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EXHIBIT 10.14
U.S. $1,100,000,000
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 1, 1998
Among
FELCOR SUITE HOTELS, INC.
and FELCOR SUITES LIMITED PARTNERSHIP
as Borrower
-- --------
and
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK
as Administrative Agent
-- -------------- -----
CHASE SECURITIES INC.
as Arranger
BANKERS TRUST COMPANY
NATIONSBANK, N.A.
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Co-Arrangers & Documentation Agents
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.................................................................................. 2
1.1. Defined Terms................................................................................. 2
1.2. Computation of Time Periods................................................................... 37
1.3. Accounting Terms.............................................................................. 37
1.4. Certain Terms................................................................................. 37
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT.............................................................. 38
2.1. The Revolving Credit Loans.................................................................... 38
2.2. The Term Loans................................................................................ 38
2.3. Making the Loans.............................................................................. 38
2.4. Fees.......................................................................................... 41
2.5. Reduction and Termination of the Commitments.................................................. 42
2.6. Repayment..................................................................................... 42
2.7. Prepayments................................................................................... 42
2.8. Conversion/Continuation Option................................................................ 44
2.9. Interest...................................................................................... 45
2.10. Interest Rate Determination and Protection.................................................... 45
2.11. Increased Costs............................................................................... 46
2.12. Illegality.................................................................................... 47
2.13. Capital Adequacy.............................................................................. 47
2.14. Payments and Computations..................................................................... 47
2.15. Taxes......................................................................................... 50
2.16. Sharing of Payments, Etc...................................................................... 52
2.17. Swing Advances................................................................................ 52
2.18. Letter of Credit.............................................................................. 54
2.19 Letter of Credit Requests..................................................................... 55
2.20 Letter of Credit Participations............................................................... 56
2.21 Agreement to Repay Letter of Credit Drawings.................................................. 58
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ARTICLE III
CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT AND OF LENDING
AND OF ISSUANCE OF LETTERS OF CREDIT.............................................................................. 59
3.1. Conditions Precedent to Effectiveness of this
Agreement, to Initial Loans and Letters of Credit............................................. 59
3.2. Additional Conditions Precedent to Effectiveness
of this Agreement, to Initial Loans and Letters
of Credit..................................................................................... 61
3.3. Conditions Precedent to Each Loan and
Letter of Credit.............................................................................. 62
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................................................... 63
4.1. Existence; Compliance with Law................................................................ 63
4.2. Power; Authorization; Enforceable Obligations................................................. 63
4.3. Taxes......................................................................................... 65
4.4. Full Disclosure............................................................................... 65
4.5. Financial Matters............................................................................. 65
4.6. Litigation.................................................................................... 66
4.7. Margin Regulations............................................................................ 66
4.8. Ownership of Borrower and DJONT; Subsidiaries................................................. 67
4.9. ERISA......................................................................................... 68
4.10. Indebtedness.................................................................................. 68
4.11. Restricted Payments........................................................................... 69
4.12. No Burdensome Restrictions; No Defaults....................................................... 69
4.13. Investments. ................................................................................. 69
4.14. Government Regulation......................................................................... 69
4.15. Insurance..................................................................................... 70
4.16. Labor Matters................................................................................. 70
4.17. Force Majeure................................................................................. 71
4.18. Use of Proceeds............................................................................... 71
4.19. Environmental Protection...................................................................... 71
4.20. Contractual Obligations Concerning Assets..................................................... 73
4.21. Intellectual Property......................................................................... 73
4.22. Title......................................................................................... 74
4.23. Status as REIT................................................................................ 76
4.24. Operator: Compliance with Law................................................................. 76
4.25. Operating Leases, Licenses and Management Agreement........................................... 76
4.26. FF&E Reserves................................................................................. 77
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ARTICLE V
FINANCIAL COVENANTS............................................................................................... 77
5.1. Unsecured Interest Expense Coverage........................................................... 78
5.2. Fixed Charge Coverage Ratio................................................................... 78
5.3. Maintenance of Tangible Net Worth............................................................. 78
5.4. Limitations on Total Indebtedness............................................................. 78
5.5. Limitations on Total Secured Indebtedness..................................................... 78
5.6. Adjusted NOI and Hotels....................................................................... 78
5.7. Limitations on Recourse Secured Indebtedness.................................................. 79
ARTICLE VI
AFFIRMATIVE COVENANTS............................................................................................. 79
6.1. Compliance with Laws, Etc..................................................................... 79
6.2. Conduct of Business........................................................................... 79
6.3. Payment of Taxes, Etc......................................................................... 80
6.4. Maintenance of Insurance...................................................................... 80
6.5. Preservation of Existence, Etc................................................................ 80
6.6. Access........................................................................................ 80
6.7. Keeping of Books.............................................................................. 81
6.8. Maintenance of Properties, Etc................................................................ 81
6.9. Performance and Compliance with Other Covenants............................................... 81
6.10. Application of Proceeds....................................................................... 81
6.11. Financial Statements.......................................................................... 81
6.12. Reporting Requirements........................................................................ 83
6.13. Leases and Operating Leases; Management Agreements
and Licenses.................................................................................. 86
6.14. Intentionally Omitted......................................................................... 87
6.15. Employee Plans................................................................................ 87
6.16. Intentionally Omitted......................................................................... 87
6.17. Fiscal Year................................................................................... 87
6.18. Environmental Matters......................................................................... 87
6.19. REIT Requirements............................................................................. 88
6.20. Maintenance of FF&E Reserves.................................................................. 88
6.21. INTENTIONALLY DELETED......................................................................... 88
6.22. Further Assurances............................................................................ 88
6.23. Unencumbered Hotel Properties/Financial Covenant Imbalance.................................... 88
6.24. Hotel Documents............................................................................... 89
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ARTICLE VII
NEGATIVE COVENANTS................................................................................................ 89
7.1. Restrictions on Creation of Subsidiaries...................................................... 89
7.2. Operation/Ownership of Hotels................................................................. 89
7.3. Lease Obligations............................................................................. 89
7.4. Restricted Payments........................................................................... 90
7.5. Mergers, Stock Issuances, Asset Sales, Etc.................................................... 90
7.6. Restrictions on Construction/Budget Hotels.................................................... 91
7.7. Change in Nature of Business or in Capital Structure.......................................... 91
7.8. Modification of Material Agreements........................................................... 92
7.9. Accounting Changes............................................................................ 92
7.10. Transactions with Affiliates.................................................................. 92
7.11. Adverse or Speculative Transactions........................................................... 92
7.12. Environmental Matters......................................................................... 92
7.13. Joint Enterprises............................................................................. 93
7.14. Intentionally Omitted......................................................................... 93
7.15. ERISA Plan Assets............................................................................. 93
ARTICLE VIII
EVENTS OF DEFAULT................................................................................................. 94
8.1. Events of Default............................................................................. 94
8.2. Remedies...................................................................................... 96
ARTICLE IX
THE ADMINISTRATIVE AGENT.......................................................................................... 97
9.1. Authorization and Action...................................................................... 97
9.2. Administrative Agent's Reliance, Etc.......................................................... 98
9.3. Chase and Affiliates.......................................................................... 99
9.4. Lender Credit Decision........................................................................ 99
9.5. Indemnification............................................................................... 99
9.6. Successor Agent...............................................................................100
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ARTICLE X
MISCELLANEOUS.....................................................................................................101
10.1. Amendments, Etc...............................................................................101
10.2. Notices, Etc..................................................................................102
10.3. No Waiver; Remedies...........................................................................103
10.4. Costs; Expenses; Indemnities..................................................................103
10.5. Right of Set-off..............................................................................105
10.6. Binding Effect................................................................................105
10.7. Assignments and Participations................................................................105
10.8. Governing Law; Severability...................................................................109
10.9. Submission to Jurisdiction; Service of Process................................................109
10.10. Section Titles................................................................................109
10.11. Execution in Counterparts.....................................................................110
10.12. Entire Agreement..............................................................................110
10.13. Confidentiality...............................................................................110
10.14. WAIVER OF JURY TRIAL..........................................................................110
10.15. Joint and Several Obligations.................................................................110
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SCHEDULES
Schedule I - Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule III - Operating Lessees
Schedule IV - Permitted Transferees
Schedule 4.8 - Subsidiaries and Unconsolidated Entities
Schedule 4.10 - Existing Indebtedness
Schedule 4.13 - Existing Investments
Schedule 4.19 - Environmental Protection
Schedule 4.22(a) - Owned Real Estate
Schedule 4.22(b) - Leased Real Estate
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EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or Continuation
Exhibit D - Form(s) of Opinion(s) of Counsel for the Loan Parties
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Intentionally Deleted
Exhibit G - Form of Compliance Certificate
Exhibit H - Form of Operating Lease
Exhibit I - Form of Subsidiary Guaranty
Exhibit J - INTENTIONALLY DELETED
Exhibit K - Form of Letter of Credit Request
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 1, 1998,
among FELCOR SUITE HOTELS, INC., a Maryland corporation ("FelCor") and FELCOR
SUITES LIMITED PARTNERSHIP, a Delaware limited partnership ("FelCor LP" and
collectively with FelCor, the "Borrower"), the financial institutions listed on
the signature pages hereof (each individually a "Lender" and collectively the
"Lenders") and THE CHASE MANHATTAN BANK ("Chase"), as administrative agent for
the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Revolving Credit Agreement dated as
of September 30, 1996, among the Borrower, the financial institutions listed on
the signature page thereof, the Administrative Agent and Wells Fargo Bank,
National Association ("Wells Fargo") as documentation agent (the "Original
Revolving Credit Agreement"), the Original Lenders agreed to make to the
Borrower revolving credit advances of up to $250,000,000 (the "Previous Maximum
Revolving Credit Amount") in aggregate principal amount outstanding at any one
time, for the purposes and upon the terms and subject to the conditions set
forth therein;
WHEREAS, pursuant to that certain Amended and Restated Revolving Credit
Agreement dated as of October 18, 1996, among the Borrower, the Lenders, the
Administrative Agent and Wells Fargo as documentation agent (the "Amended
Revolving Credit Agreement") the terms and provisions of the Original Revolving
Credit Agreement were amended and restated as more particularly set forth
therein;
WHEREAS, pursuant to that certain Second Amended and Restated Revolving
Credit Agreement dated as of March 10, 1997, among the Borrower, the Lenders,
the Administrative Agent and Wells Fargo as documentation agent (the "Second
Amended Revolving Credit Agreement") the terms and provisions of the Amended
Revolving Credit Agreement were amended and restated as more particularly set
forth therein;
WHEREAS, pursuant to that certain Third Amended and Restated Revolving
Credit Agreement dated as of August 14, 1997, among the Borrower, the Lenders,
the Administrative Agent and Wells Fargo as documentation agent (the "Third
Amended Revolving Credit Agreement") the terms and provisions of the
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Second Amended Revolving Credit Agreement were amended and restated as more
particularly set forth therein;
WHEREAS, as of the date hereof, Revolving Credit Loans (hereinafter
defined) in the aggregate principal amount of $453,000,000.00 have been advanced
to the Borrower pursuant to the terms of the Third Amended Revolving Credit
Agreement; and
WHEREAS, the Borrower has requested, and the Lenders have agreed, to
(x) increase the Previous Maximum Revolving Credit Amount, (y) make the Term
Loans and (z) amend certain terms and provisions of the Third Amended Revolving
Credit Agreement and to restate the same as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree that the
aforementioned recitals are true and correct and hereby incorporated herein and
that the Third Amended Revolving Credit Agreement is hereby amended and restated
in its entirety so that all of the terms and conditions contained in this
Agreement shall supersede and control the terms and conditions of the Third
Amended Revolving Credit Agreement.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following terms have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adjusted EBITDA" means, for any Person for any period, EBITDA of such
Person for such period less the FF&E Reserve for such Person.
"Adjusted Funds From Operations" means, for any Person, for any period,
Net Income (Loss) of such Person for such period plus (a) the sum of the
following amounts of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP to the extent included in the
determination of such Net Income (Loss): (i) depreciation expense, (ii)
amortization expense and other non-cash charges of such Person and its
Subsidiaries with respect to their real estate assets for such period, (iii)
losses from Asset Sales of such Person and its Subsidiaries, losses resulting
from restructuring of Indebtedness of such Person
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and its Subsidiaries and other extraordinary losses, and (iv) minority interests
attributable to FelCor LP's partnership units; less (b) the sum of the following
amounts of such Person and its Subsidiaries for such period determined on a
consolidated basis in conformity with GAAP to the extent included in the
determination of such Net Income (Loss): (i) gains from Asset Sales of such
Person and its Subsidiaries, gains resulting from restructuring of Indebtedness
of such Person and its Subsidiaries and other extraordinary gains, and (ii) the
applicable share of Net Income (Loss) of such Person's Unconsolidated Entities;
plus (c) such Person's Pro Rata Share of Adjusted Funds From Operations of such
Person's Unconsolidated Entities.
"Adjusted NOI" means, with respect to any Hotel owned or leased by the
Borrower or any of its Subsidiaries, Eligible Joint Ventures or Unconsolidated
Entities, for any period, the Net Operating Income for such Hotel for such
period less the FF&E Reserve for such Hotel for such period.
"Affiliate" means, to any Person, any Subsidiary of such Person and any
other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person and includes each executive officer,
director, trustee, limited liability company manager or general partner of such
Person, and each Person who is the beneficial owner of 10% or more of any class
of voting Stock of such Person. For the purposes of this definition, "control"
means the possession of the power to direct or cause the direction of management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means the Third Amended Revolving Credit Agreement,
together with all Exhibits and Schedules thereto, as amended and restated by
this Fourth Amended and Restated Credit Agreement, together with all Exhibits
and Schedules hereto and as the same may be further amended, supplemented or
otherwise modified from time to time.
"Allerton Hotel" shall mean that certain Hotel located in Chicago
Illinois and commonly known as the Allerton Hotel.
"Alternative Currency Contract" means a currency swap agreement,
currency cap agreement, currency collar agreement or forward currency agreement
entered into to provide protection against fluctuations in an Alternative
Currency.
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"Alternative Currency" means any lawful currency of a country where a
Hotel is located, other than Dollars, which is freely transferable and
convertible into Dollars.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, with respect to each Loan, the applicable
percentage per annum set forth below based upon (i) with respect to Level I
through IV Status, the Status then in effect and (ii) with respect to Level V
through VIII Status, the Status in effect on the most recent Applicable Margin
Reset Date, it being understood that the Applicable Margin for (i) Base Rate
Loans shall be the percentage set forth under the column "Base Rate Loans", (ii)
Eurodollar Rate Loans shall be the percentage set forth under the column
"Eurodollar Rate Loans", and (iii) the Commitment Fee shall be the percentage
set forth under the column "Commitment Fee":
Base Rate Eurodollar Rate Commitment
Loans Loans Fee
--------- ----------- -----------
Level I Status 0% .875% 0.125%
Level II Status 0% 1.00% 0.15%
Level III Status 0% 1.125% 0.15%
Level IV Status 0% 1.25% 0.20%
Level V Status 0% 1.375% 0.20%
Level VI Status 0% 1.5% 0.20%
Level VII Status 0.125% 1.625% 0.25%
Level VIII 0.25% 1.75% 0.30%
"Applicable Margin Reset Date" shall mean the 45th day following the
end of the most recent Fiscal Quarter.
"Asset Sale" means any sale, conveyance, transfer, assignment, lease or
other disposition (including, without limitation, by merger or consolidation,
and by condemnation, eminent domain, loss, damage, or destruction, and whether
by operation of law or otherwise) by the Borrower or any of its Subsidiaries to
any
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Person (other than to Borrower or any of its Subsidiaries) of any Stock of any
of its Subsidiaries, any Stock Equivalents of any of its Subsidiaries or any
Hotel, but excluding Operating Leases.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit E.
"Available Credit" means, at any time, an amount equal to the then
effective Revolving Credit Commitments of the Lenders less the sum of (x) the
aggregate of the outstanding principal amount of the Revolving Credit Loans at
such time and (y) the Letter of Credit Outstandings.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the higher of:
(a) the rate of interest announced publicly by Chase at its principal
office, from time to time, as Chase's base rate; and
(b) the sum (adjusted to the nearest 1/8 of one percent or, if there is no
nearest 1/8 of one percent, to the next higher 1/8 of one percent) of (i) 1/2 of
one percent per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the Loans of
any Lender that bears interest with reference to the Base Rate, other than Swing
Advances.
"Borrower's Investment" means, with respect to any Hotel, the
Borrower's or any of its Subsidiaries' investment in such Hotel (including all
investments constituting, evidencing or secured by an interest in property,
whether tangible or intangible and whether real, personal or mixed, that is used
or intended for use in, or in any manner connected with or relating to, the
ownership or leasing of such Hotel, specifically including, without limitation,
investments in Subsidiaries and Unconsolidated Entities owning or leasing
Hotels), at cost, on a consolidated basis, provided that in determining the cost
of such investments, there shall be included (i) the amount of all cash paid and
the value (as determined by the Board of Directors of FelCor for purposes of
such investment) of any other property transferred therefor by the Borrower or
its Subsidiary, (ii) the amount of all indebtedness and other obligations
assumed or incurred by the Borrower or its
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Subsidiary or to which the Borrower or its Subsidiary takes subject, and (iii)
the value (as determined by the Board of Directors of FelCor for the purposes of
such investment) of all equity securities of which the issuer is an entity that
is, or upon such investment will be, included within the Borrower or its
Subsidiary and which are issued (otherwise than for cash) to, or retained by,
any person other than the Borrower or its Subsidiary in connection with such
investment. For purposes of this definition only "indebtedness" of the Borrower
or its Subsidiary shall mean the consolidated liabilities of the Borrower and
its Subsidiaries for borrowed money (including all notes payable and drafts
accepted representing extensions of credit) and all obligations evidenced by
bonds, debentures, notes or other similar instruments on which interest charges
are customarily paid, including obligations under Capitalized Leases.
"Borrowing" means a borrowing consisting of Loans made on the same day
by the Lenders ratably according to their respective Commitments.
"Bristol" shall mean Bristol Hotel Company, a Delaware corporation.
"Bristol Distribution" shall mean Borrower's one time earnings and
profits dividend associated with the Bristol Merger.
"Bristol Effective Date" shall be the date on which the Bristol Merger
occurs, provided, however, if the Bristol Merger occurs after August 15, 1998
the Bristol Effective Date shall be deemed not to have occurred.
"Bristol Merger" shall mean the merger between Borrower and Bristol,
provided, such merger is consummated on terms substantially similar to those set
forth in that certain Merger Agreement dated as of March 23, 1998, as in effect
on the date hereof.
"Bristol Merger Date" shall be the date on which the Bristol Merger is
duly consummated.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and California and, if the applicable
Business Day relates to a Eurodollar Rate Loan, a day on which dealings are also
carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries, except
interest
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capitalized during construction, during such period for property, plant or
equipment, including, without limitation, renewals, improvements, replacements
and capitalized repairs, that would be reflected as additions to property, plant
or equipment on a consolidated balance sheet of such Person and its Subsidiaries
prepared in conformity with GAAP. For the purpose of this definition, the
purchase price of equipment which is acquired simultaneously with the trade-in
of existing equipment owned by such Person or any of its Subsidiaries or with
insurance proceeds shall be included in Capital Expenditures only to the extent
of the gross amount of such purchase price less the credit granted by the seller
of such equipment being traded in at such time or the amount of such proceeds,
as the case may be.
"Capitalized Lease" means, as to any Person, any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Cash" shall mean coin or currency of the United States of America or
immediately available federal funds.
"Cash Equivalents" means (i) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States government or any agency thereof, (ii) certificates of deposit,
eurodollar time deposits, overnight bank deposits and bankers' acceptances of
any commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $5,000,000,000 having maturities
of one year or less from the date of acquisition, and (iii) commercial paper of
an issuer rated at least "A-1" by S&P or "P-1" by Moody's, or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments.
"Closing Date" means July 1, 1998.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Commitment" means, as to any Lender, such Lender's Revolving Credit
Commitment and/or Term Loan Commitment and "Commitments" means the
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aggregate Revolving Credit Commitments and Term Loan Commitments of all Lenders.
"Commitment Fee" has the meaning specified in Section 2.4(a).
"Compliance Certificate" shall have the meaning set forth in Section
3.1(j) hereof.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness or Contractual Obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or Contractual Obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or Contractual Obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations of a Person include,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an obligation
of another Person (including, in the case of any Guarantor, its obligations
under its Subsidiary Guaranty), and (b) any liability of such Person for an
obligation of another Person through any agreement (contingent or otherwise) (i)
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 a loan, advance, stock purchase, capital contribution or
otherwise), (ii) to maintain the solvency or any balance sheet item, level of
income or financial condition of another Person, (iii) to make take-or-pay or
similar payments, if required, regardless of non-performance by any other party
or parties to an agreement, (iv) to purchase, sell or lease (as lessor or
lessee) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such obligation or to assure the holder
of such obligation against loss, or (v) to supply funds to or in any other
manner invest in such other Person (including, without limitation, to pay for
property or services irrespective of whether such property is received or such
services are rendered), if in the case of any agreement described under
subclause (i), (ii), (iii), (iv) or (v) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. Anything herein to the
contrary notwithstanding, no agreement entered into by the Borrower or any of
its Subsidiaries or Unconsolidated Entities with respect to its acquisition of
any direct or indirect interest in any Hotel shall, prior to the satisfaction in
full of all conditions precedent to the obligations of such Person pursuant to
the agreement, be deemed or construed
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to constitute a "Contingent Obligation" or "Indebtedness" of such Person
hereunder, provided that pursuant to any such agreement, the Borrower or its
Subsidiary or Unconsolidated Entity is not liable or responsible for, and does
not assume any, development or construction risks. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported.
"Contractual Obligation" of any Person means any obligation, agreement,
undertaking or similar provision of any security issued by such Person or of any
agreement (including, without limitation, any management or franchise
agreement), undertaking, contract, lease, indenture, mortgage, deed of trust or
other instrument (excluding a Loan Document) to which such Person is a party or
by which it or any of its property is bound or to which any of its properties is
subject.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"DJONT" means DJONT Operations, L.L.C., a Delaware limited liability
company.
"DOL" means the United States Department of Labor, or any successor
thereto.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule II or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Drawing" shall have the meaning provided in Section 2.21(a).
"EBITDA" means, for any Person for any period, the Net Income (Loss) of
such Person for such period taken as a single accounting period, plus (a) the
sum of the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense and other non-cash charges, (iii) interest
expense, (iv) income tax expense, (v) extraordinary losses (and other losses on
Asset Sales not otherwise included in extraordinary losses determined on a
consolidated basis in
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conformity with GAAP), and (vi) minority interests attributable to FelCor LP's
partnership units, less (b) the sum of the following amounts of such Person and
its Subsidiaries determined on a consolidated basis in conformity with GAAP to
the extent included in the determination of such Net Income (Loss): (i)
extraordinary gains (and in the case of the Borrower, other gains on Asset Sales
not otherwise included in extraordinary gains determined on a consolidated basis
in conformity with GAAP), (ii) the applicable share of Net Income (Loss) of such
Person's Unconsolidated Entities, (iii) cash payments made with respect to any
non-cash charge which was added back to Net Operating Income to determine EBITDA
for any prior period; plus (c) such Person's Pro Rata Share of EBITDA of such
Person's Unconsolidated Entities.
"Effective Date" has the meaning specified in Section 3.1.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $5,000,000,000; (ii) a commercial bank organized under the laws of any
other country which is a member of the OECD, or a political subdivision of any
such country, and having total assets in excess of $5,000,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD or the
Cayman Islands; (iii) the central bank of any country which is a member of the
OECD; corporation organized under the laws of the United States, or any State
thereof, and having total assets in excess of $3,000,000,000; (iv) a mutual fund
or an insurance company organized under the laws of the United States, or any
State thereof, in each case having total assets in excess of $5,000,000,000; (v)
any Lender; (vi) any Affiliate of any Lender; (vii) any Person other than an
Affiliate of a Loan Party; and (viii) only with respect to any Lender that is a
fund that invests in bank loans, any other fund or trust entity that invests in
bank loans and is advised by or managed by the same investment advisor as such
Lender or by an Affiliate of such investment advisor, in each case ((i) through
(viii) above) acceptable (a) to the Administrative Agent, and (b) provided no
Default or Event of Default exists, to the Borrower, which acceptance will not
be unreasonably withheld, conditioned or delayed.
"Eligible Entity" shall mean any Eligible Joint Venture in which the
Borrower owns, directly or indirectly, at least a 90% equity interest and the
remainder of such equity interest is owned by either (i) Promus, (ii) Sheraton
or (iii) New Bristol, provided, however, such Eligible Joint Venture shall only
be an Eligible Entity if (i) Borrower (x) is the sole general partner (or
equivalent) in such Eligible Joint Venture or (y) owns directly or indirectly at
least 90% of the Stock of the sole
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general partner (or equivalent) in such Eligible Joint Venture and all other
Stock of such sole general partner (or equivalent) which is not owned by
Borrower is owned by either Promus, Sheraton or New Bristol, (ii) such sole
general partner (or equivalent) is the only Person who can unilaterally
authorize the sale or encumbrance of the assets of such Eligible Joint Venture
(iii) Borrower alone controls the sole general partner (or equivalent) and (iv)
such Eligible Joint Venture has no debt other than unsecured trade debt incurred
in the ordinary course of business. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person (including without limitation the power
to authorize the sale or encumbrance of the assets of such Person), whether
through the ownership of voting securities, by contract or otherwise.
"Eligible Joint Venture" means any joint venture, corporation,
partnership or other business entity in which the Borrower (i) owns directly or
indirectly a JV% of at least 50% and (ii) is (or owns directly or indirectly a
majority of the voting Stock of and controls) the managing general partner or
equivalent thereof for such entity and (iii) Borrower alone controls such
managing general partner or equivalent. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person (including without limitation the power
to authorize the sale or encumbrance of the assets of such Person), whether
through the ownership of voting securities, by contract or otherwise.
"Environmental Claim" means any accusation, allegation, notice of
violation, action, claim, Environmental Lien, demand, abatement or other Order
or direction (conditional or otherwise) by any Governmental Authority or any
other Person for personal injury (including sickness, disease or death),
tangible or intangible property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or for
fines, penalties or restriction, resulting from or based upon (i) the existence,
or the continuation of the existence, of a Release (including, without
limitation, sudden or non-sudden accidental or non-accidental Releases) of, or
exposure to, any Hazardous Material or other nuisance (to the extent the same
relates to any Hazardous Materials), or other Release in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures or any activities
or operations thereof; (ii) the environmental aspects of the transportation,
storage, treatment or disposal of Hazardous Materials in connection with any
property owned or leased by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures or their operations or facilities; or (iii) the violation, or
alleged violation, of any
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Environmental Laws, Orders or Environmental Permits of or from any Governmental
Authority relating to environmental matters connected with any property owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint Ventures.
"Environmental Laws" means any applicable federal, state, local or
foreign law (including common law), statute, code, ordinance, rule, regulation
or other requirement having the force or effect of law relating to the
environment, natural resources, or public or employee health and safety and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. ss. 136 et seq., the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901 et seq., the
Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., the Clean Air Act, 42
U.S.C. ss. 7401 et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq. (to the extent the
same relates to any Hazardous Materials), and the Oil Pollution Act of 1990, 33
U.S.C. ss. 2701 et seq., as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous state and local
statutes.
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all reasonable fees, disbursements and expenses
of counsel, experts and consultants and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of any
claim or demand by any other Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute, including,
without limitation, any thereof arising under any Environmental Law,
Environmental Permit, order or agreement with any Governmental Authority or
other Person, and which relate to any environmental, health or safety condition,
or a Release or threatened Release, and result from the past, present or future
operations of, or ownership of property by, such Person or any of its
Subsidiaries or Eligible Joint Ventures.
"Environmental Lien" means any Lien in favor of any Governmental
Authority arising under any Environmental Law.
"Environmental Permit" means any Permit required under any applicable
Environmental Laws or Order and all supporting documents associated therewith.
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"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with any Loan
Party within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (i) an event described in Sections 4043(c)(1), (2),
(3), (5), (6), (8) or (9) of ERISA with respect to a Pension Plan; (ii) the
withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (iii) the complete or
partial withdrawal of any Loan Party or any ERISA Affiliate from any
Multiemployer Plan or the insolvency of any Multiemployer Plan; (iv) the filing
of a notice of intent to terminate a Pension Plan or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (v) the institution of
proceedings by the PBGC to terminate or appoint a trustee to administer a
Pension Plan or Multiemployer Plan; (vi) the failure to make any required
contribution to a Pension Plan; (vii) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; (viii) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA; (ix) a prohibited transaction (as described in Code Section 4975 or ERISA
Section 406) shall occur with respect to any Plan; or (x) any Loan Party or
ERISA Affiliate shall request a minimum funding waiver from the IRS with respect
to any Pension Plan.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by multiplying (a) a rate per annum
equal to the rate for U.S. dollar deposits with maturities comparable to such
Interest Period which appears on Telerate Page 3750 as of 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period,
provided, however, that if such rate does not appear on Telerate Page 3750, the
"Eurodollar Rate" applicable to a particular Interest Period shall mean a rate
per annum equal to
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the rate at which U.S. dollar deposits in an amount approximately equal to the
Principal Balance (or the portion thereof which will bear interest at a rate
determined by reference to the Eurodollar Rate during the Interest Period to
which such Eurodollar Rate is applicable in accordance with the provisions
hereof), and with maturities comparable to the last day of the Interest Period
with respect to which such Eurodollar Rate is applicable, are offered in
immediately available funds in the London Interbank Market to the London office
of Chase by leading banks in the Eurodollar market at 11:00 a.m., London time,
two (2) Business Days prior to the commencement of the Interest Period to which
such Eurodollar Rate is applicable, by (b) a fraction (expressed as a decimal)
the numerator of which shall be the number one and the denominator of which
shall be the number one minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period means the
aggregate reserve percentages (expressed as a decimal) from time to time
established by the Board of Governors of the Federal Reserve System of the
United States and any other banking authority to which any of the Lenders are
now or hereafter subject, including, but not limited to any reserve on
Eurocurrency Liabilities as defined in Regulation D of the Board of Governors of
the Federal Reserve System of the United States at the ratios provided in such
Regulation from time to time, it being agreed that any portion of the Principal
Balance bearing interest at a rate determined by reference to the Eurodollar
Rate shall be deemed to constitute Eurocurrency Liabilities, as defined by such
Regulation, and it being further agreed that such Eurocurrency Liabilities shall
be deemed to be subject to such reserve requirements without benefit of or
credit for prorations, exceptions or offsets that may be available to any of the
Lenders from time to time under such Regulation and irrespective of whether such
Lender actually maintains all or any portion of such reserve.
"Existing Guarantors" means (i) FelCor/CSS Hotels, L.L.C., a Delaware
limited liability company, (ii) FelCor/LAX Hotels, L.L.C., a Delaware limited
liability company, (iii) FelCor/CSS Holdings, L.P., a Delaware limited
partnership, (iv) FelCor/St. Paul Holdings, L.P., a Delaware limited
partnership, (v) FelCor/LAX Holdings, L.P., a Delaware limited partnership and
(vi) FelCor Eight Hotels L.L.C., a Delaware limited liability company.
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"Existing Subsidiary Guaranty" means each Subsidiary Guaranty dated as
of September 30, 1996 and executed by each Existing Guarantor in favor of the
Lenders, as reaffirmed and ratified pursuant to that certain Reaffirmation and
Ratification of Subsidiary Guaranties dated as of the Effective Date and
executed by the Existing Guarantors in favor of the Lenders.
"Event of Default" has the meaning specified in Section 8.1.
"Facing Fee" shall have the meaning provided in Section 2.4(c).
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FF&E Reserve" means, for any Person and its Subsidiaries determined on
a consolidated basis in accordance with GAAP (or with respect to any Hotel) for
any period, a reserve equal to four percent (4%) of Room Revenues from any Hotel
owned by such Person or its Subsidiary (or from such Hotel), for such Period
(unless such Person is contractually obligated to reserve a greater percentage
of Room Revenues, in which case such Person shall be required to reserve such
greater amount with respect to such Hotel), plus, for any Person, such Person's
Pro Rata Share of any FF&E Reserve for any Hotel owned by such Person's
Unconsolidated Entities.
"Financial Covenant Imbalance" shall have the meaning set forth in
Section 2.7(c).
"Final Maturity Date" means June 30, 2001.
"Fiscal Quarter" means each of the three month periods ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
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"Fixed Charges" means, for any Person for any period, (a) Gross
Interest Expense for such period plus (b) the aggregate amount of scheduled
principal payments on the Total Indebtedness of such Person (excluding optional
prepayments and scheduled principal payments in respect of any such Total
Indebtedness which is payable in a single installment at final maturity)
required to be made during such period plus (c) dividends required to be paid by
such Person (and its Subsidiaries determined on a consolidated basis in
conformity with GAAP) in connection with preferred Stock issued by such Person
(including such Person's Pro Rata Share of such dividends required to be paid by
such Person's Unconsolidated Entities.)
"Free Cash Flow" means, for any Person for any period, the Adjusted
Funds From Operations for such period less (a) the aggregate FF&E Reserve for
such Person and its Subsidiaries for such period, and (b) the aggregate amount
of scheduled principal payments on the Total Indebtedness of such Person
(excluding optional prepayments and scheduled principal payments in respect of
any such Indebtedness which is payable in a single installment at final
maturity) required to be made during such period.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Articles V and VII, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements referred to in Section 4.5.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity duly exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Gross Interest Expense" means, for any Person for any period, the sum
of (a) the total interest expense in respect of all Indebtedness (excluding all
Contingent Obligations) of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP, plus capitalized
interest of such Person and its Subsidiaries, plus (b) such Person's Pro Rata
Share of Gross Interest Expense of such Person's Unconsolidated Entities.
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"Guarantor" means the Existing Guarantors and each direct and indirect
wholly owned Subsidiary of the Borrower formed or acquired after the date
hereof, provided however, a wholly owned Subsidiary of the Borrower which is
formed or acquired after the date hereof shall only be required to be a
Guarantor if such Subsidiary is a Required Guarantor.
"Hazardous Material" means any substance, material or waste which is
regulated by any Governmental Authority of the United States as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous
waste," "restricted hazardous waste," "contaminant," "toxic waste," "toxic
substance" or words of similar meaning or import under any provision of
Environmental Law, which includes, but is not limited to, petroleum, petroleum
products, asbestos, urea formaldehyde and polychlorinated biphenyls.
"Hotel" means any Real Estate or Lease comprising an operating facility
offering hotel or other lodging services.
"Hotel Documents" means, with respect to any Hotel, the following
documents:
(i) A description of such Hotel, such description to include the
age, location and number of rooms or suites of such Hotel;
(ii) Details of the Borrower's Investment in such Hotel and, if
available (or able to be reasonably obtained), details of the Adjusted
NOI of such Hotel for the prior four (4) Fiscal Quarters;
(iii) A copy of the most recent ALTA Owner's Policy of Title
Insurance (or commitment to issue such a policy to the Person owning or
to own such Hotel) relating to such Hotel showing the identity of the
fee titleholder thereto and all matters of record as of its date;
(iv) Copies of each of the Operating Lease, Management Agreement
and License relating to such Hotel;
(v) Copies of all engineering, mechanical, structural and
maintenance studies performed by third party consultants with respect
to such Hotel;
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(vi) A "Phase I" environmental assessment of such Hotel prepared
by an environmental engineering firm acceptable to the Administrative
Agent, and any additional environmental studies or assessments
available to the Borrower performed with respect to such Hotel;
(vii) If such Hotel is owned pursuant to a Qualified Lease, a
copy of such Lease together with all and any amendments thereto or
modifications thereof; and
(viii)Such other information as the Administrative Agent may
reasonably request in order to evaluate the Hotel.
"Improvements" has the meaning specified in Section 4.22(c).
"Indebtedness" of any Person means, without duplication, the principal
amount of (i) all indebtedness of such Person for borrowed money (including,
without limitation, reimbursement and all other obligations with respect to
surety bonds, letters of credit and bankers' acceptances, whether or not
matured) or for the deferred purchase price of property or services, (ii) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments (including, in the case of the Borrower, the Loans outstanding),
(iii) all indebtedness of such Person created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (iv) all Capitalized Lease Obligations of such Person, (v) all
Contingent Obligations of such Person, (vi) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value (other than for
other equity securities) any Stock or Stock Equivalents of such Person, valued,
in the case of mandatorily redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all Indebtedness referred to in clause (i), (ii), (iii), (iv),
(v) or (vi) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including, without limitation, accounts and general intangibles)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness, and (viii) all liabilities of such Person
under Title IV of ERISA.
"Indemnitees" has the meaning specified in Section 10.4.
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"Interest Period" means, (a) in the case of any Eurodollar Rate Loan,
(i) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three, six, nine (to the extent available) or twelve
(to the extent available) months thereafter, as selected by the Borrower in its
Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.3 or 2.8, and (ii) thereafter, if
such Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant
to Section 2.8, a period commencing on the last day of the immediately preceding
Interest Period therefor and ending one, two, three, six, nine (to the extent
available) or twelve (to the extent available) months thereafter, as selected by
the Borrower in its Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.8; provided, however, that:
(A) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be
to extend such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(B) 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 end on the last Business Day of a calendar month;
(C) the Borrower may not select any Interest Period which ends
after the Final Maturity Date;
(D) Intentionally Omitted.
(E) the Borrower may not select any Interest Period in respect of
Loans having an aggregate principal amount of less than $5,000,000; and
(F) there shall be outstanding at any one time no more than
fifteen (15) Interest Periods in the aggregate.
"Interest Rate Contracts" means interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, interest rate insurance,
and other agreements or arrangements designed to provide protection against
fluctuations in interest rates.
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"Investment" means, with respect to any Person, (a) any loan or advance
to any other Person, (b) the ownership, purchase or other acquisition of, any
Stock, Stock Equivalents, other equity interest, obligations or other securities
of, (i) any other Person, (ii) all or substantially all of the assets of any
other Person, or (iii) all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any other Person, or
(c) any joint venture or partnership with, or any capital contribution to, or
other investment in, any other Person or any real property.
"Issuing Lender" shall mean Chase.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Joint Enterprise" shall mean with respect to any Person, any joint
venture, corporation, partnership or other business entity which is not
(directly or indirectly) owned 100% by such Person.
"Joint Venture Hotel" means any Hotel owned by an Eligible Joint
Venture.
"JV%" means, with respect to any Eligible Joint Venture, the percentage
ownership interest of Borrower in such Eligible Joint Venture.
"L/C Cash Collateral Account" shall have the meaning set forth in
Section 8.3 hereof.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower, or any of its wholly-owned Subsidiaries incurred in the ordinary
course of business with respect to insurance obligations and workers'
compensation, surety bonds and other similar statutory obligations (ii) earnest
money or performance obligations in respect of acquisitions permitted pursuant
to the terms of this Agreement and (iii) such other obligations of the Borrower,
or any of its wholly-owned Subsidiaries as are permitted to exist pursuant to
the terms of this Agreement.
"Leases" means, with respect to the Borrower or any of its Subsidiaries
or Eligible Joint Ventures, all of those leasehold estates in real property
owned by the Borrower or such Subsidiary or Eligible Joint Venture, as lessee,
as such may be
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amended, supplemented or otherwise modified from time to time to the extent
permitted by this Agreement.
"Legal Proceedings" means any judicial, administrative or arbitral
actions, suits, proceedings (public or private) or governmental proceedings.
"Letter of Credit" shall have the meaning provided in Section 2.18(a).
"Letter of Credit Fee" shall have the meaning provided in Section
2.4(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.19(a).
"Leverage Ratio" shall mean, at any date, a fraction (expressed as a
percentage) the numerator of which is Total Indebtedness, on such date, and the
denominator of which is Total Value, on such date.
"License" means either (x) an agreement in favor of either the Borrower
or the Operating Lessee as licensee, permitting the use of hotel system
trademarks, trade names and any related rights in connection with the ownership
or operation of any Hotel or (y) a Management Agreement, provided the Manager
under such Management Agreement owns the rights to hotel system trademarks,
trade names and any related rights in connection with the ownership or operation
of any Hotel.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a Capitalized Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the Uniform Commercial Code or comparable law of any jurisdiction, of any
financing statement naming the owner of the asset to which such Lien relates as
debtor.
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"Loan" means a Revolving Credit Loan or a Term Loan made by a Lender to
the Borrower pursuant to Article II and "Loans" means the aggregate Revolving
Credit Loans and Term Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Subsidiary Guaranties and each certificate, agreement or document executed by a
Loan Party and delivered to the Administrative Agent or any Lender in connection
with or pursuant to any of the foregoing.
"Loan Party" means each of the Borrower and each Guarantor.
"Majority Lenders" means, at any time, Lenders holding at least 51% of
the then aggregate unpaid principal amount of Loans (excluding Loans held by
Non-Funding Lenders) or, if no such Loans are then outstanding, Lenders having
at least 51% of the Commitments of all Lenders (excluding Non-Funding Lenders).
"Management Agreement" means an agreement relating to the operation
and/or management of any Hotel on behalf of the Operating Lessee.
"Manager" means Promus, Sheraton, American General Hospitality, Inc.,
Coastal Hotel Group, Inc., New Bristol or such other manager as shall be
reasonably approved by the Borrower and the Administrative Agent (such consent
not to be unreasonably withheld or delayed) and engaged by the Operating Lessee,
as manager under the Management Agreement.
"Material Adverse Change" means a material adverse change in any of (i)
the condition (financial or otherwise), business, performance, prospects,
operations or properties of (A) either entity which comprises the Borrower or
(B) the Borrower and its Subsidiaries taken as one enterprise, (ii) the
legality, validity or enforceability of any Loan Document, or any material
Operating Lease or the Operating Leases taken as a whole, (iii) the ability of
the Borrower or its Significant Subsidiaries to repay the Obligations or to
perform its obligations under any Loan Document, (iv) the ability of (x) any
Operating Lessee to perform its obligations under any material Operating Lease
or (y) DJONT or New Bristol to perform its obligations under their respective
Operating Leases taken as a whole, or (v) the rights and remedies of the Lenders
or the Administrative Agent under the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes, or
has a reasonable likelihood of resulting in or causing, a Material Adverse
Change.
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"Minimum Tangible Net Worth" means, with respect to the Borrower, at
any time, the sum of (a) $858,000,000; plus (b) 50% of the aggregate net
proceeds received by the Borrower or any of its Subsidiaries after March 31,
1998 in connection with any offering of Stock or Stock Equivalents of the
Borrower and its Subsidiaries taken as a whole.
"Moody's" means Moody's Investor Service Inc.
"Multiemployer Plan" means, as of any applicable date, a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, and to which any Loan Party,
any of its Subsidiaries or any ERISA Affiliate is making, is obligated to make,
or within the six-year period ending at such date, has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"Net Income (Loss)" means, for any Person for any period, the aggregate
of net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP.
"Net Operating Income" means, with respect to any Hotel, for any
period, the sum of the following (without duplication) (a) all gross income,
revenues, receipts and all other consideration received by the lessor under the
Operating Lease for such Hotel, including, without limitation, base rent,
percentage and similar rentals, late charges and interest payments, but
excluding extraordinary income and, until earned, security deposits, prepaid
rents and other refundable receipts, minus (b) all expenses incurred by the
owner of such Hotel during such period pursuant to its obligations as lessor
under the Operating Lease for such Hotel, including, without limitation, real
estate taxes, personal property taxes, maintenance and repair costs of a
non-capital nature for the structural portions of such Hotel and premiums
payable for insurance required to be carried by the lessor on or with respect to
such Hotels pursuant to the Operating Lease therefor, but excluding
extraordinary expenses.
"New Bristol" shall mean Bristol Hotels & Resorts, Inc and any Person
controlled by Bristol Hotels and Resorts, Inc. that is a Manager.
"Non-Funding Lender" has the meaning specified in Section 2.14(f).
"Non-Recourse Indebtedness" of any Person means all Indebtedness of
such Person with respect to which recourse for payment is limited to specific
assets encumbered by a Lien securing such Indebtedness; provided, however, that
personal
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recourse of a holder of Indebtedness against any obligor with respect
thereto for fraud, misrepresentation, misapplication of cash, waste and other
circumstances customarily excluded from non-recourse provisions in non-recourse
financing of real estate shall not, by itself, prevent any Indebtedness from
being characterized as Non-Recourse Indebtedness, provided further that if a
personal recourse claim is made in connection therewith, such claim shall not
constitute Non-Recourse Indebtedness for the purposes of this Agreement).
"Note" means, either a Revolving Credit Note or a Term Loan Note and
"Notes" means, collectively, the Revolving Credit Notes and the Term Loan Notes.
"Notice of Borrowing" has the meaning specified in Section 2.3(a).
"Notice of Conversion or Continuation" shall have the meaning set forth
in Section 2.8(b) hereof.
"Obligations" means the Loans, the obligation to pay Unpaid Drawings
and all other advances, debts, liabilities, obligations, covenants and duties
owing by the Borrower to the Administrative Agent, any Lender, the Issuing
Lender, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future, arising under this Agreement or under any other
Loan Document, whether direct or indirect (including, without limitation, those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term "Obligations"
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements and any other sum then payable by the Borrower under this
Agreement or any other Loan Document.
"OECD" means the Organization for Economic Cooperation and Development.
"Operating Lease" means a lease or sublease relating to any Hotel,
between the Borrower or any of its Subsidiaries or Eligible Joint Ventures or
Unconsolidated Entities, as lessor, and an Operating Lessee, as lessee,
substantially in a form as approved by Administrative Agent.
"Operating Lessee" means either (x) DJONT or its Subsidiary (provided
DJONT owns at least 50% of the voting Stock in such Subsidiary and maintains
voting control over such Subsidiary), or (y) any entity listed on Schedule III
attached hereto, each as lessee under an Operating Lease.
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"Operator" means the Operating Lessee and/or the Manager or both (as
the case may be) responsible for the operation and management of any Hotel.
"Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award.
"Other Taxes" has the meaning specified in Section 2.15(b).
"Participant" shall have the meaning provided in Section 2.20(a).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Pension Plan" means a plan, other than a Multiemployer Plan, which is
covered by Title IV of ERISA or Code Section 412 and which any Loan Party, any
of its Subsidiaries or any ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.
"Permit" means any permit, approval, authorization, license, variance,
registration, permission or consent required from a Governmental Authority under
an applicable Requirement of Law.
"Permitted Liens" means, collectively, (a) Liens arising by operation
of law in favor of materialmen, mechanics, warehousemen, carriers, lessors or
other similar Persons incurred by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures in the ordinary course of business which secure its
obligations to such Person; provided, however, that (i) the Borrower or such
Subsidiary or Eligible Joint Venture is not in default with respect to such
payment obligation to such Person, or (ii) the Borrower or such Subsidiary or
Eligible Joint Venture is in good faith and by appropriate proceedings
diligently contesting such obligation and adequate provision is made for the
payment thereof; (b) Liens (excluding Environmental Liens) securing taxes,
assessments or governmental charges or levies; provided, however, that neither
the Borrower nor any of its Subsidiaries or Eligible Joint Ventures is in
default in respect of any payment obligation with respect thereto unless the
Borrower or such Subsidiary or Eligible Joint Venture is in good faith and by
appropriate proceedings diligently contesting such obligation and adequate
provision is made for the payment thereof; and (c) Zoning restrictions,
subleases, licenses or concessions for restaurants, bars, gift shops, antennas,
communications equipment and similar agreements entered into in the ordinary
course of such Person's business in connection with the ownership
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and operation of a hotel; and easements, licenses, reservations, restrictions on
the use of real property or minor irregularities incident thereto which do not
in the aggregate materially detract from the value or use of the property or
assets of the Borrower or any of its Subsidiaries or Eligible Joint Venture or
impair, in any material manner, the use of such property for the purposes for
which such property is held by the Borrower or any such Subsidiary or Eligible
Joint Venture.
"Permitted Transferee" shall be those entities named on Schedule IV.
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
"Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which any Loan Party or any of its Subsidiaries maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"Previous Maximum Revolving Credit Amount" has the meaning specified in
the recitals to this Agreement.
"Principal Balance" means, collectively, the outstanding principal
balances of the Notes from time to time.
"Projections" means those financial projections covering the fiscal
years ending in 1998 through 2000, inclusive, delivered to the Lenders by the
Borrower.
"Promus" means Promus Hotels, Inc., a Delaware corporation or any
Person controlled by Promus Hotel Corporation, that is a Manager.
"Pro Rata Share" means, for any Person, with respect to such Person's
Unconsolidated Entities (or Subsidiaries), the percentage ownership interest of
such Person in such Unconsolidated Entity (or Subsidiary), provided that, in the
event that such Person is the general partner of such Unconsolidated Entity (or
Subsidiary), such Person's Pro Rata Share with respect to such Unconsolidated
Entity (or Subsidiary) shall be the percentage of the general partner interests
owned by such Person in such Unconsolidated Entity (or Subsidiary) with respect
to any Indebtedness for which recourse may be made against any general partner
of such Unconsolidated Entity (or Subsidiary).
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"Qualified Lease" means any Lease (a) which is a direct ground lease
granted by the fee owner of real property, (b) which may be transferred and/or
assigned without the consent of the lessor (or as to which the Lease expressly
provides that (i) such Lease may be transferred and/or assigned with the consent
of the lessor and (ii) such consent shall not be unreasonably withheld or
delayed), (c) which has a remaining term (including any renewal terms
exercisable at the sole option of the lessee) of at least 35 years, (d) under
which no material default has occurred and is continuing, (e) with respect to
which a security interest may be granted without the consent of the lessor (or
as to which the Lease expressly provides that (i) a security interest in such
lease may be granted with the consent of the lessor and (ii) such consent shall
not be unreasonably withheld or delayed), and (f) which contains lender
protection provisions reasonably acceptable to the Administrative Agent.
"Ratable Portion" or "ratably" means, except as otherwise specifically
provided herein, with respect to any Lender, the quotient obtained by dividing
the Commitment (or, if applicable, the Revolving Credit Commitments or the Term
Loan Commitments) of such Lender by the Commitments (or, if applicable, the
Revolving Credit Commitments or the Term Loan Commitments) of all Lenders and
that payments of principal of the Loans and interest thereon shall be made pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by the Lenders.
"R/C Lender" shall mean each Lender which has made a Revolving Credit
Commitment.
"Real Estate" means all of those plots, pieces or parcels of land now
owned or hereafter acquired by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures (the "Land"), including, without limitation, those
listed on Schedule 4.22(a), together with the right, title and interest of the
Borrower or such Subsidiary or Eligible Joint Venture, if any, in and to the
streets, the land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, adjoining or abutting the Land to the center line
thereof, the air space and development rights pertaining to the Land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments and appurtenances belonging or
in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including, without limitation, all alley, vault,
drainage, mineral, water, oil and gas rights, together with all of the buildings
and other improvements now or hereafter erected on the Land, and any fixtures
appurtenant thereto.
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"Recourse Secured Indebtedness" of any Person means the sum of the
following: (A) all Indebtedness of such Person and its Subsidiaries determined
on a consolidated basis in conformity with GAAP which (x) is secured by a Lien
and (y) recourse for payment is not limited to the specific assets encumbered by
such Lien, provided, however, that personal recourse of a holder of Indebtedness
against (i) any Subsidiary (or Unconsolidated Entity) of Borrower formed
specifically for the limited purpose of owning specific assets which secure
Indebtedness which does not exceed 65% of the value of the assets owned by such
Subsidiary (or Unconsolidated Entity) or (ii) any obligor with respect thereto
for fraud, misrepresentation, misapplication of cash, waste and other
circumstances customarily excluded from non-recourse provisions in non-recourse
financing of real estate, shall not, by itself, cause any Indebtedness to be
characterized as Recourse Secured Indebtedness, provided further that if a
personal recourse claim is made in connection therewith, such claim shall
constitute Recourse Secured Indebtedness for the purposes of this Agreement;
plus (B) such Person's Pro Rata Share of Recourse Secured Indebtedness of such
Person's Unconsolidated Entities.
"Refurbishment Hotel" shall mean Hotels, designated by Borrower, which
(i) will experience or are experiencing a disruption in hotel operations due to
refurbishment and (ii) are continuously operating with at least 65% of its rooms
in service at all times. Any given Hotel may only be characterized as a
Refurbishment Hotel for a maximum of six consecutive Fiscal Quarters provided,
however, that the requirement of continuous operation shall not apply with
respect to the Allerton Hotel.
"Register" has the meaning specified in Section 10.7.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the indoor or outdoor environment or into or
out of any property.
"Remedial Action" means all actions, including without limitation any
Capital Expenditures, required or necessary to (i) clean up, remove, treat or in
any other way address any Hazardous Material or other substance in the indoor or
outdoor environment, (ii) prevent the Release or threat of Release, or minimize
the further Release, of any Hazardous Material or other substance so it does not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care, or (iv) bring facilities on
any property owned or leased by the
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Borrower or any of its Subsidiaries into compliance with all Environmental Laws
and Environmental Permits.
"Reporting Operating Lessee" shall mean any Operating Lessee which is a
party to Operating Leases which in the aggregate provide at least 25% of
Borrower's consolidated Operating Lease revenue.
"Requested Operating Lessee" shall mean each Operating Lessee which is
a party to Operating Leases which in the aggregate provide at least 10% of
Borrower's consolidated Operating Lease revenue provided such Operating Lessee
has been designated by the Administrative Agent as a Requested Operating Lessee.
"Required Guarantor" shall mean any direct or indirect wholly-owned
Subsidiary of Borrower which is formed after the date hereof, provided, the
value of the assets of such Subsidiary plus the value of the assets of such
Person's Subsidiaries' exceed 10% of Total Value, provided, further, that in the
event the aggregate value of the assets of all wholly-owned Subsidiaries which
are not Guarantors exceed 20% of Total Value then each direct or indirect
wholly-owned Subsidiary formed thereafter shall be deemed a Required Guarantor
if the value of the assets of such Subsidiary plus the value of the assets of
such Person's Subsidiaries' exceed 1% of Total Value.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state and local laws, rules and regulations, including,
without limitation, federal, state or local securities, antitrust and licensing
laws, all food, health and safety laws, and all applicable trade laws and
requirements, including, without limitation, all disclosure requirements of
Environmental Laws, ERISA and all orders, judgments, decrees or other
determinations of any Governmental Authority or arbitrator, applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers or general partners of such Person.
"Restricted Payments" has the meaning specified in Section 7.4.
"Revolving Credit Borrowing" means a Borrowing consisting of Revolving
Credit Loans made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments.
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"Revolving Credit Commitment" means, as to each Lender, the commitment
of such Lender to make Revolving Credit Loans to the Borrower pursuant to
Section 2.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule I under the caption
"Revolving Credit Commitment", as such amount may be reduced or modified
pursuant to this Agreement, and "Revolving Credit Commitments" means the
aggregate Revolving Credit Commitments of all Lenders.
"Revolving Credit Loan" or "Revolving Credit Loans" means the revolving
credit loan or loans made or to be made by a Lender (or Lenders) to the Borrower
pursuant to Article II.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Lender in a stated principal amount equal to the amount of
such Lender's Revolving Credit Commitment as originally in effect, in
substantially the form of Exhibit A-1, evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from the Revolving Credit Loans made by
such Lender and "Revolving Credit Notes" means, collectively the Revolving
Credit Notes.
"Room Revenues" has the meaning ascribed to such term in the form of
Operating Lease attached as Exhibit H hereto.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Settlement Date" has the meaning specified in Section 2.17(d).
"Sheraton" shall mean Sheraton Operating Corporation or any Person
controlled by Starwood Hotels & Resorts Worldwide, Inc. (or its successors or
assigns) that is a Manager.
"Significant Subsidiary" means, at any date of determination, (i) any
Subsidiary of the Borrower which, or (ii) any group of Subsidiaries of the
Borrower which when aggregated, at such date, directly or indirectly own(s) or
lease(s) one or more Hotels having an aggregate value (calculated on the basis
of the Borrower's Investment therein) in excess of $75,000,000.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (at fair value) is, on the date of determination, greater
than the total amount of liabilities (including, without limitation, contingent
and unliquidated liabilities) of such Person as of such date and that, as of
such date, such Person is
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able to pay all liabilities of such Person as such liabilities mature and does
not have unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum
amount available to be drawn thereunder (in each case determined without regard
to whether any conditions to drawing could then be met).
"Status" means the existence of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status or Level VIII Status, as the case may be.
As used in this definition:
"Level I Status" exists on any date if, on such date,
either Borrower has a long-term senior unsecured actual debt
rating of A- or better by S&P and A3 or better by Moody's;
"Level II Status" exists on any date if, on such date,
either Borrower has a long-term senior unsecured actual debt
rating of BBB+ by S&P and Baa1 by Moody's;
"Level III Status" exists on any date if, on such date,
either Borrower has a long-term senior unsecured actual debt
rating of BBB by S&P and Baa2 by Moody's;
"Level IV Status" exists on any date if, on such date,
either Borrower has a long-term senior unsecured actual debt
rating of BBB- by S&P and Baa3 by Moody's;
"Level V Status" exists on any date if, on such date
(y) none of Level I Status through Level IV Status exist and
(z) the Leverage Ratio is less than 25%;
"Level VI Status" exists on any date if, on such date
(y) none of Level I Status through Level IV Status exist and
(z) the Leverage Ratio is equal to or greater than 25% but
less than 40%;
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"Level VII Status" exists on any date if, on such date
(y) none of Level I Status through Level IV Status exist and
(z) the Leverage Ratio is equal to or greater than 40% but
less than 45%;
"Level VIII Status" exists on any date if, on such date
(y) none of Level I Status through Level IV Status exist and
(z) the Leverage Ratio is equal to or greater than 45% but
less than or equal to 50%;
provided that (i) if S&P and/or Moody's shall cease to issue ratings of debt
securities of real estate investment trusts generally, then the Administrative
Agent and the Borrower shall negotiate in good faith to agree upon a substitute
rating agency or agencies (and to correlate the system of ratings of each
substitute rating agency with that of the rating agency for which it is
substituting) and (a) until such substitute rating agency or agencies are agreed
upon, Status shall be determined on the basis of the rating assigned by the
other rating agency (or, if both S&P and Moody's shall have so ceased to issue
such ratings, on the basis of the Status in effect immediately prior thereto)
and (b) after such substitute rating agency or agencies are agreed upon, Status
shall be determined on the basis of the rating assigned by the other rating
agency and such substitute rating agency or the two substitute rating agencies,
as the case may be; (ii) if the long term senior unsecured actual debt ratings
of either Borrower by S&P and Moody's are not equivalent, the higher rating will
apply for the purposes of determining Status; and (iii) if the long term senior
unsecured actual debt ratings of either Borrower by S&P and Moody's are two or
more Levels apart, the rating one Level below the higher rating will apply for
the purposes of determining Status.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities (other than Stock) convertible
into or exchangeable for Stock and all warrants, options or other rights to
purchase or subscribe for any stock, whether or not presently convertible,
exchangeable or exercisable.
"Subsidiary" means, with respect to any Person (other than FelCor LP
with respect to FelCor), at any date, any corporation, partnership or other
business entity the accounts of which would be consolidated with those of such
Person in its
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consolidated financial statements in accordance with GAAP, if such statements
were prepared as of such date.
"Subsidiary Guaranty" means a guaranty, in substantially the form of
Exhibit I, executed by each Guarantor, as such guaranty may be amended,
supplemented or otherwise modified from time to time and includes the Existing
Subsidiary Guaranties.
"Super Majority Lenders" means, at any time, Lenders holding at least
66-2/3% of the then aggregate unpaid principal amount of Loans (excluding Loans
held by Non-Funding Lenders) or, if no such Loans are then outstanding, Lenders
having at least 66-2/3% of the Commitments of all Lenders (excluding Non-Funding
Lenders).
"Swing Advance" has the meaning set forth in Section 2.17.
"Swing Advance Bank" means Chase.
"Tangible Net Worth" means, with respect to the Borrower at any date,
(a) the sum of (i) the total shareholders' equity of FelCor, and (ii) the book
value of all partnership interests in FelCor LP owned by Persons other than
FelCor; minus (b) the sum of all intangible assets of FelCor, each as shown on
the consolidated balance sheet of FelCor as of such date.
"Tax Affiliate" means, as to any Person, (i) any Subsidiary of such
Person, and (ii) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.3.
"Taxes" has the meaning specified in Section 2.15(a).
"Telerate Page 3750" means the display designated as "Page 3750" on the
Associated Press-Dow Jones Telerate Service (or such other page as may replace
Page 3750 on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for U.S. Dollar deposits). Any Eurodollar Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the provisions hereof shall be subject to corrections, if any,
made in such rate and displayed by the Associated
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Press-Dow Jones Telerate Service within one hour of the time when such rate is
first displayed by such Service.
"Term Loan" means a Loan made to the Borrower pursuant to Section 2.2
and "Term Loans" means the aggregate Term Loans.
"Term Loan Borrowing" means a Borrowing consisting of Term Loans made
on the same day by the Lenders ratably according to their respective Term Loan
Commitments.
"Term Loan Commitment" has the meaning specified in Section 2.2.
"Term Loan Maturity Date" shall mean December 31, 1999.
"Term Loan Note" means a promissory note of the Borrower payable to the
order of any Lender in a principal amount equal to the amount of such Lender's
Term Loan Commitment as originally in effect, in substantially the form of
Exhibit A-2, evidencing the Indebtedness of the Borrower to such Lender
resulting from the Term Loan made by such Lender and "Term Loan Notes" means,
collectively the Term Loan Notes.
"Termination Date" means the earliest of (i) the Final Maturity Date,
and (ii) the date of termination in whole of the Commitments pursuant to Section
2.5 or 8.2.
"Total Indebtedness" of any Person means the sum of the following
(without duplication): (a) all Indebtedness of such Person and its Subsidiaries
determined on a consolidated basis in conformity with GAAP, plus (b) such
Person's Pro Rata Share of Indebtedness of such Person's Unconsolidated
Entities, provided, however, Indebtedness of a Person's Subsidiary shall only be
included in the calculation of Total Indebtedness to the extent of the greater
of (x) such Person's Pro-Rata Share of such Indebtedness and (y) the amount of
such Indebtedness guaranteed by such Person.
"Total Secured Indebtedness" of any Person means any Total Indebtedness
of such Person for which the obligations thereunder are secured by a pledge of
or other encumbrance on any assets of such Person or its Subsidiaries or
Unconsolidated Entities.
"Total Value" means the sum of:
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(A) for Hotels owned or leased pursuant to a Qualified Lease
(including newly acquired Hotels and Hotels to be immediately acquired using the
proceeds of any Loans), other than Hotels described in clause (B) below,
Adjusted NOI on a consolidated basis from such Hotels for the preceding four (4)
Fiscal Quarters divided by ten percent (10%); plus
(B) for Hotels owned or leased pursuant to a Qualified Lease by
Borrower (or any Subsidiary or Unconsolidated Entity of Borrower) for less than
four (4) fiscal Quarters and (x) for which the Borrower (or any Subsidiary or
Unconsolidated Entity of Borrower) does not have, or is not able to reasonably
obtain, trailing four quarter audited financial information or (y) which the
Borrower has designated as a Refurbishment Hotel, in each such case 95% of the
Borrower's Investment in such Hotels (provided that if the Allerton Hotel is
designated as a Refurbishment Hotel, then such Hotel shall be valued at 85% of
the Borrower's Investment in such Hotel); plus
(C) the sum of $15,000,000, being the agreed aggregate sum of the
Borrower's investment at cost in (x) certain vacant land at the Kingston
Plantation Hotel in Myrtle Beach, South Carolina, and (y) the Myrtle Beach Condo
Management Company; plus
(D) unencumbered Cash or Cash Equivalents held by the Borrower and
its Subsidiaries (determined on a consolidated basis in accordance with GAAP)
plus the Borrower's Pro Rata Share of unencumbered Cash or Cash Equivalents held
by the Borrower's Unconsolidated Entities;
provided, however, that in the case of (A) above, Adjusted NOI with respect to a
Hotel shall only be included in the calculation of Total Value if such Hotel is,
as at the date of such calculation, owned or leased by Borrower, its Subsidiary
or its Unconsolidated Entity but only to the extent (i) in the case of Adjusted
NOI attributable to the Borrower's Subsidiaries, financial statements prepared
in accordance with GAAP would consolidate such Subsidiary with the Borrower and
(ii) in the case of Adjusted NOI attributable to the Borrower's Unconsolidated
Entities, of the Borrower's Pro Rata Share of such Adjusted NOI, and provided,
further, in the case of (B) above, the Borrower's Investment with respect to a
Hotel shall only be included in the calculation of Total Value if such Hotel is,
as of the date of such calculation, owned by Borrower, its Subsidiary or
Unconsolidated Entity. Notwithstanding the foregoing, in no event shall more
than 20% of Total Value be attributable to Refurbishment Hotels which are valued
at 95% (or 85% in the case of the Allerton Hotel) of Borrower's Investment.
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"Unconsolidated Entity" means, with respect to any Person, at any date,
any other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP with
the financial results of such Person on the consolidated financial statements of
such Person, if such statements were prepared as of such date.
"Unencumbered" means, with respect to any Hotel, at any date of
determination, the circumstance that such Hotel on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability) of any kind (including any such Lien or
restriction imposed by (i) any agreement governing Indebtedness, and (ii) the
organizational documents of the Borrower or any of its Subsidiaries or Eligible
Joint Ventures, but excluding Permitted Liens and, in the case of any Qualified
Lease (to the extent permitted by the definition thereof), restrictions on
transferability or assignability in respect of such Lease);
(b) is not subject to any agreement (including (i) any agreement
governing Indebtedness, and (ii) if applicable, the organizational documents of
the Borrower or any of its Subsidiaries or Eligible Joint Ventures) which
prohibits or limits the ability of the Borrower or any of its Subsidiaries or
Eligible Joint Ventures to create, incur, assume or suffer to exist any Lien
upon such Hotel, other than Permitted Liens (excluding any agreement or
organizational document (x) which limits generally the amount of Indebtedness
which may be incurred by the Borrower or its Subsidiaries or Eligible Joint
Ventures or (y) in the case of an Eligible Joint Venture which is not an
Eligible Entity, which requires the consent of partners (or the equivalent) in
such Eligible Joint Venture (other than the Borrower or its wholly owned
Subsidiaries) to create, incur, assume or suffer to exist any Lien upon such
Hotel); and
(c) is not subject to any agreement (including any agreement governing
Indebtedness) which entitles any Person to the benefit of any Lien (other than
Permitted Liens) on such Hotel, or would entitle any Person to the benefit of
any such Lien upon the occurrence of any contingency (including, without
limitation, pursuant to an "equal and ratable" clause, other than those certain
equal and ratable clauses contained in those certain (x) 7 3/8% Redeemable
Senior Notes due 2004 issued by FelCor Suites Limited Partnership and (y) 7 5/8%
Redeemable Senior Notes due 2007 issued by FelCor Suites Limited Partnership).
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For the purposes of this Agreement, any Joint Venture Hotel or Hotel owned by a
Subsidiary or Eligible Joint Venture of the Borrower shall not be deemed to be
Unencumbered unless both (i) such Hotel and (ii) all Stock owned directly or
indirectly by Borrower in such Eligible Joint Venture or Subsidiary, is
Unencumbered.
"Unencumbered Hotel Property" means, collectively, (a) such of the
Hotels owned or leased by the Borrower or any of its direct or indirect
wholly-owned Subsidiaries, and (b) such of the Joint Venture Hotels, as in each
case shall meet at any time and from time to time, each of the following minimum
criteria:
(a) such Hotel is Unencumbered;
(b) such Hotel is free of all material structural and title defects
and other material adverse matters;
(c) such Hotel is, as of the date upon which such Hotel is included
as an Unencumbered Hotel Property and as of the end of each
succeeding Fiscal Quarter, (i) in compliance, in all material
respects, with all applicable Environmental Laws, and (ii) not
subject to any material Environmental Liabilities and Costs, in
each case as initially verified by a written report of an
environmental consultant reasonably acceptable to the
Administrative Agent;
(d) such Hotel is (i) owned in fee simple by, or (ii) leased pursuant
to a Qualified Lease in favor of, the Borrower or its direct or
indirect wholly-owned Subsidiary or an Eligible Joint Venture;
provided that, if a Joint Venture Hotel is owned by an Eligible Joint Venture
which owns more than a single Hotel, such Joint Venture Hotel shall only be an
Unencumbered Hotel Property if it satisfies all of the requirements set forth in
subparagraphs (a) through (d) above and all other Hotels owned by such Eligible
Joint Venture satisfy the conditions set forth in subparagraphs (a) and (c)
above, provided further that the parties acknowledge and agree that the Embassy
Suites Hotel located at Los Angeles Airport, CA is subject to a mortgage in
favor of FelCor LP but the Administrative Agent has agreed, as a one time waiver
only, to accept such Hotel as Unencumbered (for purposes of clause (a) above)
provided that such Hotel shall cease to be Unencumbered (for purposes of clause
(a) above), inter alia, in the event that FelCor LP assigns its mortgage to any
other Person.
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"Unencumbered NOI" shall mean Adjusted NOI from each Unencumbered Hotel
Property, provided, that (i) only Borrower's JV% of Adjusted NOI generated by
any Joint Venture Hotel shall be included in Unencumbered NOI and (ii) in no
event shall more than 25% of Unencumbered NOI be attributable to Unencumbered
Hotel Properties leased pursuant to Qualified Leases.
"Unpaid Drawing" shall have the meaning set forth in Section 2.21(a).
"Unsecured Interest Expense" means, for any Person for any period, the
greater of (I) the sum of (a) the total interest expense in respect of all
unsecured Indebtedness of such Person (excluding, on an annual basis, up to
$3,000,000 of non-cash expense which is attributable to the amortization of
costs and expenses incurred in connection with the incurrance of such
Indebtedness) and its Subsidiaries for such period determined on a consolidated
basis in conformity with GAAP, plus capitalized interest of such Person and its
Subsidiaries in respect of unsecured Indebtedness, plus (b) such Person's Pro
Rata Share of Unsecured Interest Expense of such Person's Unconsolidated
Entities and (II) 7.5% of the sum of (a) the average outstanding balance of all
unsecured Indebtedness of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP plus (b) such
Person's Pro Rata Share of unsecured Indebtedness of such Person's
Unconsolidated Entities for such period.
1.2. Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding" and the word "through" means "to and including".
1.3. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole, and not to
any particular Article, Section, subsection or clause in this Agreement.
References herein to an Exhibit, Schedule, Article, Section, subsection or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section,
subsection or clause in this Agreement.
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(b) The terms "Lender" and "Administrative Agent" include
their respective successors and the term "Lender" includes each assignee of such
Lender who becomes a party hereto pursuant to Section 10.7.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT
2.1. The Revolving Credit Loans. On the terms and subject to the
conditions contained in this Agreement, each Lender severally agrees to make
loans (each a "Revolving Credit Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof until (but not including)
the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Revolving Credit Commitment; provided, however, that
at no time shall any Lender be obligated to make a Revolving Credit Loan in
excess of such Lender's Ratable Portion of the Available Credit. Within the
limits of each Lender's Revolving Credit Commitment, amounts prepaid pursuant to
Section 2.7(b) may be reborrowed under this Section 2.1. The Revolving Credit
Loans of each Lender shall be evidenced by the Revolving Credit Note to the
order of such Lender.
2.2. The Term Loans. On the terms and subject to the conditions
contained in this Agreement, each Lender severally agrees to make a loan (each a
"Term Loan") to the Borrower, and Borrower agrees to borrow the Term Loans, on
the Bristol Effective Date, in an amount not to exceed the amount set opposite
such Lender's name on Schedule I as its Term Loan Commitment (such Lender's
"Term Loan Commitment"). Amounts prepaid pursuant to Section 2.7(c) may not be
reborrowed. The Term Loan of each Lender shall be evidenced by the Term Note to
the order of such Lender. Notwithstanding anything to the contrary contained
herein, Borrower shall not be permitted to borrow any portion of any Term Loan
prior to the Bristol Effective Date.
2.3. Making the Loans. (a) Each Revolving Credit Borrowing shall be
made on notice, given by the Borrower to the Administrativ e Agent not later
than (i) 11:00 A.M. (New York City time) on the third (3rd) Business Day prior
to the date of the proposed Revolving Credit Borrowing in the case of Eurodollar
Rate Loans, and (ii) 11:00 A.M. (New York City time) on the Business Day prior
to the date of the proposed Revolving Credit Borrowing in the case of Base Rate
Loans. Each such notice (a "Notice of Borrowing") shall be in substantially the
form of Exhibit B, specifying therein (i) the date of such proposed Revolving
Credit
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Borrowing, (ii) the aggregate amount of such proposed Revolving Credit
Borrowing, (iii) the amount thereof, if any, requested to be Eurodollar Rate
Loans, and (iv) the initial Interest Period or Periods for any such Eurodollar
Rate Loans. The Loans shall be made as Base Rate Loans unless (subject to
Section 2.12) the Notice of Borrowing specifies that all or a pro rata portion
thereof shall be Eurodollar Rate Loans; provided, however, that the aggregate of
the Eurodollar Rate Loans for each Interest Period must be in an amount of not
less than $5,000,000 or an integral multiple of $500,000 in excess thereof.
(b) The Term Loan Borrowing shall be made upon receipt of a Notice of
Borrowing (which clearly indicates that such Notice of Borrowing is requesting a
Term Loan Borrowing), given by the Borrower to the Administrative Agent not
later than 11:00 A.M. (New York City time) on the third (3rd) Business Day prior
to the Bristol Effective Date. The Notice of Borrowing shall specify therein (i)
the Bristol Merger Date, (ii) the amount thereof, if any, requested to be
Eurodollar Rate Loans, and (iii) the initial Interest Period or Periods for such
Eurodollar Rate Loans. The Term Loans shall be made as Base Rate Loans unless
(subject to Section 2.12) the applicable Notice of Borrowing specifies that all
or a pro rata portion thereof shall be Eurodollar Rate Loans; provided, however,
that the aggregate of the -------- ------- Eurodollar Rate Loans for each
Interest Period must be in an amount of not less than $5,000,000 or an integral
multiple of $500,000 in excess thereof.
(c) The Administrative Agent shall give to each Lender prompt notice of
the Administrative Agent's receipt of a Notice of Borrowing and, if Eurodollar
Rate Loans are properly requested in such Notice of Borrowing, the applicable
interest rate under Section 2.9, and each Lender's Ratable Portion of the
proposed Borrowing. Each Lender shall, before 12:00 Noon (New York City time) on
the date of the proposed Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at its address referred to
in Section 10.2, in immediately available funds, such Lender's Ratable Portion
of such proposed Borrowing. By 12:00 Noon (New York City time) in the case of
Eurodollar Rate Loans and Base Rate Loans, on the date specified by the Borrower
in the Notice of Borrowing, subject to fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's aforesaid address;
provided that in the event that the Administrative Agent shall have received
notice from a Lender prior to the date of any proposed Borrowing that such
Lender will not make available to the Administrative Agent such Lender's Ratable
Portion of such Borrowing, the Administrative Agent shall be under no obligation
to fund such Lender's Ratable Portion of such Borrowing.
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(d) Each Base Rate Loan shall be in an aggregate amount of not less
than $1,000,000 or an integral multiple of $100,000 in excess thereof.
(e) Intentionally omitted.
(f) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any proposed Borrowing which the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such proposed Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any Eurodollar Rate Loan to be made by such Lender as part
of such proposed Borrowing when such Eurodollar Rate Loan, as a result of such
failure, is not made on such date.
(g) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.3 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have to the Borrower hereunder.
(h) The failure of any Lender to make the Loan to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
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hereunder to make its Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on the date of any Borrowing.
2.4. Fees. (a) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender, (i) a commitment fee (the "Revolving Commitment
Fee") equal to the Applicable Margin times the average daily unused portion of
such Lender's Revolving Credit Commitment, from the date hereof until the
Termination Date and (ii) a commitment fee equal to the Applicable Margin times
the average daily unused portion of such Lender's Term Loan Commitment
(notwithstanding the non-occurrence of the Bristol Effective Date), from the
date hereof until the earlier of the date the Borrower (x) borrows the entire
amount of the Term Loan or (y) terminates in their entirety (pursuant to the
terms hereof) the Lenders Term Loan Commitments (the "Term Loan Commitment Fee"
together with the Revolving Commitment Fee, the "Commitment Fees"). The
Commitment Fees shall be payable in arrears with respect to each full and
partial calendar quarter on (i) the last day of each calendar quarter during the
term of such Lender's Commitment, commencing June 30, 1998, (ii) on the date of
any reduction of the Commitments pursuant to Section 2.5, (iii) on the
Termination Date and (iv) on the date Lenders make the Term Loans. For purposes
of this Section 2.4, Swing Advances shall be included as part of the unused
portion of the Commitments.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Lender (based on its respective Ratable Portion) a fee in
respect of each Letter of Credit issued hereunder (the "Letter of Credit Fee"),
for the period from and including the date of issuance of such Letter of Credit
to and including the termination of such Letter of Credit, computed at a rate
per annum equal to the Applicable Margin then in effect for Loans maintained as
Eurodollar Rate Loans on the daily average Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be payable in arrears with respect
to each calendar quarter on (i) the last day of each calendar quarter in which
any Letter of Credit is outstanding, (ii) on the date on which no Letters of
Credit remain outstanding and (iii) on the Termination Date.
(c) The Borrower agrees to pay to the Issuing Lender, for its own
account, a facing fee in respect of each Letter of Credit issued by it hereunder
(the "Facing Fee") for the period from and including the date of issuance of
such Letter of Credit to and including the termination of such Letter of Credit,
computed at a rate per annum equal to 0.125% of the daily average Stated Amount
of such Letter of Credit. Accrued Facing Fees shall be payable in arrears with
respect to each calendar
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quarter on (i) the last day of each calendar quarter in which such Letter of
Credit is outstanding, (ii) on the date upon which such Letter of Credit has
been terminated in accordance with its terms and (iii) on the Termination Date.
(d) The Borrower shall pay, upon each Drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the Issuing Lender is generally
imposing in connection with such occurrence with respect to letters of credit.
(e) The Borrower has agreed to pay to Chase additional fees, the amount
and dates of payment of which are embodied in a separate agreement between the
Borrower and Chase.
2.5. Reduction and Termination of the Commitments. (a) The Borrower
may, upon at least three Business Days' prior notice to the Administrative
Agent, terminate in whole or reduce ratably in part the unused portions of the
respective Revolving Credit Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof. After August
15, 1998, if the Bristol Effective Date has not occurred, the Borrower may, upon
at least three Business Days' prior notice to the Administrative Agent,
terminate in whole (but not in part) the Term Loan Commitments of the Lenders.
(b) Upon the making of the Term Loan Borrowing, each Lender's Term Loan
Commitment shall terminate.
2.6. Repayment. (a) The Borrower shall repay the entire unpaid
principal amount of the Revolving Credit Loans on the Termination Date.
(b) The Borrower shall repay the entire unpaid principal amount of the
Term Loans on the Term Loan Maturity Date.
2.7. Prepayments. (a) The Borrower shall have no right to prepay the
principal amount of any Loan other than as provided in this Section 2.7.
(b) The Borrower may, upon at least two (2) Business Days' prior notice
to the Administrative Agent, stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of the Loans
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that any
prepayment of any
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Eurodollar Rate Loan made other than on the last day of an Interest Period for
such Loan shall be subject to payment by the Borrower to the Administrative
Agent of any costs, fees or expenses incurred by any Lender in connection with
such prepayment including without limitation any costs to unwind any Eurodollar
Rate contracts; and, provided, further, that each partial prepayment shall be in
an aggregate principal amount not less than $3,000,000 or integral multiples of
$100,000 in excess thereof. Upon the giving of such notice of prepayment, the
principal amount of the Loans specified to be prepaid shall become due and
payable on the date specified for such prepayment.
(c) If at any time the Borrower shall not be in compliance with the
covenant contained in Section 5.1 hereof, (a "Financial Covenant Imbalance"),
the Borrower shall prepay the Loans then outstanding in an amount necessary to
cure such Financial Covenant Imbalance, together with accrued interest as
follows:
(i) in the event that the Financial Covenant Imbalance is due to
(A) any sale, conveyance, transfer, assignment or other disposition of an
Unencumbered Hotel Property, (B) a financing secured by a Hotel or (C) a
Drawing, the prepayment shall be made within one (1) Business Day of such
event occurring;
(ii) in the event that the Financial Covenant Imbalance is due to
any (A) condemnation or taking by eminent domain of an Unencumbered Hotel
Property, or (B) loss, damage or destruction by casualty to any Hotel,
the prepayment shall be made within one (1) Business Day after receipt by
the Borrower or its Subsidiary or Eligible Joint Venture of the
condemnation award or insurance proceeds relating to such event;
(iii) INTENTIONALLY DELETED; or
(iv) in the event that the Financial Covenant Imbalance is due to a
determination by the Administrative Agent, after review of the applicable
Hotel Documents, that an Unencumbered Hotel Property, represented by
Borrower in a Compliance Certificate to be an Unencumbered Hotel
Property, fails to meet (and never actually met) the requirements for
Unencumbered Hotel Properties set forth herein, the prepayment shall be
made within 5 Business Days of the Administrative Agent notifying
Borrower of such Hotel's failure to meet the Unencumbered Hotel Property
requirements.
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(d) If at any time the aggregate principal amount of Revolving Credit
Loans outstanding at such time exceeds the Revolving Credit Commitments at such
time, the Borrower shall forthwith prepay the Revolving Credit Loans then
outstanding in an amount equal to such excess, together with accrued interest.
2.8. Conversion/Continuation Option. (a) Swing Advances shall be
automatically converted to Base Rate Loans on the Business Day following the
date of borrowing thereof.
(b) The Borrower may elect (i) at any time to convert Base Rate Loans
or any portion thereof to Eurodollar Rate Loans, (ii) at any time to convert
Swing Advances or any portion thereof to Base Rate Loans or Eurodollar Rate
Loans, or (iii) at the end of any Interest Period with respect thereto, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Rate
Loans for each Interest Period therefor must be in the amount of $5,000,000 or
an integral multiple of $500,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of all Lenders in accordance
with their Ratable Portion. Each such election shall be in substantially the
form of Exhibit C hereto (a "Notice of Conversion or Continuation") and shall be
made by giving the Administrative Agent at least three (3) Business Days' prior
written notice thereof specifying (A) the amount and type of conversion or
continuation, (B) in the case of a conversion to or a continuation of Eurodollar
Rate Loans, the Interest Period therefor, and (C) in the case of a conversion,
the date of conversion (which date shall be a Business Day and, if a conversion
from Eurodollar Rate Loans, shall also be the last day of the Interest Period
therefor). The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the contents thereof
and such Lender's Ratable Portion of the Loans to be converted. Notwithstanding
the foregoing, no conversion in whole or in part of Base Rate Loans or Swing
Advances to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any Interest Period therefor, shall
be permitted at any time at which a Default or an Event of Default shall have
occurred and be continuing. If, within the time period required under the terms
of this Section 2.8, the Administrative Agent does not receive a Notice of
Conversion or Continuation from the Borrower containing a permitted election to
continue any Eurodollar Rate Loans for an additional Interest Period or to
convert any such Loans, then, upon the expiration of the Interest Period
therefor, such Loans will be automatically converted to Base Rate Loans. Each
Notice of Conversion or Continuation shall be irrevocable.
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2.9. Interest. (a) The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(i) For Base Rate Loans, at a rate per annum equal at all times to
the Base Rate in effect from time to time plus the Applicable Margin,
payable monthly on the first day of each month, on the Termination Date
and on the date any Base Rate Loan is converted or paid in full.
(ii) For Eurodollar Rate Loans, at a rate per annum equal at all
times during the applicable Interest Period for each Eurodollar Rate Loan
to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin in effect on the most recent Applicable Margin Reset
Date, payable on the last day of such Interest Period, on the Termination
Date and, if such Interest Period has a duration of more than three
months, on the last day of each calendar quarter during such Interest
Period commencing on March 31, 1998. Notwithstanding anything to the
contrary contained herein (including but not limited to the grid
contained in the definition of Applicable Margin), the Applicable Margin
with respect to a Term Loan maintained as a Eurodollar Rate Loan shall
never be less than 100 basis points.
(b) If the principal indebtedness of the Loans is declared immediately
due and payable by the Administrative Agent pursuant to the provisions of this
Agreement or any other Loan Document, or if the Loans are not paid in full on
the Termination Date, the Borrower shall thereafter, unless and until such date,
if any, as the Super Majority Lenders may elect, in their sole and absolute
discretion, to waive, in writing, all or any portion of such default rate
interest, pay interest on the principal sum then remaining unpaid from the date
of such declaration or the Termination Date, as the case may be, until the date
on which the principal sum then outstanding is paid in full (whether before or
after judgment), at a rate per annum (calculated for the actual number of days
elapsed on the basis of a 360-day year) equal to the greater, on a daily basis,
of (x) 13% or (y) 4% plus the Base Rate, provided, however, that such interest
rate shall in no event exceed the maximum interest rate which the Borrower may
by law pay.
2.10. Interest Rate Determination and Protection. (a) The Eurodollar
Rate for each Interest Period for Eurodollar Rate Loans shall be determined by
the Administrative Agent two (2) Business Days before the first day of such
Interest Period.
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(b) The Administrative Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.9(a) or (b).
(c) If, with respect to Eurodollar Rate Loans, the Majority Lenders in
good faith notify the Administrative Agent that the Eurodollar Rate for any
Interest Period therefor will not adequately reflect the cost to such Majority
Lenders of making such Loans or funding or maintaining their respective
Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Loan will automatically, on the last day
of the then existing Interest Period therefor, convert into a Base Rate
Loan; and
(ii) the obligations of the Lenders to make Eurodollar Rate Loans
or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Administrative Agent shall notify the Borrower that
such Lenders have determined that the circumstances causing such
suspension no longer exist.
2.11. Increased Costs. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (ii) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error. If the Borrower so notifies the Administrative
Agent within five Business Days after any Lender notifies the Borrower of any
increased cost pursuant to the foregoing provisions of this Section 2.11, the
Borrower may either (A) prepay in full all Eurodollar Rate Loans of such Lender
then outstanding in accordance with Section 2.7(b) and, additionally, reimburse
such Lender for such increased cost in accordance with this Section 2.11 or (B)
convert all Eurodollar Rate Loans of all Lenders then outstanding into Base Rate
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Loans in accordance with Section 2.8 and, additionally, reimburse such Lender
for such increased cost in accordance with this Section 2.11.
2.12. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Administrative Agent, (i) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (ii) the
Borrower shall forthwith prepay in full all Eurodollar Rate Loans of such Lender
then outstanding, together with interest accrued thereon, unless the Borrower,
within five Business Days of such notice and demand, converts all Eurodollar
Rate Loans of all Lenders then outstanding into Base Rate Loans.
2.13. Capital Adequacy. If (i) the introduction of or any change in or
in the interpretation of any law or regulation, (ii) compliance with any law or
regulation, or (iii) compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any corporation controlling any Lender and such
Lender reasonably determines that such amount is based upon the existence of
such Lender's Commitments, Letters of Credit or Loans and its other commitments,
letters of credit or loans of this type, then, upon demand by such Lender (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's Commitments, Loans, Letter of Credit Outstandings or
commitments to issue Letters of Credit. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender shall be
conclusive and binding for all purposes absent manifest error.
2.14. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due, in Dollars, to the Administrative Agent at its
address referred to in Section 10.2 in immediately available funds without
set-off or counterclaim. The Administrative Agent will promptly thereafter cause
to be
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distributed immediately available funds relating to the payment of principal or
interest or fees (other than amounts payable pursuant to Section 2.11, 2.12,
2.13, 2.15 or 2.17) to the Lenders, in accordance with their respective Ratable
Portions, for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. To the extent the
foregoing payments are received by the Administrative Agent prior to 11:00 A.M.
(New York City time) and are not distributed to the Lenders on the same day, the
Administrative Agent shall pay to each Lender in addition to the amount
distributed to such Lender, interest thereon, for each day from the date such
amount is received by the Administrative Agent until the date such amount is
distributed to such Lender, at the Federal Funds Rate. Payment received by the
Administrative Agent after 11:00 A.M. (New York City time) shall be deemed to be
received on the next Business Day.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under any Loan
held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate, the Eurodollar
Rate or the Federal Funds Rate and of fees shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest and fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due hereunder to the Lenders
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent
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on such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Administrative Agent, each Lender shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
(f) If any Lender (a "Non-Funding Lender") has (x) failed to make a
Loan required to be made by it hereunder, and the Administrative Agent has
determined that such Lender is not likely to make such Loan, (y) given notice to
the Borrower or the Administrative Agent that it will not make, or that it has
disaffirmed or repudiated any obligation to make, Loans, in each case by reason
of the provisions of the Financial Institutions Reform, Recovery and Enforcement
Act of 1989 or otherwise or (z) failed to comply with its obligations pursuant
to Section 2.20(c), (i) such Non-Funding Lender shall lose any and all voting
rights hereunder, and (ii) any payment made on account of the principal of the
Loans outstanding or Unpaid Drawings shall be made as follows:
(A) in the case of any such payment made on any date when and to
the extent that, in the determination of the Administrative Agent, the
Borrower would be able, under the terms and conditions hereof, to
reborrow the amount of such payment under the Commitments and to satisfy
any applicable conditions precedent set forth in Article III to such
reborrowing, such payment shall be made on account of the outstanding
Loans or Unpaid Drawings held by the Lenders other than the Non-Funding
Lender pro rata according to the respective outstanding principal amounts
of the Loans or Unpaid Drawings of such Lenders;
(B) otherwise, such payment shall be made on account of the
outstanding Loans or Unpaid Drawings held by the Lenders pro rata
according to the respective outstanding principal amounts of such Loans
or Unpaid Drawings; and
(C) any payment made on account of interest on the Loans or Unpaid
Drawings shall be made pro rata according to the respective amounts of
accrued and unpaid interest due and payable on the Loans or Unpaid
Drawings with respect to which such payment is being made.
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2.15. Taxes. (a) Any and all payments by the Borrower under each Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent, taxes measured by its net income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Lender or
the Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes measured by its net
income, and franchise taxes imposed on it, by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities (excluding, in the case of such Lender or the Administrative Agent,
taxes imposed by reason of any failure of such Lender or the Administrative
Agent, if such Lender or the Administrative Agent is entitled at such time to a
total or partial exemption from withholding that is required to be evidenced by
a United States Internal Revenue Service Form 1001 or 4224 or any successor or
additional form (including but not limited to Form W8), to deliver to the
Administrative Agent or the Borrower, from time to time as required by the
Administrative Agent or the Borrower, such Form 1001 or 4224 (as applicable) or
any successor or additional form (including but not limited to Form W8),
completed in a manner reasonably satisfactory to the Administrative Agent or the
Borrower) being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including, without limitation, deductions applicable to additional sums payable
under this Section 2.15) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with applicable law, and (iv) the Borrower shall
deliver to the Administrative Agent evidence of such payment to the relevant
taxation or other authority.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from any payment made under any Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, any Loan Document (collectively, "Other Taxes").
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(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including, without limitation, for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 10.2, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the payment in full of the Obligations.
(f) Prior to the Effective Date in the case of each Lender that is a
signatory hereto, and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender in the case of each other Lender and from time to time
thereafter if requested by the Borrower or the Administrative Agent, each Lender
organized under the laws of a jurisdiction outside the United States that is
entitled to an exemption from United States withholding tax, or that is subject
to such tax at a reduced rate under an applicable tax treaty, shall provide the
Administrative Agent and the Borrower with an IRS Form 4224 or Form 1001 or
other applicable form (including but not limited to Form W8), certificate or
document prescribed by the IRS certifying as to such Lender's entitlement to
such exemption or reduced rate with respect to all payments to be made to such
Lender hereunder and under the Notes. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any Note are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United States.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.15 shall use its best efforts (consistent with its internal policy and
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legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
2.16. Sharing of Payments, Etc. If any Lender (other than the Swing
Advance Bank or the Issuing Lender) shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set off or otherwise) on
account of Loans made by it (other than pursuant to Section 2.13 or 2.15), and
there is either (x) any Swing Advance outstanding in respect of which the Swing
Advance Bank has not received payment in full from the Lenders pursuant to
Section 2.17(d) or (e) or (y) any Unpaid Drawing in respect of which the Issuing
Lender has not received payment in full from the Lenders pursuant to Section
2.20 or 2.21, such Lender (a "Purchasing Lender") shall purchase a participation
in all such Swing Advances or Unpaid Drawings, as applicable, in an amount equal
to the lesser of such payment and the amount of such Swing Advances or Unpaid
Drawings, as applicable, for which the Swing Advance Bank or Issuing Lender has
not so received payment in full. If, after giving effect to the foregoing, any
Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the Loans made by
it (other than pursuant to Sections 2.13 or 2.15) in excess of its Ratable
Portion of payments on account of the Loans obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
their Loans as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them.
2.17. Swing Advances. (a) The Swing Advance Bank, on the terms and
subject to the conditions contained in this Agreement, shall make advances (each
a "Swing Advance") to the Borrower from time to time on any Business Day during
the period from the date hereof until the day preceding the Termination Date in
an aggregate amount not to exceed at any time outstanding the lesser of (i)
$15,000,000, and (ii) the Available Credit; provided that the Swing Advance Bank
shall not be requested to make a Swing Advance to refinance an outstanding Swing
Advance. Within the limits set forth above, Swing Advances repaid may be
reborrowed under this Section 2.17.
(b) Each Swing Advance shall be made upon a Notice of Borrowing for a
Swing Advance being given by the Borrower to the Swing Advance Bank by no later
than 11:00 A.M. (New York City time) on the Business Day of the proposed Swing
Advance. Upon fulfillment of the applicable conditions set forth in Article III,
the Swing Advance Bank will make each Swing Advance available on the same day to
the Borrower at the Administrative Agent's address referred to in Section 10.2.
All Swing Advances shall bear interest at the same rate, and be payable on the
same basis, as Base Rate Loans and shall be converted to Base Rate Loans
pursuant to Section 2.8(a).
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(c) Each Swing Advance shall be in an aggregate amount of not less than
$1,000,000.00 or an integral multiple of $100,000.00 in excess thereof.
(d) The Administrative Agent shall give to each R/C Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing for a
Swing Advance and each R/C Lender's Ratable Portion thereof. Each R/C Lender
shall before 12:00 Noon (New York City time) on the next Business Day (the
"Settlement Date") make available to the Administrative Agent, in immediately
available funds, the amount of its Ratable Portion of the principal amount of
such Swing Advance. Upon such payment by a R/C Lender, such R/C Lender shall be
deemed to have made a Revolving Credit Loan to the Borrower in the amount of
such payment. The Administrative Agent shall use such funds to repay the Swing
Advance to the Swing Advance Bank. To the extent that any R/C Lender fails to
make such payment to the Swing Advance Bank, the Borrower shall repay such Swing
Advance on demand and, in any event, on the Termination Date.
(e) During the continuance of a Default under Section 8.1(e), each R/C
Lender shall acquire, without recourse or warranty, an undivided participation
in each Swing Advance otherwise required to be repaid by such R/C Lender
pursuant to the preceding paragraph, which participation shall be in a principal
amount equal to such R/C Lender's Ratable Portion of such Swing Advance, by
paying to the Swing Advance Bank on the date on which such R/C Lender would
otherwise have been required to make a payment in respect of such Swing Advance
pursuant to the preceding paragraph, in immediately available funds, an amount
equal to such R/C Lender's Ratable Portion of such Swing Advance. If such amount
is not in fact made available to the Swing Advance Bank on the date when the
Swing Advance would otherwise be required to be made pursuant to the preceding
paragraph, the Swing Advance Bank shall be entitled to recover such amount on
demand from that R/C Lender together with interest accrued from such date at the
Federal Funds Rate. From and after the date on which any R/C Lender purchases an
undivided participation interest in a Swing Advance pursuant to this paragraph
(e), the Swing Advance Bank shall promptly distribute to such R/C Lender such
R/C Lender's Ratable Portion of all payments of principal and of interest on
such Swing Advance, other than those received from a R/C Lender pursuant to
Section 2.16 or this or the preceding paragraph (d). If any payment made by or
on behalf of the Borrower and
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received by the Swing Advance Bank with respect to any Swing Advance is
rescinded or must otherwise be returned by the Swing Advance Bank for any reason
and the Swing Advance Bank has made a payment to the Administrative Agent, on
account thereof, each R/C Lender shall, upon notice to the Swing Advance Bank,
forthwith pay over to the Swing Advance Bank an amount equal to such R/C
Lender's pro rata share of the payment so rescinded or returned based on the
respective amounts paid in respect thereof to the R/C Lenders pursuant to the
preceding paragraph (d).
2.18. Letter of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that the Issuing Lender
issue, at any time and from time to time on and after the Closing Date and prior
to the Termination Date, for the account of the Borrower and for the benefit of
any holder (or any trustee, agent or other similar representative for any such
holders) of L/C Supportable Obligations of the Borrower, an irrevocable standby
letter of credit, in a form customarily used by the Issuing Lender or in such
other form as has been approved by the Issuing Lender in its discretion (each
such standby letter of credit, a "Letter of Credit") in support of such L/C
Supportable Obligations.
(b) Subject to the terms and conditions contained herein, the Issuing
Lender hereby agrees that it will, at any time and from time to time on or after
the Closing Date and prior to the Termination Date, following its receipt of the
respective Letter of Credit Request, issue for the account of the Borrower one
or more Letters of Credit in support of such L/C Supportable Obligations of the
Borrower as are permitted to remain outstanding without giving rise to a Default
or Event of Default hereunder, provided that the Issuing Lender shall be under
no obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the
Issuing Lender refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing
Lender with respect to such Letter of Credit any restriction or reserve
or capital requirement (for which the Issuing Lender is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, or known to the Issuing Lender
as of the date hereof and which the Issuing Lender in good faith deems
material to it; or
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(ii) the Issuing Lender shall have received notice from any Lender
prior to the issuance of such Letter of Credit of the type described in
the second sentence of Section 2.19(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) and the aggregate
principal amount of all Revolving Credit Loans then outstanding, would exceed
the Revolving Credit Commitments at such time, (ii) each Letter of Credit shall
be denominated in Dollars, (iii) each Letter of Credit shall by its terms
terminate on or before the earlier of (A) the date which occurs 12 months after
the date of the issuance thereof (although any such Letter of Credit may be
automatically extendable for successive periods of up to 12 months, but not
beyond the tenth Business Day prior to the Termination Date, on terms acceptable
to the Issuing Lender) and (B) the tenth Business Day prior to the Termination
Date, (iv) the Stated Amount of each Letter of Credit upon issuance shall be not
less than $100,000 or such lesser amount as is acceptable to the Issuing Lender.
2.19 Letter of Credit Requests. (a) Whenever the Borrower desires that
a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the Issuing Lender at least five Business Days' (or
such shorter period as is acceptable to the Issuing Lender) written notice
thereof. Each notice shall be in the form of Exhibit K (each a "Letter of Credit
Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.18(c). Unless the Issuing Lender has received notice from any R/C Lender
before it issues a Letter of Credit that one or more of the conditions specified
in Article III, are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.18(c), then the Issuing Lender may issue the
requested Letter of Credit for the account of the Borrower in accordance with
the Issuing Lender's usual and customary practices. Upon the issuance of any
Letter of Credit, the Issuing Lender shall promptly notify each R/C Lender of
such issuance and such notice shall be accompanied by a copy of the issued
Letter of Credit.
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2.20 Letter of Credit Participations. (a) Immediately upon the issuance
by the Issuing Lender of any Letter of Credit, the Issuing Lender shall be
deemed to have sold and transferred to each R/C Lender, other than the Issuing
Lender (each such Lender, in its capacity under Section 2.20, a "Participant"),
and each such Participant shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Lender, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Ratable Portion, in such Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto (excluding the Facing Fee), and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Credit Commitments of the
R/C Lenders, it is hereby agreed that, with respect to any outstanding Letters
of Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.20 to reflect the new Ratable Portions
of the R/C Lenders.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall have no obligation relative to the other Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Issuing Lender under or in connection with any Letter of
Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for the Issuing Lender any resulting liability to
the Borrower or any Lender.
(c) In the event that the Issuing Lender makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Lender pursuant to Section 2.21(a), the Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant, of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender the amount of such Participant's
Ratable Portion of such unreimbursed payment in Dollars and same day funds. If
the Administrative Agent so notifies any Participant prior to 11:00 A.M. (New
York time) on any Business Day, such Participant shall make available such funds
to the Issuing Lender on such Business Day. If and to the extent such
Participant shall not have so made its Ratable Portion of the amount of such
payment available to the Issuing Lender, such Participant agrees to pay to the
Issuing Lender, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Lender at the overnight Federal Funds Rate. The failure of any Participant to
make available to the Issuing Lender its Ratable Portion of any payment under
any Letter of Credit shall not relieve any other Participant of its obligation
hereunder to
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make available to the Issuing Lender its Ratable Portion of any payment under
Letter of Credit on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make available
to the Issuing Lender such other Participant's Ratable Portion of any such
payment.
(d) Whenever the Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Lender shall forward such payment to
the Administrative Agent, which in turn shall distribute such funds to each
Participant in accordance with the terms of Section 2.14.
(e) Upon the request of any Participant, the Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the Issuing
Lender with respect to Letters of Credit issued by it shall be irrevocable and
not subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, the Issuing Lender, any Participant,
or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any 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) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
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(v) the occurrence of any Default or Event of Default.
2.21 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the Issuing Lender, by making payment to the
Administrative Agent in accordance with the terms of the first sentence of
Section 2.14, for any drawing (each, a "Drawing") made by it under any Letter of
Credit (each such Drawing until reimbursed, an "Unpaid Drawing"), no later than
five (5) Business Days after the date of such Drawing, with interest on the
amount of such Drawing, to the extent not reimbursed prior to 11:00 A.M. (New
York time) on the date of such Drawing, from and including the date of such
Drawing to but excluding the date the Issuing Lender was reimbursed by the
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Loans maintained as Base Rate
Loans, provided, however, to the extent such amounts are not reimbursed prior to
11:00 A.M. (New York time) on the sixth Business Day following such Drawing,
interest shall thereafter accrue on the amount (and until reimbursed by the
Borrower) at a rate per annum which shall be the Base Rate in effect from time
to time plus 4%, in each such case, with interest to be payable on demand. The
Issuing Lender shall give the Borrower prompt written notice of each Drawing
under any Letter of Credit, provided that the failure to give any such notice
shall in no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.21 to
reimburse the Issuing Lender with respect to Drawings (including interest
thereon) shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against any Lender (including in its capacity as
the Issuing Lender or as a Participant), or any nonapplication or misapplication
by the beneficiary of the proceeds of such Drawing, the Issuing Lender's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing Lender
any resulting liability to the Borrower.
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ARTICLE III
CONDITIONS TO EFFECTIVENESS
OF THIS AGREEMENT AND OF LENDING
AND OF ISSUANCE OF LETTERS OF CREDIT
3.1. Conditions Precedent to Effectiveness of this Agreement, to
Initial Loans and Letters of Credit. The effectiveness of this Agreement and the
obligation of each Lender to make its initial Loan hereunder and the obligation
of the Issuing Lender to issue a Letter of Credit hereunder is subject to
satisfaction of the conditions precedent that the Administrative Agent shall
have received counterparts of this Agreement duly executed by each Borrower,
each Lender and the Administrative Agent, together with the following, each
dated the Effective Date (hereinafter defined) unless otherwise indicated, in
form and substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Lender (the date of satisfaction of the
conditions precedent set forth in this Section 3.1 and in Section 3.2 being the
"Effective Date"):
(a) The Notes to the order of the Lenders, respectively.
(b) A certificate of the Secretary or an Assistant Secretary of each
Loan Party (or, as applicable, of such Loan Party's partners) certifying (i) the
resolutions of its Board of Trustees or Directors, as appropriate, approving
each Loan Document to which it is a party, (ii) all documents evidencing other
necessary trust, partnership or corporate action, as appropriate, and required
governmental and third party approvals, licenses and consents with respect to
each Loan Document to which it is a party and the transactions contemplated
thereby, (iii) a copy of its and each of its Subsidiaries' and Eligible Joint
Ventures' declaration of trust, certificates of incorporation, by-laws,
partnership agreements and certificates of partnership as appropriate, as of the
Effective Date, and (iv) the names and true signatures of each of its officers
who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Person.
(c) A copy of the declaration of trust or articles or certificate of
incorporation or partnership agreement or certificate of partnership, as
appropriate, of each Loan Party and of each of its Subsidiaries and Eligible
Joint Ventures which is not a Loan Party certified as of a recent date by the
Secretary of State of the state of formation of such Loan Party or Subsidiary,
together with certificates of such official
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attesting to the good standing of each such Loan Party, Subsidiary and Eligible
Joint Ventures.
(d) Favorable opinion(s) of counsel to the Loan Parties, in
substantially the form(s) of Exhibit D, and as to such other matters as any
Lender through the Administrative Agent may reasonably request.
(e) A certificate of the chief financial officer of the Borrower,
stating that the Borrower is Solvent after giving effect to the initial Loans,
the application of the proceeds thereof in accordance with Section 6.10 and the
payment of all estimated legal, accounting and other fees related hereto and
thereto.
(f) Evidence that the insurance required by Section 6.4 is in full
force and effect.
(g) Such additional documents, information and materials as any Lender,
through the Administrative Agent, may reasonably request.
(h) A certificate, signed by a Responsible Officer of the Borrower,
stating that the following statements are true and correct on the Effective
Date:
(i) The statements set forth in Section 3.3 are true after giving
effect to the Loans being made on the Effective Date.
(ii) All costs and accrued and unpaid fees and expenses
(including, without limitation, legal fees and expenses) required to be
paid to the Lenders on or before the Effective Date, including, without
limitation, those referred to in Sections 2.4 and 10.4, to the extent
then due and payable, have been paid.
(iii) All necessary governmental and third party approvals
required to be obtained by any Loan Party in connection with the
transactions contemplated hereby have been obtained and remain in effect,
and all applicable waiting periods have expired without any action being
taken by any competent authority which restrains, prevents, impedes,
delays or imposes materially adverse conditions upon any of the
transactions contemplated hereby.
(iv) There exists no judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions upon any
of the transactions contemplated hereby.
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(v) There exists no claim, action, suit, investigation or
proceeding (including, without limitation, shareholder or derivative
litigation) pending or, to the knowledge of the Borrower, threatened in
any court or before any arbitrator or Governmental Authority which
relates to the Loan Documents or the financing hereunder or which, if
adversely determined, would have a Material Adverse Effect.
(vi) There has been no Material Adverse Change since December 31,
1997 in the corporate, capital or legal structure of the Borrower or any
of its Subsidiaries without the consent of the Administrative Agent.
(vii) The Borrower's Tangible Net Worth is not less than the
Minimum Tangible Net Worth.
(i) Administrative Agent's reasonable satisfaction with the form and
substance of each Operating Lease.
(j) A Compliance Certificate, executed by the Chief Financial Officer
of the Borrower substantially in the form attached as Exhibit G hereto (a
"Compliance Certificate"), and if requested by the Administrative Agent,
together with copies (to the extent not already delivered) of the Hotel
Documents in respect of each Hotel indicated by Administrative Agent.
(k) Each Subsidiary Guaranty, duly executed by the Guarantor party
thereto.
3.2. Additional Conditions Precedent to Effectiveness of this
Agreement, to Initial Loans and Letters of Credit. The effectiveness of this
Agreement, the obligation of each Lender to make its initial Loan hereunder and
the obligation of the Issuing Lender to issue Letters of Credit hereunder is
subject to the further conditions precedent that:
(a) No Lender or the Issuing Lender in its sole judgment exercised
reasonably shall have determined (i) that there has been any Material Adverse
Change since December 31, 1997 or (ii) that there has occurred any adverse
change which such Lender deems material in the financial markets generally,
since December 31, 1997 or (iii) that there is any claim, action, suit,
investigation, litigation or proceeding (including, without limitation,
shareholder or derivative litigation) pending or threatened in any court or
before any arbitrator or Governmental Authority which, if adversely determined,
would have a Material Adverse Effect; and nothing shall
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have occurred since December 31, 1997 which, in the judgment of any Lender, has
had a Material Adverse Effect.
(b) Each Lender and the Issuing Lender shall be satisfied, in its sole
judgment, exercised reasonably, with the corporate, capital, legal and
management structure of the Borrower and its Subsidiaries, and shall be
satisfied, in its sole judgment exercised reasonably, with the nature and status
of all Contractual Obligations, securities, labor, tax, ERISA, employee benefit,
environmental, health and safety matters, in each case, involving or affecting
the Borrower or any of its Subsidiaries.
3.3. Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan (including the Loan being made by
such Lender on the Effective Date) and the obligation of the Issuing Lender to
issue a Letter of Credit shall be subject to the further conditions precedent
that:
(a) The following statements shall be true on the date of such Loan or
issuance, before and after giving effect thereto and to the application of the
proceeds therefrom (and the acceptance by the Borrower of the proceeds of such
Loan or such Letter of Credit shall constitute a representation and warranty by
the Borrower that on the date of such Loan or issuance such statements are
true):
(i) The representations and warranties of the Borrower contained
in Article IV and of each Loan Party in the other Loan Documents are
correct on and as of such date as though made on and as of such date (it
being understood and agreed that any representation or warranty which by
its terms is made on a specified date shall be required to be true and
correct only as of such specified date); and
(ii) No Default or Event of Default exists or will result from the
Loans being made or the Letters of Credit being issued on such date.
(b) The making of the Loans or the issuance of the Letters of Credit on
such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
(c) The Administrative Agent shall have received a Compliance
Certificate, executed by a Responsible Officer of the Borrower, satisfactory to
the Administrative Agent, and if requested by the Administrative Agent, together
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with copies (to the extent not already delivered) of the Hotel Documents in
respect of each Hotel indicated by Administrative Agent.
(d) The Administrative Agent shall have received such additional
documents, information and materials as any Lender, through the Administrative
Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, the Borrower represents and warrants to the Lenders and the
Administrative Agent that on and after the Effective Date:
4.1. Existence; Compliance with Law. Each Loan Party and each of its
Subsidiaries and Eligible Joint Ventures (i) is a real estate investment trust
or a corporation, limited liability company or limited partnership, as specified
herein, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation; (ii) is duly qualified as a foreign
corporation, limited liability company or limited partnership and in good
standing under the laws of each jurisdiction where such qualification is
necessary, except for failures which in the aggregate have no Material Adverse
Effect; (iii) has all requisite corporate, limited liability company or
partnership power and authority and the legal right to own, pledge and mortgage
its properties, to lease (as lessee) the properties that it leases as lessee, to
lease or sublease (as lessor) the properties it owns and/or leases (as lessee)
and to conduct its business as now or currently proposed to be conducted; (iv)
is in compliance with its declaration of trust or certificate of or formation
and by-laws, regulations or partnership agreement, as appropriate; (v) is in
compliance with all other applicable Requirements of Law except for such
non-compliances as in the aggregate have no Material Adverse Effect; and (vi)
has all necessary licenses, permits, consents or approvals from or by, has made
all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, leasing and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which in the aggregate have no
Material Adverse Effect.
4.2. Power; Authorization; Enforceable Obligations. (a) The execution,
delivery and performance by each Loan Party of the Loan Documents to
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which it is
a party and the consummation of the transactions related to the financing
contemplated hereby:
(i) are within such Loan Party's corporate, partnership or trust
powers, as appropriate;
(ii) have been duly authorized by all necessary corporate,
partnership or trust action, as appropriate, including, without
limitation, the consent of stockholders and general and/or limited
partners where required;
(iii) do not and will not (A) contravene any Loan Party's or any
of its Subsidiaries' or Eligible Joint Ventures' respective declaration
of trust, certificate of incorporation or formation or by-laws,
regulations, partnership agreement or other comparable governing
documents, (B) violate any other applicable Requirement of Law
(including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), or any order or decree of any
Governmental Authority or arbitrator, (C) conflict with or result in the
breach of, or constitute a default under, or result in or permit the
termination or acceleration of, any material Contractual Obligation of
any Loan Party or any of its Subsidiaries or Eligible Joint Ventures, or
(D) result in the creation or imposition of any Lien upon any of the
property of any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures; and
(iv) do not require the consent of, authorization by, approval of,
notice to, or filing or registration with, any Governmental Authority or
any other Person, other than those which have been obtained or made and
copies of which have been or will be delivered to the Administrative
Agent pursuant to Section 3.1, and each of which on the Effective Date
will be in full force and effect.
(b) This Agreement has been, and each of the other Loan Documents has
been, or will have been upon delivery thereof pursuant to Section 3.1, duly
executed and delivered by each Loan Party thereto. This Agreement is, and the
other Loan Documents are or will be, when delivered hereunder, the legal, valid
and binding obligation of each Loan Party thereto, enforceable against it in
accordance with its terms except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting the enforcement of
creditor's rights and remedies generally.
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4.3. Taxes. All federal, state, local and foreign tax returns, reports
and statements (collectively, the "Tax Returns") required to be filed by the
Borrower or any of its Tax Affiliates have been filed with the appropriate
governmental agencies in all jurisdictions in which such Tax Returns, are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all taxes, charges and other impositions due and payable have been
timely paid prior to the date on which any fine, penalty, interest, late charge
or loss may be added thereto for non-payment thereof, except where contested in
good faith and by appropriate proceedings if (i) adequate reserves therefor have
been established on the books of the Borrower or such Tax Affiliate in
conformity with GAAP and (ii) all such non-payments in the aggregate have no
Material Adverse Effect. Proper and accurate amounts have been withheld by the
Borrower and each of its respective Tax Affiliates from their respective
employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable federal, state,
local and foreign law and such withholdings have been timely paid to the
respective Governmental Authorities. None of the Borrower or any of its Tax
Affiliates has (i) executed or filed with the IRS any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any charges; (ii) agreed or been requested to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise; or (iii) any obligation under any written tax sharing
agreement.
4.4. Full Disclosure. No written statement prepared or furnished by or
on behalf of any Loan Party or any of its Affiliates in connection with any of
the Loan Documents or the consummation of the transactions contemplated thereby,
and no financial statement delivered pursuant hereto or thereto, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading.
4.5. Financial Matters. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 1997, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, audited by Coopers
& Lybrand, L.L.P. and the consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 1997, and the related consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the twelve months then ended, certified by the chief financial officer of
the Borrower, copies of which have been furnished to each Lender, fairly
present, subject, in the case of said balance sheets as at December 31, 1997,
and said statements of income, retained earnings and cash flows for the twelve
months then ended, to year-end audit
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adjustments, the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such dates, all in
conformity with GAAP.
(b) Since December 31, 1997, there has been no Material Adverse Change
and there have been no events or developments that in the aggregate have had a
Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries had at December
31, 1997 any material obligation, contingent liability or liability for taxes,
long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.
(d) The Projections that have been delivered to each Lender, were
prepared on the basis of the assumptions expressed therein, which assumptions
the Borrower believed to be reasonable based on the information available to the
Borrower at the time so furnished and on the Closing Date.
(e) The Borrower is, and on a consolidated basis the Borrower and its
Subsidiaries are, Solvent.
4.6. Litigation. There are no pending or, to the knowledge of the
Borrower, threatened actions, investigations or proceedings affecting the
Borrower, any of its Subsidiaries or Eligible Joint Ventures, or (to the best
knowledge of the Borrower) any Operating Lessee or any of their respective
properties or revenues before any court, Governmental Authority or arbitrator,
other than those that in the aggregate, if adversely determined, would have no
Material Adverse Effect. The performance of any action by (a) any Loan Party
required or contemplated by any of the Loan Documents or (b) any Operator
required or contemplated by any Operating Lease or Management Agreement is not,
to the best knowledge of the Borrower, restrained or enjoined (either
temporarily, preliminarily or permanently), and, to the best knowledge of the
Borrower, no material adverse condition has been imposed by any Governmental
Authority or arbitrator upon any of the foregoing transactions contemplated by
the aforementioned documents.
4.7. Margin Regulations. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Borrowing will be used to purchase or
carry any
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margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
4.8. Ownership of Borrower and DJONT; Subsidiaries. (a) The authorized
capital stock of FelCor consists of (i) as of the date hereof 100,000,000 shares
of common stock, $.01 par value per share, of which 36,591,080 shares are issued
and outstanding as of the date hereof, and (ii) as of the date hereof 10,000,000
shares of preferred stock, $.01 par value per share, of which 6,050,000 shares,
designated as $1.95 Series A Cumulative Convertible Preferred Stock, $25.00 per
share liquidation preference, and 57,500 shares designated as 9% Series B
Cumulative Redeemable Preferred Stock, $2,500.00 per share liquidation
preference (and represented by 5,750,000 Depository Shares, each representing a
1/100 interest in such preferred stock) are outstanding as of the date hereof.
All of the outstanding capital stock of FelCor has been validly issued, is fully
paid and non-assessable.
(b) FelCor is the sole general partner of FelCor LP and, as of the date
hereof, owns beneficially and of record at least 92.7% of the partnership
interests of FelCor LP free and clear of all Liens.
(c) There are no outstanding classes of voting membership interests of
DJONT other than the Class A membership interests. As of the date hereof Hervey
A. Feldman and Thomas J. Corcoran, Jr. own, beneficially, all of the voting
Class A membership interests in DJONT, free and clear of all Liens.
(d) Set forth on Schedule 4.8 hereto is a complete and accurate list
showing, as of the Effective Date, all Subsidiaries and Unconsolidated Entities
of the Borrower and, as to each such Subsidiary and Unconsolidated Entity, the
jurisdiction of its formation and the percentage of the outstanding Stock of
each class owned (directly or indirectly) by the Borrower. No Stock of any
Subsidiary or Unconsolidated Entity of the Borrower is subject to any
outstanding option, warrant, right of conversion or purchase or any similar
right other than certain rights of first refusal contained in partnership
agreements to which the Borrower or a Subsidiary is a party. All of the
outstanding capital Stock of each such Subsidiary and Unconsolidated Entity
owned by the Borrower has been validly issued, is fully paid and (except for
partnership interests) non-assessable, and all outstanding capital Stock of its
Subsidiaries and Unconsolidated Entities owned by the Borrower is free and clear
of all Liens. Neither the Borrower nor any such Subsidiary or Unconsolidated
Entity is a party to, or has knowledge of, any agreement restricting the
transfer or hypothecation of any shares of Stock of any such Subsidiary or
Unconsolidated Entity, other than those imposed by Requirements of Law, or the
Loan Documents.
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4.9. ERISA. (a) There are no Multiemployer Plans.
(b) Each Plan and any related trust intended to qualify under Code
Section 401 or 501 has been determined by the IRS to be so qualified and to the
best knowledge of the Borrower nothing has occurred which would cause the loss
of such qualification.
(c) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate, with respect to any Pension Plan, has failed to make any contribution
or pay any amount due as required by Section 412 of the Code or Section 302 of
ERISA or the terms of any such plan, and all required contributions and benefits
have been paid in accordance with the provisions of each such plan.
(d) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or proceedings (other than claims for benefits in the
normal course), relating to any Plan other than those that in the aggregate, if
adversely determined, would have no Material Adverse Effect.
(e) No Pension Plan has any unfunded accrued benefit liabilities, as
determined by using reasonable actuarial assumptions utilized by such plan's
actuary for funding purposes. Within the last five years none of the Borrower,
any of its Subsidiaries or any ERISA Affiliate has caused a Pension Plan with
any such liabilities to be transferred outside of its "controlled group" (within
the meaning of Section 4001(a)(14) of ERISA).
(f) No Plan provides for continuing health, disability, accident or
death benefits or coverage for any participant or his or her beneficiary after
such participant's termination of employment (except as may be required by
Section 4980B of the Code and at the sole expense of the participant or the
beneficiary) which would result in the aggregate under all Plans in a liability
in an amount which would have a Material Adverse Effect.
(g) None of the assets of any of the Loan Parties are subject to Title
I of ERISA because they consist of "plan assets" within the meaning of DOL
Regulation Section 2510.3-101 by reason of an equity investment in any of the
Loan Parties.
4.10. Indebtedness. Except as disclosed on Schedule 4.10, as of the
date hereof, none of the Borrower or any of its Subsidiaries or Unconsolidated
Entities has any Indebtedness.
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4.11. Restricted Payments. From and after the Closing Date, the
Borrower has not declared or made any Restricted Payments (other than those
permitted pursuant to Section 7.4).
4.12. No Burdensome Restrictions; No Defaults. (a) No Loan Party nor
any of its Subsidiaries or Eligible Joint Ventures (i) is a party to any
Contractual Obligation the compliance with which would have a Material Adverse
Effect or the performance of which by any thereof, either unconditionally or
upon the happening of an event, will result in the creation of a Lien on the
property or assets of any such Loan Party or its Subsidiaries, or (ii) is
subject to any charter or corporate restriction which has a Material Adverse
Effect.
(b) No Loan Party or Subsidiary or Eligible Joint Venture of any Loan
Party is in default under or with respect to any Contractual Obligation owed by
it and, to the knowledge of the Borrower, no other party is in default under or
with respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary or Eligible Joint Venture of a Loan Party, other than those defaults
which in the aggregate have no Material Adverse Effect.
(c) No Event of Default or Default has occurred and is continuing.
(d) There is no Requirement of Law the compliance with which by any
Loan Party would have a Material Adverse Effect.
(e) As of the date hereof, no Subsidiary or Eligible Joint Venture of
the Borrower is subject to any Contractual Obligation (other than as set forth
in the governing documents thereof) restricting or limiting its ability to
transfer its assets to the Borrower or to declare or make any dividend payment
or other distribution on account of any shares of any class of its Stock or its
ability to purchase, redeem, or otherwise acquire for value or make any payment
in respect of any such shares or any shareholder rights.
4.13. Investments. Except as disclosed on Schedule 4.8 or 4.13, the
Borrower and its Subsidiaries considered as a single enterprise, is not engaged
in any joint venture or partnership with any other Person nor does it maintain
any Investment, as of the date hereof.
4.14. Government Regulation. Neither the Borrower nor any of its
Subsidiaries or Eligible Joint Ventures is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company",
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as such terms are defined in the Investment Company Act of 1940, as amended, or
subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, or any other
federal or state statute or regulation such that its ability to incur
Indebtedness is limited, or its ability to consummate the transactions
contemplated hereby or by any other Loan Document, or the exercise by the
Administrative Agent or any Lender of rights and remedies hereunder or
thereunder, is impaired. The making of the Loans by the Lenders, the application
of the proceeds and repayment thereof by the Borrower and the consummation of
the transactions contemplated by the Loan Documents will not cause the Borrower
or any of its Subsidiaries or Eligible Joint Ventures to violate any provision
of any of the foregoing or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.
4.15. Insurance. All policies of insurance of any kind or nature owned
by or issued to or for the benefit of any Loan Party or any of its Subsidiaries
or Eligible Joint Ventures, or issued in respect of any real property owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint Ventures
including, without limitation, policies of life, fire, theft, product liability,
public liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient and as is
customarily carried by companies of the size and character of such Person. No
Loan Party or any of its Subsidiaries or Eligible Joint Ventures has been
refused insurance for which it applied or had any policy of insurance terminated
(other than at its request).
4.16. Labor Matters. (a) There are no strikes, work stoppages,
slowdowns or lockouts pending or threatened against or involving the Borrower or
its Subsidiaries or their respective Hotels, other than those which in the
aggregate have no Material Adverse Effect.
(b) There are no unfair labor practice charges, arbitrations or
grievances pending against or involving, or to the knowledge of the Borrower
threatened against or involving the Borrower or its Subsidiaries or Eligible
Joint Ventures, other than those which, in the aggregate, if resolved adversely
to the Borrower or such Subsidiary or Eligible Joint Venture, would have no
Material Adverse Effect.
(c) As of the Effective Date, neither the Borrower nor any of its
Subsidiaries or Eligible Joint Ventures are parties to, or have any obligations
under, any collective bargaining agreement.
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(d) There is no organizing activity involving the Borrower or any of
its Subsidiaries or Eligible Joint Ventures pending or, to the Borrower's
knowledge, threatened by any labor union or group of employees, other than those
which in the aggregate have no Material Adverse Effect. There are no
representation proceedings pending or, to the Borrower's knowledge, threatened
with the National Labor Relations Board, and no labor organization or group of
employees of the Borrower or any of its Subsidiaries or Eligible Joint Ventures
have made a pending demand for recognition, other than those which in the
aggregate have no Material Adverse Effect.
4.17. Force Majeure. Neither the business nor the properties of any
Loan Party or any of their respective Subsidiaries or Eligible Joint Ventures
are currently suffering from the effects of any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance), other than those which in the aggregate have no Material
Adverse Effect.
4.18. Use of Proceeds. The proceeds of the Loans will be used by the
Borrower solely as follows: (a) subject to the limitations set forth herein, to
fund any direct or indirect investment in existing Hotels, in Hotels and/or
interests in Hotels which are to be acquired by the Borrower or any of its
Subsidiaries, and for the payment of related transaction costs, fees and
expenses, (b) for general corporate or working capital purposes or for Letters
of Credit and (c) for repayment of indebtedness assumed by Borrower from Bristol
in connection with the Bristol Merger.
4.19. Environmental Protection. Except as disclosed on Schedule 4.19
(and the Borrower represents and warrants to the Lenders and the Administrative
Agent that the matters disclosed in the reports identified on Schedule 4.19
would not reasonably be expected to have a Material Adverse Effect):
(a) to the best knowledge of Borrower and its Subsidiaries, all real
property leased or owned by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures is free from contamination by any Hazardous Material which could
reasonably be expected to subject the Borrower or any of its Subsidiaries to
Environmental Liabilities and Costs of $5,000,000 or more;
(b) the operations of the Borrower and each of its Subsidiaries or
Eligible Joint Ventures, and the operations at any real property leased or owned
by the Borrower or any of its Subsidiaries or Eligible Joint Ventures are in
material compliance in all respects with all applicable Environmental Laws;
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(c) neither the Borrower nor any of its Subsidiaries or Eligible Joint
Ventures have liabilities with respect to Hazardous Materials and, to the best
knowledge of the Borrower and its Subsidiaries, no facts or circumstances exist
which could give rise to liabilities with respect to Hazardous Materials which
could reasonably be expected to subject the Borrower or any of its Subsidiaries
to Environmental Liabilities and Costs of $5,000,000 or more;
(d) (i) the Borrower and its Subsidiaries and Eligible Joint Ventures
and all real property owned or leased by the Borrower or its Subsidiaries and
Eligible Joint Ventures have all Environmental Permits necessary for the
operations at such real property and are in material compliance with such
Environmental Permits, (ii) there are no Legal Proceedings pending nor, to the
best knowledge of the Borrower and its Subsidiaries, threatened to revoke, or
alleging the violation of, such Environmental Permits, and (iii) neither the
Borrower nor any of its Subsidiaries or Eligible Joint Ventures or to the best
knowledge of the Borrower and its Subsidiaries the Operators have received any
notice from any source to the effect that there is lacking any Environmental
Permit required in connection with the current use or operation of any property
leased or owned by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures;
(e) neither the Borrower's nor any of its Subsidiaries' or Eligible
Joint Ventures' current facilities and operations, nor, to the best knowledge of
the Borrower and its Subsidiaries, any Operator, any predecessor of the Borrower
or any of its Subsidiaries or Eligible Joint Ventures, nor any of the Borrower's
or its Subsidiaries' or Eligible Joint Ventures' past facilities and operations,
nor to the best knowledge of the Borrower and its Subsidiaries, any owner of
premises leased or operated by the Borrower and its Subsidiaries and Eligible
Joint Ventures, are subject to any outstanding written Order or Contractual
Obligation, including Environmental Liens, with any Governmental Authority or
other Person, or to any federal, state, local, foreign or territorial
investigation respecting (i) Environmental Laws, (ii) Remedial Action, (iii) any
Environmental Claim, or (iv) the Release or threatened Release of any Hazardous
Material;
(f) neither the Borrower nor any of its Subsidiaries or Eligible Joint
Ventures or, to the best knowledge of the Borrower and its Subsidiaries,
Operators are subject to any pending Legal Proceeding alleging the violation of
any Environmental Law with respect to a Hotel nor, to the best knowledge of the
Borrower and its Subsidiaries, are any such proceedings threatened;
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(g) neither the Borrower nor any of its Subsidiaries or Eligible Joint
Ventures nor, to the best knowledge of the Borrower and its Subsidiaries, any
Operators or predecessor of the Borrower or any of its Subsidiaries or Eligible
Joint Ventures, nor to the best knowledge of the Borrower and its Subsidiaries
any owner of premises leased by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, have filed any notice under federal, state or local,
territorial or foreign law indicating past or present treatment, storage, or
disposal of or reporting a Release of Hazardous Material into the environment;
(h) none of the operations of the Borrower or any of its Subsidiaries
or Eligible Joint Ventures or, to the best knowledge of the Borrower and its
Subsidiaries, of any Operators or predecessor of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures, or, to the best knowledge of the
Borrower and its Subsidiaries, of any owner of premises leased by the Borrower
or any of its Subsidiaries or Eligible Joint Ventures, involve or previously
involved the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Part 261.3 (in effect as of the date
of this Agreement) or any state, local, territorial or foreign equivalent; and
(i) there is not now, nor to the best knowledge of the Borrower and its
Subsidiaries, has there been in the past, on, in or under any real property
leased or owned by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures, to the best knowledge of the Borrower and its Subsidiaries or any of
their predecessors (i) any underground storage tanks or surface tanks, dikes or
impoundments (other than for surface water), (ii) any friable
asbestos-containing materials, (iii) any polychlorinated biphenyls, or (iv) any
radioactive substances other than naturally-occurring radioactive material.
4.20. Contractual Obligations Concerning Assets. As of the date hereof,
neither the Borrower nor any of its Subsidiaries owns or holds, or is obligated
under or a party to, any option, right of first refusal, or other contractual
right to purchase or acquire (other than pursuant to the Bristol Merger), or any
Contractual Obligation to effect an Asset Sale of, any Hotel owned or leased by
the Borrower or any of its Subsidiaries, except those that in the aggregate
would not have a Material Adverse Effect whether or not exercised.
4.21. Intellectual Property. The Loan Parties and its Subsidiaries and
Eligible Joint Ventures or the Operating Lessee own or license or otherwise have
the right to use all material licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright
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applications, franchises, authorizations and other intellectual property rights
that are necessary for the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including, without limitation, the Licenses and all trade names
associated with any private label brands of any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures. To the best knowledge of the Borrower,
no material slogan or other advertising device, product, process, method,
substance, part or component, or other material now employed, or now
contemplated to be employed, by any Loan Party or any of their respective
Subsidiaries or Eligible Joint Ventures or the Operating Lessee infringes upon
or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened.
4.22. Title. (a) Each Loan Party and their respective Subsidiaries and
Eligible Joint Ventures own good and marketable fee simple absolute title to all
of the Real Estate purported to be owned by them, which Real Estate is at the
date hereof described in Schedule 4.22(a), and good and marketable title to, or
valid leasehold interests in, all other properties and assets purported to be
leased by any Loan Party or any of their respective Subsidiaries or Eligible
Joint Ventures, including, without limitation, valid leasehold interests
pursuant to the Leases and all property reflected in the balance sheet referred
to in Section 4.5(a). Each Loan Party and its respective Subsidiaries or
Eligible Joint Ventures received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents, and have duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Loan Party's and their
respective Subsidiaries' or Eligible Joint Ventures' right, title and interest
in and to all such property except for such documents or actions the failure to
obtain or accomplish which would not have a Material Adverse Effect.
(b) All material real property leased at the date hereof by the
Borrower or any of their respective Subsidiaries or Eligible Joint Ventures is
listed on Schedule 4.22(b). Each of such leases is valid and enforceable in
accordance with its terms and is in full force and effect. The Borrower has
delivered to the Administrative Agent true and complete copies of each of such
leases and all documents affecting the rights or obligations of the Borrower or
any of its Subsidiaries or Eligible Joint Ventures which is a party thereto,
including, without limitation, any non-disturbance and recognition agreements,
subordination agreements, attornment agreements and agreements regarding the
term or rental of any of the leases. None of the Borrower or any of its
respective Subsidiaries or Eligible Joint Ventures nor, to the knowledge of the
Borrower, any other party to any such lease is in default of its obligations
thereunder or has delivered or received any notice of
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default under any such lease, nor has any event occurred which, with the giving
of notice, the passage of time or both, would constitute a default under any
such lease, except for defaults which in the aggregate have no Material Adverse
Effect.
(c) All components of all improvements included within the Hotels owned
or leased, as lessee, by any Loan Party or Eligible Joint Venture (collectively,
"Improvements"), including, without limitation, the roofs and structural
elements thereof and the heating, ventilation, air conditioning, plumbing,
electrical, mechanical, sewer, waste water, storm water, paving and parking
equipment, systems and facilities included therein, are in good working order
and repair, subject to such exceptions which are not reasonably likely to have,
in the aggregate, a Material Adverse Effect. All water, gas, electrical, steam,
compressed air, telecommunication, sanitary and storm sewage lines and systems
and other similar systems serving the Hotels owned or leased by any Loan Party
or any of their respective Subsidiaries or Eligible Joint Ventures are installed
and operating and are sufficient to enable the real property owned or leased by
any Loan Party and their respective Subsidiaries or Eligible Joint Ventures to
continue to be used and operated in the manner currently being used and
operated, and no Loan Party or any of its Subsidiaries or Eligible Joint
Ventures has any knowledge of any factor or condition that reasonably could be
expected to result in the termination or material impairment of the furnishing
thereof. No Improvement or portion thereof is dependent for its access,
operation or utility on any land, building or other Improvement not included in
the real property owned or leased by any Loan Party or any of its Subsidiaries
or Eligible Joint Ventures other than for access provided pursuant to a recorded
easement or other right of way establishing the right of such access.
(d) All Permits required to have been issued or appropriate to enable
all real property owned or leased by any Loan Party or any of its Subsidiaries
or Eligible Joint Ventures to be lawfully occupied and used for all of the
purposes for which they are currently occupied and used have been lawfully
issued and are in full force and effect, other than those which in the aggregate
have no Material Adverse Effect.
(e) No Loan Party or any of its Subsidiaries or Eligible Joint Ventures
has received any notice, or has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any real property owned or leased
by any Loan Party or any of its Subsidiaries or Eligible Joint Ventures or
any part thereof, or any proposed termination or impairment of any parking at
any such owned or leased real property or of any sale or other disposition of
any real property owned or leased by any Loan Party or any of its Subsidiaries
or Eligible Joint Ventures or
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any part thereof in lieu of condemnation, which in the aggregate, are reasonably
likely to have a Material Adverse Effect.
(f) Except for events or conditions not reasonably likely to have, in
the aggregate, a Material Adverse Effect, (i) no portion of any real property
owned or leased by any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures has suffered any material damage by fire or other casualty loss which
has not heretofore been completely repaired and restored to its condition prior
to such casualty, and (ii) no portion of any real property owned or leased by
any Loan Party or any of its Subsidiaries or Eligible Joint Ventures is located
in a special flood hazard area as designated by any Federal Governmental
Authorities.
4.23. Status as REIT. The Borrower is organized in conformity with the
requirements for qualification as an equity-oriented real estate investment
trust under the Code. Borrower has met all of the requirements for qualification
as an equity-oriented real estate investment trust under the Code for its Fiscal
Year ended December 31, 1997. The Borrower is in a position to qualify for its
current Fiscal Year as a real estate investment trust under the Code and its
proposed methods of operation will enable it to so qualify.
4.24. Operator: Compliance with Law. To the best knowledge of the
Borrower and its Subsidiaries, each Operator (i) has full power and authority
and the legal right to own, lease (or sublease), manage and operate (as
applicable) the properties it operates and to conduct the business in which it
is currently engaged with respect to any real property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures, (ii) is duly
qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership, lease (or sublease), management or operation
of any real property owned or leased by the Borrower or any of its Subsidiaries
or Eligible Joint Ventures requires such qualification, and (iii) is in
compliance with all Requirements of Law applicable to the real property owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint Ventures, or
applicable to the operation or management thereof except to the extent that the
failure to comply therewith is not reasonably likely to have, in the aggregate,
a Material Adverse Effect.
4.25. Operating Leases, Licenses and Management Agreement. (a) Each of
the Hotels (i) is leased to an Operating Lessee under an Operating Lease (ii) is
the subject of a License, and (iii) is managed and operated for the Operating
Lessee pursuant to a Management Agreement.
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(b) Each of the Operating Leases, Licenses and Management Agreements in
respect of the Hotels (i) is in full force and effect, (ii) is a legally valid
and binding obligation of each of the parties thereto, subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect, and (iii) has not been modified, amended or supplemented in any
material or adverse way. Neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures has collected any rents becoming due under any Operating
Lease more than 30 days in advance. All rent and other sums and charges payable
by any Operating Lessee under each Operating Lease to which it is a party are
current, no notice of default or termination under any such Operating Lease is
outstanding, no termination event or condition or uncured default on the part of
the Operating Lessee exists under any Operating Lease, and no event of default
has occurred which, with the giving of notice or the lapse of time or both,
would constitute such a default or termination event or condition or uncured
default on the part of the Borrower or its Subsidiaries or Eligible Joint
Ventures or the Operators (as the case may be), subject to such exceptions which
are not reasonably likely to have, in the aggregate, a Material Adverse Effect.
As to all of the Leases, Borrower and each of its Subsidiaries or Eligible Joint
Ventures has performed all of its repair and maintenance obligations (if any)
and, to the best knowledge and belief of Borrower, each Operating Lessee under
each Operating Lease to which it is a party has performed all of its repair and
maintenance obligations, subject to such exceptions which are not reasonably
likely to have, in the aggregate, a Material Adverse Effect.
4.26. FF&E Reserves. An FF&E Reserve has been established in respect of
each of the Hotels and the Borrower or its Subsidiaries or Eligible Joint
Ventures have made any contributions to such FF&E Reserve as required by the
terms of the Operating Lease and/or the Management Agreement relating thereto.
4.27 Year 2000 Compliance. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the Borrower's
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which Borrower's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed by January 1, 1999. The cost to the Borrower of
such reprogramming and testing and of the reasonably foreseeable consequences of
year 2000 to the Borrower (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) will not result in a Default or
a Material Adverse Effect. Except for such of the reprogramming referred to in
the preceding sentence as may be necessary, the computer and management
information systems of the Borrower and its Subsidiaries are and, with ordinary
course upgrading and
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maintenance, will continue for the term of this Agreement to be, sufficient to
permit the Borrower to conduct its business without the occurrence of a Material
Adverse Effect.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or Commitments remain outstanding,
unless the requisite Lenders specified in Section 10.1 otherwise consent in
writing, the Borrower agrees with the Lenders and the Administrative Agent that:
5.1. Unsecured Interest Expense Coverage. The Borrower shall maintain
at the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on
March 31, 1998, a ratio of (a) Unencumbered NOI to (b) Unsecured Interest
Expense, in each case determined on the basis of the four (4) Fiscal Quarters
ending on the date of determination, of not less than 2.5:1.0.
5.2. Fixed Charge Coverage Ratio. The Borrower shall maintain at the
end of each Fiscal Quarter commencing with the Fiscal Quarter ending on March
31, 1998, a ratio of (a) Adjusted EBITDA to (b) Fixed Charges, in each case
determined on the basis of the four (4) Fiscal Quarters ending on the date of
determination, of not less than 2.0:1.0.
5.3. Maintenance of Tangible Net Worth. The Borrower shall maintain
during each Fiscal Quarter a Tangible Net Worth of not less than the Minimum
Tangible Net Worth.
5.4. Limitations on Total Indebtedness. The Borrower shall not, during
each Fiscal Quarter on a consolidated basis, permit the Total Indebtedness
(including, without limitation, the Obligations and all Capitalized Lease
Obligations) of the Borrower for borrowed money to exceed 50% of Total Value.
5.5. Limitations on Total Secured Indebtedness. The Borrower shall not,
during each Fiscal Quarter on a consolidated basis, permit the Total Secured
Indebtedness (including, without limitation, secured Obligations and Capitalized
Lease Obligations) of the Borrower, to exceed (x) prior to and including June
30, 1999, 30% of Total Value and (y) after June 30, 1999, 25% of Total Value.
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5.6. Adjusted NOI and Hotels. The Borrower shall ensure that at the end
of each Fiscal Quarter commencing with the Fiscal Quarter ending on June 30,
1997 at least 50% of the aggregate Adjusted NOI generated by all Hotels during
the preceding four (4) Fiscal Quarters shall be generated by Hotels wholly owned
or leased by the Borrower or its wholly-owned Subsidiaries, provided that, for
Hotels owned or leased for less than four (4) Fiscal Quarters only the Adjusted
NOI generated by such Hotels since the date of acquisition of such Hotel shall
be included in calculating such aggregate Adjusted NOI.
5.7. Limitations on Recourse Secured Indebtedness. The Borrower shall
not, during each Fiscal Quarter on a consolidated basis, permit the Recourse
Secured Indebtedness (including, without limitation, secured Obligations and
Capitalized Lease Obligations) of the Borrower, to exceed the lesser of (x) 7.5%
of Total Value and (y) $200,000,000.00.
ARTICLE VI
AFFIRMATIVE COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, unless the Majority Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
6.1. Compliance with Laws, Etc. The Borrower shall comply, and shall
cause each of its Subsidiaries and Eligible Joint Ventures to comply, in all
material respects with all Requirements of Law, Contractual Obligations,
commitments, instruments, licenses, permits and franchises, including, without
limitation, all Permits; provided, however, that the Borrower shall not be
deemed in default of this Section 6.1 if all such non-compliances in the
aggregate have no Material Adverse Effect.
6.2. Conduct of Business. The Borrower shall (a) conduct, and shall
cause each of its Subsidiaries and Eligible Joint Ventures to conduct, its
business in the ordinary course and consistent with past practice; (b) use, and
cause each of its Subsidiaries and Eligible Joint Ventures to use, its
reasonable efforts, in the ordinary course and consistent with past practice, to
(i) preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower or
any of its Subsidiaries or Eligible Joint Ventures, and (ii) keep available the
services and goodwill of its present employees; (c) preserve, and cause each of
its Subsidiaries and Eligible Joint Ventures to preserve, all
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registered patents, trademarks, trade names, copyrights and service marks with
respect to its business; and (d) perform and observe, and cause each of its
Subsidiaries and Eligible Joint Ventures to perform and observe, all the terms,
covenants and conditions required to be performed and observed by it under its
Contractual Obligations (including, without limitation, to pay all rent and
other charges payable under any lease and all debts and other obligations as the
same become due), and do, and cause its Subsidiaries and Eligible Joint Ventures
to do, all things necessary to preserve and to keep unimpaired its rights under
such Contractual Obligations; provided, however, that, in the case of each of
clauses (a) through (d), the Borrower shall not be deemed in default of this
Section 6.2 if all such failures in the aggregate have no Material Adverse
Effect.
6.3. Payment of Taxes, Etc. The Borrower shall pay and discharge, and
shall cause each of its Subsidiaries and Eligible Joint Ventures, as
appropriate, to pay and discharge, before the same shall become delinquent, all
lawful governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings, if adequate reserves therefor
have been established on the books of the Borrower or the appropriate Subsidiary
or Eligible Joint Venture in conformity with GAAP; provided, however, that the
Borrower shall not be deemed in default of this Section 6.3 if all such
non-payments in the aggregate have no Material Adverse Effect.
6.4. Maintenance of Insurance. The Borrower shall maintain, and shall
cause each of its Subsidiaries and Eligible Joint Ventures to maintain,
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks (including, without limitation, fire,
extended coverage, vandalism, malicious mischief, public liability, product
liability, and business interruption) as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary or Eligible Joint Venture. The Borrower
will furnish to the Lenders from time to time such information as may be
requested as to such insurance.
6.5. Preservation of Existence, Etc. The Borrower shall preserve and
maintain, and shall cause each of its Subsidiaries and Eligible Joint Ventures
to preserve and maintain, its corporate or partnership existence, rights
(charter and statutory) and franchises, except as permitted under Section 7.5.
6.6. Access. The Borrower shall, at any reasonable time and from time
to time, permit the Administrative Agent or any of the Lenders, or any agents or
representatives thereof, at the expense of the Lenders (but such expense to be
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reimbursed by the Borrower in the event that any of the following reveal a
material Default by the Borrower), to (a) examine and make copies of and
abstracts from the records and books of account of the Borrower and each of its
Subsidiaries and Eligible Joint Ventures, (b) visit the properties of the
Borrower and each of its Subsidiaries and Eligible Joint Ventures, (c) discuss
the affairs, finances and accounts of the Borrower and each of its Subsidiaries
and Eligible Joint Ventures with any of their respective officers or directors,
and (d) communicate directly with the Borrower's independent certified public
accountants.
6.7. Keeping of Books. The Borrower shall keep, and shall cause each of
its Subsidiaries and Eligible Joint Ventures to keep, proper books of record and
account, in which proper entries shall be made of all financial transactions and
the assets and business of the Borrower and each such Subsidiary or Eligible
Joint Venture.
6.8. Maintenance of Properties, Etc. The Borrower shall maintain and
preserve, and shall cause each of its Subsidiaries and Eligible Joint Ventures
to maintain and preserve, (i) all of its properties which are used or useful or
necessary in the conduct of its business in good working order and condition,
and (ii) all rights, permits, licenses, approvals and privileges (including,
without limitation, all Permits) which are used or useful or necessary in the
conduct of its business; provided, however, that the Borrower shall not be
deemed in default of this Section 6.8 if all such failures in the aggregate have
no Material Adverse Effect.
6.9. Performance and Compliance with Other Covenants. The Borrower
shall perform and comply with, and shall cause each of its Subsidiaries and
Eligible Joint Ventures to perform and comply with, each of the covenants and
agreements set forth in each Contractual Obligation to which it or any of its
Subsidiaries or Eligible Joint Ventures is a party; provided, however, that the
Borrower shall not be deemed in default of this Section 6.9 if all such failures
in the aggregate have no Material Adverse Effect.
6.10. Application of Proceeds. The Borrower shall use the entire amount
of the proceeds of the Loans as provided in Section 4.18.
6.11. Financial Statements. The Borrower shall furnish to the Lenders:
(a) as soon as available and in any event within 45 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year, consolidated
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balance sheets of the Borrower and its Subsidiaries and the Reporting Operating
Lessees and any Requested Operating Lessee as of the end of such quarter and
consolidated statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries and the Reporting Operating Lessees and any
Requested Operating Lessee for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, all prepared in
conformity with GAAP and certified by the chief financial officer of the
Borrower or the chief financial officer of the Reporting Operating Lessees or a
Requested Operating Lessee, as appropriate, as fairly presenting the financial
condition and results of operations of the Borrower and its Subsidiaries and the
Reporting Operating Lessees and any Requested Operating Lessee at such date and
for such period, together with (i) a certificate of said officer stating that no
Default or Event of Default has occurred and is continuing or, if a Default or
an Event of Default has occurred and is continuing, a statement as to the nature
thereof and the action which the Borrower, any Reporting Operating Lessees or
any Requested Operating Lessee, as appropriate, proposes to take with respect
thereto, (ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Borrower or any Reporting Operating Lessee or any
Requested Operating Lessee, as appropriate, in determining compliance with all
financial covenants contained herein, and (iii) a written discussion and
analysis by the management of the Borrower or any Reporting Operating Lessee or
any Requested Operating Lessee, as appropriate, of the financial statements
furnished in respect of such Fiscal Quarter;
(b) as soon as available and in any event within 90 days after the end
of each Fiscal Year, consolidated balance sheets of the Borrower and its
Subsidiaries and the Reporting Operating Lessees as of the end of such year and
consolidated statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries and the Reporting Operating Lessees for such
Fiscal Year, all prepared in conformity with GAAP and certified, in the case of
such consolidated financial statements, in a manner reasonably acceptable to the
Administrative Agent without qualification as to the scope of the audit by
Coopers & Lybrand or other independent public accountants of recognized national
standing together with (i) a schedule in form satisfactory to the Administrative
Agent of the computations used by the Borrower in determining, as of the end of
such Fiscal Year, the Borrower's or a Reporting Operating Lessee's, as
appropriate, compliance with all financial covenants contained herein, and (ii)
a written discussion and analysis by the management of the Borrower or any
Reporting Operating Lessee, as appropriate, of the financial statements
furnished in respect of such Fiscal Year; and
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(c) promptly after the same are received by the Borrower, a
copy of each management letter provided to the Borrower by its independent
certified public accountants which refers in whole or in part to any inadequacy,
defect, problem, qualification or other lack of fully satisfactory accounting
controls utilized by the Borrower or any of its Subsidiaries.
(d) within 45 days after the end of each Fiscal Quarter, a Compliance
Certificate as of the end of such Fiscal Quarter, executed by the Chief
Financial Officer of the Borrower and if requested by the Administrative Agent,
together with copies (to the extent not already delivered) of the Hotel
Documents in respect of each Hotel indicated by Administrative Agent.
6.12. Reporting Requirements. The Borrower shall furnish to the
Lenders:
(a) prior to any Asset Sale generating proceeds in excess of 10% of the
Total Value of the Borrower, a notice (i) describing the assets being sold, (ii)
stating the estimated Asset Sales proceeds in respect of such Asset Sale and
(iii) accompanied by a Compliance Certificate and a certificate of the Chief
Financial Officer of the Borrower stating that before and after giving effect to
such Asset Sale, the Borrower shall be in compliance with all of its covenants
set forth in the Loan Documents and that no Default or Event of Default will
result from such Asset Sale.
(b) as soon as available and in any event within 90 days after the end
of each Fiscal Year (or earlier if approved earlier by the Board of Directors of
the Borrower), an annual budget of the Borrower and its Subsidiaries for the
succeeding Fiscal Year, displaying on a quarterly basis anticipated balance
sheets, forecasted Capital Expenditures, working capital requirements, revenues,
net income, cash flow, EBITDA, all on a consolidated basis;
(c) promptly and in any event within 30 days after the Borrower, any of
its Subsidiaries or any ERISA Affiliate knows or has reason to know that any
ERISA Event has occurred, a written statement of the Chief Financial Officer or
other appropriate officer of the Borrower describing such ERISA Event or waiver
request and the action, if any, which the Borrower, its Subsidiaries and ERISA
Affiliates propose to take with respect thereto and a copy of any notice filed
by or with the PBGC or the IRS pertaining thereto;
(d) promptly and in any event within 10 days after receipt thereof, a
copy of any adverse notice, determination letter, ruling or opinion the
Borrower, any
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of its Subsidiaries or any ERISA Affiliate receives from the PBGC,
DOL or IRS with respect to any Plan, other than those which, in the aggregate,
do not have any reasonable likelihood of resulting in a Material Adverse Change;
(e) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries, except those
which in the aggregate, if adversely determined, would have no Material Adverse
Effect;
(f) promptly and in any event within two Business Days after the
Borrower becomes aware of the existence of (i) any Default or Event of Default,
(ii) any breach or non-performance of, or any default under, any Operating
Lease, Management Agreement or any Contractual Obligation which is material to
the business, prospects, operations or financial condition of the Borrower and
its Subsidiaries taken as one enterprise, or (iii) any Material Adverse Change
or any event, development or other circumstance which has any reasonable
likelihood of causing or resulting in a Material Adverse Change, telephonic or
telecopied notice in reasonable detail specifying the nature of the Default,
Event of Default, breach, non-performance, default, event, development or
circumstance, including, without limitation, the anticipated effect thereof,
which notice shall be promptly confirmed in writing within five days;
(g) promptly after the sending or filing thereof, copies of all reports
which the Borrower sends to its security holders generally, and copies of all
reports and registration statements which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any national
securities exchange or the National Association of Securities Dealers, Inc.;
(h) promptly upon the request of any Lender, through the Administrative
Agent, copies of all federal tax returns and reports filed by the Borrower or
any of its Subsidiaries in respect of taxes measured by income (excluding sales,
use and like taxes);
(i) promptly and in any event within ten days of the Borrower or any
Subsidiary learning of any of the following, written notice to the
Administrative Agent of any of the following:
(i) the Release or threatened Release of any Hazardous Material on
or from any property owned or leased by the Borrower of any of its
Subsidiaries or Eligible Joint Ventures and any written order, notice,
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permit, application or other written communication or report received by
the Borrower, any of its Subsidiaries or Eligible Joint Ventures in
connection with or relating to any such Release or threatened Release,
unless such Release or threatened Release is not reasonably likely to
subject the Borrower or any of its Subsidiaries to Environmental
Liabilities and Costs of $5,000,000 or more;
(ii) any notice or claim to the effect that the Borrower, any of
its Subsidiaries or any Eligible Joint Ventures is or may be liable to
any Person as a result of the Release or threatened Release of any
Hazardous Material into the environment;
(iii) receipt by the Borrower, any of its Subsidiaries or Eligible
Joint Ventures or any Operator of notification that any real or personal
property of the Borrower or any of its Subsidiaries is subject to an
Environmental Lien;
(iv) any Remedial Action taken by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or any other Person on their
behalf in response to any Hazardous Material on, under or about any real
property owned or leased by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, unless such Remedial Action is not reasonably
likely to subject the Borrower or any of its Subsidiaries or Eligible
Joint Ventures to Environmental Liabilities and Costs of $5,000,000 or
more;
(v) receipt by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures of any notice of violation of, or knowledge by the
Borrower or any of its Subsidiaries or any Eligible Joint Ventures that
there exists a condition which may result in a violation by the Borrower
or any of its Subsidiaries or Eligible Joint Ventures of, any
Environmental Law, unless such violation is not reasonably likely to
subject the Borrower or any of its Subsidiaries to Environmental
Liabilities and Costs of $5,000,000 or more;
(vi) any proposed Capital Expenditure by the Borrower or any of
its Subsidiaries or Eligible Joint Ventures intended or designed to
implement any existing or additional Remedial Action, unless such
expenditures are not reasonably likely to exceed $5,000,000;
(vii) the commencement of any judicial or administrative
proceeding or investigation alleging a violation of any Environmental
Law; or
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(viii) any proposed acquisition of stock, assets or real property,
or any proposed leasing of property by the Borrower, or any of its
Subsidiaries or Eligible Joint Ventures, unless such action is not
reasonably likely to subject the Borrower and its Subsidiaries to
Environmental Liabilities and Costs to the Borrower in excess of
$5,000,000;
(j) promptly, such additional financial and other information
respecting the financial or other condition of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or the Operating Lessee or the status or
condition of any real property owned or leased by the Borrower or its
Subsidiaries or Eligible Joint Ventures, or the operation thereof which the
Borrower is entitled to or can otherwise reasonably obtain, as the
Administrative Agent from time to time reasonably requests; and
(k) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any Environmental Claim,
Remedial Action or any other issue identified in any notice or report required
pursuant to this Section 6.12.
6.13. Leases and Operating Leases; Management Agreements and Licenses.
(a) If requested by Administrative Agent, the Borrower shall provide the
Administrative Agent, within 30 days of such request, with a copy of each
Qualified Lease and each Operating Lease (to the extent not already delivered).
The Borrower shall, and shall cause each of its Subsidiaries and Eligible Joint
Ventures to, (i) comply in all material respects with all of their respective
obligations under all of their respective Leases and Operating Leases now or
hereafter held respectively by them with respect to real property, including,
without limitation, the Leases set forth in Schedule 4.22(b); (ii) not modify,
amend, cancel, extend or
otherwise change in any materially adverse manner any of the terms, covenants or
conditions of any such Leases or Operating Leases; (iii) not assign any Leases
or sublet any portion of the premises if such assignment or sublet would have a
Material Adverse Effect; (iv) provide the Administrative Agent with a copy of
each notice of default under any Lease or Operating Lease received by the
Borrower or any Subsidiary or Eligible Joint Venture of the Borrower immediately
upon receipt thereof and deliver to the Administrative Agent a copy of each
notice of default sent by the Borrower or any Subsidiary or Eligible Joint
Venture of the Borrower under any Lease or Operating Lease simultaneously with
its delivery of such notice under such Lease or Operating Lease except to the
extent that such defaults, in the aggregate, would not have a Material Adverse
Effect; (v) notify the Administrative Agent, not later than 30 days prior to the
date of the expiration of the term of any Qualified Lease, of the
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Borrower's or any Subsidiary or Eligible Joint Venture of the Borrower's
intention either to renew or to not renew any such Qualified Lease, and, if the
Borrower or any Subsidiary or Eligible Joint Venture of the Borrower intends to
renew such Qualified Lease, the terms and conditions of such renewal; and (vi)
maintain each Operating Lease in full force and effect and enforce the
obligations of the Operating Lessee thereunder, in a timely manner except to the
extent that the failure to do so, in the aggregate, would not have a Material
Adverse Effect.
(b) The Borrower shall take all actions and do all things within its
power or control necessary or required to cause each Operating Lessee to (i)
keep, observe, comply with and perform all of the terms, provisions, covenants
and undertakings on its part required by each Operating Lease, each License,
each sublease and Management Agreement relating to any Hotel, and (ii) to
enforce the provisions of each License and each Management Agreement, if the
failure to comply or enforce such agreements would be reasonably likely, in the
aggregate, to have a Material Adverse Effect.
6.14. Intentionally Omitted.
6.15. Employee Plans. For each Plan and any related trust hereafter
adopted or maintained by a Loan Party or any of its ERISA Affiliates intended to
qualify under Code Section 125, 401 or 501, the Borrower shall (i) seek, and
cause such of its ERISA Affiliates to seek, and receive determination letters
from the IRS to the effect that such plan is so qualified; and (ii) cause such
plan to be so qualified.
6.16. Intentionally Omitted.
6.17. Fiscal Year. The Borrower shall maintain as its Fiscal Year the
twelve month period ending on December 31 of each year.
6.18. Environmental Matters. (a) The Borrower shall comply and shall
cause each of its Subsidiaries and Eligible Joint Ventures and each property
owned or leased by such parties to comply in all material respects with all
applicable Environmental Laws currently or hereafter in effect.
(b) If Administrative Agent or Lenders at any time have a reasonable
basis to believe that there may be a material violation of any Environmental Law
by the Borrower or any of its Subsidiaries and Eligible Joint Ventures or any
Operator related to any real property owned or leased by the Borrower or any of
its Subsidiaries and Eligible Joint Ventures, or real property
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adjacent to such real property, then the Borrower agrees, upon request from the
Administrative Agent, to provide the Administrative Agent, at the Borrower's
expense, with such reports, certificates, engineering studies or other written
material or data as the Administrative Agent or Lenders may reasonably require
so as to reasonably satisfy the Administrative Agent and Lenders that the
Borrower or such Subsidiary, Eligible Joint Venture or real property owned or
leased by them is in material compliance with all applicable Environmental Laws.
Furthermore, Administrative Agent shall have the right to inspect during normal
business hours any real property owned or leased by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures if at any time Administrative Agent or
Lenders have a reasonable basis to believe that there may be such a material
violation of Environmental Law.
(c) The Borrower shall, and shall cause each of its Subsidiaries and
Eligible Joint Ventures and each Operating Lessee to, take such Remedial Action
or other action as required by Environmental Laws, as any Governmental Authority
requires, except to the extent contested in good faith and by proper
proceedings, or as is appropriate and consistent with good business practice.
6.19. REIT Requirements. The Borrower shall operate its business at all
times so as to satisfy all requirements necessary to qualify as an
equity-oriented real estate investment trust under Sections 856 through 860 of
the Code. The Borrower will maintain adequate records so as to comply with all
record-keeping requirements relating to the qualification of the Borrower as an
equity-oriented real estate investment trust as required by the Code and
applicable regulations of the Department of the Treasury promulgated thereunder
and will properly prepare and timely file with the IRS all returns and reports
required thereby. The Borrower will request from its shareholders all
shareholder information required by the Code and applicable regulations of the
Department of Treasury promulgated thereunder.
6.20. Maintenance of FF&E Reserves. The Borrower shall cause to be
maintained the FF&E Reserves pursuant to the terms of the Operating Leases.
6.21. INTENTIONALLY DELETED
6.22. Further Assurances. At any time upon the request of the
Administrative Agent, the Borrower will, promptly and at its expense, execute,
acknowledge and deliver such further documents and do such other acts and things
as the Administrative Agent may reasonably request to evidence the Loans made
hereunder and interest thereon in accordance with the terms of this Agreement;
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6.23. Unencumbered Hotel Properties/Financial Covenant Imbalance. (a)
The Borrower shall promptly notify the Administrative Agent in writing in the
event that at any time the Borrower or any of its Subsidiaries receives or
otherwise gains knowledge that (i) any Hotel included in the calculation of a
prior Compliance Certificate as an Unencumbered Hotel Property, ceases, for any
reason whatsoever, to be an Unencumbered Hotel Property or (ii) a Financial
Covenant Imbalance exists, and the amount of the Loans which must be repaid to
cure such Financial Covenant Imbalance.
(b) The Administrative Agent, at the expense of the Lenders, which
expense shall not exceed $10,000 without the consent of the Majority Lenders
(but such expense to be reimbursed by the Borrower in the event that a Hotel
fails to meet requirements for an Unencumbered Hotel Property in any material
respect) may make physical and other verifications of any Hotels included as
Unencumbered Hotel Properties in any reasonable manner and through any medium
that the Administrative Agent considers advisable, and the Borrower shall
furnish all such assistance and information as the Administrative Agent may
require in connection therewith.
6.24. Hotel Documents. Within 30 days of Administrative Agent's
request, Borrower shall deliver to Administrative Agent Hotel Documents (to the
extent not already delivered) for any Hotel indicated by Administrative Agent.
ARTICLE VII
NEGATIVE COVENANTS
As long as any of the Obligations or Commitments remain outstanding,
without the written consent of the Administrative Agent, the Borrower agrees
with the Lenders and the Administrative Agent that:
7.1. Restrictions on Wholly-Owned Subsidiaries. (a) The Borrower shall
not create or acquire any direct or indirect wholly-owned Subsidiary after the
Closing Date unless (i) if such Subsidiary is a Required Guarantor, concurrently
with the creation or acquisition thereof, such Subsidiary executes and delivers
to the Administrative Agent a Subsidiary Guaranty or (ii) if such Subsidiary is
not a Required Guarantor the organizational documents and agreement of limited
partnership (or equivalent) of such Subsidiary provide that such Subsidiary
shall not incur any Indebtedness (other than (A) intercompany Indebtedness owed
to Borrower and (B) Indebtedness which is either (x) Non-Recourse Indebtedness
or (y) recourse to such Subsidiary provided such Indebtedness (I) does not
exceed 65% of the value of
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such Subsidiary's assets which secures such Indebtedness and (II) is secured by
all of the Hotels owned by such Subsidiary).
(b) No wholly-owned Subsidiary which is acquired or created after the
Closing Date may (i) incur any Indebtedness (other than (A) intercompany
Indebtedness owed to Borrower and (B) Indebtedness which is either (x)
Non-Recourse Indebtedness or (y) recourse to such Subsidiary provided such
Indebtedness (I) does not exceed 65% of the value of such Subsidiary's assets
which secures such Indebtedness and (II) is secured by all of the Hotels owned
by such Subsidiary) or (ii) be subject to any contractual restriction on such
Subsidiary's ability to declare or pay dividends or distribute cash or other
assets to Borrower or any of its Subsidiaries.
(c) Borrower shall not permit any direct or indirect wholly-owned
Subsidiary to own assets (including the assets of such Person's Subsidiaries)
the value of which exceed 10% of Total Value unless such Subsidiary executes and
delivers to the Administrative Agent a Subsidiary Guaranty, provided, that in
the event the aggregate value of the assets of all wholly-owned Subsidiaries
which are not Guarantors exceed 20% of Total Value then Borrower shall not
permit any direct or indirect wholly-owned Subsidiary formed thereafter to own
assets (including the assets of such Person's Subsidiaries) the value of which
exceed 1% of Total Value unless such Subsidiary executes and delivers to the
Administrative Agent a Subsidiary Guaranty.
7.2. Operation/Ownership of Hotels. (a) Borrower shall not own or lease
(directly or indirectly) any Hotels which are not (i) leased to an Operating
Lessee pursuant to an Operating Lease within 90 days of Borrower's (or a
Subsidiary's) acquisition of such Hotel, (ii) managed pursuant to a Management
Agreement and (iii) operated pursuant to and with the benefit of a License. The
aggregate value of any Hotels owned or leased by the Borrower (directly or
indirectly) which are not managed by a Manager may not exceed 10% of Total
Value.
(b) The aggregate value of any Hotels owned or leased by the Borrower
(directly or indirectly) which are not operated under a nationally recognized
brand may not exceed 10% of Total Value.
7.3. Lease Obligations. (a) The Borrower shall not create or suffer to
exist, or permit any of its Subsidiaries or Eligible Joint Ventures to create or
suffer to exist, any obligations as lessee for the rental or hire of real or
personal property of any kind under other leases or agreements to lease entered
into otherwise than in the ordinary course of business.
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(b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to, become or remain liable as lessee or
guarantor or other surety with respect to any lease, whether an operating lease
or a Capitalized Lease, of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, which (i) the Borrower or any of its
Subsidiaries or Eligible Joint Ventures has sold or transferred or is to sell or
transfer to any other Person, or (ii) the Borrower or any of its Subsidiaries or
Eligible Joint Ventures intends to use for substantially the same purposes as
any other property which has been or is to be sold or transferred by that entity
to any other Person in connection with such lease.
7.4. Restricted Payments. The Borrower, unless otherwise required in
order to maintain FelCor's status as a real estate investment trust in
accordance with the written advice of independent counsel to the Borrower, shall
not declare or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities (other than the Bristol
Distribution) on account or in respect of any of its Stock or Stock Equivalents
(collectively, "Restricted Payments"); provided, that, notwithstanding the
foregoing, during any period of four consecutive Fiscal Quarters, (i) the
Borrower may make Restricted Payments in an aggregate amount not to exceed 85%
of the consolidated Adjusted Funds From Operations of the Borrower for such
period and (ii) the aggregate amount of Restricted Payments made shall not
exceed 100% of Free Cash Flow of the Borrower for such period.
7.5. Mergers, Stock Issuances, Asset Sales, Etc. (a) The Borrower shall
not sell, convey, transfer, lease or otherwise dispose of all or substantially
all of its assets or properties, and shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to, (i) merge with any Person, or (ii)
consolidate with any Person, unless the Borrower or its Subsidiary or Eligible
Joint Venture is the surviving or resulting entity and, following such merger or
consolidation, no Default or Event of Default shall have occurred.
(b) The Borrower shall not and shall not permit any of its Subsidiaries
or Eligible Joint Ventures to effect, enter into, consummate or suffer to exist
any Asset Sale(s) of any Hotel(s) generating proceeds aggregating more than 25%
of the greater of the value of the Hotels owned by the Borrower, its
Subsidiaries and Eligible Joint Ventures (x) as at the Closing Date or (y) if
the Bristol Merger occurs, as at the Bristol Merger Date.
(c) The Borrower shall not sell or otherwise dispose of, or factor at
maturity or collection, or permit any of its Subsidiaries or Eligible Joint
Ventures to
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sell or otherwise dispose of, or factor at maturity or collection, any accounts
receivables.
7.6. Restrictions on Construction/Budget Hotels. (a) The Borrower shall
not, and shall not permit any of its Subsidiaries or Eligible Joint Ventures to
(i) engage in the construction of new hotels (provided that nothing herein shall
prohibit expansions to existing Hotels) or (ii) enter into any commitments or
agreements to purchase any Hotels under, or to be under, original construction
(provided that nothing herein shall limit commitments or agreements for
expansions to existing Hotels), pursuant to which (A) such Persons' obligations,
in the aggregate, exceed the lesser of (x) 15% of the Total Value of the
Borrower as of the end of the Fiscal Quarter immediately preceding the date of
any such commitment or agreement and (y) $300,000,000, or (B) any such Person is
or may be liable for, or otherwise assumes, any risks relating to the
development or construction (but not operation) of such Hotel, whether by way of
providing any guaranties of completion, payment of any construction loans,
payment of construction cost overruns, or otherwise.
(b) Other than Borrower's (or its Subsidiary's or Unconsolidated
Entity's) investments in budget hotels, limited service hotels or extended stay
hotels which are in existence as of the Effective Date plus those acquired by
Borrower (as a direct result of the Bristol Merger) on the Bristol Merger Date,
the Borrower's investments (direct or indirect) in any budget hotels, limited
service hotels or extended stay hotels, shall not exceed, in the aggregate, 10%
of Total Value.
7.7. Change in Nature of Business or in Capital Structure. (a) The
Borrower shall not make, and shall not permit any of its Subsidiaries or
Eligible Joint Ventures to make, any material change in the nature or conduct of
its business as carried on at the Closing Date except as contemplated by the
Bristol Merger on the Bristol Merger Date.
(b) The Borrower shall not make, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to make, any change in its capital
structure (including, without limitation, in the terms of its outstanding Stock)
or amend its declaration of trust, certificate of incorporation or by-laws or
other equivalent documents other than for changes or amendments which in the
aggregate have no Material Adverse Effect.
7.8. Modification of Material Agreements. The Borrower shall not, and
shall not permit any of its Subsidiaries or Eligible Joint Ventures to, alter,
amend, modify, rescind, terminate, supplement or waive any of their respective
rights
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under, or fail to comply in all material respects with, any of its material
Contractual Obligations unless approved by the Administrative Agent, which
approval shall not be unreasonably withheld, conditioned or delayed; provided,
however, that, with respect to any such failure to comply with any Contractual
Obligation, the Borrower shall not be deemed in default of this Section 7.8 if
all such failures in the aggregate would have no Material Adverse Effect; and
provided, further, that in the event of any breach or event of default by a
Person other than the Borrower or any of its Subsidiaries or Eligible Joint
Ventures, the Borrower shall promptly notify the Administrative Agent of any
such breach or event of default and take all such action as may be reasonably
necessary in order to endeavor to avoid having such breach or event of default
have a Material Adverse Effect.
7.9. Accounting Changes. The Borrower shall not make, nor permit any of
its Subsidiaries to make, any change in accounting treatment and reporting
practices or tax reporting treatment, except as required by GAAP or law and
disclosed to the Lenders and the Administrative Agent.
7.10. Transactions with Affiliates. The Borrower shall not, and shall
not permit any of its Subsidiaries or Eligible Joint Ventures, to enter into any
transaction or series of related transactions, including, without limitation,
any Asset Sale or the rendering of any service, with any Affiliate (other than
among the Borrower and its wholly owned Subsidiaries) unless (a) no Default or
Event of Default would occur as a result thereof, and (b) such transaction is
(i) in the ordinary course of the Borrower's or such Subsidiary's or Eligible
Joint Venture's business, and (ii) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary or Eligible Joint Venture, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
7.11. Adverse or Speculative Transactions. The Borrower shall not and
shall not permit any of its Subsidiaries or Eligible Joint Ventures to engage in
any transaction involving contracts for commodity options or futures contracts
other than Interest Rate Contracts and Alternative Currency Contracts.
7.12. Environmental Matters. (a) The Borrower shall not, and shall not
permit any of its Subsidiaries or Eligible Joint Ventures or any Operating
Lessee, or, to the extent reasonably practicable, any other Person to dispose of
any Hazardous Material by placing it in or on the ground or waters of any
property owned or leased by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures.
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(b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures, or, to the extent practicable,
authorize any other Person to, dispose or to arrange for the disposal of any
Hazardous Material on behalf of the Borrower or any of its Subsidiaries or
Eligible Joint Ventures except in material compliance with all applicable
Environmental Laws currently and hereinafter in effect.
7.13. Joint Enterprises. Other than investments in (x) Joint
Enterprises in existence as of the Effective Date plus those investments in
Joint Enterprises acquired by Borrower on the Bristol Merger Date and as a
direct result of the Bristol Merger and (y) Eligible Entities, the Borrower's
investments (direct or indirect) in Joint Enterprises shall not exceed, in the
aggregate, 15% of Total Value.
7.14. Intentionally Omitted.
7.15. ERISA Plan Assets. The Borrower shall not and shall not permit
any of its Subsidiaries to have any of their assets become subject to Title I of
ERISA because they constitute "plan assets" within the meaning of the DOL
Regulation Section 2510.3-101 and by reason of an investment in the Borrower or
any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default. Each of the following events shall be an Event
of Default:
(a) The Borrower shall fail to pay any principal (including, without
limitation, mandatory prepayments of principal) of, or interest on, any
Loan, any Unpaid Drawing, any fee, any other amount due hereunder or under
the other Loan Documents or other of the Obligations when the same becomes
due and payable; or
(b) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
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(c) Any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or in any other Loan
Document if such failure shall remain unremedied for thirty days after the
earlier of the date on which (A) a Responsible Officer of the Borrower
becomes aware of such failure or (B) written notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender; or
(d) Any Loan Party or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Recourse Indebtedness of such
Loan Party or Subsidiary having a principal amount of $10,000,000 or more
(excluding Indebtedness evidenced by the Notes and any Non-Recourse
Indebtedness), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity
of such Indebtedness; or any such Indebtedness shall become or be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), or any Loan Party or any of its Subsidiaries
shall be required to repurchase or offer to repurchase such Indebtedness,
prior to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or
against the Borrower or any of its Significant Subsidiaries seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a custodian, receiver, trustee or other similar
official for it or for any substantial part of its property and, in the case
of any such proceedings instituted against the Borrower or any of its
Significant Subsidiaries (but not instituted by it), either such proceedings
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceedings shall occur; or the Borrower or any of
its Significant Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
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(f) Any judgment or order for the payment of money in excess of
$10,000,000 to the extent not fully covered by insurance shall be rendered
against any Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order, or (ii) there shall be any period of 10 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(g) An ERISA Event shall occur which, in the reasonable determination
of the Majority Lenders, has a reasonable possibility of a liability,
deficiency or waiver request of the Borrower or any ERISA Affiliate, whether
or not assessed, exceeding $5,000,000; or
(h) The Borrower or any of its Subsidiaries shall have entered into any
consent or settlement decree or agreement or similar arrangement with an
Governmental Authority or any judgment, order, decree or similar action
shall have been entered against the Borrower or any of its Subsidiaries, in
each case based on or arising from the violation of or pursuant to any
Environmental Law, or the generation, storage, transportation, treatment,
disposal or Release of any Hazardous Material and, in connection with all
the foregoing, the Borrower and its Subsidiaries are likely to incur
Environmental Liabilities and Costs in excess of $5,000,000; or
(i) There shall occur a Material Adverse Change or an event which is
reasonably likely to have a Material Adverse Effect; or
(j) FelCor shall cease, for any reason, to maintain its status as an
equity-oriented real estate investment trust under Sections 856 through 860
of the Code; or
(k) FelCor shall cease at any time to be the sole general partner of
FelCor LP; or
(l) INTENTIONALLY DELETED
(m) Hervey A. Feldman or Thomas J. Corcoran, Jr. shall sell, transfer
or encumber (otherwise than to (i) members of their respective families,
(ii) entities controlled by them, (iii) trusts for the benefit of any of the
foregoing or (iv) a Permitted Transferee) their voting Class A membership
interest in DJONT; or
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(n) INTENTIONALLY DELETED
(o) Any provision of any Subsidiary Guaranty after delivery thereof
under Section 3.1 shall for any reason cease to be valid and binding on any
Significant Subsidiary party thereto, or any Significant Subsidiary Party
shall so state in writing.
8.2. Remedies. (a) If there shall occur and be continuing any Event of
Default, the Administrative Agent (i) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Borrower, declare the
obligation of each Lender to make Loans and the Issuing Lender to issue a Letter
of Credit to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Majority Lenders by
notice to the Borrower, declare the Loans, all interest thereon and all other
amounts and Obligations payable under this Agreement to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts and
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that upon the occurrence of the Event
of Default specified in subparagraph 8.1(e) above, (A) the obligation of each
Lender to make Loans and of the Issuing Lender to issue Letters of Credit shall
automatically be terminated and (B) the Loans, all such interest and all such
amounts and Obligations shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower. In addition to the remedies set forth
above, the Administrative Agent may exercise any remedies provided by applicable
law.
(b) If the Administrative Agent exercises any rights or remedies
pursuant to subparagraph 8.2(a), the Administrative Agent shall not, without the
consent of the Majority Lenders, rescind the exercise of said rights or
remedies.
8.3 Actions in Respect of Letters of Credit. (a) Upon the Termination
Date, the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office, for deposit in a special
non-interest-bearing cash collateral account (the "L/C Cash Collateral Account")
to be maintained with and in the name of the Administrative Agent on behalf of
the Lenders at such place as shall be designated by the Administrative Agent, an
amount equal to all outstanding Letter of Credit Outstandings.
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(b) The Borrower hereby pledges, and grants to the Administrative Agent
a Lien on all of its right, title and interest in and to all funds held in the
L/C Cash Collateral Account from time to time, and all proceeds thereof, as
security for the payment of all amounts due and to become due from the Borrower
to the Lenders and the Issuing Lender.
(c) The Administrative Agent may, from time to time after funds are
deposited in the L/C Cash Collateral Account, apply funds then held in the L/C
Cash Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become or shall become due and
payable by the Borrower to the Issuing Lender or Lenders in respect of the
Letter of Credit Outstandings.
(d) Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account. The Borrower agrees that it will not (i) sell
or otherwise dispose of any interest in the L/C Cash Collateral Account or any
funds held therein or (ii) create or permit to exist any Lien upon or with
respect to the L/C Cash Collateral Account or any funds held therein, except as
provided in or contemplated by this Agreement.
(f) The Administrative Agent may also exercise, in its sole discretion,
in respect of the L/C Cash Collateral Account, in addition to the other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the Uniform Commercial Code
in effect in the State of New York at that time, and the Administrative Agent
may, without notice except as specified below, sell the L/C Cash Collateral
Account or any part thereof in one or more sales, at public or private sale, at
any of the Administrative Agent's offices or elsewhere, for cash, or credit or
for future delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable. The Borrower agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of the L/C Cash Collateral Account, regardless
of notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
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(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the L/C Cash
Collateral Account, may, in the discretion of the Administrative Agent, then or
at any time thereafter be applied (after all payments provided for in Section
8.3(c), the expiration of all outstanding Letters of Credit and the payment of
any amounts payable pursuant to Section 10.4) in whole or in part by the
Administrative Agent against all or any part of the other Obligations in such
order as the Administrative Agent shall elect. Any surplus of such cash or cash
proceeds held by the Administrative Agent and remaining after the indefeasible
cash payment in full of all of the Obligations shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Authorization and Action. (a) Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents.
(b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions
shall be binding upon all Lenders and all holders of Notes; provided, however,
that the Administrative Agent shall not be required to take any action which the
Administrative Agent in good faith believes exposes it to personal liability or
is contrary to this Agreement or applicable law. The Administrative Agent agrees
to give to each Lender prompt notice of (a) each notice and, (b) to the extent
the Administrative Agent grants any consents, approvals, disapprovals or waivers
to the Borrower pursuant to the directions of the Majority Lenders or all of the
Lenders as required hereunder, notice of such consent,
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approval, disapproval or waiver, given to it by, or by it to, any Loan Party
pursuant to the terms of this Agreement or the other Loan Documents.
9.2. Administrative Agent's Reliance, Etc. Neither the Administrative
Agent, nor any of its Affiliates or any of the respective directors, officers,
agents or employees of the Administrative Agent or any such Affiliate shall be
liable for any action taken or omitted to be taken by it, him, her or them under
or in connection with this Agreement or the other Loan Documents, except for
its, his, her or their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent (i) may
treat the payee of any Note as the holder thereof until such note has been
assigned in accordance with Section 10.7; (ii) may rely on the Register to the
extent set forth in Section 10.7(c); (iii) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iv)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents; (v) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any of the other
Loan Documents on the part of the Borrower or any other Loan Party or to inspect
the property (including, without limitation, the books and records) of the
Borrower or any other Loan Party; (vi) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; and (vii)
shall incur no liability under or in respect of this Agreement or any of the
other Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable, telex or facsimile
transmission) believed by it to be genuine and signed or sent by the proper
party or parties.
9.3. Chase and Affiliates. With respect to its Commitments, the Loans
made by it and each Note issued to it, and Letters of Credit issued by it, Chase
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Chase in its individual capacity. Chase and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower or any other Loan Party or any
of their respective Subsidiaries
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and any Person who may do business with or own securities of the Borrower or any
other Loan Party or any of their respective Subsidiaries, all as if Chase were
not the Administrative Agent and without any duty to account therefor to the
Lenders.
9.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements referred to in Article IV and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
9.5. Indemnification. The Lenders agree to indemnify the Issuing
Lender, the Administrative Agent and their Affiliates, and their respective
directors, officers, employees, agents and advisors (to the extent not
reimbursed by the Borrower or other Loan Parties), ratably according to the
respective principal amounts of the Notes then held by each of them (or if no
Notes are at the time outstanding, ratably according to the respective amounts
of the aggregate of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements (including, without limitation, fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Administrative Agent in any
way relating to or arising out of this Agreement or the other Loan Documents or
any action taken or omitted by the Administrative Agent under this Agreement or
the other Loan Documents; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Affiliate's gross negligence or wilful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including, without limitation, fees and disbursements of
legal counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of its rights or responsibilities under, this
Agreement or the other Loan Documents, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrower or another Loan Party.
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9.6. Successor Agent. The Administrative Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower and may be
removed by the Super Majority Lenders in the event that the Administrative Agent
commits a willful breach of, or is grossly negligent in the performance of, its
material obligations hereunder. Furthermore, in the event that at any time the
Administrative Agent assigns its entire interest as a Lender hereunder to an
Eligible Assignee as permitted by Section 10.7 hereof, which Eligible Assignee
is not an Affiliate of the Administrative Agent, then the Administrative Agent
shall resign as Administrative Agent. Upon any such resignation or removal
(which shall be effective upon such date as a successor Agent accepts its
appointment), the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Super
Majority Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof, having a combined capital and surplus
of at least $50,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc. (a) No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that, (x) the Administrative Agent shall have the right to waive or depart from
any of the requirements or criteria contained in the definition of Qualified
Lease and (y) subject to Sections 10.1(b) and (c) below, the Administrative
Agent shall have the right to
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make non-material waivers of non-economic provisions of this Agreement or
consent to non-material departures therefrom. The parties hereto agree that any
non-material waiver of any provision of this Agreement or any other Loan
Document shall be effective upon the execution by the party so charged of a
written agreement to such effect.
(b) Notwithstanding anything set forth in subparagraph (a) above, no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders do any of the following: (i) waive any of the conditions specified in
Article III except as otherwise provided therein; (ii) increase the Commitments
of the Lenders or subject the Lenders to any additional obligations; (iii)
reduce the principal of, or interest on, the Loans or any fees or other amounts
payable hereunder; (iv) waive or postpone any date fixed for any payment of
principal of, or interest on, the Loans or any fees or other amounts payable
hereunder; (v) change the percentage of the Commitments, the aggregate unpaid
principal amount of the Loans, or the number of Lenders which shall be required
for the Lenders or any of them to take any action hereunder; (vi) waive any of
the financial covenants specified in Sections 5.1, 5.2 or 5.4; (vii) change the
definitions of Available Credit, Majority Lenders or Super Majority Lenders
(provided that the foregoing shall not include changes in any defined terms used
in such definitions), (viii) release any Loan Party from its obligations under
any Note or any Subsidiary Guaranty, or (ix) amend this Section 10.1; and
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement or the other Loan Documents.
(c) Notwithstanding anything set forth in subparagraph (a) above, no
amendment, waiver or consent shall, (x) unless in writing and signed by the
Super Majority Lenders do any of the following: (i) waive any of the covenants
specified in Sections 5.3 or 5.5, (ii) change the definitions of Unencumbered
Hotel Property or Eligible Joint Venture (provided that the foregoing shall not
include changes in any defined terms used in such definitions), (iii) waive
payment of any default rate interest pursuant to Section 2.9(b), or (iv) remove
the Administrative Agent for a willful breach of, or gross negligence in the
performance of, its material obligations hereunder pursuant to Section 9.6 or
(y) unless in writing and signed by the Majority Lenders change the definitions
of Adjusted NOI or Unencumbered NOI (provided that the foregoing shall not
include changes in any defined terms used in such definitions).
(d) Each Lender shall reply promptly, but in any event within ten (10)
Business Days of receipt by such Lender of a request for consent, approval,
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disapproval or waiver, from the Administrative Agent (the "Lender Reply
Period"). Unless a Lender shall give written notice to the Administrative Agent
that it objects to consenting, approving, disapproving or waiving any matter as
requested by the Administrative Agent (together with a written explanation of
the reasons behind such objection) within the Lender Reply Period, such Lender
shall be deemed to have consented, approved, disapproved or waived such matters
as specified in the Administrative Agent's request.
10.2. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Borrower, at its address at
545 East John Carpenter Freeway, Suite 1300, Irving, Texas 75062 (telecopy
number: 972-444-4949) (telephone number: 972-444-4900), Attention: Chief
Financial Officer, with a copy to Attention: General Counsel; if to any Lender,
at its Domestic Lending Office specified opposite its name on Schedule II; and
if to the Administrative Agent, at its address at 380 Madison Avenue, 10th
Floor, New York, New York 10017 (telecopy number: 212-622-3395) (telephone
number: 212-622-3369), Attention Charles Hoagland with a copy to One Chase
Manhattan Plaza, 8th Floor, New York, New York 10081 (telecopy number:
212-552-5701) (telephone number: 212-552-7469), Attention Linda Rodriguez; or,
as to the Borrower or the Administrative Agent, at such other address as shall
be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telexed, telecopied, cabled
or delivered, be effective when deposited in the mails, delivered to the
telegraph company, confirmed by telex answerback, telecopied with confirmation
of receipt, delivered to the cable company or delivered by hand to the addressee
or its agent, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or IX shall not be effective until
received by the Administrative Agent.
10.3. No Waiver; Remedies. No failure on the part of any Lender or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
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10.4. Costs; Expenses; Indemnities. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Administrative Agent and its respective
Affiliates in connection with the preparation, execution, delivery,
administration, syndication, modification and amendment of this Agreement, each
of the other Loan Documents and each of the other documents to be delivered
hereunder and thereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel, accountants, appraisers, consultants or
industry experts retained by the Administrative Agent with respect thereto and,
as to the Administrative Agent, with respect to advising it as to its rights and
responsibilities under this Agreement and the other Loan Documents, and (ii) all
costs and expenses of the Administrative Agent or any of the Lenders (including,
without limitation, the fees and out-of-pocket expenses of counsel, accountants,
appraisers, consultants or industry experts retained by the Administrative Agent
or any Lender) in connection with the restructuring or enforcement (whether
through negotiation, legal proceedings or otherwise) of this Agreement and the
other Loan Documents.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and the Issuing Lender and their respective
Affiliates, and the directors, officers, employees, agents, attorneys,
consultants and advisors of or to any of the foregoing (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including, without limitation,
fees and disbursements of counsel to any such Indemnitee and experts, engineers
and consultants and the costs of investigation and feasibility studies) which
may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct, indirect,
or consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of or based upon or attributable to this Agreement,
any other Loan Document, any document delivered hereunder or thereunder, any
Obligation, or any act, event or transaction related or attendant to any
thereof, including, without limitation, (i) arising from any misrepresentation
or breach of warranty under Section 4.18 or any Environmental Claim or any
Environmental Lien or any Remedial Action arising out of or based upon anything
relating to real property owned or leased by the Borrower or any of its
Subsidiaries (collectively, the "Indemnified Matters"); provided, however, that
the Borrower shall not have any obligation under this Section
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10.4(b) to an Indemnitee with respect to any Indemnified Matter caused by or
resulting from the gross negligence or willful misconduct of that Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order.
(c) If any Lender receives any payment of principal of, or is subject
to a conversion of, any Eurodollar Rate Loan other than on the last day of an
Interest Period relating to such Loan, as a result of any payment or conversion
made by the Borrower or acceleration of the maturity of the Notes pursuant to
Section 8.2 or for any other reason, the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), to the extent
not previously paid to such Lender pursuant to any other provision hereof, pay
to the Administrative Agent for the account of such Lender all amounts required
to compensate such Lender for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment or conversion, including,
without limitation, any loss (including, without limitation, loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund or maintain such
Loan.
(d) The Borrower shall indemnify the Administrative Agent, the Lenders
and the Issuing Lender for, and hold the Administrative Agent, the Lenders and
the Issuing Lender harmless from and against, any and all claims for brokerage
commissions, fees and other compensation made against the Administrative Agent
and the Lenders for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement.
(e) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including, without
limitation, pursuant to this Section 10.4) or any other Loan Document shall (i)
survive payment of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.
10.5. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default each Lender and the Issuing Lender is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
and all of the Obligations now or hereafter existing whether or not such Lender
shall have made
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any demand under this Agreement or any Note or any other Loan Document and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to the other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
10.6. Binding Effect. This Agreement shall become effective as of the
Effective Date and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent, each Lender and the Issuing Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
10.7. Assignments and Participations. (a) Each Lender and the Issuing
Lender may sell, transfer, negotiate or assign to one or more other Lenders or
Eligible Assignees all or a portion of its Commitments, commitment to issue
Letters of Credit, the Loans and Letter of Credit Outstandings owing to it and
the Notes held by it and a commensurate portion of its rights and obligations
hereunder and under the other Loan Documents; provided, however, that (i) the
aggregate amount of the Commitments, Loans and Letter of Credit Outstandings
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event
be less than the assignor's entire interest, except (x) with the consent of the
Borrower and the Administrative Agent, or (y) during the continuance of an Event
of Default, or (z) a Lender may assign a portion of its Commitments, Loans and
Letter of Credit Outstandings to another existing Lender or Lenders only,
provided that the aggregate amount of the Commitments, Loans and Letter of
Credit Outstandings retained by the assignor shall in no event be less than
$10,000,000, and (ii) each assignee hereunder shall also be an Eligible
Assignee. The parties to each assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording, an Assignment and Acceptance, together with the Notes (or an
Affidavit of Loss and Indemnity with respect to such Notes satisfactory to the
Administrative Agent) subject to such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (A) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and thereunder, and (B)
the assignor thereunder shall, to the extent that rights and
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obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under this Agreement or any other Loan Document or of any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assigning Lender confirms that it has delivered to the assignee and the assignee
confirms that it has received a copy of this Agreement and each of the Loan
Documents together with a copy of the most recent financial statements delivered
by the Borrower to the Lenders pursuant to each of the clauses of Section 6.11
(or if no such statements have been delivered, the financial statements referred
to in Section 4.5 of this Agreement) and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender and if
such assignor was the Issuing Lender, of the Issuing Lender.
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(c) The Administrative Agent shall maintain at its address referred to
in Section 10.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of and principal amount of the Loans and Letters
of Credit Outstandings owing to each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Loan Parties, the Administrative Agent, the
Issuing Lender and the Lenders may treat each Person whose name is recorded in
the Register as a Lender for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower, the Administrative Agent, the
Issuing Lender or any Lender at any reasonable time and from time to time upon
reasonable prior notice. The Administrative Agent shall supply to the Borrower
promptly after any amendment thereto, a copy of the amended Register.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender or Issuing Lender and an assignee representing that it is an
Eligible Assignee, together with the Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for such surrendered Notes, new Notes to the
order of such Eligible Assignee in an amount equal to the Commitments assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained Commitments hereunder, new Notes to the order of the assigning Lender
in an amount equal to the Commitments retained by it hereunder. Such new Notes
shall be dated the same date as the Surrendered Notes and be in substantially
the form of Exhibit A hereto.
(e) In addition to the other assignment rights provided in this Section
10.7, each Lender may assign, as collateral or otherwise, any of its rights
under this Agreement (including, without limitation, rights to payments of
principal or interest on the Loans) to any Federal Reserve Bank without notice
to or consent of the Borrower or the Administrative Agent; provided, however,
that no such assignment shall release the assigning Lender from any of its
obligations hereunder. The terms and conditions of any such assignment and the
documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
110
119
(f) Each Lender may sell participations to one or more banks or other
Persons in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitments,
the Loans and Letters of Credit Outstandings owing to it and the Notes held by
it). The terms of such participation shall not, in any event, require the
participant's consent to any amendments, waivers or other modifications of any
provision of any Loan Documents, the consent to any departure by any Loan Party
therefrom, or to the exercising or refraining from exercising any powers or
rights which such Lender may have under or in respect of the Loan Documents
(including, without limitation, the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would reduce the amount, or postpone any date fixed for, any amount (whether of
principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation. In the event of the sale of any participation by any Lender, (i)
such Lender's obligations under the Loan Documents (including, without
limitation, its Commitments) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of such Notes and
Obligations for all purposes of this Agreement, and; (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(g) Each participant shall be entitled to the benefits of Sections
2.11, 2.13, 2.15 and 10.4 as if it were a Lender; provided, however, that
anything herein to the contrary notwithstanding, the Borrower shall not, at any
time, be obligated to pay to any assignee or participant of any interest of any
Lender, under Section 2.11, 2.13, 2.15 or 10.4, any sum in excess of the sum
which if the Borrower would not at the time of such assignment have been
obligated to pay to such assignor Lender any such amount in respect of such
interest had such assignment not been effected or had such participation not
been sold.
(h) Notwithstanding the foregoing provisions of this Section 10.7, the
aggregate Commitments and Loans of (i) Chase shall be at least equal to that of
any other Lender, (ii) Bankers Trust Company shall be at least equal to that of
any other Lender, (iii) NationsBank, N.A. shall be at least equal to that of any
other Lender and (iv) Wells Fargo Bank, National Association shall be at least
equal to that of any other Lender; provided that, (i) if an Event of Default
exists, Chase, Bankers Trust Company, NationsBank, N.A. and/or Wells Fargo Bank,
National Association may assign all or any portion of their respective
Commitments and Loans and (ii) if
111
120
Chase ceases to be Administrative Agent for any reason, Chase may assign all or
any portion of their respective Commitments and Loans.
10.8. Governing Law; Severability. This Agreement and the Notes and the
rights and obligations of the parties hereto and thereto shall be governed by,
and construed and interpreted in accordance with, the law of the State of New
York. Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of
this Agreement.
10.9. Submission to Jurisdiction; Service of Process. (a) Any legal
action or proceeding with respect to this Agreement or the Notes or any document
related thereto may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which any of them may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) The Borrower irrevocably consents to the service of process of any
of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the right of
the agent, any Lender or any holder of a Note to serve process in any other
manner permitted by law or commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
10.10. Section Titles. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
10.11. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
112
121
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
10.12. Entire Agreement. This Agreement, together with all of the other
Loan Documents and all certificates and documents delivered hereunder or
thereunder, and the agreements referred to in Section 2.4(b) embody the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.
10.13. Confidentiality. Each Lender and the Administrative Agent agree
to keep information obtained by it pursuant hereto and the other Loan Documents
confidential and agrees that it will only use such information in connection
with the transactions contemplated by this Agreement and not disclose any of
such information other than (i) to such Lender's or the Administrative Agent's,
as the case may be, Affiliates, employees, representatives and agents who are or
are expected to be involved in the evaluation of such information in connection
with the transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender or the Administrative
Agent, as the case may be, on a non-confidential basis from a source other than
the Borrower, (iii) to the extent disclosure is required by law, regulation or
judicial order or requested or required by bank regulators or auditors, or (iv)
to assignees or participants or potential assignees or participants who agree to
be bound by the provisions of this sentence.
10.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO.
10.15. Joint and Several Obligations. Unless the context clearly
indicates otherwise each covenant, agreement, undertaking, condition or other
matter stated herein as a covenant, agreement, undertaking or matter involving
the Borrower shall be jointly and severally binding upon each of the parties
comprising Borrower.
113
122
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
FELCOR SUITE HOTELS, INC.
By:/s/ RANDALL L. CHURCHEY
-----------------------------------------
Name: Randall L. Churchey
Title: Senior Vice President &
Chief Financial Officer
FELCOR SUITES LIMITED PARTNERSHIP
By: FelCor Suite Hotels, Inc. its general partner
By:/s/ RANDALL L. CHURCHEY
-----------------------------------------
Name: Randall L. Churchey
Title: Senior Vice President &
Chief Financial Officer
THE CHASE MANHATTAN BANK, as Administrative Agent
By:/s/ THOMAS H. KOZIARK
-----------------------------------------
Name: Thomas H. Koziark
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
123
BANKERS TRUST COMPANY, as Documentation
Agent
By: /s/ GARRETT W. THELANDER
-----------------------------------------
Name: Garrett W. Thelander
Title: Vice President
NATIONSBANK, N.A., as Documentation Agent
By:/s/ M. DAVID HOWARD
-----------------------------------------
Name: M. David Howard
Title: Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Documentation Agent
By:/s/ KENT HOWARD
-----------------------------------------
Name: Kent Howard
Title: Vice President
124
Lenders
THE CHASE MANHATTAN BANK
By:/s/ THOMAS H. KOZIARK
-----------------------------------------
Name: Thomas H. Koziark
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
125
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:/s/ KENT HOWARD
-----------------------------------------
Name: Kent Howard
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
126
BANK ONE, TEXAS, N.A.
By:/s/ EDDIE HODGES
-----------------------------------------
Name: Eddie Hodges
Title: Assistant Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
127
BANKBOSTON, N.A.
By: /s/ JEFFREY L. WARWICK
-----------------------------------------
Name: Jeffrey L. Warwick
Title: Director
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
128
PNC BANK, NATIONAL ASSOCIATION
By:/s/ TERRI L. ROBISON
-----------------------------------------
Name: Terri L. Robison
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
129
NATIONSBANK, N.A.
By:/s/ M. DAVID HOWARD
-----------------------------------------
Name: M. David Howard
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
130
THE FIRST NATIONAL BANK OF CHICAGO
By:/s/ MICHAEL A. PARISI
-----------------------------------------
Name: Michael A. Parisi
Title: Corporate Banking Officer
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
131
AMSOUTH BANK OF ALABAMA
By:/s/ [ILLEGIBLE]
-----------------------------------------
Name: [ILLEGIBLE}
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
132
SOCIETE GENERALE, SOUTHWEST AGENCY
By:/s/ THOMAS K. DAY
-----------------------------------------
Name: Thomas K. Day
Title: Director
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
133
CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ JOSEPH A. ASCIOLLA
-----------------------------------------
Name: Joseph A. Asciolla
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
134
BANK OF MONTREAL(CHICAGO BRANCH)
By:/s/ CATHERINE SAHAGIAN MOUSSEAU
-----------------------------------------
Name: Catherine Sahagian Mousseau
Title: Director
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
135
CIBC INC.
By: CIBC OPPENHEIMER CORP.
By:/s/ DEAN J. DECKER
-----------------------------------------
Name: Dean J. Decker
Title: Executive Director
CIBC Oppenheimer Corp., AS AGENT
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
136
THE SUMITOMO BANK, LIMITED
By:/s/ YASUO MIYAZAWA
-----------------------------------------
Name: Yasuo Miyazawa
Title: Joint General Manager
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
137
THE BANK OF NOVA SCOTIA
By:/s/ BRUCE G. FERGUSON
-----------------------------------------
Name: Bruce G. Ferguson
Title: Senior Relationship Manager
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
138
BANKERS TRUST COMPANY
By:/s/ GARRETT W. THELANDER
-----------------------------------------
Name: Garrett W. Thelander
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
139
CHANG HWA COMMERCIAL BANK, LTD., a New York
Branch
By:/s/ WAN-TU YEH
-----------------------------------------
Name: Wan-Tu Yeh
Title: Vice President & General Manager
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
140
CREDITANSTALT CORPORATE FINANCE, INC.
By:/s/ WILLIAM E. MCCOLLUM, JR. By:/s/ SCOTT KRAY
------------------------------ ------------------------------
Name: William E. McCollum, Jr. Name: Scott Kray
title: Senior Associate Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
141
DEUTSCHE BANK AG
New York Branch and/or Cayman Islands Branch
By:/s/ HANS-JOSEF THIELE
-----------------------------------------
Name: Hans-Josef Thiele
Title: Director
By:/s/ JOEL MAKOWSKY
-----------------------------------------
Name: Joel Makowsky
Title: Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
142
ERSTE BANK
By:/s/ JOHN S. RUNNION
-----------------------------------------
Name: John S. Runnion
Title: First Vice President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
143
METROPOLITAN LIFE INSURANCE COMPANY
By:/s/ ROBERT N. JENKINS
-----------------------------------------
Name: Robert N. Jenkins
Title: Vice-President
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
144
OCTAGON LOAN TRUST
By: Octagon Credit Investors
By:/s/ JAMES P. FERGUSON
-----------------------------------------
Name: James P. Ferguson
Title: Managing Director
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
145
SCHEDULE I
COMMITMENTS
REVOLVING CREDIT TERM LOAN
LENDER COMMITMENT COMMITMENT
- ---------------------------------- ---------------- ------------
The Chase Manhattan Bank, $75,000,000 $109,000,000
Administrative Agent and Arranger
Bankers Trust Company, $75,000,000 $25,000,000
Co-Arranger
NationsBank, N.A., $75,000,000 $25,000,000
Co-Arranger
Wells Fargo Bank, Co-Arranger $75,000,000 $25,000,000
AmSouth Bank of Alabama $35,000,000 $5,000,000
Bank of Montreal (Chicago Branch) $40,000,000 $-0-
The Bank of Nova Scotia $60,000,000 $-0-
Bank One, Texas N.A. $30,000,000 $-0-
Chang Hwa Commercial Bank $12,000,000 $8,000,000
CIBC Inc. $60,000,000 $-0-
Credit Lyonnais New York Branch $60,000,000 $-0-
Creditanstalt $35,000,000 $-0-
Deutsche Bank AG $20,000,000 $-0-
Erste Bank $15,000,000 $-0-
The First National Bank of Boston $30,000,000 $-0-
I
146
REVOLVING CREDIT TERM LOAN
LENDER COMMITMENT COMMITMENT
- ---------------------------------- ---------------- ------------
The First National Bank of Chicago $40,000,000 $-0-
Metlife $-0- $25,000,000
PNC Bank, National Association $33,000,000 $-0-
Societe Generale, Southwest $60,000,000 $10,000,000
Agency
The Sumitomo Bank, Limited $20,000,000 $-0-
Octagon Loan Trust $-0- $18,000,000
TOTALS $850,000,000 $250,000,000
II
147
SCHEDULE II
APPLICABLE LENDING OFFICES AND
ADDRESSES FOR NOTICES
LENDER DOMESTIC LENDING OFFICE AND ADDRESS EURODOLLAR LENDING OFFICE
FOR NOTICES
- ----------- ----------------------------------- --------------------------------
Chase 1 Chase Manhattan Plaza 1 Chase Manhattan Plaza
8th Floor 8th Floor
New York, NY 10081 New York, NY 10081
Attention: Linda Rodriguez Attention: Linda Rodriguez
Telecopy: (212) 552-5701 Telecopy: (212) 552-5701
Bankers 130 Liberty Street 130 Liberty Street
Trust 25th Floor New York, NY 10006
Company New York, New York 10006 Attn: Wendy Williams
Attn: Caryl Mooney Telecopy: (212) 250-7351
Telecopy: (212) 669-0732
Nations 901 Main, 51st Floor 901 Main, 51st Floor
Bank Dallas, TX 75202 Dallas, TX 75224
Attn: David Howard Attn: Mary Burnette
Telecopy: (214) 508-0085 Telecopy: (2140 508-1571
Wells Fargo 12377 Merit Drive, Suite 300 2120 East Park Place, Suite 100
Dallas, TX 75251 El Segundo, CA 90245
Attention: Kent Howard Attention: Match Fundings
Telecopy:(972) 386-4723 Administrator
Telecopy:(310) 335-1014
AmSouth P.O. Box 11007 P.O. Box 11007
Bank of Brimingham, AL 35288 Brimingham, AL 35288
Alabama Attn: Buddy Sharbel Attn: Buddy Sharbel
Telecopy: (205) 326-4075 Telecopy: (205) 326-4075
Bank of 115 South LaSalle Street 115 South LaSalle Street
Montreal Chicago, IL 60603 Chicago, IL 60603
(Chicago Attn: David Mazujian Attn: Debra Sandt
Branch) Telecopy: (312) 750-4352 Telecopy: (312) 750-4345
III
148
LENDER DOMESTIC LENDING OFFICE AND ADDRESS EURODOLLAR LENDING OFFICE
FOR NOTICES
- ----------- ----------------------------------- --------------------------------
The Bank Real Estate Banking 600 Peachtree St., N.E.
of Nova One Liberty Plaza Suite 2700
Scotia New York, NY 10006 Atlanta, GA 30308
Attn: Bruce Ferguson Attn: Craig Subryan
Telecopy: (212) 225-5166 Telecopy: (404) 888-8998
Bank One Bank One, Texas Bank One, Texas
Texas 1717 Main Street, 4th Floor 1717 Main Street, 4th Floor
Dallas, TX 75201 Dallas, TX 75201
Attention: Eddie Hodges Attention: Eddie Hodges
Telecopy: (214) 290-2275 Telecopy: (214) 290-2275
Chang Hwa One World Trade Center One World Trade Center
Commercial 32nd Floor Suite 3211 32nd Floor Suite 3211
Bank New York, NY 10048 New York, NY 10048
Attn: Teddy Mou Attn: Teddy Mou
Telecopy: 212-390-0120 Telecopy: 212-390-0120
CIBC Inc. 2727 Paces Road, Suite 1200 2727 Paces Road, Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339
Attn: Kim Perrone Attn: Kim Perrone
Telecopy: (770) 319-4950 Telecopy: (770) 319-4950
Creditanstalt 2 Ravinia Drive 2 Ravinia Drive
Suite 1680 Suite 1680
Atlanta, GA 30346 Atlanta, GA 30346
Attn: Scott Kray Attn: Scott Kray
Telecopy: (770) 390-1851 Telecopy: (770) 390-1851
Credit 1301 Avenue of the Americas 1301 Avenue of the Americas
Lyonnais New York, NY 10019 New York, NY 10019
Attn: Jan Hazelton Attn: Hotel Finance/18th
Telecopy: (212) 261-7540 Floor
Telecopy: (212) 261-7890
Deutsche 31 West 52nd Street 31 West 52nd Street
Bank AG New York, NY 10019 New York, NY 10019
Attn: Stephan Wiedemann Attn: Stephan Wiedemann
Telecopy: (212) 469-8212 Telecopy: (212) 469-8212
IV
149
LENDER DOMESTIC LENDING OFFICE AND ADDRESS EURODOLLAR LENDING OFFICE
FOR NOTICES
- ----------- ----------------------------------- --------------------------------
Erste Bank 280 Park Avenue 280 Park Avenue
West Building West Building
New York, NY 10017 New York, NY 10017
Attn: Paul Judicke Attn: Paul Judicke
Telecopy: (212) 984-5627 Telecopy: (212) 984-5627
First 115 Perimeter Ctr Place, Suite 500 115 Perimeter Ctr Place, Suite 500
National Atlanta, GA 30346 Atlanta, GA 30346
Bank of Att: Steven P. Selbo Attn: Jeanette Streander
Boston Telecopy:(770) 390-8434 Telecopy:(770) 390-8434
The First One First National Plaza One First National Plaza
National Suite 1051 Suite 1051
Bank of Chicago, IL 60607 Chicago, IL 60607
Chicago Attn: Rebecca McCloskey Attn: Ernest M. Misioria
Telecopy: (312) 732-1117 Telecopy: (312) 732-1117
MetLife 200 Park Avenue 200 Park Avenue
10th Floor 10th Floor
New York, NY New York, NY
Attn: Tara Innes Attn: Tara Innes
Telecopy: (212) 578-2927 Telecopy: (212) 578-2927
PNC Bank, One PNC Plaza, P1-POPP-19-2 One PNC Plaza, P1-POPP-192
National 249 Fifth Avenue 249 Fifth Avenue
Assoc. Pittsburgh, PA 15222-2702 Pittsburgh, PA 15222-2702
Att: Jan Dotchin Att: Jan Dotchin
Telecopy: (412) 768-5754 Telecopy: (412) 768-5754
Societe 2001 Ross Avenue 2001 Ross Avenue
Generale, Suite 4900 Suite 4900
Southwest Dallas, TX 75201 Dallas, TX 75201
Agency Attn: Carina Huynh Attn: Martha Fleming
Telecopy: (214) 979-2727 Telecopy: (214) 979-2727
V
150
LENDER DOMESTIC LENDING OFFICE AND ADDRESS EURODOLLAR LENDING OFFICE
FOR NOTICES
- ----------- ----------------------------------- --------------------------------
The Sears Tower Sears Tower
Sumitomo Suite 4800 Suite 4800
Bank Limited 233 South Wacker Drive 233 South Wacker Drive
Chicago, IL 60606 Chicago, IL 60606
Attn: Tom Batterham Attn: Tom Batterham
Telecopy: (312) 876-6436 Telecopy: (312) 876-643
Octagon 380 Madison Avenue 380 Madison Avenue
Loan Trust New York, NY 10017 New York, NY 10017
Attn: Yalin Karadagon Attn: Yalin Karadagon
Telecopy: (212) 622-3797 Telecopy: (212) 622-3797
VI