respective Affiliates, on the one hand, and the Agent, Lenders or Bankers, on
the other hand, in connection with the transactions
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described in the Original Financing Letter, the Loan Documents and the Related
Documents, as well as any other equitable considerations. The parties agree
that for the purpose of this subsection 9.3C, the relative benefits to the Loan
Parties and their respective Affiliates, on the one hand, and the Agent,
Lenders and Bankers, on the other hand shall be deemed to be in the same
proportion as the proceeds received or to be received by the Loan Parties from
the Loan Documents bears to the fees paid or to be paid to the Agent, Lenders
and Bankers under the Loan Documents. Notwithstanding the foregoing, the
Agent, Lenders and Bankers shall not be required to contribute under this
subsection 9.3C any amount in excess of the amount of fees actually received by
the Agent, Lenders and Bankers, respectively, in respect of the Loan Documents.
The Company, Agent, Bankers and the Lenders agree that it would not be just and
equitable if contribution pursuant to this subsection 9.3C were determined by
pro rata allocation or by any other method which does not take into account the
equitable considerations referred to in this subsection 9.3C.
D. NO LIMITATION. The foregoing rights to indemnity and
contribution shall be in addition to any rights that any Indemnified Person and
Loan Parties may have at common law or otherwise and shall remain in full force
and effect following the completion or any termination of the transactions
contemplated by the Original Financing Letter, the Loan Documents and the
Related Documents. In no event shall the Agent, the Lenders, or Bankers be
responsible or liable to any person for consequential damages which may be
alleged as a result of the Original Financing Letter, the Loan Documents and
the Related Documents or any transaction contemplated thereby.
E. INDEPENDENCE OF INDEMNITY. The Company acknowledges and
agrees that the provisions of this subsection 9.3 are separate from and in
addition to the provisions contained in the Original Financing Letter and
contained in the Environmental Indemnity.
9.4 NO JOINT VENTURE OR PARTNERSHIP.
The Lenders and the Company acknowledge and agree that the
relationship created hereunder or under the other Loan Documents is that of
creditor/debtor. The Company acknowledges and agrees that (a) the Company
through its directors, officers and employees, is a knowledgeable and
sophisticated business practitioner with particular expertise and broad
experience in the area of real estate acquisition and finance; (b) the Lenders
individually and collectively, do not owe, and have expressly disclaimed, any
fiduciary or special obligation to the Company and/or any of the Company's
partners, agents, or representatives; and (c) nothing contained in this
Agreement or any other Loan Document shall affect the relationship between the
Lenders and the Company as that of creditor/debtor hereunder and under the
other Loan Documents. Nothing herein or therein is intended to create a joint
venture, partnership, tenancy-in-common, or joint tenancy relationship between
the Company, any other Loan Party or Subsidiary thereof and the Lenders nor to
grant the Agent or the Lenders any interest in the Mortgaged Property other
than that of mortgagee or lender.
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9.5 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder
or under the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify the Agent and
each other Lender of the receipt of such payment and (ii) apply a portion of
such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt
by such seller of its portion of such payment) in the Aggregate Amounts Due to
the other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided, however, that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of the Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. The Company expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by the Company to that
holder with respect thereto as fully as if that holder were owed the amount of
the participation held by that holder.
9.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by any
Loan Party therefrom, shall in any event be effective without the written
concurrence of the Agent. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by the Company, on the Company.
9.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not
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avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed, or sent by telefacsimile or courier service
and shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex; provided, however, that
notices to the Agent and the Company shall not be effective until received.
For the purposes hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or (i) as to the Company
and the Agent, such other address as shall be designated by such Person in a
written notice delivered to the other parties hereto and (ii) as to each other
party, such other address as shall be designated by such party in a written
notice delivered to the Agent.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. Except as provided in subsection 9.9B below, all
representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder and shall terminate upon
indefeasible payment in full of the Obligations and the expiration or
termination of all Commitments and Letters of Credit, notwithstanding anything
in this Agreement or implied by law to the contrary.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of the Company set forth in subsections 2.6,
2.7, 3.5A, 3.6, 5.2G (to the extent it incorporates the Environmental
Indemnity), 6.8 (to the extent it incorporates the Environmental Indemnity),
9.2, 9.3 and 9.5 shall survive the payment in full of the Obligations, the
cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
9.10 AGENT'S DISCRETION.
Whenever pursuant to this Agreement or any other Loan Document the
Agent exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to the Agent, the decision of the
Agent to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of the Agent. The Company
acknowledges and agrees that, notwithstanding anything in this Agreement to the
contrary, certain decisions to be made by the Agent under this Agreement may be
subject to or determined by the further decision by the Lenders or a percentage
of the Lenders.
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9.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.
The obligations of the Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitment of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by the Lenders pursuant hereto or thereto, shall be deemed to
constitute the Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
9.12 REMEDIES OF THE COMPANY.
In the event that a claim or adjudication is made that the Agent or
any Lender or their respective agents has acted unreasonably or unreasonably
delayed acting in any case where by law or under this Agreement, the Notes, the
Mortgages or the other Loan Documents, the Agent, such Lender or such agent, as
the case may be, has an obligation to act reasonably or promptly, the Company
agrees that none of the Agent, such Lender or such agents, shall be liable for
any monetary damages, and the Company's sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory judgement. The
parties hereto agree that any action or proceeding to determine whether the
Agent or any Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.
9.13 MARSHALLING; PAYMENTS SET ASIDE.
Neither the Agent nor any Lenders shall be under any obligation to
marshal any assets in favor of the Company, any other Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent
that the Company or any other Loan Party makes a payment or payments to the
Lenders or the Agent (or to the Agent for the benefit of the Lenders), or the
Agent or the Lenders enforce any security interests or the Agent exercises its
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause of action, then,
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor or
related thereto, shall be revived and continued in full force and effect as if
such payment or payments had not been made or such enforcement or setoff had
not occurred.
9.14 MAXIMUM AMOUNT.
A. It is the intention of the Company and the Lenders to conform
strictly to the usury and similar laws relating to interest from time to time
in force, and all agreements between the Loan Parties and their respective
Subsidiaries and the Lenders, whether now existing or hereafter arising and
whether oral or written, are hereby expressly limited so that in no contingency
or event whatsoever, whether by acceleration of maturity hereof or
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otherwise, shall the amount paid or agreed to be paid in the aggregate to the
Lenders as interest hereunder or under the other Loan Documents or in any other
security agreement given to secure the indebtedness of the Company to the
Lenders, or in any other document evidencing, securing or pertaining to the
indebtedness evidenced hereby, exceed the maximum amount permissible under
applicable usury or such other laws (the "MAXIMUM AMOUNT"). If under any
circumstances whatsoever fulfillment of any provision hereof, or any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve exceeding the Maximum Amount, then, ipso facto, the obligation to
be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest paid and/or payable hereunder in
respect of laws pertaining to usury or such other laws, all sums paid or agreed
to be paid to the holder hereof for the use, forbearance or detention of the
indebtedness of the Company evidenced hereby, outstanding from time to time
shall, to the extent permitted by Applicable Law, be amortized, pro-rated,
allocated and spread from the date of disbursement of the proceeds of the Notes
until payment in full of all of such indebtedness, so that the actual rate of
interest on account of such indebtedness is uniform through the term hereof.
The terms and provisions of this subsection shall control and supersede every
other provision of all agreements between the Company or any endorser of the
Notes and the Lenders.
B. If under any circumstances any Lender shall ever receive an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of the principal amount of the Loans and shall be treated
as a voluntary prepayment under subsection 2.4B(i) and shall be so applied in
accordance with subsection 2.4 hereof or if such excessive interest exceeds the
unpaid balance of the Loans and any other indebtedness of the Company in favor
of such Lender, the excess shall be deemed to have been a payment made by
mistake and shall be refunded to the Company.
9.15 SEVERABILITY.
In case any provision in or obligation under this Agreement or any
Note or any other Loan Document shall be invalid, illegal or unenforceable in
any jurisdiction or under any set of circumstances, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction or under any other set of
circumstances, shall not in any way be affected or impaired thereby.
9.16 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.17 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE
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STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
9.18 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Agent and the Lenders (it being
understood that the Lenders' rights of assignment are subject to subsection
9.1). Neither the Company's rights or obligations hereunder nor any interest
therein may be assigned or delegated by the Company.
9.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, THE COMPANY, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 9.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT THE AGENT RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.19
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
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ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
9.20 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY AND THEREBY. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement and
the other Loan Documents, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 9.20 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the Company and
the Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
9.22 MATERIAL INDUCEMENT.
The Company acknowledges that its representations, warranties,
covenants and agreements contained in this Agreement and the other Loan
Documents, including its covenants
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and agreements to pay Release Prices, are material inducements to the Lenders
to enter into this Agreement and to make the Loans and issue the Letters of
Credit, that the Lenders have already relied on such representations,
warranties, covenants and agreements in entering into this Agreement and
agreeing to make the Loans (notwithstanding any investigation heretofore or
hereafter made by or on behalf of the Lenders), and that the Lenders will
continue to rely on such representations, warranties, covenants and agreements
in their future dealings with the Company. The Company understands that the
Release Prices are designed to afford to the Lenders a predictable return on
their investment in the Loans, that the Release Prices will be required to be
paid by the Company in connection with all voluntary and involuntary
prepayments of the principal amount of the Loans and reductions in the
Commitments (except as specifically set forth to the contrary in subsection
2.4B), and that the payment of the Release Prices in connection with
involuntary prepayments beyond the Company's control (such as upon the
occurrence of a casualty or a Taking) will be required. The Company agrees
that its representations, warranties, covenants and agreements contained in
this Agreement and the other Loan Documents, including its covenants and
agreements to pay Release Prices, are reasonable in purpose and scope. The
Company represents and warrants that it has reviewed this Agreement and the
other Loan Documents with its legal counsel and that it knowingly and
voluntarily is entering into this Agreement and the other Loan Documents
following consultation with legal counsel.
9.23 ENTIRE AGREEMENT.
This Agreement is evidence of the indebtedness incurred pursuant
hereto and, taken together with all of the other Loan Documents and all
certificates and other documents delivered to the Agent and the Lenders
hereunder and thereunder, embodies the entire agreement and supersede all prior
agreements, written and oral, relating to the subject matter hereof.
9.24 CONFIDENTIALITY.
Each Lender and the Agent, severally and not jointly, agrees to
exercise commercially reasonable efforts to keep any non-public information
delivered or made available to such Lender or the Agent pursuant to the Loan
Documents, which any Loan Party or its authorized representative has identified
as confidential information, confidential from any Person other than Persons
employed by or retained by such Lender or the Agent who are or are expected to
become engaged in evaluating, approving, structuring or administering the
Revolving Loans, Letters of Credit and other extensions of credit or
Obligations hereunder; provided that nothing herein shall prevent any Lender or
the Agent from disclosing such information to any bona fide Eligible Assignee,
transferee or Eligible Participant that has agreed to comply with this
subsection 9.24 by execution of an agreement in the form attached hereto as
Exhibit XXI in connection with the contemplated assignment or transfer of any
Commitments, Revolving Loans, Letters of Credit or other extensions of credit
or Obligations hereunder or participation therein or as required or requested
by any Governmental Authority or representative thereof or pursuant to legal
process or in connection with the exercise of any remedy under the Loan
Documents.
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9.25 RELIANCE BY THE COMPANY.
The Company shall be entitled to rely on all written approvals and
consents received from the Agent as being that also of the Lenders, without
obtaining separate acknowledgement of same, and shall be required to deal only
with the Agent, all except as otherwise expressly provided in this Agreement or
in such approval or consent.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
WYNDHAM HOTEL CORPORATION
By:
-----------------------------------
Name:
Title:
Notice Address:
Wyndham Hotel Corporation
2001 Bryan Street, Suite 2300
Dallas, Texas 75201
Attention: __________
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244
AGENT:
BANKERS TRUST COMPANY,
as Agent
By:
-----------------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
280 Park Avenue
New York, New York 10017
Attention: __________
LENDERS:
BANKERS TRUST COMPANY,
as a Lender
By:
-----------------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
280 Park Avenue
New York, New York 10017
Attention: __________
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