1
EXHIBIT 10.1
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$40,000,000
CREDIT AGREEMENT
DATED AS OF JULY 28, 1998
AMONG
BRISTOL HOTEL MANAGEMENT CORPORATION,
BRISTOL MANAGEMENT, L.P.
BHMC GENPAR, L.L.C.
BHMC LIMPAR, L.L.C.
BRISTOL HOTEL TENANT COMPANY
BRISTOL HOSPITALITY TENANT COMPANY
BRISTOL LODGING TENANT COMPANY
BRISTOL SALT LAKE TENANT COMPANY
AS BORROWERS,
BRISTOL HOTELS & RESORTS
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
BANKERS TRUST COMPANY,
AS ARRANGING AGENT AND ADMINISTRATIVE AGENT
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(Credit Agreement)
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CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . 29
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . . 29
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4 Prepayments and Reductions in Commitments of Revolving Loans; General Provisions Regarding
Payments; Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.6 Special Provisions Governing LIBOR Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . 40
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.8 Obligation of Lenders and Issuing Lenders to Mitigate . . . . . . . . . . . . . . . . . . . . 48
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein . . . . . . . . 48
3.2 Standby Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . . . 53
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . . 56
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . 57
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.1 Conditions to Initial Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5. BORROWERS' REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . 67
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(i) (Credit Agreement)
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5.3 Financial Condition; Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.4 No Material Adverse Change; No Restricted Junior Payments . . . . . . . . . . . . . . . . . . 70
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts . . . . . . . . . 71
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.17 Cash Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.18 Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . . . 82
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.8 Borrowers' Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . . 86
6.9 Execution of Guaranty and Collateral Documents by Future Subsidiaries . . . . . . . . . . . . 86
6.10 Use of Proceeds to Increase Total Liquid Net Worth . . . . . . . . . . . . . . . . . . . . . . 88
6.11 Cash Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.12 Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 7. BORROWERS' NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.3 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.5 Restricted Junior Payments; Certain Other Payments . . . . . . . . . . . . . . . . . . . . . . 96
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions. . . . . . . . . . . . . . . 97
7.8 Acquisition of Other Lease and Management Agreements . . . . . . . . . . . . . . . . . . . . . 98
7.9 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
(ii) (Credit Agreement)
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7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 99
7.13 Disposal of Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.15 Amendments of Documents Relating Management Contracts, Leases, and the Master Hotel
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . 102
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . 103
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.12 Invalidity of Any Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.13 Failure of Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 9. ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9.2 Powers and Duties; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . . 108
9.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
9.5 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
9.6 Collateral Documents and Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
9.7 Payee of Note Treated as Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . . 111
10.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
10.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
10.4 Set-Off; Security Interest in Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . 117
10.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
10.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
10.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
10.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
(iii) (Credit Agreement)
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10.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . 120
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 120
10.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
10.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . 121
10.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
10.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
10.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
10.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 122
10.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
10.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Signature pages S-1
(iv) (Credit Agreement)
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF STANDBY LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF ENVIRONMENTAL INDEMNITY
VII FORMS OF OPINIONS OF BORROWERS' COUNSEL
VIII FORM OF OPINION OF O'MELVENY & MYERS LLP
IX FORMS OF OPINIONS OF LOCAL AND FOREIGN COUNSEL
X FORM OF ASSIGNMENT AGREEMENT
XI [Reserved]
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF PLEDGE AND SECURITY AGREEMENT
XV FORM OF GUARANTY
XVI FORM OF TRADEMARK SECURITY AGREEMENT
XVII FORM OF LEASEHOLD MORTGAGE AND ASSIGNMENT OF RENTS
XVIII FORM OF AGREEMENT REGARDING LIQUOR LEASES, SERVICING
AGREEMENTS AND LIQUOR LICENSES
XIX FORM OF COMFORT LETTER
XX FELCOR RECOGNITION AGREEMENT
XXI FORM OF STANDBY LETTER OF CREDIT
XXII FORM OF CASH MANAGEMENT LETTER
XXIII FORM OF CANADIAN STOCK PLEDGE AGREEMENT
(v) (Credit Agreement)
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1B CAPITAL AND OWNERSHIP STRUCTURE
4.1N SCHEDULE OF LEASES WITHOUT CONSENT TO MORTGAGE
4.1R FRANCHISE AGREEMENTS
4.1S GROUND LEASES
5.1 SUBSIDIARIES OF BRISTOL HOTELS & RESORTS
5.3B CONTINGENT OBLIGATIONS
5.5 REAL PROPERTY ASSETS
5.6 LITIGATION
5.12 CERTAIN FEES
5.17 CASH MANAGEMENT SYSTEM
5.13 ENVIRONMENTAL MATTERS
7.3 CERTAIN EXISTING INVESTMENTS
7.12 INTERESTED TRANSACTIONS
(vi) (Credit Agreement)
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CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of July 28, 1998 and entered
into by and among BRISTOL HOTEL MANAGEMENT CORPORATION, a Delaware corporation,
BRISTOL MANAGEMENT, L.P., a Texas limited partnership, BHMC GENPAR, L.L.C., a
Delaware limited liability company, BHMC LIMPAR, L.L.C., a Delaware limited
liability company, BRISTOL HOTEL TENANT COMPANY, a Delaware corporation,
BRISTOL HOSPITALITY TENANT COMPANY, a Delaware corporation, BRISTOL LODGING
TENANT COMPANY, a Delaware corporation and BRISTOL SALT LAKE TENANT COMPANY, a
Delaware corporation (referred to herein individually as a "BORROWER" and
collectively as "BORROWERS"), BRISTOL HOTELS & RESORTS, a Delaware corporation,
as a guarantor ("BHR"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (referred to herein individually as a "LENDER" and collectively as
"LENDERS"), and BANKERS TRUST COMPANY, as sole arranging agent (in such
capacity, "ARRANGING AGENT") and as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, Borrowers desire that Lenders extend certain credit
facilities, the proceeds of which will be used to provide (i) financing for
working capital and general corporate purposes, including acquisition of
management contracts and leases, and (ii) Standby Letters of Credit issued (x)
for the benefit of the owners of the Hotels (as defined in the Master Hotel
Agreement) that are directly or indirectly controlled by FELCOR SUITE HOTELS,
INC., a Maryland corporation ("FELCOR") or FELCOR SUITES LIMITED PARTNERSHIP, a
Delaware limited partnership ("FELCOR, LP") for the purpose of meeting the
requirements of Paragraph 5 of the Master Hotel Agreement or (y) for the
benefit of Other Lessors for the purpose of meeting the requirements of an
agreement between any such Other Lessor and BHR or one of its Subsidiaries
substantially in the same form as the Master Hotel Agreement or otherwise as
approved by the Administrative Agent, such approval not to be unreasonably
withheld (the purposes set forth in clauses (x) and (y) being, collectively,
the "L/C PURPOSES");
WHEREAS, Lenders have agreed to extend such credit facilities
to Borrowers;
WHEREAS, Borrowers choose to secure all of the Obligations
hereunder and the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a first priority pledge of all of the capital stock of each
of Borrowers' Domestic Subsidiaries and a pledge of sixty-six percent (66%) of
the capital stock of each of Borrowers' direct and indirect Foreign
Subsidiaries;
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WHEREAS, Borrowers' parent company, BHR, and all of the
Domestic Subsidiaries of Borrowers have agreed to guaranty the obligations
hereunder and under the other Loan Documents, and BHR and each Domestic
Subsidiary has agreed to secure its guaranties by granting to Administrative
Agent a first priority pledge of all of the capital stock and other equity
interests of each of their respective Domestic Subsidiaries and a pledge of
sixty-six percent (66%) of the capital stock of each of their respective
Foreign Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, BHR, Borrowers, Lenders
and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION EXPENDITURES" means expenditures made by
Borrowers for the purpose of acquiring hotel management contracts or leases on
hotels.
"ADJUSTED LIBOR RATE" means, for any Interest Rate
Determination Date with respect to a LIBOR Rate Loan, the rate per annum
obtained by dividing (i) the LIBOR offered rate for deposits with maturities
comparable to the Interest Period for which such Adjusted LIBOR Rate will apply
as of approximately 11:00 A.M. (London time) on such Interest Rate
Determination Date as set forth on Telerate Page 3750 (or such other comparable
page as may, in the opinion of the Agent, replace such page for the purpose of
displaying such rate) by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to Section 9.5.
"AFFECTED LENDER" has the meaning assigned to that term in
Section 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person,
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means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
"AFFILIATE PLEDGOR" means the Borrowers, BHR and each
Subsidiary of BHR that is a party to the Pledge and Security Agreement.
"AGREEMENT" means this Credit Agreement dated as of July 28,
1998, as it may be amended, supplemented or otherwise modified from time to
time.
"APPLICABLE LAWS" means, collectively, all statutes, laws,
rules, regulations, ordinances, orders, decisions, writs, judgments, decrees
and injunctions of governmental authorities (including Environmental Laws)
affecting any Borrower, any other Loan Party or the Collateral or any part
thereof (including the acquisition, development, construction, renovation,
occupancy, use, improvement, alteration, management, operation, maintenance,
repair or restoration thereof), whether now or hereafter enacted and in force,
and all authorizations relating thereto, and all covenants, conditions and
restrictions contained in any instruments of record at any time in force
directly affecting any Real Property Asset or any part thereof, including any
such covenants, conditions and restrictions which may (i) require improvements,
repairs or alterations in or to such Real Property Asset or any part thereof or
(ii) in any way limit the use and enjoyment thereof; for purposes of usury,
Applicable Laws means the law of the State of New York applicable to maximum
rates of interest.
"ARRANGING AGENT" means Bankers Trust Company, as arranging
agent of the credit facilities described herein.
"ASSET SALE" means the sale by Borrowers, BHR or any of their
Subsidiaries to any Person other than Borrowers, BHR or any of their
wholly-owned Subsidiaries of (i) any of the stock of any of Borrowers or of any
of the Subsidiaries of BHR or Borrowers (other than through the issuance of new
shares of stock in exchange for payment of Cash), (ii) substantially all of the
assets of any division or line of business of BHR, Borrowers or any of their
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
BHR, Borrowers or any of their Subsidiaries (other than (a) inventory and
obsolete FF&E sold in the ordinary course of business and (b) any such other
assets to the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to $50,000 or less).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
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"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BHR" has the meaning set forth in the introduction to this
Agreement.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in Section 2.2A.
"BASS" means Bass p.l.c., an English public limited company.
"BASS GROUP" means Bass and its Affiliates, collectively.
"BORROWER" and "BORROWERS" have the meaning assigned to those
terms in the introduction to this Agreement.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is
a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"CANADIAN STOCK PLEDGE AGREEMENT" means the Canadian Stock
Pledge Agreement, executed and delivered by BHR on the Closing Date,
substantially in the form of Exhibit XXIII hereto, as such Canadian Stock
Pledge Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CAPITAL STOCK" means, with respect to any Person, any capital
stock or partnership, limited liability company or joint venture interests of
such Person and any shares, interests, participations or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into any of the foregoing), warrants or options to
purchase any of the foregoing.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally guaranteed as
to interest and principal by the Government of the United States of America or
(2) issued by any agency of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America,
in each case maturing within one year after such date; (b) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of
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any such state or any public instrumentality thereof, in each case maturing
within one year after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either Standard & Poor's Ratings
Services ("S&P") or Moody's Investors Service, Inc. ("MOODY'S"); (c) commercial
paper maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody's; (d) certificates of deposit or bankers'
acceptances maturing within one year after such date and issued or accepted by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (1) is
at least "adequately capitalized" (as defined in the regulations of its primary
Federal banking regulator) and (2) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; and (e) shares of any money market
mutual fund that (1) has at least 95% of its assets invested continuously in
the types of investments referred to in clauses (a) and (b) above, (2) has net
assets of not less than $500,000,000, and (3) has the highest rating obtainable
from either S&P or Moody's for funds of such type.
"CASH MANAGEMENT LETTERS" means (i) each letter agreement with
respect to the Local Accounts among the applicable Loan Parties, the financial
institutions at which Deposit Accounts are located pursuant to the Cash
Management System and the Administrative Agent, in each case substantially in
the form of Exhibit XXII annexed hereto with such changes as are acceptable to
the Administrative Agent, (ii) the Cash Manager Cash Management Agreements, and
(iii) all other agreements with or directions to the financial institutions at
which Deposit Accounts are located satisfactory to the Administrative Agent, in
either case pursuant to which, in accordance with Section 6.11, such financial
institutions are to direct funds from such Deposit Accounts to the
Concentration Account.
"CASH MANAGEMENT SYSTEM" means the system of Deposit Accounts
of Loan Parties and their Subsidiaries pursuant to which all Receipts of Loan
Parties and their Subsidiaries are collected and distributed, all as described
in Schedule 5.17 annexed hereto, as it may be modified from time to time in
accordance with the terms hereof.
"CASH MANAGER" means Bank One, Texas, N.A., or any successor
thereto approved by the Administrative Agent in its sole discretion.
"CASH MANAGER CASH MANAGEMENT AGREEMENT" means the letter
agreement among the Cash Manager, the Administrative Agent, and the Borrowers
delivered to the Administrative Agent pursuant to Section 4.1G(vii) with
respect to the Concentration Account.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XII annexed hereto delivered by a Lender
to Administrative Agent pursuant to Section 2.7B(iii).
"CHANGE OF CONTROL" means:
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(1) United/Harvey Holdings, its Mirror Entities (as defined
below) and the management owners of BHR, as a group (collectively, the "CORE
GROUP"), and Bass and its Affiliates, as a group (collectively, the "BASS
GROUP"), shall cease to maintain legal and beneficial ownership of 50.0% and
50.0%, respectively, of the number of shares of Common Stock of BHR ("COMMON
STOCK") which the Core Group or the Bass Group, as the case may be, own on the
Closing Date; (2) on or before the third anniversary of the Closing Date, (A)
none of the Hampstead Principals shall be a member of the board of directors of
BHR or (B) a majority of the board of directors of BHR shall not consist of (w)
the Hampstead Principals, (x) members of the senior management of BHR or
Hampstead, (y) representatives of the limited partners of United/Harvey
Holdings or its Mirror Entities, or (z) representatives of the Bass Group; (3)
on or before the third Anniversary, any two of the Hampstead Principals do not
control, directly or indirectly, each of United/Harvey Holdings and its Mirror
Entities; (4) on or before the third anniversary of the Closing Date the
Hampstead Principals cease to own at least 80% of the beneficial interests in
United/Harvey Holdings and its Mirror Entities, determined in the aggregate,
which they owned on the Closing Date; or (5) BHR shall cease to own
beneficially and of record, or to have the right to vote, all or any of the
outstanding shares of capital stock of the Borrowers. For purposes of the
foregoing, the term "MIRROR ENTITY" means, for so long as each of the
following conditions are satisfied (and no longer), a limited partnership (A)
formed under the laws of the State of Delaware pursuant to an agreement of
limited partnership containing substantially the same provisions as those
contained in the agreement of limited partnership of United/Harvey Holdings, as
amended from time to time, (B) having the same Persons (and no other Persons)
as general and limited partners thereof as are the partners of United/Harvey
Holdings from time to time, such Persons having the same respective types of
partnership interest (i.e., general or limited) and percentages or other
ownership interests in each such Mirror Entity as in United/Harvey Holdings,
and (C) having as assets only shares of Common Stock or distributions made by
BHR in respect of shares of Common Stock.
"CLOSING DATE" means the date on or about July 28, 1998, but
in no event later than August 15, 1998, on which the conditions set forth in
Section 4.1 have been satisfied by Borrowers or have been waived in writing by
Administrative Agent.
"COLLATERAL" means, collectively, all Capital Stock of all
Domestic Subsidiaries of BHR and 66% of all Capital Stock of all Foreign
Subsidiaries, all leasehold interests in real property, all rights under and
all rights to receive payments under all leases, management contracts, liquor
licenses, franchise agreements, service contracts, other contracts, deposit and
bank accounts, guarantees, Lease Agreements, the Master Hotel Agreement and all
other personal property, in each case of the Affiliate Pledgors, and the rights
of Bristol Hotel Company under the HI Guaranty, the FelCor Spin-Off Agreement
and the FelCor Merger Agreement, except in each case above to the extent
prohibited by the terms of third-party indebtedness, leases, management
agreements, joint venture agreements and similar arrangements in effect on the
Closing Date, in each case above as approved by the Lenders, or in effect after
the Closing Date if such prohibitions are customary on terms consistent with
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industry and, if applicable, past practice or if such prohibitions are approved
by the Administrative Agent, such approval not to be unreasonably withheld or
delayed. Notwithstanding the foregoing, Excluded Agreements shall also be
excluded from Collateral.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Borrowers and Administrative Agent on the
Closing Date, substantially in the form of Exhibit XIII annexed hereto, as such
Collateral Account Agreement may hereafter be amended, supplemented or
otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Canadian Stock Pledge
Agreement, the Collateral Account Agreement, the Pledge and Security Agreement,
the Omnibus Management and Liquor License Agreement and the Leasehold Mortgage
and Assignment of Rents.
"COMMITMENTS" means the Revolving Loan Commitments plus the
Standby Letter of Credit Commitments.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit V annexed hereto delivered to Administrative Agent by
Borrowers pursuant to Section 6.1(iii).
"CONCENTRATION ACCOUNT" means an interest bearing account, or
accounts at the election of the Borrowers, established and maintained in the
name of the Administrative Agent at the offices of the Cash Manager at [1717
Main Street, Dallas, Texas], pursuant to the terms of the Pledge and Security
Agreement, to which funds on deposit in the Deposit Accounts included in the
Cash Management System are directed by the Administrative Agent in accordance
with Section 6.11.
"CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income for
such period; provided that the calculation of the amount referred to in this
clause (i) shall exclude (x) income resulting from the write-up of the value of
assets and stock option expense, (y) the income or loss of any Joint Venture or
any other entity accounted for by the equity method of accounting, and
increases or decreases in earnings attributable to minority interests and (z)
the income of any Person acquired in a pooling of interests transaction before
the date of acquisition and shall include for each Joint Venture and other
entity accounted for by the equity method of accounting all cash distributions
actually received by BHR or any of its wholly owned Subsidiaries and shall
include for each Joint Venture and other entity accounted for by the equity
method of accounting the amounts of all principal amortization on any such
Joint Venture's or other entity's Indebtedness allocated or allocable to BHR or
any of its wholly owned Subsidiaries, (ii) Consolidated Interest Expense, (iii)
expenses and provisions for
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expenses for taxes based on income, (iv) total depreciation expense, (v) total
amortization expense, and (vi) other non- cash items reducing Consolidated Net
Income less other non-cash items increasing Consolidated Net Income, all of the
foregoing as determined for BHR and its subsidiaries on a consolidated basis in
conformity with GAAP.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) expenses and provisions for expenses for taxes based on
income, and (iii) scheduled principal payments in respect of Consolidated Total
Indebtedness, all of the foregoing as determined in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of BHR and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, with respect to all
outstanding Indebtedness of BHR and its Subsidiaries, including, without
limitation, to the extent included in interest expense in accordance with GAAP,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, but excluding, however, any amounts referred to in
Section 2.3 payable to Administrative Agent and Lenders on or before the
Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the aggregate
net income of BHR and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET WORTH" means, as of any date of
determination, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of BHR and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
BHR and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, as
of any date of determination and without duplication, any direct or indirect
liability, contingent or otherwise, of such Person which has not been (or to
the extent that it has not been) paid or otherwise discharged with respect to
the following: (i) any guaranty of an obligation not owed to a Guarantor; (ii)
any letter of credit issued for the account of such Person or as to which such
Person is otherwise liable for reimbursement of drawings; (iii) net liabilities
under Interest Rate Agreements, to the extent contingent; (iv) indemnification
or contribution obligations owed to any Person other than a Guarantor; provided
that Contingent Obligations shall not include (a) performance, surety, appeal
and similar bonds provided in the ordinary course of business and, if
applicable, consistent with past practices, (b) indemnification or contribution
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obligations in respect of agreements providing for indemnification, adjustment
of purchase price or similar obligations or for guaranties or letters of
credit, surety bonds and performance bonds securing any obligations of a
Borrower or any of its Subsidiaries pursuant to such agreements, in any case
incurred in connection with the acquisition or transfer of a business, asset or
Subsidiary (other than guaranties of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition), and (c) (x) customary indemnification
obligations with respect to environmental matters and "bad deeds" and (y)
indemnification obligations with respect to other matters on customary terms
and, if applicable, consistent with industry practice (including in connection
with Indebtedness, service contracts, Lease Agreements, management agreements,
partnership agreements, Franchise Agreements, tenant leases, licensing
agreements, Ground Leases and other agreements, each on customary terms and, if
applicable, consistent with industry practice and to the extent any such
Indebtedness or agreement is not prohibited by this Agreement); and (v)
obligations of the type set forth in clauses (i) - (iv) above for which such
Person is liable or may become liable, by law, contract, ownership of
Securities or otherwise. The amount of any Contingent Obligation, as of any
date of determination, shall be equal to the lesser of (x) the amount of the
obligation so guarantied or that otherwise may be required to be paid and (y)
the amount to which such Contingent Obligation is expressly limited.
Contingent Obligations shall not include any item set forth in clauses (i) -
(v) above to the extent they constitute Indebtedness or Investments under the
definitions thereof.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person, or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any direct or indirect Subsidiary
of BHR or Borrowers that is incorporated or organized under the laws of a state
of the United States of America or the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized
under the laws of the United States of America or any state thereof; (b) a
savings and loan association or
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savings bank organized under the laws of the United States of America or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof, provided, however, that (x) such
bank is acting through a branch or agency located in the United States of
America or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (d) any other entity (other than an
individual) which is an "accredited investor" (as defined in Regulation D under
the Securities Act) which extends credit or buys loans as one of its principal
businesses including, but not limited to, insurance companies, investment
banks, mutual funds and lease financing companies, in each case (under clauses
(a) through (d) above) that is reasonably acceptable to the Administrative
Agent; and (ii) any Lender and any Affiliate of any Lender; provided further,
however, that (A) that no Affiliate of a Borrower or any other Person who,
either directly or through one or more Affiliates, owns, manages or otherwise
operates hotels or motels as one of its primary business activities shall be an
Eligible Assignee and (B) each Eligible Assignee under clauses (i)(a) through
(i)(c) above shall have Tier 1 capital (as defined in the regulations of its
primary Federal banking regulator) of not less than $100,000,000.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Borrowers or any of their ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Borrowers, any
of their Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
executed and delivered as of the Closing Date by BHR and each of its
Subsidiaries that owns or operates a Real Property Asset on the Closing Date,
and thereafter by each other Subsidiary of BHR that becomes an owner or
operator of a Real Property Asset, in favor of Administrative Agent and
Lenders, in substantially the form of Exhibit VI annexed hereto, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms hereof and thereof.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and requirements having the
force of law relating to (i) environmental matters, including, without
limitation, those relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries resulting from
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the Release or threatened Release of Hazardous Materials, (ii) the generation,
use, storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the protection
of human, plant or animal health or welfare from environmental hazards, in any
manner applicable to BHR, Borrowers or any of their Subsidiaries or any of
their respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act ( 33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
local, state and federal statutes and regulations promulgated pursuant thereto,
each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any former ERISA
Affiliate of a Person shall continue to be considered an ERISA Affiliate within
the meaning of this definition with respect to the period such entity was an
ERISA Affiliate of the Person and with respect to liabilities arising after
such period for which the Person could be liable under the Internal Revenue
Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Borrowers or any of their ERISA Affiliates from any
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Pension Plan with two or more contributing sponsors or the termination of any
such Pension Plan resulting in liability pursuant to Sections 4063 or 4064 of
ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension
Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Borrowers or
any of their ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or
by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal
by Borrowers or any of their ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by Borrowers or any of their ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under Section
4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could
give rise to the imposition on Borrowers or any of their ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or against Borrowers or
any of their ERISA Affiliates in connection with any such Employee Benefit
Plan; (x) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan (or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or the failure of any trust forming part
of any Pension Plan to qualify for exemption from taxation under Section 501(a)
of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED AGREEMENTS" means (i) leases or management
agreements between owners or lessees of full service or limited service hotels
and BHR or one of its Subsidiaries, such that by the terms of any such lease or
management agreement neither BHR nor any of its Subsidiaries is required to
make an Acquisition Expenditure (other than a division of revenues generated
from the hotel subject to the lease or management agreement), and, after giving
effect to such lease or management agreement, the total contribution of all
Excluded Agreements under this clause (i) to Consolidated EBITDA, determined on
a pro-forma basis, for the period of four Fiscal Quarters ending immediately
prior to the commencement of such lease or management agreement does not exceed
10% of Consolidated EBITDA, determined on a pro- forma basis, for such period
of four Fiscal Quarters; and (ii) leases or management agreements between
owners or lessees of full service or limited service hotels and BHR or one of
its Subsidiaries, such that by the terms of any such lease or management
agreement either
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BHR or one or more of its Subsidiaries is required to make an Acquisition
Expenditure, and, after giving effect to such lease or management agreement,
the total contribution of all Excluded Agreements under this clause (ii) to
Consolidated EBITDA, determined on a pro-forma basis, for the period of four
Fiscal Quarters ending immediately prior to the commencement of such lease or
management agreement does not exceed 10% of Consolidated EBITDA, determined on
a pro-forma basis, for such period of four Fiscal Quarters; provided that for
any period of four Fiscal Quarters, the total contribution to Consolidated
EBITDA of all Excluded Agreements under clauses (i) and (ii) above shall not
exceed 15% of Consolidated EBITDA, in each case determined on a pro-forma
historical basis as aforesaid; and provided further that Borrowers may convert
an Excluded Agreement to a non-Excluded Agreement for the purposes of this
definition by complying with all requirements, if any, under Section 7.8 of
this Credit Agreement for entering into a lease or management agreement that is
not an Excluded Agreement with respect to the converted agreement.
"EXCLUDED TAXES" means any franchise or similar Tax levied on
a Lender or any Tax measured with respect to the overall net income or capital
of a Lender.
"FACILITIES" means all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) and
related facilities now, hereafter or heretofore owned, leased, operated or used
by BHR, Borrowers or any of their Subsidiaries or any of their respective
predecessors.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Administrative Agent from three
Federal funds brokers of recognized standing selected by Administrative Agent.
"FELCOR" has the meaning set forth in the recitals to this
Agreement.
"FELCOR, LP" has the meaning set forth in the recitals to this
Agreement.
"FELCOR MERGER" means the planned merger of Bristol Hotel
Company and FelCor, conforming substantially to the FelCor Merger Agreement.
"FELCOR MERGER AGREEMENT" means the Agreement and Plan of
Merger dated March 23, 1998 between Bristol Hotel Company and FelCor, as such
agreement may be amended, supplemented, restated or otherwise modified from
time to time.
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"FELCOR RECOGNITION AGREEMENT" means that certain FelCor
Recognition Agreement substantially in the form of Exhibit XX hereto.
"FELCOR SPIN-OFF AGREEMENT" means the Spin-Off Agreement dated
as of March 23, 1998 among Bristol Hotel Company, Bristol Hotel Management
Corporation and Bristol Hotels & Resorts, Inc., as such agreement may be
amended, supplemented, restated or otherwise modified from time to time.
"FF&E" means, with respect to any hotel managed by, or the
offices of, BHR and its Subsidiaries, any furniture, fixtures and equipment
located thereon or therein and owned or leased by BHR or any of its
Subsidiaries.
"FF&E FINANCING INDEBTEDNESS" means Indebtedness (other than
any Loans) incurred by BHR or any of its Subsidiaries for the financing or
refinancing of FF&E, including, without limitation, that portion of the
obligations with respect to a Capital Lease, conditional sale agreement or
similar arrangement that is classified as a liability on a balance sheet
prepared in conformity with GAAP, and any refinancing, exchange or refunding
thereof that is permitted pursuant to Section 7.1(v).
"FINANCIAL OFFICER" means, with respect to any Person, the
Chief Executive Officer, Chief Financial Officer, Treasurer, Chief Accounting
Officer or Controller of such Person.
"FINANCIAL PLAN" has the meaning assigned to that term in
Section 6.1(xii).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of BHR, Borrowers and
their Subsidiaries ending on December 31 of each calendar year.
"FOREIGN STOCK PLEDGE AGREEMENT" has the meaning set forth in
Section 6.9C.
"FOREIGN SUBSIDIARY" means any direct or indirect Subsidiary
of BHR or Borrowers which is incorporated or organized under the laws of any
government or sovereignty other than any state of the United States of America
or the District of Columbia.
"FRANCHISE AGREEMENT" means each of the franchise agreements
listed on Schedule 4.1R annexed hereto, together with the most recent related
core modernization plan or other property improvement plan required by the
respective franchisor, as each such agreement or property improvement plan may
be amended, restated, supplemented or otherwise modified or replaced from time
to time.
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"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at 130 Liberty Street, New York, NY 10017 or (ii)
such other office of Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Borrowers and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in Section 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GROUND LEASES" means each of the ground leases to which any
hotel now or in the future managed by BHR or any of its Subsidiaries may become
subject, including the ground leases listed on Schedule 4.1S annexed hereto, as
such Schedule may be revised or supplemented from time to time.
"GUARANTY" means the Guaranty Agreement executed and
delivered by BHR and its Subsidiaries on the Closing Date and to be executed
and delivered by BHR and its Subsidiaries (other than the Borrowers) from time
to time thereafter in accordance with Section 6.9, substantially in the form of
Exhibit XV annexed hereto, as such Guaranty Agreement may be amended,
supplemented or otherwise modified from time to time.
"GUARANTOR" means, at any time, any of BHR's Subsidiaries that
is then a party to the Guaranty and BHR.
"HAMPSTEAD" means the Hampstead Group, L.L.C., a Texas limited
liability company.
"HAMPSTEAD PRINCIPALS" means, collectively, Robert A. Whitman,
Donald McNamara and Daniel A. Decker; provided that, if any one (but only one)
of such persons shall not be a principal of Hampstead on any date of
determination, then "HAMPSTEAD PRINCIPALS" means the two remaining persons and
any other individual who, as of such applicable date of determination, is also
a principal of Hampstead.
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"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar meaning and regulatory effect under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable substances
or explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii)
urea formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority or which may or could pose a hazard to the health
and safety of the owners, occupants or any Persons in the vicinity of the
Facilities; provided, however, that Hazardous Materials shall not include any
materials in a non-hazardous form such as asphalt contained in road-surfacing
materials or hazardous materials customarily used in the operation of hotel
properties and properly stored and maintained.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"HI GUARANTY" means that certain Guarantee dated as of
December 15, 1996 by Bass International Holdings N.V. in favor of Bristol Hotel
Company and its subsidiaries and affiliates, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time.
"INDEBTEDNESS" means, with respect to any Person and as of any
date of determination, to the extent required to be shown on a balance sheet
prepared in conformity with GAAP, without duplication, (i) all indebtedness for
money borrowed by such Person, (ii) that portion of obligations with respect to
Capital Leases that is classified as a liability on a balance sheet prepared in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) all obligations owed for all or any part of the deferred purchase
price of assets or services purchased by such Person (excluding any such
obligations incurred under ERISA) that are either (a) due more than six months
from the date of incurrence of the obligation in respect thereof, (b) evidenced
by a note or similar written instrument or (c) owed in respect of real property
purchased by such Person or any of its Subsidiaries, (v) all indebtedness
secured by any Lien on any property or asset owned by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by such Person
or is nonrecourse to the credit of such Person, (vi) the net obligations of
such Person under Currency Agreements and
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Interest Rate Agreements, (vii) the excess of (a) the aggregate amount of that
portion of each other obligation of such Person (other than reservation and
similar deposits from customers and working capital deposits from owners
received and held in the ordinary course of business) that is classified as a
liability on a balance sheet prepared in conformity with GAAP, which obligation
is either (1) due more than six months from the date of incurrence thereof or
(2) evidenced by a note or similar written instrument over (b) $1,000,000,
(viii) trade payables of such Person and its Subsidiaries that by their terms
are more than 90 days delinquent as of such date of determination unless being
contested in accordance with the provisions of Section 6.3, (ix) all
obligations, contingent or otherwise, of such Person as an account party under
acceptance, letters of credit or similar facilities, whether or not such
obligations would be shown on a balance sheet prepared in conformity with GAAP
(other than obligations in respect of undrawn letters of credit securing trade
payables or performance of obligations incurred in the ordinary course of
business not more than 90 days past due or being contested in good faith), (x)
all obligations of such Person to purchase, redeem, retire or otherwise acquire
for value any Capital Stock of such Person (provided that the obligation to
purchase, redeem, retire or otherwise acquire any preferred stock or preferred
limited partner interests shall only be included in Indebtedness to the extent
such obligation requires payment in cash as opposed to Capital Stock), and (xi)
all guaranties by such Person of obligations described in clauses (i)-(x)
above.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 10.3A.
"INSOLVENCY EVENT" means, with respect to any Person, the
occurrence of any of the events described in Sections 8.6 or 8.7; provided
that, solely for purposes of this definition, any references to BHR, Borrowers
or any of their Subsidiaries in Sections 8.6 or 8.7 shall be deemed to be a
generic reference to such Person.
"INSOLVENCY LAWS" means the Bankruptcy Code or any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect in
the United States of America or any state thereof.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of BHR, Borrowers and their Subsidiaries as
currently conducted that are material to the condition (financial or
otherwise), business or operations of BHR, Borrowers and their Subsidiaries,
taken as a whole.
"INTERCOMPANY NOTE" shall have the meaning set forth in
Section 7.1(iv).
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each March 31, June 30, September 30 and December 31, commencing on
the first such date to occur after the Closing Date, and (ii) with respect to
any LIBOR Rate Loan, the last day of each Interest Period applicable to such
Loan; provided that, in the case of each Interest Period
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of six months, "Interest Payment Date" shall also include the date that is
three months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
Section 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means, with respect to any Person or any of its
Subsidiaries, as of any date of determination and without duplication:
(i) any direct or indirect purchase or other
acquisition (whether or not for consideration) by such investing
Person or Subsidiary of, or of a beneficial interest in, any equity or
debt Securities of any other Person;
(ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value by such investing
Person or Subsidiary from any other Person (other than (a) a Person
with respect to which such investing Person or Subsidiary is a wholly
owned subsidiary or (b) any other wholly owned subsidiary of the
Person referred to in the preceding clause (a); provided that, in the
case of BHR and its Subsidiaries, such other wholly owned subsidiary
is a Loan Party and has guarantied the Obligations or is a Borrower)
of any equity Securities of such investing Person or Subsidiary;
(iii) any direct or indirect loan, advance (other
than advances to officers, employees, consultants, accountants,
attorneys and other advisors and members of the Board of Directors of
any Person for moving, entertainment and travel expenses, drawing
accounts, retainers and similar expenditures in each case incurred in
the ordinary course of business) or capital contribution to any other
Person, including all indebtedness and accounts receivable owing from
that other Person that are not current assets or did not arise from
sales to, or Operating Leases with, that other Person in the ordinary
course of business;
(iv) any payment to any other Person for the
purpose of, or otherwise in connection with, securing, extending,
renewing or modifying any lease, operating agreement or management
agreement other than leases of FF&E;
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(v) any Contractual Obligation to make (but not
to transfer, whether pursuant to a "short" sale or otherwise) any
investment described in clauses (i) through (iv) above; and
(vi) any liability that is recourse to such
investing Person or Subsidiary or secured by any asset of such
investing Person or Subsidiary and that arises, by law, contract,
ownership of Securities or otherwise, directly or indirectly, as the
result of or otherwise in connection with the origination,
continuation or termination of any investment described in clauses (i)
through (v) above, except for performance, surety, appeal or similar
bonds or indemnification or contribution obligations, each provided or
arising in the ordinary course of business and, if applicable,
consistent with past practices.
The amount of any Investment, as of any date of determination, shall be equal
to (x) with respect to an Investment referred to in clause (i), (ii) or (iii)
of the preceding sentence, the remainder of (1) the sum of original cost of
such Investment plus the cost of all additions thereto as of such date of
determination, minus (2) the aggregate amount paid to such Person or Subsidiary
as a return of such Investment; provided, that (A) the calculation of the
amount referred to in this clause (2) shall exclude all fees and other amounts
(or the portion thereof) that shall constitute interest, dividends or other
similar amounts in respect of the return on such Investment, as determined in
conformity with GAAP, and (B) the calculation of the amount referred to in this
clause (2) shall exclude all adjustments for increases or decreases in value,
and write-ups, write-downs or write-offs with respect to such Investment, and
(y) with respect to an Investment referred to in clause (v) or (vi) above, the
maximum aggregate liability for which such investing Person or Subsidiary is
liable, by law, contract, ownership of Securities or otherwise, with respect to
such Investment as of such date of determination.
"ISSUING LENDER" means, with respect to any Standby Letter of
Credit, any Lender which agrees or is otherwise obligated to issue such Standby
Letter of Credit, determined as provided in Section 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate, limited liability company or
limited partnership Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"L/C PURPOSES" has the meaning stated in the recitals of the
Credit Agreement.
"LEASE AGREEMENTS" means all leases of hotels entered into by
BHR, Borrowers or their Subsidiaries with (a) FelCor or its Subsidiaries or (b)
any Other Lessor.
"LEASEHOLD MORTGAGE AND ASSIGNMENT OF RENTS" means a Leasehold
Mortgage and Assignment of Rents in substantially the form of Exhibit XVII
annexed hereto.
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"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to Section 10.1; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
"LEVERAGE RATIO" has the meaning assigned to that term in
Section 7.6B.
"LIBOR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted LIBOR Rate as provided in Section 2.2A.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LIQUID NET WORTH" has the same meaning as that term is given
in the Master Hotel Agreement.
"LIQUID NET WORTH CUT-OFF DATE" means the date on which the
Standby Letter of Credit Commitment has been reduced to $5,000,000 or less.
"LLC LOAN PARTIES" means, collectively, each Person that is a
limited liability company and is, or becomes, a Loan Party.
"LOAN" or "LOANS" means one or more of the Revolving Loans.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Borrowers in favor of an Issuing Lender
relating to, the Letters of Credit), the FelCor Recognition Agreement, the
Guaranty, the Collateral Documents and the Environmental Indemnity.
"LOAN PARTIES" means any of BHR, Borrowers or any Subsidiary
of Borrowers executing the Guaranty.
"LOCAL ACCOUNTS" means, collectively, the Deposit Accounts
listed on Schedule 5.17 annexed hereto as "Local Accounts" and any other
Deposit Account established for the purpose of receiving Receipts pursuant to
Section 6.11.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
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"MASTER HOTEL AGREEMENT" means the Master Hotel Agreement
dated as of May 29, 1998, among BHR, FelCor and FelCor, LP, in effect on the
date of this Agreement, as such agreement may be amended, restated,
supplemented or otherwise modified pursuant to the terms thereof and hereof.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations or condition (financial or otherwise) of the Loan
Parties, taken as a whole or (ii) the impairment in any material respect of the
ability of any Loan Party to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Borrowers or any of their Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, to which Borrowers or any of their ERISA Affiliates
is contributing, or ever has contributed, or to which Borrowers or any of their
ERISA Affiliates has, or ever has had, an obligation to contribute.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, the gross purchase price therefor less the sum of (i) the amounts applied
to the payment of Indebtedness or other obligations secured by a Lien on, or
otherwise subject to prepayment as a result of such disposition of, such asset
or other asset (other than the Obligations), (ii) the reasonable out-of-pocket
fees, costs and expenses paid or payable by the relevant Loan Party or
Subsidiary in connection with such Asset Sale, (iii) the amount of all taxes
paid (or reasonably estimated to be payable) by the relevant Loan Party or
Subsidiary in connection with such Asset Sale, and (iv) closing adjustments and
similar liabilities and obligations contemplated or reserved, including without
limitation, reserves established to fund contingent liabilities reasonably
estimated by the relevant Loan Party or Subsidiary to be payable in connection
with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by BHR, Borrowers or any of their Subsidiaries (i) under
any business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of BHR,
Borrowers or any of their Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by BHR,
Borrowers or such Subsidiary in connection with the adjustment or settlement of
any claims of BHR, Borrowers or such Subsidiary in respect thereof and, in the
case of any such taking, net of (X) income taxes reasonably estimated to be
actually payable within two years of the date of such taking as a result of any
gain recognized in connection therewith and (Y) payment of the outstanding
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principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Permitted Lien on the
assets taken or that is otherwise required to be repaid under the terms thereof
as a result of such taking.
"NOTES" means one or more of the Revolving Notes.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Borrowers to Administrative Agent
pursuant to Section 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Borrowers
to Administrative Agent pursuant to Section 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Lenders or any of
them under the Loan Documents, whether for principal, interest (including
interest accruing on or after the occurrence of an Insolvency Event),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation
(whether for itself, on behalf of a partnership of which it is a general
partner or a limited liability company of which it is a managing member, or in
any other capacity), a certificate executed on behalf of such corporation by a
person specified in this Agreement for such purpose or, in the absence of such
specification, by its chairman of the board (if an officer), its president, one
of its vice presidents, its chief financial officer, its treasurer or its
controller; provided, however, that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of the Loan hereunder
shall include (i) a statement that the officer making or giving such Officer's
Certificate has read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of such signer, such signer has made or has caused to be made such
examination or investigation as is reasonably necessary to enable such signer
to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of such
signer, such condition has been complied with.
"OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT" means the
Agreement Regarding Liquor Leases, Servicing Agreements and Liquor Licenses
executed and delivered by Borrowers and each other Loan Party thereto in favor
of the Administrative Agent on or before the Closing Date pursuant to Sections
4.1A and 4.1G, and thereafter by each other Subsidiary of BHR that becomes a
party thereto, substantially in the form of Exhibit XVIII annexed hereto, as
such agreement may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof and hereof.
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"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"OTHER INDEBTEDNESS" has the meaning assigned to that term in
Section 7.1(v).
"OTHER INDEBTEDNESS DOCUMENTS" means, collectively, each
agreement, guaranty, instrument, promissory note or other document entered into
by any Loan Party or any of its Subsidiaries in connection with Other
Indebtedness, as each such agreement, guaranty, instrument, promissory note or
other document may be amended, restated, supplemented or otherwise modified
from time to time.
"OTHER LEASE AND MANAGEMENT AGREEMENT" means (i) an Operating
Lease or (ii) any other agreement, including a management agreement, that
contains Contingent Obligations or payment requirements (other than Acquisition
Expenditures), in each case above for the purpose of managing a limited service
or full service hotel and entered into between an Other Lessor and BHR or one
of its Subsidiaries.
"OTHER LESSOR" means any owner or lessee of a full service or
limited service hotel entering into an Other Lease and Management Agreement.
"PARTNERSHIP LOAN PARTIES" means, collectively, each Person
that is a partnership and is, or becomes, a Loan Party.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims, if payment of such taxes, assessments or governmental
charges or claims is not, at the time, required by Section 6.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such
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reserve or other appropriate provision, if any, as shall be required
by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under Section 8.8;
(v) leases or subleases granted to others not interfering
in any material respect with the ordinary conduct of the business of
BHR, Borrowers or any of their Subsidiaries;
(vi) easements, rights-of-way, restrictions,
encroachments, minor defects or irregularities in title, and other
similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of BHR, Borrowers or
any of their Subsidiaries;
(vii) (a) any interest or title of a lessor or sublessor
under any Lease Agreement, any Other Lease and Management Agreement or
any other lease permitted by Section 7.8, (b) any restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) any subordination of the interest of the lessee
or sublessee under such lease to any restriction or encumbrance
referred to in the preceding clause (b);
(viii) Liens arising from filing Uniform Commercial Code
financing statements relating solely to leases permitted by this
Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) licenses of patents, trademarks and other
intellectual property rights granted by BHR, Borrowers or any of their
Subsidiaries in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of BHR,
Borrowers or such Subsidiary;
(xi) contractual Liens of landlords contained in Operating
Leases that are subordinated to the Obligations; and
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(xii) Liens bonded and released of record.
"PERMITTED LIENS" has the meaning set forth in Section 7.2A.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies,
limited liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement executed and delivered by Borrowers on the Closing Date,
substantially in the form of Exhibit XIV annexed hereto, as such Pledge and
Security Agreement may thereafter be amended, supplemented or otherwise
modified from time to time.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Bankers Trust Company as its prime commercial
lending rate in effect at its principal office in New York. The Prime Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company or any other Lender
may make commercial loans or other loans at rates of interest at, above or
below the Prime Rate.
"PRO RATA SHARE" means with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, as the applicable percentage may be adjusted by
assignments permitted pursuant to Section 10.1. The initial Pro Rata Share of
each Lender for purposes of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
"REAL PROPERTY ASSETS" means all real property from time to
time owned in fee by any Loan Party and all rights, title and interest in and
to any and all leases of real property as to which any Loan Party has a
leasehold interest, including without limitation any such fee or leasehold
interests acquired by any Loan Party after the date hereof.
"RECEIPTS" means, collectively, all cash, Cash Equivalents,
checks, notes, drafts and any items of payment or collection received by or on
behalf of BHR or any of its Subsidiaries, or by any officers, employees or
agents of BHR or any of its Subsidiaries or other Persons acting for or in
concert with BHR or such Subsidiary to make collections on
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BHR's or such Subsidiary's behalf in connection with or in any way relating to
BHR or such Subsidiary or the operation of BHR's or such Subsidiary's business,
including, without limitation, any proceeds received from or pursuant to (i)
any sales of, or loans against, accounts of BHR or any of its Subsidiaries
(other than the Loans pursuant to this Agreement), (ii) any sale or other
disposition of assets (including, without limitation, any disposition of assets
permitted hereunder or consented to by the Administrative Agent, but excluding
amounts applied to the repayment of Indebtedness or other obligations secured
by a Lien on the assets sold or disposed of, or otherwise payable as a result
of such disposition) or issuance or sale of equity Securities by BHR or any of
its Subsidiaries, (iii) the incurrence of Indebtedness by BHR or any of its
Subsidiaries and the issuance and sale by BHR or any of its Subsidiaries of
equity or debt Securities, in each case other than the Obligations and other
Indebtedness permitted by this Agreement, (iv) insurance policies (other than
liability insurance payable directly or indirectly to a third party) maintained
by BHR or any of its Subsidiaries, whether or not the Administrative Agent is
an additional insured or named as loss payee thereunder, (v) the successful
prosecution (including any settlement) of any claims, actions or other
litigation or proceeding by or on behalf of or against BHR or any of its
Subsidiaries, (vi) Investments in, or equity and debt Securities issued by,
Subsidiaries or Joint Ventures of BHR and its Subsidiaries or other Persons and
(vii) any management agreements; it being understood and agreed that nothing
contained in this definition shall in any respect be deemed to permit any
transactions by BHR or any of its Subsidiaries otherwise restricted or
prohibited by this Agreement.
"REGISTER" has the meaning assigned to that term in Section
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
Section 3.3B.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REQUEST FOR ISSUANCE OF STANDBY LETTER OF CREDIT" means a
notice substantially in the form of Exhibit III annexed hereto delivered by
Borrowers to Administrative Agent pursuant to Section 3.1B(i) with respect to
the proposed issuance of a Standby Letter of Credit.
"REQUIREMENT OF LAW" means (a) the certificates or articles of
incorporation, by-laws and other organizational or governing documents of a
Person, (b) any law, treaty,
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rule, regulation or determination of an arbitrator, court or other governmental
authority, or (c) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or approval binding
on a Person or any of its property.
"REQUISITE LENDERS" means Lenders having or holding 51% or
more of the sum of the aggregate Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of any Loan Party now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class (and cash
in lieu of fractional shares) and a dividend payable to BHR or any wholly owned
Subsidiary of BHR that is a Loan Party, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of any Loan Party now
or hereafter outstanding other than any such payment, purchase or other
acquisition by a wholly owned Subsidiary of a Loan Party of its shares, (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of
any Loan Party now or hereafter outstanding other than any such payment by a
wholly owned Subsidiary of a Loan Party of any such rights made to a Loan
Party, and (iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness other than any such payment or prepayment
made in accordance with the terms of such Subordinated Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Borrowers pursuant to Section 2.1A, and "REVOLVING
LOAN COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means 12 months
after the Closing Date, unless extended pursuant to Section 2.1F.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Standby Letter of
Credit Usage in respect of all Standby Letters of Credit issued by that Lender
(in each case net of any participations purchased by other Lenders in such
Standby Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
aggregate amount of all participations purchased by that Lender in any
outstanding Standby Letters of Credit or any unreimbursed drawings under any
Standby Letters of Credit.
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"REVOLVING LOANS" means the Loans made by Lenders to Borrowers
pursuant to Section 2.1A.
"REVOLVING NOTES" means (i) the promissory notes of Borrowers
issued pursuant to Section 2.1E on the Closing Date and (ii) any promissory
notes issued by Borrowers pursuant to the last sentence of Section 10.1B(i) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of Exhibit IV
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the property
of such Person or Persons, as applicable, (including, without limitation, any
rights to contribution from the other Loan Parties under the Loan Documents) is
(y) greater than the total amount of liabilities (including contingent
liabilities) of such Person or Persons, as applicable, and (z) not less than
the amount that will be required to pay the aggregate probable liabilities on
each such Person's or Persons', as applicable, then existing debts as they
become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person or Persons, as
applicable; (b) such Person's or Persons', as applicable, capital is (or will
be, as the case may be), not unreasonably small in relation to its or their, as
applicable, business or any contemplated or undertaken transaction; and (c)
such Person or Persons, as applicable, do not intend to incur, or do not
believe (nor should it or they reasonably believe) that it or they will incur,
debts beyond its or their ability to pay such debts as they become due; and
(ii) such Person or Persons, as applicable, are (or will be, as the case may
be), in the aggregate, "solvent" within the meaning given that term and similar
terms under Applicable Laws relating to fraudulent transfers and conveyances.
For purposes of clause (i) of the preceding sentence, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting obligations of
Borrowers or their Subsidiaries
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and issued for the benefit of hotels controlled by FelCor, one of its
Affiliates, or an Other Lessor.
"STANDBY LETTER OF CREDIT COMMITMENT" means $20,000,000
subject to reduction as provided in Section 3.1D.
"STANDBY LETTER OF CREDIT COMMITMENT TERMINATION DATE" means
the date that is twelve months from the Closing Date, unless extended pursuant
to Section 3.1F.
"STANDBY LETTER OF CREDIT REDUCTION EVENT" shall have the
meaning set forth in Section 3.1D.
"STANDBY LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Standby Letters of
Credit then outstanding plus (ii) the aggregate amount of all drawings under
Standby Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed by Borrowers.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Borrowers
(other than Indebtedness to any of their Subsidiaries) that is subordinated in
right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by a governmental authority, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "TAX ON THE OVERALL NET
INCOME" of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of a
Lender, its lending office) is located or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of that
Person (whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).
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"TOTAL DEBT" as applied to any Person, means, as at any date
of determination, the aggregate stated balance sheet amount of all Indebtedness
of such Person, determined in accordance with GAAP.
"TOTAL LIQUID NET WORTH" means the amount equal to the sum of
the Liquid Net Worth of BHR, Borrowers and their respective Subsidiaries.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans made to Borrowers plus (ii) the Standby Letter of
Credit Usage with respect to all Standby Letters of Credit issued for the
account of Borrowers.
"UNITED/HARVEY HOLDINGS" means United/Harvey Holdings L.P., a
Delaware limited partnership and an Affiliate of Hampstead.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrowers to Lenders pursuant to clauses (i), (ii),
(iii) and (xii) of Section 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in Section 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in Section 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. An Event of Default shall "continue" or be "continuing" until
such Event of Default has been waived in accordance with Section 10.6 hereof.
The term "including" shall mean "including, without limitation" as used in the
Agreement.
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SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
herein set forth, each Lender hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Borrowers from
time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date an aggregate amount not exceeding
its Pro Rata Share of the aggregate amount of the Revolving Loan Commitments
then in effect to be used for the purposes identified in Section 2.5. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Revolving Loan Commitments is $40,000,000; provided that the
Revolving Loan Commitments of Lenders shall be reduced as provided in Section
2.4; provided further that the Revolving Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Revolving Loan Commitments
pursuant to Section 10.1B. Each Lender's Revolving Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving Loans
and the Revolving Loan Commitments shall be paid in full no later than that
date. Amounts borrowed under this Section 2.1A may be repaid and reborrowed
to, but excluding, the Revolving Loan Commitment Termination Date, at any time
and from time to time without premium or penalty except as provided in Section
2.6D.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in effect.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date
shall be in an aggregate minimum amount of $2,000,000 and integral multiples of
$1,000,000 in excess of that amount. Whenever a Borrower desires that Lenders
make Revolving Loans it shall deliver to Administrative Agent a Notice of
Borrowing no later than 10:00 A.M. (New York time) at least three Business Days
in advance of the proposed Funding Date (in the case of a LIBOR Rate Loan) or
no later than 10:00 A.M. (New York time) on the proposed Funding Date (in the
case of a Base Rate Loan). The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the amount of Loans
requested, (iii) in the case of Loans made on the Closing Date, that such Loans
shall be Base Rate Loans, (iv) in the case of Loans not made on the Closing
Date, whether such Loans shall be Base Rate Loans or LIBOR Rate Loans, (v) in
the case of any Loans requested to be made as LIBOR Rate Loans, the initial
Interest Period requested therefor, and (vi) the Borrower or Borrowers
requesting the Loans. Revolving Loans may be continued as or converted into
Base Rate Loans and LIBOR Rate Loans in the manner provided in Section 2.2D.
In lieu of delivering the above-described Notice of Borrowing, a Borrower may
give Administrative Agent telephonic notice
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by the required time of any proposed borrowing under this Section 2.1B;
provided that such notice shall be promptly confirmed in writing by delivery of
a Notice of Borrowing to Administrative Agent on or before the applicable
Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to a Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of such
Borrower or for otherwise acting in good faith under this Section 2.1B, and
upon funding of Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice a Borrower shall have effected Loans hereunder.
A Borrower shall notify Administrative Agent prior to the
funding of any Loans in the event that any of the matters to which Borrowers
are required to certify in the applicable Notice of Borrowing is no longer true
and correct as of the applicable Funding Date, and the acceptance by a Borrower
of the proceeds of any Loans shall constitute a re-certification by Borrowers,
as of the applicable Funding Date, as to the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in Sections 2.6B, 2.6C and 2.6G,
a Notice of Borrowing for a LIBOR Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrowers shall be bound to either (i) make a borrowing
in accordance therewith or (ii) pay all amounts due under Section 2.6D.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder. Promptly after receipt by
Administrative Agent of a Notice of Borrowing pursuant to Section 2.1B (or
telephonic notice in lieu thereof), Administrative Agent shall notify each
Lender of the proposed borrowing (such notification shall be made on the same
day for any Notice of Borrowing delivered to Administrative Agent by the time
required pursuant to Section 2.1B). Each Lender shall make the amount of its
Loan available to Administrative Agent, in same day funds in Dollars, at the
Funding and Payment Office, not later than 12:00 Noon (New York time) on the
applicable Funding Date. Upon satisfaction or waiver of the conditions
precedent specified in Sections 4.1 (in the case of Loans made on the Closing
Date) and 4.2 (in the case of all Loans), Administrative Agent shall make the
proceeds of such Loans available to the appropriate Borrower on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from Lenders to be
credited only to the account of the appropriate Borrower at the Funding and
Payment Office.
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Unless Administrative Agent shall have been notified by any Lender,
prior to the Funding Date for any Loans, that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding
Date, and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Borrowers a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the customary rate set by
Administrative Agent for the correction of errors among banks for three
Business Days, and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent shall promptly notify Borrowers and Borrowers
shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Funding Date until the
date such amount is paid to Administrative Agent, at the rate payable under
this Agreement for Base Rate Loans. Nothing in this Section 2.1C shall be
deemed to relieve any Lender from its obligation to fulfill its Commitment
hereunder or to prejudice any rights that Borrowers may have against any Lender
as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in Section 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Revolving Loan Commitment and Revolving Loans from time to time of
each Lender and each repayment or prepayment in respect of the
principal amount of the Revolving Loans of each Lender. Any such
recordation shall be conclusive and binding on Borrowers and each
Lender, absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect
Borrowers' Obligations in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of each Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on Borrowers,
absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect
Borrowers' Obligations in respect of the applicable Loans; and
provided, further that in the event of any
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inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Borrowers, Administrative Agent and Lenders shall
deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case unless and
until an Assignment Agreement effecting the assignment or transfer
thereof shall have been accepted by Administrative Agent and recorded
in the Register as provided in Section 10.1B(ii). Prior to such
recordation, all amounts owed with respect to the applicable
Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.
(v) Borrowers hereby designate Administrative Agent to
serve as Borrowers' agent solely for purposes of maintaining the
Register as provided in this Section 2.1D, and Borrowers hereby agree
that, to the extent Administrative Agent serves in such capacity,
Administrative Agent and its officers, directors, employees, agents
and affiliates shall constitute Indemnified Persons for all purposes
under Section 10.3.
E. NOTES. Borrowers shall execute and deliver to each Lender (or
to Administrative Agent for that Lender) on the Closing Date a Revolving Note
substantially in the form of Exhibit IV annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions.
F. EXTENSION OF REVOLVING LOAN COMMITMENT TERMINATION DATE.
(a) As long as no Potential Event of Default or Event of
Default is then continuing, the Borrowers may, no earlier than 120 days and no
later than 30 days prior to the then effective Revolving Loan Commitment
Termination Date (as it may be extended from time to time pursuant hereto),
obtain by requesting in writing to the Administrative Agent an extension of the
Revolving Loan Commitment Termination Date for an additional 12 months, which
extension shall be effective upon delivery of the request therefor with no need
for further action on the part of the parties hereto.
(b) The Borrowers may not receive more than two extensions of
the Revolving Loan Commitment Termination Date under this Section 2.1F.
2.2 INTEREST ON THE LOANS.
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A. RATE OF INTEREST. Subject to the provisions of Sections 2.2F,
2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
LIBOR Rate. The applicable basis for determining the rate of interest with
respect to any Loan shall be selected by the Borrower receiving the Loan
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to Section 2.1B, and the basis for determining the interest rate with
respect to any Loan may be changed from time to time pursuant to Section 2.2D.
If on any day a Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate.
(i) Subject to the provisions of Sections 2.2E and 2.7,
the Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the Base Rate
plus 0.875%; or
(b) if a LIBOR Rate Loan, then at the sum of the
Adjusted LIBOR Rate plus 1.875%.
B. INTEREST PERIODS. In connection with each LIBOR Rate Loan,
the Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at the requesting Borrower's option, either a one, two, three or six month
period; provided that:
(i) the initial Interest Period for any such Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a LIBOR Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a
Loan converted to a LIBOR Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a LIBOR Rate Loan continued as such pursuant to
a Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
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(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this Section 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period shall extend beyond the Revolving
Loan Commitment Termination Date;
(vi) there shall be no more than three Interest Periods
outstanding at any time; and
(vii) in the event a Borrower fails to specify an Interest
Period for any LIBOR Rate Loan, in the applicable Notice of Borrowing
or Notice of Conversion/Continuation, such Borrower shall be deemed to
have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of Section 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to Section 2.4B(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the
next succeeding Interest Payment Date applicable to Base Rate Loans (or, if
earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
Section 2.6, Borrowers shall have the option from and after the date which is
three Business Days after the Closing Date (including by delivery of a Notice
of Conversion/Continuation on the Closing Date) to convert at any time all or
any part of its outstanding Revolving Loans equal to $2,000,000 and integral
multiples of $1,000,000 in excess of that amount from Base Rate Loans to LIBOR
Rate Loans, or (ii) upon the expiration of any Interest Period applicable to a
LIBOR Rate Loan, to continue all or any portion of such Loan equal to
$2,000,000 and integral multiples of $1,000,000 in excess of that amount as a
LIBOR Rate Loan; or (iii) subject to the payment of all amounts due under
Section 2.6D, to convert a LIBOR Rate Loan into a Base Rate Loan at any time.
Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York time) of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) or at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a LIBOR Rate Loan). A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the
proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a LIBOR Rate Loan, the requested
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Interest Period, and (v) in the case of a conversion to, or a continuation of,
a LIBOR Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice
of Conversion/Continuation, Borrowers may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
Section 2.2D; provided that such notice shall be promptly confirmed in writing
by delivery of a Notice of Conversion/Continuation to Administrative Agent on
or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any
liability to Borrowers in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Borrowers or
for otherwise acting in good faith under this Section 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Borrowers shall have effected a conversion or continuation,
as the case may be, hereunder.
Except as otherwise provided in Sections 2.6B, 2.6C and 2.6G,
a Notice of Conversion/Continuation for conversion to, or continuation of, a
LIBOR Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on
and after the related Interest Rate Determination Date, and Borrowers shall be
bound to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE INTEREST. During the continuation of any Event
of Default, the outstanding principal amount of all Loans and, to the extent
permitted by Applicable Law, any interest payments thereon not paid when due
(other than any excess interest payable solely pursuant to this Section 2.2E)
and any fees and other amounts then due and payable hereunder, shall thereafter
bear interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy or Insolvency Laws) payable upon
demand at a rate that is 3.0% per annum in excess of the interest rate
otherwise payable under this Agreement with respect to the applicable Loans
(or, in case of any such fees and other amounts, at a rate which is 3.0% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided, however, that, in the case of LIBOR Rate Loans, if
such Event of Default is continuing, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective, such
LIBOR Rate Loans shall thereupon become Base Rate Loans and shall thereafter
bear interest payable upon demand at a rate which is 3.0% per annum in excess
of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for
in this Section 2.2E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of the Administrative Agent or any Lender.
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F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 365/366-day year in the case of Base Rate Loans and
a 360-day year in the case of LIBOR Rate Loans, in each case for the actual
number of days elapsed in the period during which it accrues. In computing
interest on any Loan, (i) the date of the making of such Loan or the first day
of an Interest Period applicable to such Loan or, with respect to a LIBOR Rate
Loan being converted to a Base Rate Loan, the date of conversion of such LIBOR
Rate Loan to such Base Rate Loan shall be included, and (ii) the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a LIBOR Rate
Loan, the date of conversion of such Base Rate Loan to such LIBOR Rate Loan
shall be excluded; provided that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Borrowers agree to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to
and excluding the Revolving Loan Commitment Termination Date equal to the
average of the daily excess of the Revolving Loan Commitments over the Total
Utilization of Revolving Loan Commitments multiplied by 0.25%.
Such commitment fees to be calculated on the basis of a
360-day year and the actual number of days elapsed and to be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date.
B. OTHER FEES. Borrowers agree to pay to Administrative Agent
such other fees in the amounts and at the times separately agreed upon between
Borrowers and Administrative Agent.
2.4 PREPAYMENTS AND REDUCTIONS IN COMMITMENTS OF REVOLVING LOANS; GENERAL
PROVISIONS REGARDING PAYMENTS; TERMINATION OF COMMITMENTS.
A. SCHEDULED PAYMENTS OF THE LOANS. The Loans shall be paid in
full no later than the Revolving Loan Commitment Termination Date, and the
final installment payable by Borrowers on such date shall be in an amount
sufficient to repay all amounts owing by Borrowers under this Agreement with
respect to the Loan.
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOANS
COMMITMENTS.
(i) Voluntary Prepayments. Borrowers may, upon not less
than one Business Day's prior written or telephonic notice, in the
case of Base Rate Loans, and
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three Business Days' prior written or telephonic notice, in the case
of LIBOR Rate Loans, in each case given to Administrative Agent by
12:00 Noon (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time prepay Revolving Loans on any Business
Day in whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount; provided,
however, that a LIBOR Rate Loan may only be prepaid on the expiration
of the Interest Period applicable thereto unless Borrowers comply with
Section 2.6D with respect to any breakage costs resulting from such
prepayment being made on a date prior to the expiration of the
applicable Interest Period. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice
shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in Section
2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Borrowers may, upon not less than three Business Days' prior written
or telephonic notice confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments
at the time of such proposed termination or reduction; provided that
any such partial reduction of the Revolving Loan Commitments shall be
in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount. Borrowers' notice to
Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Loan Commitments shall be effective on the date specified in
Borrowers' notice and shall reduce the Revolving Loan Commitment of
each Revolving Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more
specifically provided in Section 2.4B(iv):
(a) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Administrative
Agent or by BHR, Borrowers or any of their Subsidiaries of any
Net Insurance/Condemnation Proceeds to the extent required
under Section 6.4,
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Borrowers shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation
Proceeds; provided, however, that so long as no Event of
Default or Potential Event of Default has occurred and is
continuing, no such prepayment shall be required to the extent
Borrowers determine to utilize such Net Insurance/Condemnation
Proceeds (x) to replace, rebuild or repair the asset damaged,
destroyed or taken, and Borrowers so utilize or contractually
commit to utilize such Net Insurance/Condemnation Proceeds
within 6 months of the receipt thereof or (y) as required by
any applicable Lease Agreement.
(b) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitments pursuant to
Section 2.4B(iii)(a), Borrowers shall deliver to
Administrative Agent an Officer's Certificate demonstrating
the calculation of the amount (the "NET PROCEEDS AMOUNT") of
the applicable Net Insurance/Condemnation Proceeds to be so
applied. In the event that Borrowers shall subsequently
determine that the actual Net Proceeds Amount to be so applied
was greater than the amount set forth in such Officer's
Certificate, Borrowers shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving
Loan Commitments shall be permanently reduced) in an amount
equal to the amount of such excess, and Borrowers shall
concurrently therewith deliver to Administrative Agent an
Officer's Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
(c) Prepayments Due to Reductions or Restrictions
of Revolving Loan Commitments. Borrowers shall from time to
time prepay the Revolving Loans to the extent necessary so
that the Total Utilization of Revolving Loan Commitments shall
not at any time exceed the Revolving Loan Commitments then in
effect. Any such mandatory prepayment shall be applied as
specified in Section 2.4B(iv).
(iv) Application of Prepayments and Unscheduled Reductions
of Commitments. Any prepayments pursuant to Sections 2.4B(i) and
2.4B(iii) shall be applied as specified by Borrowers in the applicable
notice of prepayment; provided that in the event Borrowers fail to
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to Base Rate Loans to the full
extent thereof before application to LIBOR Rate Loans, in each case in
a manner which minimizes the amount of any payments required to be
made by Borrowers pursuant to Section 2.6D.
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C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by
Borrowers of principal, interest, fees and other Obligations hereunder
and under the Notes shall be made in Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 1:00
P.M. (New York time) on the date due at the Funding and Payment Office
for the account of Lenders. Funds received by Administrative Agent
after that time on such due date shall be deemed to have been paid by
Borrowers on the next succeeding Business Day. Upon the occurrence
and during the continuance of an Event of Default, each Borrower
hereby authorizes the Administrative Agent to instruct the Cash
Manager to charge its accounts with the Cash Manager (including the
Concentration Accounts) in order to cause timely payment to be made to
the Administrative Agent of all principal, interest, fees and expenses
due hereunder or under the Notes or other Loan Documents (subject to
sufficient funds being available in its accounts for that purpose.)
(ii) Application of Payments to Principal and Interest.
Except as provided in Section 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares of such Loans; provided that payments of
interest in respect of Revolving Loans which are Base Rate Loans shall
be apportioned ratably among Lenders in proportion to the average
daily amount of such Base Rate Loans of each Lender outstanding during
the period in which such interest shall have accrued. Administrative
Agent shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof or
at such other address as such Lender may request, its Pro Rata Share
of all such payments received by Administrative Agent in respect of
Loans and the commitment fees of such Lender when received by
Administrative Agent pursuant to Section 2.3. Notwithstanding the
foregoing provisions of this Section 2.4D(iii), if, pursuant to the
provisions of Section 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes
Base Rate Loans in lieu of its Pro Rata Share of any LIBOR Rate Loans,
Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be
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included in the computation of the payment of interest hereunder or of
the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), Lender will make a notation thereon
of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the Obligations of Borrowers hereunder or under
such Note with respect to any Loan or any payments of principal or
interest on such Note.
2.5 USE OF PROCEEDS.
A. REVOLVING LOANS. The proceeds of any Revolving Loans shall be
applied by Borrowers to provide for working capital and/or other general
corporate purposes of Borrowers and their Subsidiaries, including acquisition
of management contracts and leases.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Borrowers or any of their
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING LIBOR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to LIBOR Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 12:00 Noon (New York time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the LIBOR Rate Loans for which
an interest rate is then being determined for the applicable Interest Period
and shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrowers and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Rate Loans, that by reason of
circumstances affecting the interbank LIBOR market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted LIBOR Rate, Administrative
Agent shall
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on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Borrowers and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, LIBOR Rate Loans until such time as
Administrative Agent notifies Borrowers and such Lenders that the circumstances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrowers with respect to the Loans
in respect of which such determination was made shall be deemed to be rescinded
by Borrowers.
C. ILLEGALITY OR IMPRACTICABILITY OF LIBOR RATE LOANS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrowers and Administrative Agent) that the
making, maintaining or continuation of its LIBOR Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of
this Agreement which materially and adversely affect the interbank LIBOR market
or the position of such Lender in that market, then, and in any such event,
such Lender shall be an "AFFECTED LENDER" and it shall on that day give notice
(by telefacsimile or by telephone confirmed in writing) to Borrowers and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation
of the Affected Lender to make Loans as, or to convert Loans to, LIBOR Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to
a LIBOR Rate Loan then being requested by Borrowers pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall
make such Loan as (or convert such Loan to, as the case may be) a Base Rate
Loan, (c) the Affected Lender's obligation to maintain its outstanding LIBOR
Rate Loans (the "AFFECTED LOANS"), shall be terminated at the earlier to occur
of the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a LIBOR Rate Loan then being requested by
Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrowers shall have the option, subject to the
provisions of Section 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately
preceding sentence, nothing in this Section 2.6C shall affect the obligation of
any Lender other than an Affected Lender to make or maintain Loans as, or to
convert Loans to, LIBOR Rate Loans in accordance with the terms of this
Agreement.
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D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrowers shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any additional interest paid by that Lender to lenders of funds
borrowed by it to make or carry its LIBOR Rate Loans and any loss, expense or
liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any LIBOR Rate Loan
does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
LIBOR Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its LIBOR Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its LIBOR
Rate Loans is not made on any date specified in a notice of prepayment given by
Borrowers, or (iv) as a consequence of any other default by Borrowers in the
repayment of its LIBOR Rate Loans when required by the terms of this Agreement.
E. BOOKING OF LIBOR RATE LOANS. Any Lender may make, carry or
transfer LIBOR Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF LIBOR RATE LOANS.
Calculation of all amounts payable to a Lender under this Section 2.6 and under
Section 2.7A shall be made as though that Lender had actually funded each of
its relevant LIBOR Rate Loans through the purchase of a LIBOR deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted LIBOR Rate in an amount equal to the amount of such LIBOR Rate Loan
and having a maturity comparable to the relevant Interest Period and through
the transfer of such LIBOR deposit from an offshore office of that Lender to a
domestic office of that Lender in the United States of America; provided,
however, that each Lender may fund each of its LIBOR Rate Loans in any manner
it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.6 and under
Section 2.7A.
G. LIBOR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a LIBOR Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of Section
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrowers with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by Borrowers.
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2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of Section 2.7B, in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Excluded Taxes) with
respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to LIBOR Rate Loans that are reflected in
the definition of Adjusted LIBOR Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank LIBOR
market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Borrower shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this Section 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than 180 days prior to the time it gives
notice to Borrowers (as provided in the next sentence) of the relevant
circumstance. Such Lender shall deliver to Borrowers (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender
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under this Section 2.7A, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Borrowers under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other
than Excluded Taxes) imposed, levied, collected, withheld or assessed
by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from
or to which a payment is made by or on behalf of Borrowers or by any
federation or organization of which the United States of America or
any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Borrowers or any other
Person is required by law to make any deduction or withholding on
account of any such Tax (other than an Excluded Tax) from any sum paid
or payable by Borrowers to Administrative Agent or any Lender under
any of the Loan Documents:
(a) Borrowers shall notify Administrative Agent
of any such requirement or any change in any such requirement
as soon as Borrowers become aware of it;
(b) Borrowers shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Borrowers) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Borrowers shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
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provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the
rate of such deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from Withholding Taxes.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
Section 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Borrowers, on or
prior to the Closing Date (in the case of each Lender listed
on the signature pages hereof) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as
may be necessary in the determination of Borrowers or
Administrative Agent (each in the reasonable exercise of its
discretion), (X) two original copies of Internal Revenue
Service Form 1001 or 4224 (or any successor forms), properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (Y)
if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (X) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to Section
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever
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a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect, that such Lender shall (1) promptly deliver
to Administrative Agent for transmission to Borrowers, two new
original copies of Internal Revenue Service Form 1001 or 4224,
or a Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be,
properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required
in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States (as
applicable) federal income tax with respect to payments to
such Lender under the Loan Documents or (2) notify
Administrative Agent and Borrowers of its inability to deliver
any such forms, certificates or other evidence.
(c) Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
Section 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of clause (a) or (b) of this Section
2.7B(iii); provided that if such Lender shall have satisfied
the requirements of Section 2.7B(iii)(a) on the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender),
nothing in this Section 2.7B(iii)(c) shall relieve Borrowers
of their obligation to pay any additional amounts pursuant to
clause (c) of Section 2.7B(ii) in the event that, as a result
of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the
interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in Section 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans, Commitments or
Standby Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Standby Letters of Credit, in the
case of any Lender to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or
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such controlling corporation with regard to capital adequacy), then from time
to time, within five Business Days after receipt by Borrowers from such Lender
of the statement referred to in the next sentence, Borrowers shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Borrowers (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. REPLACEMENT OF A LENDER.
(i) In the event that any Lender shall give
notice to any Borrower that such Lender is entitled to receive
payments under Section 2.7A or 3.6A, and unless the circumstances
which have caused such payments are no longer in effect, Borrowers
may, if such Lender shall fail to withdraw such notice within five
Business Days after Borrowers' request for such withdrawal, upon ten
Business Days prior written notice by Borrowers to the Administrative
Agent and such Lender, elect to cause such Lender to assign its Loans
and Commitments in full in accordance with the provisions of Section
10.1A to an Eligible Assignee designated by Borrowers and reasonably
satisfactory to the Administrative Agent; provided that at any time
prior to the consummation of any such assignment, the Administrative
Agent may (but shall have no obligation to) designate another Eligible
Assignee in substitution for the Eligible Assignee designated by
Borrowers, in which event the applicable Lender shall assign its Loans
and Commitments to such other Eligible Assignee.
(ii) (a) At the time of any replacement
pursuant to this Section 2.7D, the Eligible Assignee (the "REPLACEMENT
LENDER") replacing the applicable Lender (the "REPLACED LENDER") shall
enter into one or more Assignment Agreements pursuant to which the
Replacement Lender shall acquire all of the Commitments and
outstanding Loans of the Replaced Lender and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to
the sum of (1) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, and (2) an
amount equal to all accrued, but theretofore unpaid, fees owing to the
Replaced Lender; and
(b) all Obligations of the Borrowers
owing to the Replaced Lender (excluding those specifically described
in clause (a) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid by the
Borrowers in full to such Replaced Lender concurrently with such
replacement.
Upon the execution of the respective assignment documentation, the
payments of amounts referred to in clauses (a) and (b) above and, if
so requested by the Replacement Lender, the delivery of the
appropriate Note or Notes executed by the
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Borrowers, the Replacement Lender shall become a Lender hereunder and
the Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to Borrowers' obligations regarding the
indemnification provisions under this Agreement, which will survive
for the benefit of such Replaced Lender in accordance with the terms
hereof.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Standby Letters of Credit of such Lender or Issuing
Lender, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under Section 2.7 or Section 3.6, it will, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans or Standby
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
Section 2.7 or Section 3.6 would be materially reduced and if, as determined by
such Lender or Issuing Lender in its sole discretion, the making, issuing,
funding or maintaining of such Commitments or Loans or Standby Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Standby Letters of Credit or the
interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this Section 2.8 unless Borrowers agree to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Borrowers pursuant to this Section 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or Issuing Lender to
Borrowers (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
SECTION 3. STANDBY LETTERS OF CREDIT
3.1 ISSUANCE OF STANDBY LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. STANDBY LETTERS OF CREDIT. In addition to Borrowers
requesting that Lenders make Revolving Loans pursuant to Section 2.1A,
Borrowers may request, in accordance with the provisions of this Section 3.1,
from time to time during the period from the Closing Date
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to but excluding the date that is five Business Days prior to the Standby
Letter of Credit Commitment Termination Date, that the Issuing Lenders issue
Standby Letters of Credit for the account of Borrowers for the purposes
specified in the definition of Standby Letter of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Borrowers herein set forth, Issuing Lenders shall issue such
Standby Letters of Credit in accordance with the provisions of this Section
3.1; provided that Borrowers shall not request that Issuing Lenders issue (and
Issuing Lenders shall not issue):
(i) any Standby Letter of Credit if, after giving effect
to such issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitments then in effect;
(ii) any Standby Letter of Credit if, after giving effect
to such issuance, the Standby Letter of Credit Usage would exceed the
Standby Letter of Credit Commitment;
(iii) any Standby Letter of Credit having an expiration
date later than five Business Days prior to the Standby Letter of
Credit Commitment Termination Date;
(iv) any Standby Letter of Credit denominated in a
currency other than Dollars; or
(v) any Standby Letter of Credit that is not on a sight
basis.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Borrowers desire the
issuance of a Standby Letter of Credit, the requesting Borrower shall
deliver to Administrative Agent a Request for Issuance of Standby
Letter of Credit substantially in the form of Exhibit III annexed
hereto no later than 12:00 Noon (New York time) at least three
Business Days, or such shorter period as may be agreed to by the
Issuing Lender in any particular instance, in advance of the proposed
date of issuance. The Request for Issuance of Standby Letter of
Credit shall (a) specify the proposed date of issuance (which shall be
a Business Day), (b) specify the face amount of the Standby Letter of
Credit, (c) specify the expiration date of the Standby Letter of
Credit, (d) specify the name and address of the beneficiary, (e)
certify that, after giving effect to the requested Standby Letter of
Credit, (x) the Total Utilization of Revolving Loan Commitments will
not exceed the Revolving Loan Commitments then in effect, (y) the
Standby Letter of Credit Usage will not exceed the Standby Letter of
Credit Commitment, and (f) attach any language which would need to be
used in the Standby Letter of Credit issued. The Standby Letter of
Credit issued pursuant to each Request for Issuance of Standby Letter
of Credit shall be substantially in the form of Exhibit XXI annexed
hereto.
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The requesting Borrower shall notify the Issuing Lender prior
to the issuance of any Standby Letter of Credit in the event that any of the
matters to which it is required to certify in the applicable Request for
Issuance of Standby Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Standby Letter of Credit, and upon the
issuance of any Standby Letter of Credit the requesting Borrower shall be
deemed to have re- certified, as of the date of such issuance, as to the
matters to which it is required to certify in the applicable Request for
Issuance of Standby Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Request for Issuance of Standby Letter of
Credit pursuant to Section 3.1B(i) requesting the issuance of a
Standby Letter of Credit, Administrative Agent agrees to issue such
Standby Letter of Credit, notwithstanding the fact that the Standby
Letter of Credit Usage with respect to such Standby Letter of Credit
and with respect to all other Standby Letters of Credit issued by
Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans, may exceed Administrative Agent's
Revolving Loan Commitment then in effect. In fulfilling its duties as
an Issuing Lender, Administrative Agent is acting in its capacity as a
Lender, and not as Administrative Agent. Notwithstanding the
foregoing, if the Administrative Agent agrees not to serve as the
Issuing Lender, Borrowers may request another Lender to act as the
Issuing Lender and such other Lender may, at its option and sole
discretion, agree to act as Issuing Lender with respect to any Standby
Letter of Credit.
(iii) Issuance of Standby Letter of Credit. Upon
satisfaction or waiver (in accordance with Section 10.6) of the
conditions set forth in Section 4.3, the Issuing Lender shall issue
the requested Standby Letter of Credit in accordance with the Issuing
Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any
Standby Letter of Credit the applicable Issuing Lender shall promptly
notify Administrative Agent and each other Lender of such issuance.
Upon request of any Lender the Issuing Lender shall provide a copy of
such Standby Letter of Credit to the requesting Lender. Promptly
after receipt of such notice (or, if Administrative Agent is the
Issuing Lender, together with such notice), Administrative Agent shall
notify each Lender of the amount of such Lender's respective
participation in such Standby Letter of Credit, determined in
accordance with Section 3.1C.
(v) Reports to Lenders. Within 15 days after the end of
each calendar quarter ending after the Closing Date, so long as any
Standby Letter of Credit shall have been outstanding during such
calendar quarter, each Issuing Lender shall deliver to each other
Lender a report setting forth for such calendar quarter the daily
maximum amount available to be drawn under the Standby Letters of
Credit issued by such Issuing Lender that were outstanding during such
calendar quarter.
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C. LENDERS' PURCHASE OF PARTICIPATIONS IN STANDBY LETTERS OF
CREDIT. Immediately upon the issuance of each Standby Letter of Credit, each
Lender shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Standby Letter of Credit and
drawings thereunder in an amount equal to such Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to be drawn
thereunder.
D. REDUCTION OF STANDBY LETTER OF CREDIT COMMITMENT. The Standby
Letter of Credit Commitment on the Closing Date shall be $20,000,000. This
amount shall be reduced from time to time, but never increased, upon the
occurrence of either of the following (either, a "STANDBY LETTER OF CREDIT
REDUCTION EVENT"): (i) delivery of any quarterly or yearly consolidated balance
sheets of BHR and its Subsidiaries pursuant to Sections 6.1(i) and 6.1(ii), or
(ii) any increase in Total Liquid Net Worth due to any of the events described
in Section 6.10. Upon the occurrence of any Standby Letter of Credit Reduction
Event, the Standby Letter of Credit Commitment shall be reduced to an amount
equal to (x) the Minimum Liquid Net Worth (as defined in the Master Hotel
Agreement) after the occurrence of such Standby Letter of Credit Reduction
Event minus (y) the Total Liquid Net Worth upon the occurrence of such Standby
Letter of Credit Reduction Event (as calculated pursuant to Section 6.10 or as
reflected on the balance sheets delivered pursuant to Sections 6.1(i) or
6.1(ii)) plus (z) $5,000,000. In no event shall the Standby Letter of Credit
Commitment be increased to an amount higher than the Standby Letter of Credit
Commitment existing immediately prior to such Standby Letter of Credit
Reduction Event, nor shall the Standby Letter of Credit Commitment ever exceed
$20,000,000.
E. REDUCTION OF STANDBY LETTER OF CREDIT USAGE. Within [ten]
days after the occurrence of a Standby Letter of Credit Reduction Event,
Borrowers shall require the beneficiaries under any outstanding Standby Letters
of Credit to: (i) deliver to the Issuing Lender a written instrument, in form
and substance satisfactory to the Issuing Lender, reducing (and in no case
increasing) the aggregate amount of the Standby Letter of Credit Usage to an
amount less than or equal to the amount of the reduced Standby Letter of Credit
Commitment (as calculated pursuant to Section 3.1D); and (ii) take any other
action reasonably requested by such Issuing lender to reduce the Standby Letter
of Credit Usage to an amount less than or equal to the amount of the reduced
Standby Letter of Credit Commitment (as calculated pursuant to Section 3.1D).
F. EXTENSION OF STANDBY LETTER OF CREDIT COMMITMENT TERMINATION
DATE.
(a) The Borrowers may, no earlier than 120 days and no
later than 30 days prior to the then effective Standby Letter of Credit
Commitment Termination Date (as it may be extended from time to time pursuant
hereto), request in writing that the Standby Letter of Credit Commitment
Termination Date be extended for an additional 12 months, provided that any
request to extend the Standby Letter of Credit Commitment Termination Date must
also request an extension of the Revolving Loan Commitment Termination Date
pursuant to
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Section 2.1F. After the Borrowers' request, each Lender may, in its sole
discretion, consent or not consent to such extensions by giving written notice
thereof to the Administrative Agent within 21 days after receipt of the
Borrower's request. Each Lender's annual decision as to whether to extend the
Standby Letter of Credit Commitment Termination Date shall be based, in part,
on a new credit analysis utilizing then current information in respect of the
Borrowers' business, financial condition and operations and other information
furnished by the Borrowers. Failure of any Lender to respond within such
21-day period shall be deemed to be a refusal of such request by such Lender.
The Administrative Agent shall promptly notify each Lender and the Borrowers of
any Lender's decision to refuse the requested extensions.
(b) If, in accordance with the provisions of this Section
3.1F, a Lender consents to the extension of the Standby Letter of Credit
Commitment Termination Date, the Standby Letter of Credit Commitment
Termination Date for such Lender shall be extended for 12 months from the then
current Standby Letter of Credit Commitment Termination Date, without any
further action by the Borrowers or such Lender.
(c) If any Lender does not consent to a request for an
extension of the Standby Letter of Credit Commitment Termination Date, or is
deemed not to have consented to the requested extension, and the Standby Letter
of Credit Commitment Termination Date has been extended for at least one other
Lender: (i) the Borrowers may, on or prior to the end of the non-extended
Standby Letter of Credit Commitment Termination Date, terminate such
non-consenting Lender's Commitment under this Agreement upon return of one or
more Standby Letters of Credit in an amount equal to the non-consenting
Lender's Standby Letter of Credit Commitment, together with payment in full of
such non-consenting Lender's Revolving Loans, including principal and interest,
and such other sums, if any, owing to such non-consenting Lender and, in
connection with such termination, the Borrowers may replace such non-consenting
Lender with an Eligible Assignee or have an existing Lender or Lenders assume
the Commitment of the non-consenting Lender. If the Borrowers have not
previously terminated such non-consenting Lender's Commitments under this
Agreement and paid amounts due to such non-consenting Lender as provided above,
then all amounts due to such non-consenting Lender, including principal and
interest on all of the non-consenting Lender's Revolving Loans and all fees
owed, shall be due and payable on the non-extended Standby Letter of Credit
Commitment Termination Date and the Standby Letter of Credit Commitment
Termination Date and Revolving Loan Commitment Termination Date shall not be
extended insofar as such non-consenting Lender is concerned.
(d) The Borrowers may not receive more than two extensions of
the Standby Letter of Credit Commitment Termination Date under this Section
3.1F.
3.2 STANDBY LETTER OF CREDIT FEES.
Borrowers agree to pay the following amounts with respect to
Standby Letters of Credit issued by such Issuing Lender at Borrowers' request:
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(i) with respect to each Standby Letter of Credit, (a) to
each Issuing Lender, a fronting fee equal to 0.125% per annum (with a
minimum of $500 per annum) of the daily maximum amount available to be
drawn under such Standby Letter of Credit issued by such Issuing
Lender and (b) to the Administrative Agent for distribution to each
Lender, a Standby Letter of Credit fee equal to 1.875% per annum of
the daily maximum amount available to be drawn under such Standby
Letter of Credit, in each case payable in arrears on and to (but
excluding) each January 31, April 30, July 31 and October 31 of each
year and computed on the basis of a 360-day year for the actual number
of days elapsed; and
(ii) to each Issuing Lender with respect to the issuance,
amendment or transfer of each Standby Letter of Credit and each
payment of a drawing made thereunder (without duplication of the fees
payable under clauses (i) and (ii) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this Section 3.2, such Issuing Lender shall distribute to each other
Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER STANDBY LETTERS OF
CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Standby Letter of Credit by
the beneficiary thereof, the Issuing Lender shall be responsible only to
exercise reasonable care to determine that the documents required to be
delivered under such Standby Letter of Credit have been delivered and that they
comply on their face with the requirements of such Standby Letter of Credit.
B. REIMBURSEMENT BY THE BORROWER OF AMOUNTS DRAWN UNDER STANDBY
LETTERS OF CREDIT. In the event an Issuing Lender has determined to honor a
drawing under a Standby Letter of Credit issued by it, such Issuing Lender
shall immediately notify the Borrower and, unless the Administrative Agent is
the Issuing Lender, Administrative Agent, and the Borrower shall reimburse such
Issuing Lender on or before the Business Day immediately following the date on
which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the amount of such drawing; provided
that, anything contained in this Agreement to the contrary notwithstanding, (i)
unless the Borrower shall have notified Administrative Agent and such Issuing
Lender prior to 12:00 Noon (New York time) on the date such drawing is honored
that the Borrower intends to reimburse such Issuing Lender for the amount of
payment under the drawing with funds other than the proceeds of Revolving
Loans, the Borrower shall be deemed to have given a timely Notice of Borrowing
to Administrative Agent requesting Lenders to make Revolving Loans that are
Base
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Rate Loans on the Reimbursement Date in an amount in Dollars equal to the
amount of such drawing and (ii) subject to satisfaction or waiver of the
conditions specified in Section 4.3B, Lenders shall, on the Reimbursement Date,
make Revolving Loans that are Base Rate Loans in the amount of such payment,
the proceeds of which shall be applied directly by Administrative Agent to
reimburse such Issuing Lender for the amount of such drawing; and provided,
further that if for any reason proceeds of Revolving Loans are not received by
such Issuing Lender on the Reimbursement Date in an amount equal to the amount
of such drawing, the Borrower shall reimburse such Issuing Lender, on demand,
in an amount in same day funds equal to the excess of the amount of such
drawing over the aggregate amount of such Revolving Loans, if any, which are so
received. Nothing in this Section 3.3B shall be deemed to relieve any Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and the Borrower shall retain any and all rights it
may have against any Lender resulting from the failure of such Lender to make
such Revolving Loans under this Section 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED DRAWINGS UNDER STANDBY
LETTERS OF CREDIT.
(i) Payment by Lenders. In the event that Borrowers
shall fail for any reason to reimburse any Issuing Lender as provided
in Section 3.3B in an amount equal to the amount of any drawing
honored by such Issuing Lender under a Standby Letter of Credit issued
by it, such Issuing Lender shall promptly notify each other Lender of
the unreimbursed amount of such drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata
Share. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same
day funds, at the office of such Issuing Lender specified in such
notice, not later than 12:00 Noon (New York time) on the first
business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available
to such Issuing Lender on such business day the amount of such
Lender's participation in such Standby Letter of Credit as provided in
this Section 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon
at the rate customarily used by such Issuing Lender for the correction
of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this Section 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender pursuant to this
Section 3.3C in the event that it is determined by the final judgment
of a court of competent jurisdiction that the payment with respect to
a Standby Letter of Credit by such Issuing Lender in respect of which
payment was made by such Lender constituted gross negligence or
willful misconduct, as determined by a final judgment of a court of
competent jurisdiction on the part of such Issuing Lender.
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(ii) Distribution to Lenders of Reimbursements Received
From Borrowers. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to Section 3.3C(i) for all or any
portion of any drawing honored by such Issuing Lender under a Standby
Letter of Credit issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
Section 3.3C(i) with respect to such drawing such other Lender's Pro
Rata Share of all payments subsequently received by such Issuing
Lender from Borrowers in reimbursement of such drawing when such
payments are received. Any such distribution shall be made to a
Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS DRAWN UNDER STANDBY LETTERS OF CREDIT.
(i) Payment of Interest by Borrowers. Borrowers agree to
pay to each Issuing Lender, with respect to drawings made under any
Standby Letters of Credit issued by such Issuing Lender at its
request, interest on the amount paid by such Issuing Lender in respect
of each such payment from the date of such drawing to but excluding
the date such amount is reimbursed by Borrowers (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
Section 3.3B) at a rate equal to (a) for the period from the date of
such drawing to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2% per annum in
excess of the rate of interest otherwise payable under this Agreement
with respect to Revolving Loans that are Base Rate Loans. Interest
payable pursuant to this Section 3.3D(i) shall be computed on the
basis of a 365/366-day year for the actual number of days elapsed in
the period during which it accrues and shall be payable on demand or,
if no demand is made, on the date on which the related drawing under a
Standby Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to Section 3.3D(i) with respect to a drawing under a Standby
Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date of such drawing
to but excluding the date on which such Issuing Lender is reimbursed
for the amount of such drawing (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to Section 3.3B), the
amount that such other Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in
respect of such Standby Letter of Credit for such period pursuant to
Section 3.2 if no drawing had been made under such Standby Letter of
Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to Section 3.3C(i) for all or any
portion of such drawing, such Issuing Lender shall distribute to each
other Lender which has paid all amounts payable by it under Section
3.3C(i) with respect to such
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drawing such other Lender's Pro Rata Share of any interest received by
such Issuing Lender in respect of that portion of such drawing so
reimbursed by other Lenders for the period from the date on which such
Issuing Lender was so reimbursed by other Lenders to but excluding the
date on which such portion of such drawing is reimbursed by Borrowers.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or
at such other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Borrowers to reimburse each Issuing Lender
for drawings made under the Standby Letters of Credit issued by it and to repay
any Revolving Loans made by Lenders pursuant to Section 3.3B and the
obligations of Lenders under Section 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Standby
Letter of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Borrowers or any Lender may have at any time against a
beneficiary or any transferee of any Standby Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing
Lender or other Lender or any other Person or, in the case of a
Lender, against Borrowers, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrowers or one of
their Subsidiaries and the beneficiary for which any Standby Letter of
Credit was procured);
(iii) any draft or document presented under any Standby
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Standby Letter of Credit against presentation of a draft or document
which does not comply with the terms of such Standby Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Borrowers or any of their Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
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(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Standby Letter of Credit shall not have constituted gross negligence
or willful misconduct of such Issuing Lender under the circumstances in
question (as determined by a final judgment of a court of competent
jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in Section 3.6, Borrowers hereby agree to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Standby Letter of Credit by such
Issuing Lender, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Standby Letter of Credit issued by it or (ii) the failure of such
Issuing Lender to honor a drawing under any such Standby Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
or omissions herein called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Borrowers on
the one hand and any Issuing Lender on the other hand, Borrowers assume all
risks of the acts and omissions of, or misuse of the Standby Letters of Credit
issued by such Issuing Lender by, the respective beneficiaries of such Standby
Letters of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such
Standby Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Standby Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Standby Letter of Credit to comply fully with any
conditions required in order to draw upon such Standby Letter of Credit; (iv)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) errors in interpretation of
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technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Standby Letter of
Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Standby Letter of Credit of the proceeds of any drawing under such
Standby Letter of Credit; or (viii) any consequences arising from causes beyond
the control of such Issuing Lender, including without limitation any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this Section 3.5B, any
action taken or omitted by any Issuing Lender under or in connection with the
Standby Letters of Credit issued by it or any documents and certificates
delivered thereunder, if taken or omitted without gross negligence or willful
misconduct, as determined by a final judgment of a court of competent
jurisdiction, shall not put such Issuing Lender under any resulting liability
to Borrowers.
Notwithstanding anything to the contrary contained in this
Section 3.5, Borrowers shall retain any and all rights they may have against
any Issuing Lender for any liability arising out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO STANDBY LETTERS OF CREDIT.
A. COMPENSATION FOR INCREASED COSTS AND TAXES.
In the event that any Issuing Lender or Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after
the date hereof, or compliance by any Issuing Lender or Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Excluded Tax) with respect to the issuing or
maintaining of any Standby Letters of Credit or the purchasing or
maintaining of any participations therein or any other obligations
under this Section 3, whether directly or by such being imposed on or
suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special
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deposit, compulsory loan, FDIC insurance or similar requirement in
respect of any Standby Letters of Credit issued by any Issuing Lender
or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section
3 or any Standby Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Standby
Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or Lender (or its applicable lending or letter of credit office)
with respect thereto; then, in any such case, Borrowers shall promptly pay to
such Issuing Lender or Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts as may be necessary to
compensate such Issuing Lender or Lender for any such increased cost or
reduction in amounts received or receivable hereunder; provided that an Issuing
Lender or Lender shall not be entitled to avail itself of the benefit of this
Section 3.6 to the extent that any such increased cost or reduction in amounts
was incurred more than 180 days prior to the time it gives notice to Borrowers
(as provided in the next sentence) of the relevant circumstances. Such Issuing
Lender or Lender shall deliver to Borrowers a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Issuing Lender or Lender under this Section 3.6, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND STANDBY LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Standby Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
4.1 CONDITIONS TO INITIAL REVOLVING LOANS.
The obligations of Lenders to make the initial Revolving Loans
are, in addition to the conditions precedent specified in Section 4.2, subject
to prior or concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS.
(i) Each Loan Party (other than any Partnership Loan Party or
LLC Loan Party), each corporate general partner of a Partnership Loan Party and
each corporate managing member of a LLC Loan Party shall deliver or cause to be
delivered to the Administrative Agent (with sufficient originally executed
copies for each Lender and the
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Administrative Agent's counsel) the following, each unless otherwise noted
dated the Closing Date:
(a) to the extent such Loan Party is a party
thereto, executed originals of this Agreement, a Note in favor of each
Lender, the Guaranty, the Pledge and Security Agreement, the Canadian
Stock Pledge Agreement and each other Loan Document to which it is a
party;
(b) certified copies of its Certificate of
Incorporation, together with a good standing certificate (including
verification, where generally available, of tax good standing) from
the Secretary of State (or similar official) of its jurisdiction of
incorporation and each other state in which real or personal property
owned or leased by such Loan Party is located and that requires such
Loan Party to qualify as a foreign corporation in such state, each
dated a recent date prior to the Closing Date; provided that the
Certificate of Incorporation shall also be certified as of the Closing
Date by its corporate secretary or an assistant secretary;
(c) copies of its Bylaws, certified as of the
Closing Date by its corporate secretary or an assistant secretary;
(d) resolutions of its Board of Directors
approving and authorizing (a) the execution, delivery and performance
of each Loan Document to which it is a party and (b) the consummation
of the transactions contemplated hereby and thereby, in each case (1)
for itself or as general partner of a Partnership Loan Party or
managing member of a LLC Loan Party, as the case may be, and (2)
certified as of the Closing Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment; and
(e) signature and incumbency certificates of its
officers executing this Agreement and the other Loan Documents to
which it is a party.
(ii) Each Partnership Loan Party shall deliver to the
Administrative Agent (with sufficient originally executed copies for each
Lender and the Administrative Agent's counsel) the following, each unless
otherwise noted dated the Closing Date:
(a) to the extent such Loan Party is a party
thereto, executed originals of the Guaranty, the Pledge and Security
Agreement, and each other Loan Document to which it is a party;
(b) a conformed copy of the partnership
agreement, certified by each general partner of such partnership as of
the Closing Date as being in full force and effect without
modification or amendment;
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(c) its Certificate of Limited Partnership,
certified by the Secretary of State (or similar official) of its
jurisdiction of formation and a certificate of existence or good
standing, as the case may be, from the Secretary of State (or similar
official) of such jurisdiction, each dated a recent date prior to the
Closing Date (provided that the Certificate of Limited Partnership
shall also be certified as of the Closing Date by the general partner
of such Partnership Loan Party), and a good standing certificate or
certificate of existence, as the case may be, from the Secretary of
State (or similar official) of each state or other jurisdiction in
which a real or personal property owned or leased by such entity is
located and that requires such Loan Party to qualify as a foreign
limited partnership in such state;
(d) all documents of such Partnership Loan Party
and its partners (to the extent required by the applicable
organizational documents) approving or authorizing (a) the execution,
delivery and performance of the Guaranty, the Pledge and Security
Agreement and any other Loan Documents to which it is a party, and (b)
the consummation of the transactions contemplated hereby and thereby,
each certified as of the Closing Date by the general partner of such
Partnership Loan Party; and
(e) unless otherwise required to be delivered
pursuant to Section 4.1A(i)(e), signature and incumbency certificates
of the Person(s) executing, on behalf of such Partnership Loan Party,
any Loan Documents to which such Partnership Loan Party is a party.
(iii) Each LLC Loan Party shall deliver to the Administrative
Agent (with sufficient originally executed copies for each Lender and the
Administrative Agent's counsel) the following, each unless otherwise noted
dated the Closing Date:
(a) to the extent such Loan Party is a party
thereto, executed originals of the Guaranty, the Pledge and Security
Agreement and each other Loan Document to which it is a party;
(b) a conformed copy of the limited liability
company agreement and each other organizational document, certified by
the manager of such LLC Loan Party as of the Closing Date as being in
full force and effect without modification or amendment;
(c) its Articles of Organization or Certificate
of Formation, certified by the Secretary of State (or similar
official) of its jurisdiction of organization, each dated a recent
date prior to the Closing Date (and certified as of the Closing Date
by the applicable managing member), and a good standing certificate or
certificate of existence, as the case may be, from the Secretary of
State (or similar official) of each state or other jurisdiction in
which a Property owned or leased by such entity is located
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and that requires such Loan Party to qualify as a foreign limited
liability company in such state;
(d) all documents of such LLC Loan Party and its
members (to the extent required by the applicable organizational
documents) approving or authorizing (a) the execution, delivery and
performance of the Guaranty, the Pledge and Security Agreement and any
other Loan Documents to which it is a party, and (b) the consummation
of the transactions contemplated hereby and thereby, each certified as
of the Closing Date by the managing member of such LLC Loan Party; and
(e) unless otherwise required to be delivered
pursuant to Section 4.1A(i)(e), signature and incumbency certificates
of the Person(s) executing, on behalf of such LLC Loan Party, any Loan
Documents to which such LLC Loan Party is a party.
B. CAPITALIZATION, ETC. The capital and ownership structure of
BHR, Borrowers and their Subsidiaries after the FelCor Merger shall be as set
forth on Schedule 4.1B annexed hereto.
C. PRO FORMA FINANCIAL STATEMENTS AND BUSINESS PLAN. On or
before the Closing Date, Lenders shall have received from Borrowers pro forma
consolidated balance sheets of BHR, Borrowers and their Subsidiaries prepared
in accordance with GAAP and reflecting the consummation of the FelCor Merger,
the financing and other transactions contemplated hereby, which pro forma
financial statements shall be in form and substance satisfactory to Lenders.
D. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; THIRD
PARTY CONSENTS; EXPIRATION OF WAITING PERIODS, ETC. Borrowers shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the transactions
contemplated by the Loan Documents and the FelCor Merger and each of the
foregoing shall be in full force and effect, in each case other than those the
failure to obtain or maintain which, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. All
applicable waiting periods shall have expired without any action being taken or
threatened by any competent governmental authority which would restrain,
prevent or otherwise impose adverse conditions on transactions contemplated by
the Loan Documents or the FelCor Merger. No action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.
E. NO MATERIAL ADVERSE EFFECT. As of the Closing Date, no
Material Adverse Effect (in the sole good faith opinion of Administrative
Agent) shall have occurred.
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F. INTERCOMPANY NOTE. Each Loan Party shall execute an
Intercompany Note evidencing the intercompany Indebtedness of such Loan Party,
as set forth in Section 7.1(iv).
G. SECURITY INTERESTS IN THE COLLATERAL. BHR, Borrowers and
their Subsidiaries shall have taken or caused to be taken (and Administrative
Agent shall have received satisfactory evidence thereof) such actions (other
than the filing or recording of items described in clause (ii) below) in such a
manner so that Administrative Agent has a valid and perfected first priority
security interest (except as otherwise permitted by this Agreement with respect
to Liens permitted under section 7.2) as of such date in the entire Collateral.
Such actions shall include, without limitation, the following:
(i) delivery to Administrative Agent of certificates
(which certificates shall be properly endorsed in blank for transfer
or accompanied by irrevocable undated stock powers duly endorsed in
blank, all in form and substance satisfactory to Administrative Agent)
representing the capital stock pledged pursuant to the Pledge and
Security Agreement and the Canadian Stock Pledge Agreement and
delivery to Administrative Agent of all other instruments (duly
endorsed where appropriate) evidencing the Collateral;
(ii) delivery to Administrative Agent of Uniform
Commercial Code financing statements as to the Collateral for all
jurisdictions as may be necessary or desirable to perfect the security
interests in the Collateral;
(iii) delivery to Administrative Agent of opinions of
counsel under the law of New York with respect to the creation and
perfection of the security interests in favor of Administrative Agent
in the Collateral (in each case to the extent governed by the law of
New York);
(iv) delivery to Administrative Agent of an opinion of
counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) under the laws of each jurisdiction in which a
Foreign Subsidiary is located the stock of which will be pledged to
secure the Obligations, as well as Iowa, New Jersey, Kansas,
Massachusetts and Nebraska, with respect to the creation and
perfection of the security interests in favor of Administrative Agent
in such Collateral and such other matters governed by the laws of such
jurisdiction regarding such security interests as Administrative Agent
may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent dated as of the Closing Date and
setting forth substantially the matters in the forms of opinions
annexed hereto as Exhibit IX and as to such other matters as
Administrative Agent may reasonably require;
(v) delivery to Administrative Agent of such other
documents and instruments that Administrative Agent reasonably deems
necessary or advisable to establish, preserve and perfect the first
priority Liens (subject to Liens permitted under
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Section 7.2) granted to Administrative Agent on behalf of Lenders
under the Collateral Documents;
(vi) evidence reasonably satisfactory to Administrative
Agent that all other filings, terminations, recordings and other
actions Administrative Agent deems necessary or advisable to
establish, preserve and perfect the first priority Liens granted to
Administrative Agent in the Collateral shall have been made; and
(vii) except as disclosed to the contrary on Schedule
5.17 annexed hereto or as otherwise permitted by Section 6.11, the
Loan Parties shall have delivered to the Agent the Cash Manager Cash
Management Agreement and a Cash Management Letter for each financial
institution at which a Deposit Account is located pursuant to the Cash
Management System, which Cash Manager Cash Management Agreement and
Cash Management Letters and Cash Management System shall be in form
and substance reasonably satisfactory to the Agent.
H. OPINIONS OF BORROWERS' COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of Munsch,
Hardt, Kopf, Harr & Dinan, P.C. and Jones, Day, Reavis & Pogue, counsel for
Borrowers, in form and substance reasonably satisfactory to Administrative
Agent and its counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VII annexed
hereto and as to such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request.
I. OPINIONS OF O'MELVENY & MYERS LLP. Lenders shall have
received originally executed copies of one or more favorable written opinions
of O'Melveny & Myers, dated as of the Closing Date, substantially in the form
of Exhibit VIII annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request.
J. EVIDENCE OF INSURANCE. Borrowers shall deliver to
Administrative Agent certificates of insurance naming Administrative Agent on
behalf of Lenders as loss payee under all casualty insurance policies
maintained by Borrowers and their Subsidiaries, and as an additional insured
under all liability and business interruption insurance policies maintained by
Borrowers and their Subsidiaries, all as required pursuant to Section 6.4 or
pursuant to the Collateral Documents. All such certificates of insurance shall
contain such endorsements as are reasonably required by Administrative Agent.
K. FEES. Borrowers shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in Section 2.3.
L. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Borrowers shall have delivered to Administrative Agent an Officer's
Certificate, in form and substance
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satisfactory to Administrative Agent, to the effect that the representations
and warranties in Section 5 hereof are true, correct and complete in all
material respects on and as of the Closing Date to the same extent as though
made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations
and warranties were true, correct and complete in all material respects on and
as of such earlier date) and that Borrowers shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent.
M. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
Administrative Agent may reasonably request.
N. LEASE AGREEMENTS. Administrative Agent shall have approved
the form of all Lease Agreements entered into by FelCor or one of its
Subsidiaries and BHR or one of its Subsidiaries, and each Lease Agreement shall
have a term of at least 10 years (after giving effect to any option to renew
granted to BHR or one of its Subsidiaries, which option may be exercised in
BHR's or its Subsidiary's sole discretion. Each lessor under such Lease
Agreements shall have consented to this Agreement (if such consent is required
thereunder), and except as set forth on Schedule 4.1N, approved of
Administrative Agent obtaining a leasehold mortgage on the leasehold interest
under each Lease Agreement.
O. SATISFACTORY COMPLETION OF FELCOR MERGER. Borrowers shall
have delivered executed documents memorializing completion of the FelCor Merger
which are satisfactory to the Administrative Agent.
P. FELCOR RECOGNITION AGREEMENT. FelCor shall have entered into
the FelCor Recognition Agreement.
Q. REPAYMENT OF OUTSTANDING INDEBTEDNESS. Except as permitted
under Section 7.1, Borrower shall certify that all outstanding Indebtedness of
Borrowers has been repaid.
R. FRANCHISE AGREEMENTS; FRANCHISOR COMFORT LETTERS. The
Borrowers shall have delivered to the Administration Agent a form of Franchise
Agreement substantially in the form of each Franchise Agreement (as amended or
waived through the Closing Date) entered into by BHR or one of its Subsidiaries
on or before the Closing Date, as listed on Schedule 4.1R annexed hereto, which
Franchise Agreements shall be reasonably satisfactory in
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form and substance to the Administrative Agent in all material respects; such
Franchise Agreements, as so amended or waived, shall be in full force and
effect and no material term or condition thereof shall have been further
amended, modified or waived after the execution thereof; and no Person shall
have failed in any material respect to perform any material obligation or
covenant or satisfy any material condition required by such Franchise
Agreements to be performed or complied with on or before the Closing Date,
including, without limitation (but only if the same constitutes a material
obligation, covenant or condition), obligations under property improvement
plans and quality control plans required by the respective franchisors to be
performed within specified periods. The Borrowers shall have delivered to the
Administrative Agent original counterparts of a franchisor's comfort letter
with respect to each Franchise Agreement licensing the use of any "Holiday Inn"
brand, reasonably acceptable in form and substance to the Administrative Agent,
and duly executed by each franchisor under such Franchise Agreement; provided
that a franchisor's comfort letter delivered with respect to a Franchise
Agreement licensing the use of any "Holiday Inn" brand shall be acceptable for
the purposes of this Section 4.1R if such comfort letter shall contain terms
and conditions not substantially less favorable to the Administrative Agent and
the Lenders than the terms and conditions of the comfort letter attached hereto
as Exhibit XIX with respect to Franchise Agreements licensing the use of any
"Holiday Inn" brand.
S. GROUND LEASES; LANDLORD ESTOPPEL CERTIFICATES. The Borrowers
shall have delivered to the Administrative Agent Schedule 4.1S listing all
Ground Leases.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of Section 2.1B, an originally executed
Notice of Borrowing, in each case signed by a Financial Officer of the
requesting Borrowers or by any executive officer of the requesting Borrowers
designated by a Financial Officer of the requesting Borrowers on behalf of the
requesting Borrowers in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of
such earlier date;
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(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) Borrowers shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Borrowers, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting BHR, Borrowers or
any of their Subsidiaries or any property of BHR, Borrowers or any of
their Subsidiaries that would be required to be disclosed by Borrowers
pursuant to and that has not been disclosed by Borrowers in writing
pursuant to Section 5.6 or 6.1(ix) prior to the making of the last
preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of Administrative Agent or of Requisite
Lenders, would be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO STANDBY LETTERS OF CREDIT.
The issuance of any Standby Letter of Credit hereunder
(whether or not the applicable Issuing Lender is obligated to issue such
Standby Letter of Credit) is subject to the following conditions precedent:
A. On or before the date of issuance of the initial Standby
Letter of Credit pursuant to this Agreement, the conditions set forth in
Section 4.1 shall have been satisfied.
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B. On or before the date of issuance of such Standby Letter of
Credit, Administrative Agent shall have received, in accordance with the
provisions of Section 3.1B(i), an originally executed Request for Issuance of
Standby Letter of Credit, in each case signed by a Financial Officer of the
requesting Borrowers or by any executive officer of the requesting Borrowers
designated by a Financial Officer of the requesting Borrowers on behalf of the
requesting Borrowers in a writing delivered to Administrative Agent, together
with all other information specified in Section 3.1B(i) and such other
documents or information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Standby Letter of Credit.
C. On the date of issuance of such Standby Letter of Credit, all
conditions precedent described in Section 4.2B shall be satisfied to the same
extent as if the issuance of such Standby Letter of Credit were the making of a
Loan and the date of issuance of such Standby Letter of Credit were a Funding
Date.
SECTION 5. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders to issue Standby Letters of Credit
and to induce other Lenders to purchase participations therein, Borrowers
represent and warrant to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Standby Letter of Credit, that
the following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party and each of its
Subsidiaries (other than any Partnership Loan Party or any LLC Loan Party) is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation (which jurisdiction is set forth on
Schedule 5.1A annexed hereto). Each such Loan Party and each such Subsidiary
has the requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party, to carry
out the transactions contemplated hereby and thereby and, in the case of each
Borrower, to issue and pay the Notes. Each Partnership Loan Party is a limited
partnership duly formed and validly existing under the laws of its jurisdiction
of organization (which jurisdiction is set forth on Schedule 5.1A) and each
Partnership Loan Party has all requisite partnership power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into each Loan Document to which it is a
party, to carry out the transactions contemplated hereby and thereby and, in
the case of each Borrower, to issue and pay the Notes. Each LLC Loan Party is
a limited liability company duly formed and validly existing under the laws of
its jurisdiction of organization (which jurisdiction is set forth on Schedule
5.1A) and each LLC Loan Party has all requisite power and authority to own and
operate its properties, to carry on
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its business as now conducted and proposed to be conducted, to enter into each
Loan Document to which it is a party, to carry out the transactions
contemplated thereby and, in the case of each Borrower, to issue and pay the
Notes. The books and records of each Loan Party and each of its Subsidiaries
reflect the properties and assets purported to be owned by such Loan Party or
Subsidiary, as applicable, in accordance with GAAP or applicable foreign
accounting rules.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party and each of
its Subsidiaries are qualified to do business and in good standing in every
jurisdiction necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. The jurisdictions in which each Loan
Party and each of its Subsidiaries owns property or otherwise conducts business
as of the Closing Date are set forth on Schedule 5.1A annexed hereto.
C. CONDUCT OF BUSINESS. Each Loan Party and each of its
Subsidiaries are engaged only in the businesses permitted to be engaged in by
them pursuant to Section 7.14.
D. SUBSIDIARIES. The Capital Stock of each of BHR's Subsidiaries
is duly and validly authorized and issued and (with the exception of
partnership interests of general partners and except to the extent that the
limited liability company agreements governing the respective limited liability
companies provide otherwise) fully paid and nonassessable. All of the
Subsidiaries of each Loan Party are identified on Schedule 5.1A annexed hereto,
as Schedule 5.1A may be supplemented from time to time in accordance with the
terms of this Agreement. The Capital Stock of each Person identified on
Schedule 5.1A (as so supplemented) is not Margin Stock. Schedule 5.1A
correctly sets forth the ownership interests in each Loan Party (other than
BHR) and each of its Subsidiaries, as Schedule 5.1A may be supplemented from
time to time in accordance with the terms of this Agreement. Except as set
forth on Schedule 5.1A, each Subsidiary of the Borrowers is a wholly owned
Subsidiary.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by any
Loan Party of the Loan Documents to which it is a party and the consummation of
the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to any Loan Party, the Certificate or Articles of Incorporation or
Bylaws of any Loan Party or any order, judgment or decree of any court or other
agency of government binding on any Loan Party, (ii) conflict with, result in a
breach of
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or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of any Loan Party, except for such conflicts, breaches
or defaults which could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of any
Loan Party (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of any Loan Party, except for such approvals or consents
which will be obtained on or before the Closing Date or that are not required
to be obtained pursuant hereto or the failure to obtain which could not
reasonably be expected to result in a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by any Loan Party of the Loan Documents to which it is a party and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body, except for (i) filings required by federal or
state securities laws, (ii) such other registrations, consents, approvals,
notices or other actions which have been made, obtained, given or taken on or
before the Closing Date or such later date as may be required by the applicable
governmental authority or regulatory body and (iii) such of the foregoing that
if not made or obtained, could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
5.3 FINANCIAL CONDITION; CONTINGENT OBLIGATIONS.
A. FINANCIAL CONDITION. Borrowers have heretofore delivered to
Lenders, at Lenders' request, the following financial statements: (i) the pro
forma consolidated statement of income of BHR for the three months ended March
31, 1998 and the year ended December 31, 1997 and (ii) the pro forma
consolidated balance sheet of BHR as of March 31, 1998 and as of December 31,
1997, in each case above as included in BHR's Form 10/A filed with the United
States Securities and Exchange Commission relating to the spin-off of BHR from
Bristol Hotel Company. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to the changes
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resulting from audit and normal year-end adjustments and absence of footnotes,
provided that the foregoing representation is subject to and qualified by the
qualifications set forth on page 24 of BHR's Form 10/A (Amendment No. 1).
None of the Loan Parties has (and none of the Loan Parties will have following
the funding of the initial Loans) any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is required by GAAP to be, but is not, or to the
extent not required by GAAP which is known to or reasonably should be known to
Borrowers, but is not, reflected in the foregoing financial statements or the
most recent financial statements delivered pursuant to Section 6.1 or the notes
thereto and which in any such case is material in relation to the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of BHR and its Subsidiaries, taken as a whole.
B. CONTINGENT OBLIGATIONS. On the Closing Date, the Loan Parties
and their respective Subsidiaries will not be directly or indirectly liable
with respect to any Contingent Obligations other than as set forth on Schedule
5.3B annexed hereto or as otherwise permitted by Section 7.4.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since the Closing Date, no event or change has occurred that
has caused or constitutes, either in any case or in the aggregate, a Material
Adverse Effect. Since the Closing Date, none of BHR, Borrowers nor any of
their Subsidiaries has directly or indirectly declared, ordered, paid or made,
or set apart any sum or property for, any Restricted Junior Payment or agreed
to do so except as permitted by Section 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
BHR, Borrowers and their Subsidiaries have (i) good and
indefeasible title to (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in Section 5.3 or in the most recent financial
statements delivered pursuant to Section 6.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under Section 7.7. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
Schedule 5.5 annexed hereto sets forth all of the Real Property Assets of BHR,
Borrowers and their Subsidiaries as of the Closing Date.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of BHR, Borrowers or their Subsidiaries)
at law or in equity or before or by any federal, state,
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municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, pending or, to the knowledge of
Borrowers, threatened against or affecting Borrowers, the FelCor Merger or BHR
or its Subsidiaries or any property of BHR, Borrowers or their Subsidiaries,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of BHR, Borrowers or their Subsidiaries is
(i) in violation of any Applicable Laws that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect or (ii)
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by Section 6.3, all tax returns
and reports of BHR, Borrowers and their Subsidiaries required to be filed by
any of them have been timely filed, and all taxes, assessments, fees and other
governmental charges upon BHR, Borrowers and their Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable, except as to such of the
foregoing where failure to comply could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Borrowers do not
know of any proposed tax assessment against BHR, Borrowers and their
Subsidiaries which is not being actively contested by BHR, Borrowers or such
Subsidiary in good faith and by appropriate proceedings that could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; provided that such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither BHR, Borrowers nor their Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, could
reasonably be expected to constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, would
not have a Material Adverse Effect.
B. Neither BHR, Borrowers nor their Subsidiaries is a party to or
is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. All Material Contracts of BHR, Borrowers and their
Subsidiaries are in full force and effect and no defaults currently exist
thereunder, except where the consequences,
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direct or indirect, of such default or defaults, if any, would not have a
Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither BHR, Borrowers nor their Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither BHR, Borrowers nor their Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Borrowers only or of BHR and its
Subsidiaries on a consolidated basis), subject to the provisions of Section 7.2
[correct cross-reference?] or 7.7, or subject to any restriction contained in
any agreement or instrument between Borrowers and any Lender or any Affiliate
of any Lender relating to Indebtedness and within the scope of Section 8.2,
will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Borrowers and each of their ERISA Affiliates are in compliance
in all material respects with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder and the
terms of each Employee Benefit Plan, and have performed all their material
obligations under each Employee Benefit Plan except for, such failures to
comply or perform that could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
B. No ERISA Event has occurred or is reasonably expected to occur
which could result in any material liability to Borrowers or any of their ERISA
Affiliates, except for such ERISA Events that could not reasonably be expected
to have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employees of Borrowers or any of their ERISA Affiliates.
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D. In accordance with the most recent actuarial valuation for any
Pension Plan, the amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), does not exceed $100,000 any time.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
BHR, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to
Section 4221(e) of ERISA, does not exceed $5,000,000.
5.12 CERTAIN FEES.
Except as set forth in Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Borrowers hereby
indemnify Lenders against, and agree that they will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged
to have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of BHR and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in
the Facilities) comply with all Environmental Laws except for any such
noncompliance which could not reasonably be expected to have a
Material Adverse Effect;
(ii) BHR and each of its Subsidiaries have obtained all
Governmental Authorizations under Environmental Laws necessary to
their respective operations, and all such Governmental Authorizations
are being maintained in good standing, and BHR and each of its
Subsidiaries are in compliance with such Governmental Authorizations
except for any such failure to obtain, maintain or comply which could
not reasonably be expected to have a Material Adverse Effect;
(iii) neither BHR nor any of its Subsidiaries has received
(a) any notice or claim to the effect that it is or may be liable to
any Person as a result of or in connection with any Hazardous
Materials or (b) any letter or request for information under Section
104 of CERCLA (42 U.S.C. Section 9604) or comparable state laws, and,
to
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the best of Borrowers' knowledge, none of the operations of Borrowers
or any of its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location except for such of
the foregoing which could not reasonably be expected to have a
Material Adverse Effect;
(iv) none of the operations of BHR or any of its
Subsidiaries is subject to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental Laws
which if adversely determined could reasonably be expected to have a
Material Adverse Effect;
(v) neither BHR nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order or agreement with any governmental authority
or private party relating to (a) any actual or potential violation of
or liability under Environmental Laws or (b) any Environmental Claims
except for such of the foregoing which could not reasonably be
expected to have a Material Adverse Effect;
(vi) neither BHR nor any of its Subsidiaries has any
contingent liability in connection with any Release of any Hazardous
Materials by Borrowers or any of their Subsidiaries except for such of
the foregoing which could not reasonably be expected to have a
Material Adverse Effect;
(vii) neither BHR nor any of its Subsidiaries nor, to the
best knowledge of Borrowers, any predecessor of BHR or any of its
Subsidiaries has filed any material notice under any Environmental Law
indicating past or present material treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that could reasonably be expected to give rise to
an Environmental Claim having a Material Adverse Effect, and neither
BHR nor any of its Subsidiaries has filed any notice or report of a
Release of any Hazardous Materials that could reasonably be expected
to give rise to an Environmental Claim having a Material Adverse
Effect;
(ix) neither BHR nor any of its Subsidiaries nor, to the
best knowledge of Borrowers, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that could reasonably
be expected to give rise to an Environmental Claim having a Material
Adverse Effect;
(x) to the best knowledge of Borrowers, no underground
storage tanks or surface impoundments are on or at any Facility,
except as set forth on Schedule 5.13; and
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(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been
attached to any Facility except for any such Lien which could not
reasonably be expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving BHR or any of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect.
5.15 SOLVENCY.
BHR and each of its Subsidiaries is and, upon the incurrence
of any Obligations by Borrowers on any date on which this representation is
made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of BHR or any of its
Subsidiaries contained in any Loan Document or in any other document or
certificate furnished to Administrative Agent or to Lenders by or on behalf of
BHR or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement (as from time to time superseded by subsequent
materials furnished to the Administrative Agent or Lenders) contains any untrue
statement of a material fact or omits to state a material fact (known to
Borrowers, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrowers to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results
and that such projections are subject to significant uncertainties and
contingencies, many of which are beyond Borrowers' control, and that no
assurance can be given that such projections will be realized. There are no
facts known (or which should upon the reasonable exercise of diligence be
known) to Borrowers (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such
other documents or certificates furnished to Administrative Agent or to Lenders
for use in connection with the transactions contemplated hereby.
5.17 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System set forth on
Schedule 5.17 annexed hereto is accurate and complete in all material respects
and does not omit to state any material fact necessary to make the statements
set forth therein not misleading. None of BHR, Borrowers or their Subsidiaries
owns any Deposit Account which is not described in Schedule
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5.17. After the Closing Date, there will be no change to the Cash Management
System (other than as permitted by Section 6.11) except such changes as have
been disclosed to the Administrative Agent in writing and approved by the
Administrative Agent in writing. Except as disclosed on Schedule 5.17, a Cash
Management Letter covering each Local Account or Concentration Account included
in the Cash Management System has been delivered to the Administrative Agent.
5.18 YEAR 2000 COMPLIANCE.
BHR has (i) initiated a review and assessment of all areas
within its and each of its Subsidiaries' business and operations (including
those affected by suppliers and vendors) that could reasonably be expected to
be materially adversely affected by the "Year 2000 Problem" (that is, the risk
that computer applications used by BHR or any of its Subsidiaries (or their
suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. BHR reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material
to its Subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent that
a failure to do so could not reasonably be expected to have Material Adverse
Effect.
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations and the cancellation or expiration of all
Standby Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, Borrowers shall perform, and shall cause each of their
Subsidiaries to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrowers will maintain, and cause each of their Subsidiaries
to maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrowers will deliver to Administrative Agent:
(i) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each calendar quarter of
each calendar year, commencing with respect to the calendar quarter
ending on the last day of March, June and September, as the case may
be, that next follows the Closing Date, (a) the consolidated balance
sheet of BHR and its Subsidiaries as at the end of such calendar
quarter and the related
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consolidated statements of income, stockholders' equity and cash flows
of BHR and its Subsidiaries for such calendar quarter and for the
period from the beginning of the then current calendar year to the end
of such calendar quarter, and beginning one year after the Closing
Date setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous year, all in
reasonable detail (it being understood and agreed that, to the extent
BHR's quarterly report filed on Form 10-Q with the Securities and
Exchange Commission for such period contains the foregoing
information, such quarterly report shall be deemed to comply with the
foregoing requirements) and certified by a Financial Officer of BHR
stating that (x) such consolidated financial statements fairly
present, in all material respects, the consolidated financial
condition of BHR and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments and (y) except as noted, there are no material differences
between such consolidated financial statements of BHR and its
Subsidiaries and the consolidated financial statements of the
Borrowers and their respective Subsidiaries with respect to such
quarter, and (b) an accounting by a Financial Officer of BHR of the
current Total Liquid Net Worth and the amount of Standby Letters of
Credit that must be issued as of the date of the consolidated balance
sheet delivered therewith for the L/C Purposes;
(ii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheets of BHR and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of BHR and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year all in reasonable
detail (it being understood and agreed that, to the extent BHR's
annual report filed on Form 10-K with the Securities and Exchange
Commission for such period contains the foregoing information, such
Form 10-K shall be deemed to comply with the foregoing requirements)
and certified by a Financial Officer of BHR that they fairly present,
in all material respects, the consolidated financial condition of BHR
and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, (b)
an accounting by a Financial Officer of BHR of the current Total
Liquid Net Worth and the amount of the Standby Letters of Credit that
must be issued as of the date of the consolidated balance sheet
delivered therewith for the L/C Purposes, and (c) in the case of such
consolidated financial statements, a report thereon of a nationally
recognized independent accounting firm, which report shall be
unqualified as to scope of audit, shall express no doubts about the
ability of BHR and its Subsidiaries to continue as a going concern,
and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position
of BHR and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that
the
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examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards;
(iii) Officer's and Compliance Certificates: together with
each delivery of financial statements of BHR and its Subsidiaries
pursuant to subdivisions (i) and (ii) above, (a) an Officer's
Certificate of Borrowers stating that the signer has reviewed the
terms of this Agreement and has made, or caused to be made under such
signer's supervision, a review in reasonable detail of the
transactions and condition of BHR, Borrowers and their Subsidiaries
during the accounting period covered by such financial statements and
that such review has not disclosed the existence during or at the end
of such accounting period, and that such signers does not have
knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action Borrowers have taken, are taking and propose
to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
Section 7;
(iv) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in Section
5.3, the consolidated financial statements of BHR and its Subsidiaries
delivered pursuant to subdivisions (i), (ii) or (xii) of this Section
6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies
been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (i), (ii) or (xii) of this Section
6.1 following such change, consolidated financial statements of BHR
and its Subsidiaries for (y) the current Fiscal Year to the effective
date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect
during such periods, and (b) together with each delivery of financial
statements pursuant to subdivision (i), (ii) or (xii) of this Section
6.1 following such change, a written statement of a Financial Officer
of BHR setting forth the differences (including without limitation any
differences that would affect any calculations relating to the
financial covenants set forth in Section 7.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(v) Accountants' Certification: together with each
delivery of consolidated financial statements of BHR and its
Subsidiaries pursuant to subdivision (ii) above, a written statement
by independent certified public accountants giving the report thereon
(a) stating that their audit examination has included a review of the
terms of this Agreement and the other Loan Documents as they relate to
accounting matters and (b)
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stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default with respect to the covenants set forth in Section 7,
has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by reason
of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course
of their audit examination;
(vi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports submitted to BHR or Borrowers by independent certified
public accountants in connection with each annual, interim or special
audit of the financial statements of BHR and its Subsidiaries made by
such accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by BHR
to its security holders or by any Subsidiary of BHR to its security
holders other than BHR or another Subsidiary of BHR, (b) all regular
and periodic reports and all registration statements (other than on
Form S-8 or a similar form) and prospectuses, if any, filed by BHR or
any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other statements
made available generally by BHR or any of its Subsidiaries to the
public concerning material developments in the business of BHR or any
of its Subsidiaries;
(viii) Events of Default, etc.: promptly upon any officer
of Borrowers obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to BHR or any of its Subsidiaries or taken
any other action with respect to a claimed default or event or
condition of the type referred to in Section 8.2, (c) of any condition
or event that would be required to be disclosed in a current report
filed by BHR with the Securities and Exchange Commission on Form 8-K
(Items 1, 2, 4 and 6 of such Form as in effect on the date hereof) if
BHR were required to file such reports under the Exchange Act, or (d)
of the occurrence of any event or change that has caused or
constitutes, either in any case or in the aggregate, a Material
Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action BHR or Borrowers have taken, are
taking and propose to take with respect thereto;
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(ix) Litigation or Other Proceedings: (a) promptly upon
any officer of Borrowers obtaining knowledge of (X) the institution
of, or non-frivolous, overt threat of, any non-frivolous action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting BHR or
any of its Subsidiaries or any property of BHR or any of its
Subsidiaries (collectively, "PROCEEDINGS") not previously disclosed in
writing by Borrowers to Lenders or (Y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrowers to enable Lenders and their counsel
to evaluate such matters; and (b) within twenty days after the end of
each Fiscal Quarter, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, BHR or any of
its Subsidiaries equal to or greater than $500,000 in excess of any
insurance as to which the carrier has accepted or as to which BHR
reasonably believes the carrier will accept coverage, or $500,000 in
any matter not covered by insurance or where the carrier disputes
coverage, and promptly after request by Administrative Agent such
other information as may be reasonably requested by Administrative
Agent to enable Administrative Agent and its counsel to evaluate any
of such Proceedings;
(x) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action BHR or any of its
ERISA Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by BHR or any of its ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (b) all
material notices received by BHR or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) such
other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably
request;
(xii) Financial Plans: as soon as reasonably available and
in any event no later than the beginning of each Fiscal Year, a
consolidated plan and financial forecast
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for such Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Year),
including without limitation (a) a forecasted consolidated balance
sheet and forecasted consolidated statements of income and cash flows
of BHR and its Subsidiaries for such Fiscal Year, and (b) forecasted
consolidated statements of income and cash flows of Borrowers and its
Subsidiaries for each Fiscal Quarter of such Fiscal Year, together
with an explanation of the assumptions on which such forecasts are
based;
(xiii) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by BHR and its
Subsidiaries and all material insurance coverage planned to be
maintained by BHR and its Subsidiaries in the immediately succeeding
Fiscal Year and confirming the status of Administrative Agent as loss
payee or additional insured under all such insurance to the extent
required by Section 6.4;
(xiv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of BHR or any of its
Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility or which relate to
an Environmental Claim in either case which could reasonably be
expected to result in a Material Adverse Effect;
(xv) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of BHR;
(xvi) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of BHR or a Borrower, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of BHR or a Borrower and (b) all of the data required to be
set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of BHR and Borrowers (it being understood that such
written notice shall be deemed to supplement Schedule 5.1 annexed
hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event
within 30 Business Days after any Material Contract of BHR or any of
its Subsidiaries is terminated or amended in a manner that is
materially adverse to BHR or such Subsidiary, as the case may be, or
any new Material Contract is entered into, a written statement
describing such event with copies of such material amendments or new
contracts, and an explanation of any actions being taken with respect
thereto;
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to BHR or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender; and
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(xix) Schedules: if at any time from and after the Closing
Date the information contained on any Schedule to this Agreement or
any Other Loan Document is incomplete or incorrect, the Borrowers
shall, as soon as available and in any event within 20 days after the
end of each calendar quarter, commencing with the calendar quarter
next following the calendar quarter in which the Closing Date shall
occur, deliver to the Administrative Agent revised or supplemented
Schedules, which Schedules shall be reasonably satisfactory to the
Administrative Agent.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted pursuant to Section 7.7, each Loan Party
shall, and shall cause each of its Subsidiaries to, at all times preserve and
keep in full force and effect its corporate, partnership or limited liability
company existence and all rights and franchises, except where the failure to so
preserve and keep in full force and effect any such rights or franchises could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. BHR and Borrowers will, and will cause each of their
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon them or any of their properties or assets or in respect of any of
their income, businesses or franchises before any material penalty accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or may become a Lien upon any of their properties or assets,
prior to the time when any material penalty or fine shall be incurred with
respect thereto; provided that no such tax, assessment, charge or claim need be
paid if (i) being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor or (ii) failure to pay, individually or in the aggregate for all
such failures, could not reasonably be expected to result in a Material Adverse
Effect. Notwithstanding anything to the contrary contained in the foregoing
sentence, within 30 days of the Closing Date, any Borrowers not in good
standing on the Closing Date will pay in full any delinquent franchise taxes.
B. BHR and Borrowers will not, and will not permit any of their
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than BHR or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
BHR and Borrowers will, and will cause each of their
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear
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excepted, all of their respective material properties used or useful in the
business of BHR and its Subsidiaries (including, without limitation,
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof reasonably necessary for
the conduct of their business. BHR and Borrowers will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to their properties and business and the properties and businesses of
their Subsidiaries against loss or damage of the kinds customarily carried or
maintained under similar circumstances by similarly situated corporations of
established reputation engaged in similar businesses. Without limiting the
generality of the foregoing, BHR and Borrowers will maintain or cause to be
maintained public liability insurance, third party property damage insurance
and replacement value insurance on the Collateral (to the extent commercially
reasonable) under such policies of insurance, with such insurance companies, in
such amounts and covering such risks as are at all times satisfactory to
Administrative Agent in its commercially reasonable judgment. Each such policy
of insurance that insures against loss or damage with respect to any Collateral
or against losses due to business interruption shall name Administrative Agent
for the benefit of Lenders as the loss payee thereunder for any covered loss in
excess of $100,000 and shall have attached thereto a loss payable clause
acceptable to Administrative Agent that shall (i) contain an agreement by the
insurer that any loss thereunder shall be payable to Administrative Agent
notwithstanding any action, inaction or breach of representation or warranty by
Borrowers, (ii) provide that there shall be no recourse against Administrative
Agent for payment of premiums or other amounts with respect thereto, and (iii)
provide that at least 30 days (10 days in the event of nonpayment of premium)
prior written notice of cancellation, material amendment, reduction in scope or
limits of coverage or of lapse shall be given to Administrative Agent by the
insurer. Upon receipt by Administrative Agent of any insurance proceeds as
loss payee or additional insured (i) in respect of any such business
interruption insurance, (a) Administrative Agent shall, so long as no Event of
Default or Potential Event of Default shall have occurred and be continuing,
promptly deliver such insurance proceeds to Borrowers, and (b) if an Event of
Default or Potential Event of Default shall have occurred and be continuing,
Administrative Agent shall, and Borrowers hereby authorize Administrative Agent
to, upon 90 days' notice to BHR, apply such insurance proceeds to prepay the
Loans if an Event of Default or Potential Event of Default exists and is
continuing after such 90 day period, and (ii) in respect of any such insurance
against loss or damage with respect to any Collateral, (a) to the extent that
BHR or any of its Subsidiaries intends to use any such insurance proceeds to
repair, restore or replace the assets of BHR or its Subsidiaries in respect of
which such insurance proceeds were received and/or other assets useful in the
business of BHR or its Subsidiaries, Administrative Agent shall, so long as no
Event of Default or Potential Event of Default shall have occurred and be
continuing, (A) in the event the aggregate amount of such insurance proceeds in
respect of any covered loss does not exceed $100,000, deliver such insurance
proceeds to BHR, and BHR shall, or shall cause such Subsidiaries to, use such
insurance proceeds to effect such repair, restoration or replacement, and (B)
in the event the aggregate amount of such insurance proceeds exceeds $100,000,
hold such proceeds in a cash collateral account and so long as BHR or any of
its Subsidiaries proceeds to repair, restore or replace the assets of BHR or
such Subsidiary in
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respect of which such insurance proceeds were received and/or other assets
useful in the business of BHR or its Subsidiaries, Administrative Agent shall
from time to time disburse to BHR or such Subsidiaries amounts necessary to pay
the cost of such repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation reasonably satisfactory
to Administrative Agent describing the amount of costs so incurred; provided
however that if in the reasonable good faith belief of Administrative Agent,
BHR or such Subsidiaries are not proceeding diligently with the repair,
restoration or replacement, Administrative Agent shall, and BHR and Borrowers
hereby authorize Administrative Agent to, upon 90 days' notice to BHR, apply
such insurance proceeds to prepay the Loans and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing or to the
extent that neither BHR nor any of its Subsidiaries intends to use any such
insurance proceeds to repair, restore or replace assets of BHR and Borrowers or
any of its Subsidiaries as described above, Administrative Agent shall, and BHR
hereby authorizes Administrative Agent to, upon 90 days' notice to BHR, apply
such insurance proceeds to prepay the Loans.
6.5 INSPECTION; LENDER MEETING.
BHR and Borrowers shall, and shall cause each of their
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of BHR or any of its Subsidiaries,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Borrowers may, if they so choose, be present at or participate
in any such discussion), and permit such additional audits as Administrative
Agent may deem necessary or advisable at any time after the occurrence and
during the continuance of an Event of Default, all upon reasonable notice and
at such reasonable times during normal business hours as may be reasonably
requested. Without in any way limiting the foregoing, Borrowers will, upon the
request of Administrative Agent or Requisite Lenders, participate in a meeting
of Administrative Agent and Lenders once during each Fiscal Year to be held at
Borrowers' corporate offices (or such other location as may be agreed to by
Borrowers and Administrative Agent) at such time as may be agreed to by
Borrowers and Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
BHR and Borrowers shall, and shall cause each of their
Subsidiaries to, comply with the requirements of all Applicable Laws,
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate at any time, a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. BHR and Borrowers shall, and shall cause each of their
Subsidiaries to, (i) exercise all commercially reasonable efforts in order to
comply in all material respects and cause all tenants under any leases or
occupancy agreements affecting any portion of the
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Facilities to comply in all material respects with all Environmental Laws and
(ii) use commercially reasonable efforts to cause all other Persons on or
occupying such property to comply in all material respects with all
Environmental Laws, except in each case above where failure to comply,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
B. Borrowers agree that Administrative Agent may, from time to
time and in its reasonable discretion and upon a reasonable belief that
Borrowers have breached in any material respect any covenant or representation
with respect to environmental matters or that there has been a material
violation of Environmental Laws at any Facility or by Borrowers, retain, at
Borrowers' expense, an independent professional consultant to review any report
relating to Hazardous Materials prepared by or for Borrowers and, subject to
the requirements and restrictions in any applicable Operating Lease, management
agreement and other similar agreements, as the case may be, to conduct its own
reasonable investigation of such matter at any Facility currently owned,
leased, operated or used by BHR or any of its Subsidiaries, and Borrowers agree
to use their commercially reasonable efforts to obtain permission for
Administrative Agent's professional consultant to conduct its own investigation
of any such matter at any Facility previously owned, leased, operated or used
by BHR or any of its Subsidiaries. BHR and Borrowers hereby grant, subject to
the requirements and restrictions in any applicable Operating Lease, management
agreement and other similar agreements, as the case may be, to Administrative
Agent and its agents, employees, consultants and contractors the right, subject
to the requirements and restrictions in any applicable Operating Lease,
management agreement and other similar agreements, as applicable, to enter into
or on the Facilities currently owned, leased, operated or used by BHR or any
of its Subsidiaries upon reasonable notice to BHR and Borrowers to perform such
assessments on such property as are reasonably necessary to conduct such a
review and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by BHR, Borrowers and Administrative
Agent, during normal business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the ongoing operations at any
such Facility or to cause any damage or loss to any property at such Facility.
Borrowers and Administrative Agent hereby acknowledge and agree that any report
of any investigation conducted at the request of Administrative Agent pursuant
to this Section 6.7B will be obtained and shall be used by Administrative Agent
and Lenders for the purposes of Lenders' internal credit decisions, to monitor
and police the Loans and to protect Lenders' security interests, if any,
created by the Loan Documents. Administrative Agent agrees to deliver a copy
of any such report to Borrowers with the understanding that Borrowers
acknowledge and agree that (i) they will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or liabilities
relating to Borrowers' use of or reliance on such report, (ii) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (iii) by delivering such report to Borrowers,
neither Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
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C. Borrowers shall promptly advise Lenders in writing and in
reasonable detail of (i) any material Release of any Hazardous Materials
required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with respect to any Environmental Claims that have a
reasonable possibility of giving rise to a Material Adverse Effect or with
respect to any material Release of Hazardous Materials required to be reported
to any federal, state or local governmental or regulatory agency, (iii) any
remedial action taken by Borrowers or any other Person in response to (x) any
Hazardous Materials on, under or about any Facility, the existence of which has
a reasonable possibility of resulting in an Environmental Claim having a
Material Adverse Effect, or (y) any Environmental Claim which has a reasonable
possibility of having a Material Adverse Effect, (iv) Borrowers' discovery of
any occurrence or condition on any real property adjoining or in the vicinity
of any Facility that could reasonably be expected to cause such Facility or any
part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws, and (v)
any request for information from any governmental agency that suggests such
agency is investigating whether BHR or any of its Subsidiaries may be
potentially responsible for a Release of Hazardous Materials.
D. Borrowers shall promptly notify Lenders of (i) any proposed
acquisition of stock, assets, or property by BHR or any of its Subsidiaries
that could reasonably be expected to expose BHR or any of its Subsidiaries to,
or result in, Environmental Claims that could reasonably be expected to have a
Material Adverse Effect or that could reasonably be expected to have a material
adverse effect on any Governmental Authorization then held by BHR or any of its
Subsidiaries and (ii) any proposed action to be taken by BHR or any of its
Subsidiaries to commence manufacturing, industrial or other operations that
could reasonably be expected to subject BHR or any of its Subsidiaries to
material additional obligations or requirements under Environmental Laws.
E. Borrowers shall, at their own expense, provide copies of such
documents or information as Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this Section 6.7.
6.8 BORROWERS' REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
To the extent, if any, that a Loan Party owns fee title to any
Facility or is liable or responsible therefor under any Operating Lease,
management agreement, or Environmental Law, BHR and Borrowers shall promptly
take, and shall cause each of their Subsidiaries promptly to take or shall
promptly cause any responsible lessor under any applicable Lease Agreement to
take, any and all remedial action in connection with the presence, storage,
use, disposal, transportation or Release of any Hazardous Materials on, under
or about any Facility in order to comply with all applicable Environmental Laws
and Governmental Authorizations except where failure to so comply or act
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. In the event BHR and Borrowers or any of
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their Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, BHR, such Borrowers or such
Subsidiaries shall conduct and complete such remedial action in compliance with
all applicable Environmental Laws and the policies, orders and directives of
all federal, state and local governmental authorities, except where failure to
so comply or act individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, and except when, and only to
the extent that, BHR's, such Borrowers' or such Subsidiaries' liability for
such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith by BHR, such Borrowers or
such Subsidiaries.
6.9 EXECUTION OF GUARANTY AND COLLATERAL DOCUMENTS BY FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS. In
the event that any Person becomes a Domestic Subsidiary of any Borrower after
the date hereof, Borrowers will promptly notify Administrative Agent of that
fact and cause each such Subsidiary to execute and deliver to Administrative
Agent a counterpart of the Guaranty and the Pledge and Security Agreement and
to take all such further action and execute all such further documents and
instruments as may be reasonably required to grant and perfect in favor of
Administrative Agent, for the benefit of Lenders, a first-priority security
interest in all of the Capital Stock held by such Subsidiary in all
Subsidiaries of such Subsidiary except to the extent any such actions are
prohibited by the terms of any existing third-party Indebtedness, leases,
management contracts, joint venture agreements and similar arrangements, or
such agreements or similar arrangements entered after the Closing Date if such
prohibitions are on customary terms consistent with industry practice and, if
applicable, past practice or if such prohibitions are approved by the
Administrative Agent, such approval not to be unreasonably withheld or delayed,
with any Person not an Affiliate of BHR or its Subsidiaries until such time
that any such restriction is no longer in place. With respect to any such
Domestic Subsidiary, Borrowers shall also deliver to Administrative Agent a
pledge amendment to the Pledge and Security Agreement, granting to
Administrative Agent on behalf of Lenders a first priority security interest in
one hundred percent (100%) of the Capital Stock of such Domestic Subsidiary and
Borrowers shall take, or cause to be taken, all such other actions as
Administrative Agent shall deem necessary or desirable to perfect such security
interest except to the extent any such actions are prohibited by the terms of
any existing third-party Indebtedness, leases, management contracts, joint
venture agreements and similar arrangements, or such agreements or similar
arrangements entered after the Closing Date if such prohibitions are on
customary terms consistent with industry practice and, if applicable, past
practice or if such prohibitions are approved by the Administrative Agent, such
approval not to be unreasonably withheld or delayed, with any Person not an
Affiliate of BHR or its Subsidiaries until such time that any such restriction
is no longer in place. Any such Domestic Subsidiary shall also execute an
Intercompany Note, if applicable, in accordance with Section 7.1(iv).
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B. SUBSIDIARY CHARTER DOCUMENTS, ETC. Borrowers shall deliver to
Administrative Agent, together with the applicable Guaranty and such Collateral
Documents, (i) certified copies of such Subsidiary's Articles or Certificate of
Incorporation, together with a good standing certificate from the Secretary of
State of the jurisdiction of its incorporation, each to be dated a recent date
prior to their delivery to Administrative Agent, (ii) a copy of such
Subsidiary's Bylaws, certified by its corporate secretary or an assistant
corporate secretary as of a recent date prior to their delivery to
Administrative Agent, and (iii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the incumbency and signatures
of the officers of such Subsidiary executing such Guaranty and the Collateral
Documents to which such Subsidiary is a party and (b) the fact that the
attached resolutions of the Board of Directors of such Subsidiary authorizing
the execution, delivery and performance of such Guaranty and such Collateral
Documents are in full force and effect and have not been modified or rescinded.
C. FUTURE FOREIGN SUBSIDIARIES. In the event that any Person
becomes a Subsidiary of any Borrower after the date hereof and such Subsidiary
is a Foreign Subsidiary, with respect to any such Foreign Subsidiary, Borrowers
shall deliver to Administrative Agent a pledge amendment to the Pledge and
Security Agreement or to the Canadian Stock Pledge Agreement, or shall execute
an agreement (a "FOREIGN STOCK PLEDGE AGREEMENT") under the laws of the
jurisdiction of organization or incorporation of such Foreign Subsidiary, in
each case granting to Administrative Agent on behalf of Lenders a first
priority security interest in 66% of the Capital Stock of such Foreign
Subsidiary, and, in each case, Borrowers shall take, or cause to be taken, all
such other actions as Administrative Agent shall deem necessary or desirable to
perfect such security interest. Any such Foreign Subsidiary shall also execute
an Intercompany Note, if applicable, in accordance with Section 7.1(iv).
6.10 USE OF PROCEEDS TO INCREASE TOTAL LIQUID NET WORTH.
(a) Increase From Net Asset Sale Proceeds. Prior to the
Liquid Net Worth Cut-Off Date, BHR, Borrowers or any of their
Subsidiaries shall hold any Net Asset Sale Proceeds in respect of any
Asset Sale in such form that Total Liquid Net Worth is increased in an
aggregate amount equal to such Net Asset Sale Proceeds. At the time
of any such Asset Sale, Borrowers shall provide to the Administrative
Agent an accounting by a Financial Officer of BHR of the Total Liquid
Net Worth and the amount of Standby Letters of Credit that must be
issued as of the date of the Asset Sale to meet the requirements of
the Master Hotel Agreement, such Total Liquid Net Worth to be not less
than the Total Liquid Net Worth most recently reported by Borrowers to
the Administrative Agent prior to the date of the Asset Sale plus such
Net Asset Sale Proceeds, and shall reduce the Standby Letter of Credit
Commitment and Standby Letter of Credit Usage as set forth in Sections
3.1D and 3.1E.
(b) Increase Due to Issuance of Debt or Equity
Securities. Prior to the Liquid Net Worth Cut-Off Date, BHR,
Borrowers or any of their Subsidiaries shall
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hold the Cash proceeds (any such proceeds, net of underwriting and
private placement discounts, fees and commissions and other reasonable
costs and expenses associated therewith, including reasonable legal
fees and expenses, being "NET SECURITIES PROCEEDS") from the issuance
of debt Securities or equity Securities of BHR, Borrowers or any of
their Subsidiaries after the Closing Date in such form that Total
Liquid Net Worth is increased (but not decreased) in an aggregate
amount equal to such Net Securities Proceeds; provided that only 50%
of Net Securities Proceeds derived within three months of the Closing
Date from common stock sold to employees of BHR or its Subsidiaries as
part of an employee stock purchase plan, the total Net Securities
Proceeds received in such employee stock purchases not to exceed
$2,000,000, must be used as provided in this Section 6.10(b). At the
time of any such issuance of debt Securities or equity Securities,
Borrowers shall provide to the Administrative Agent an accounting by a
Financial Officer of BHR of the Total Liquid Net Worth and the amount
of Standby Letters of Credit that must be issued as of the date of the
issuance of such Securities to meet the requirements of the Master
Hotel Agreement, such Total Liquid Net Worth to be not less than the
Total Liquid Net Worth most recently reported by Borrowers to the
Administrative Agent prior to the date of such issuance plus such Net
Securities Proceeds, and shall reduce the Standby Letter of Credit
Commitment and Standby Letter of Credit Usage as set forth in Sections
3.1D and 3.1E.
(c) Increase from Net Income. Prior to the Liquid Net
Worth Cut-Off Date, BHR, Borrowers or any of their Subsidiaries shall
hold 100% of Net Income earned by any Loan Party, as determined on a
quarterly basis, in such form that Total Liquid Net Worth most
recently reported is increased (but not decreased) in an aggregate
amount equal to such Net Income.
(d) Notwithstanding the foregoing, if the Net Asset Sale
Proceeds, Net Securities Proceeds and Net Income referred to above are
applied to the acquisition of assets in a manner that requires BHR,
Borrowers and their Subsidiaries, as the case may be, to account for a
portion of such acquired assets as goodwill under GAAP and the amount
of such goodwill is not credited to Total Liquid Net Worth under the
terms of the Master Hotel Agreement, then the amount of Net Asset Sale
Proceeds, Net Securities Proceeds and Net Income referred to above
shall be deemed reduced the amount of such goodwill and BHR, Borrowers
and their Subsidiaries shall not be obligated to apply the amount of
such goodwill in a manner that increases Total Liquid Net Worth.
(e) The Master Hotel Agreement shall contain a provision
whereby BHR and Borrowers may require that [FelCor, FelCor, LP or any
Affiliate of FelCor or FelCor, LP] who is a beneficiary under any
outstanding Standby Letter of Credit to take the actions described in
Section 3.1E to reduce the Standby Letter of Credit Usage.
6.11 CASH MANAGEMENT SYSTEM.
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A. CASH MANAGEMENT SYSTEM. Each Loan Party shall, and shall
cause each of its Subsidiaries to, maintain the Cash Management System as
described on Schedule 5.17 annexed hereto; provided that each Loan Party may
open and close Local Accounts and make other changes to the Cash Management
System in the ordinary course of business upon prior written notice to the
Administrative Agent as long as (w) no Potential Event of Default or Event of
Default shall have occurred and be continuing or would result therefrom, (x)
such changes, either individually or in the aggregate, are not adverse to
either the Administrative Agent or any Lender (in its capacity as a Lender) and
do not impair any rights, priority or perfection of the Administrative Agent
under the Collateral Documents, (y) in the case of any closing of any Local
Account, a replacement Local Account satisfactory to the Administrative Agent
is opened by such Loan Party or such Subsidiary, as the case may be, and a Cash
Management Letter is entered into with respect to such replacement Local
Account prior to the closing of such Local Account and (z) all Receipts of each
Loan Party and each of its Subsidiaries continue to be collected and
distributed pursuant to procedures subject to Cash Management Letters at all
times, except as described on Schedule 5.17; provided further, that a Loan
Party may close a Concentration Account and open a substitute Concentration
Account with any Lender as long as (a) no Potential Event of Default or Event
of Default shall have occurred and be continuing or would result therefrom and
(b) prior to opening any substitute Concentration Account, such Loan Party
shall have delivered evidence satisfactory to the Administrative Agent that the
Administrative Agent shall have, for the benefit of the Lenders, a perfected
security interest in such Concentration Account. For the purposes of this
Section 6.11, Receipts shall include, without limitation, Receipts derived from
the Investments in Subsidiaries and Joint Ventures and other Securities. All
Cash Management Letters with respect to the Local Accounts listed on Schedule
5.17 annexed hereto shall be delivered to the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent, on or before the
last day of the third calendar month after the calendar month in which the
Closing Date shall occur.
B. ADMINISTRATIVE AGENT RIGHTS. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with the following:
(i) Notwithstanding any other provision of this
Agreement or any other Loan Document, except as described on Schedule
5.17 annexed hereto, all Receipts of each Loan Party and each of its
Subsidiaries shall be deposited daily in Local Accounts that are
subject to Cash Management Letters or into the Concentration Account,
in each case on or before the first Business Day following receipt
thereof, by the accounting office of the Loan Party or such
Subsidiary, as applicable, and as soon as practical in the case of
Receipts received in any other manner. All funds on deposit in the
Local Accounts of each Loan Party and each of its Subsidiaries shall
be transferred to the Concentration Account in the manner described on
Schedule 5.17. Receipts shall be received and held by such Loan Party
and such Subsidiary and any of their respective officers, employees,
agents, managers or other Persons acting for or in
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concert with such Loan Party or such Subsidiary to make collections
for or on behalf of such Loan Party or such Subsidiary, in trust for
the Administrative Agent as Collateral.
(ii) So long as no Potential Event of Default or
Event of Default shall have occurred and be continuing, the Borrowers
may request that the Administrative Agent instruct the Cash Manager to
either apply Receipts on deposit in the Concentration Account to pay
Obligations or transfer such Receipts to accounts designated by the
Borrowers in such amounts as the Borrowers may require, in each case
by delivering such a request to the Administrative Agent. So long as
no Potential Event of Default of Event of Default shall have occurred
and be continuing, upon receipt by the Administrative Agent of such a
request, the Administrative Agent shall instruct the Cash Manager to
apply the Receipts on deposit in accordance with such request;
provided that the Administrative Agent may instruct the Cash Manager
to automatically apply Receipts on deposit in the Concentration
Account in accordance with the Borrowers' instructions (subject to the
availability of funds on deposit in the Concentration Account) unless
the Administrative Agent notifies the Cash Manager that a Potential
Event of Default or an Event of Default has occurred and is
continuing.
(iii) So long as no Potential Event of Default or
Event of Default shall have occurred and be continuing, the Borrowers
may instruct the Cash Manager to invest in Cash Equivalents in
accordance with the Borrowers' instructions all or any part of amounts
from time to time on deposit in the Concentration Account, and the
Administrative Agent shall authorize the Cash Manager to follow the
Borrowers' instructions as long as no Potential Event of Default or
Event of Default shall have occurred and be continuing.
C. NAMES ON DEPOSIT ACCOUNTS. The Borrowers shall cause each
Local Account and Concentration Account listed on Schedule 5.17 annexed hereto
to be changed to the extent necessary so that such Local Account is, promptly
after the Closing Date but in no event later than the last day of the calendar
month next following the calendar month in which the Closing Date shall occur,
maintained by and in the name of the applicable Borrower or any wholly owned
Subsidiary.
D. CASH MANAGEMENT LETTER. Notwithstanding anything in this
Agreement or in any of the other Loan Documents to the contrary, including any
Cash Management Letter, except during the continuation of an Event of Default,
the Administrative Agent shall not withdraw any funds from, close or take any
other actions in connection with any Deposit Account (other than cause such
funds to be transferred to the Concentration Account) pursuant to any Cash
Management Letter without the applicable Borrower's prior written consent or
written joinder. The instructions given by any Loan Party to any depository
institution in any Cash Management Letter shall be made without prejudice to
the rights of any Loan Party under this Agreement or any other Loan Document
(other than such Cash Management Letter).
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6.12 YEAR 2000 COMPLIANCE.
The Borrowers will promptly notify the Administrative Agent in
the event the Borrowers discover or determine that any computer application
(including those of its suppliers and vendors) that is material to BHR or any
of its Subsidiaries' business and operations will not be Year 2000 compliant on
a timely basis, and that such failure to be Year 2000 compliant could
reasonably be expected to have a Material Adverse Effect.
SECTION 7. BORROWERS' NEGATIVE COVENANTS
BHR and Borrowers covenant and agree that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations and the cancellation or expiration of
all Standby Letters of Credit, unless the Requisite Lenders shall otherwise
give prior written consent, Borrowers shall perform, and shall cause each of
their Subsidiaries to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrowers may become and remain liable with respect
to the Obligations;
(ii) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Indebtedness under Currency
Agreements and Interest Rate Agreements entered into in the ordinary
course of business;
(iii) BHR, Borrowers and their Subsidiaries may become and
remain liable with respect to, and may amend, refinance, exchange or
refund on terms not less advantageous to Lenders, Indebtedness in
respect of Capital Leases or purchase money Indebtedness (other than
Capital Leases or purchase money Indebtedness constituting Other
Indebtedness or FF&E Financing Indebtedness); provided that such
Capital Leases or purchase money Indebtedness shall not exceed an
aggregate amount greater than $500,000;
(iv) BHR and Borrowers may become and remain liable with
respect to, and may amend, refinance, exchange or refund on terms not
less advantageous to Lenders, Indebtedness to any of their
wholly-owned Subsidiaries, and any wholly-owned Subsidiary of BHR and
Borrowers may become and remain liable with respect to Indebtedness to
BHR, Borrowers or any other wholly-owned Subsidiary of BHR and
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Borrowers; provided that all such intercompany Indebtedness shall be
evidenced by a promissory note or promissory notes (an "INTERCOMPANY
NOTE") that (other than notes issued and payable to Foreign
Subsidiaries) are pledged to Administrative Agent pursuant to the
terms of the applicable Collateral Document;
(v) without the approval of the Requisite Lenders, (1)
BHR and its Subsidiaries may become and remain liable with respect to,
and may amend, refinance, exchange or refund, Indebtedness that is not
referred to in the other clauses of this Section 7.1 (as so incurred,
amended, refinanced, exchanged or refunded, "OTHER INDEBTEDNESS"),
including without limitation FF&E Financing Indebtedness, provided
that the aggregate principal amount of such Other Indebtedness (other
than the Other Indebtedness described in clause (2) below) shall not
at any time outstanding exceed $5,000,000 and (2) BHR and its
Subsidiaries may incur such Other Indebtedness (in addition to the
Other Indebtedness referred to in clause (1) above) to the extent it
is FF&E Financing Indebtedness; provided also that (a) the aggregate
principal amount of such FF&E Financing Indebtedness incurred by BHR
and its Subsidiaries pursuant to clause (2) above shall not at any
time exceed $350,000 per hotel managed by BHR or its Subsidiaries, (b)
at the time of such incurrence, amendment, refinancing, exchange or
refunding, no payment default hereunder or Event of Default shall have
occurred and be continuing (other than a payment default or Event of
Default that would be cured by such incurrence, amendment,
refinancing, exchange or refunding) or would result therefrom and such
incurrence, amendment, refinancing, exchange, or refunding is
permitted under the terms and provisions of all Other Indebtedness
Documents, (c) such Other Indebtedness shall not be secured by Liens
on the assets of any Loan Party or any of its Subsidiaries (other than
the FF&E or other assets purchased, financed or refinanced with the
proceeds of such Other Indebtedness) and (d) such Other Indebtedness
shall not preclude or limit the distribution of cash flow to BHR and
its other Subsidiaries; provided, further, that the only Indebtedness
BHR may incur pursuant to this Section 7.1(v) is FF&E Financing
Indebtedness;
(vi) BHR, Borrowers and their Subsidiaries may become and
remain liable with respect to other Indebtedness in each case to
acquire Other Lease and Management Agreements pursuant to Section 7.8.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. BHR and Borrowers shall not, and shall
not permit any of their Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of BHR and Borrowers or any of their Subsidiaries, whether
now owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the
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Uniform Commercial Code of any State or under any similar recording or notice
statute, except (collectively, "PERMITTED LIENS"):
(i) Permitted Encumbrances;
(ii) Liens with respect to Capital Leases and purchase
money debt incurred, amended, refinanced, exchanged or refunded
pursuant to Section 7.1(iii);
(iii) Liens on FF&E granted to secure Indebtedness
incurred, amended, refinanced, exchanged or refunded pursuant to
Section 7.1(v); and
(iv) Liens granted pursuant to the Collateral Documents.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If BHR, Borrowers or any
of their Subsidiaries shall create or assume any Lien upon any of their
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of Section 7.2A, they shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided that, notwithstanding
the foregoing, this covenant shall not be construed as a consent by any lender
to the creation or assumption of any such Lien not permitted by the provisions
of Section 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a sale or other
disposition of assets permitted hereunder, (ii) specific property subject to a
Ground Lease, (iii) management agreements and Joint Venture agreements (to the
extent that the terms thereof prohibit the assignment by BHR, Borrowers or
their Subsidiaries of their rights thereunder, but not any other rights or
interests of BHR, Borrowers or their Subsidiaries and otherwise consistent with
industry practices), (iv) the Lease Agreements and (v) any other agreement
entered into in the ordinary course of business which by its terms restricts
the assignment by BHR, Borrowers or their Subsidiaries of their of rights
thereunder (but not any other rights or interests of BHR, Borrowers or their
Subsidiaries and otherwise consistent with industry practices), the Loan
Parties shall not and shall not permit any of their respective Subsidiaries to,
directly or indirectly, enter into any agreement prohibiting the creation or
assumption of any Lien upon any of their properties or assets (including,
without limitation, any interest in, or right to receive payments under, any of
the management agreements except as provided under clauses (iii) and (v)
above), whether now owned or hereafter acquired, except to the extent that
Liens to secure the Obligations are excluded therefrom.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BHR, BORROWERS
OR OTHER SUBSIDIARIES. Except as provided in this Agreement, the Other
Indebtedness Documents entered into or amended in accordance with the
provisions of this Agreement, the Master Hotel
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Agreement, Lease Agreements, joint venture agreements, management agreements or
other agreements with terms consistent with industry practices and entered in
the ordinary course of business and, if applicable, consistent with past
practices, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction of any
kind (other than generally applicable restrictions relating to the payment of
dividends from surplus and net profits and similar restrictions based on the
financial condition of companies paying dividends generally applicable to
business corporations) on the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on any of such Subsidiary's capital
stock or other equity interest owned by such Loan Party or Subsidiary from the
cash flow of such Loan Party or Subsidiary, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to a Loan Party or any other Subsidiary of
a Loan Party, (iii) make loans or advances to a Loan Party or any other
Subsidiary of a Loan Party, or (iv) transfer any of its property or assets to a
Loan Party or any other Subsidiary of a Loan Party, except for specific
property encumbered to secure the payment of particular Indebtedness permitted
hereunder.
7.3 INVESTMENTS.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, make or own any Investment in any Real
Property Asset or in any Person, including any Joint Venture, except:
(i) BHR and Borrowers and their Subsidiaries may make and
own Investments in Cash Equivalents;
(ii) BHR and Borrowers and their Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of BHR and Borrowers;
(iii) BHR and Borrowers and their Subsidiaries may make
intercompany loans to the extent permitted under Section 7.1(iv);
(iv) BHR and Borrowers and their Subsidiaries may continue
to own the Investments owned by them and described in Schedule 7.3
annexed hereto;
(v) BHR or its Subsidiaries may purchase a Real Property
Asset with consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed following delivery by BHR to the
Administrative Agent of engineering reports and environmental reports
reasonably satisfactory to the Administrative Agent;
(vi) BHR or its Subsidiaries may make and own Investments
(other than Investments constituting intercompany loans permitted
pursuant to clause (iii) above) in wholly owned Subsidiaries; and
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(vii) BHR and Borrowers and their Subsidiaries may make and
own other Investments in an aggregate amount not to exceed at any time
$25,000,000; provided that without the consent of the Requisite Lenders, which
consent shall not be unreasonably withheld or delayed, BHR and its Subsidiaries
shall not make an Investment in any Person that owns, leases or operates hotels
if after giving effect thereto BHR and its Subsidiaries, shall own greater than
15% of any class of equity Securities of such Person;
7.4 CONTINGENT OBLIGATIONS.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Contingent Obligations in respect of
Standby Letters of Credit issued pursuant to this Agreement;
(ii) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Contingent Obligations arising under
the Guaranty;
(iii) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Contingent Obligations in respect of
customary indemnification and purchase price adjustment obligations
incurred in connection with Asset Sales or other sales of assets to
the extent constituting Contingent Obligations under the definition
thereof;
(iv) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Contingent Obligations in respect of
any Indebtedness of BHR and Borrowers or any of their Subsidiaries
permitted by Section 7.1;
(v) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to Contingent Obligations under
Currency Agreements and Interest Rate Agreements entered into in the
ordinary course of business;
(vi) BHR and its Subsidiaries may be liable with respect
to the Contingent Obligations of BHR or such Subsidiary, as the case
may be, set forth on Schedule 5.3B, in each case in the aggregate
amount not greater than the maximum estimated amount specified thereon
with respect to such Contingent Obligation; and
(vii) BHR and Borrowers and their Subsidiaries may become
and remain liable with respect to other Contingent Obligations;
provided that the maximum aggregate liability, contingent or
otherwise, of BHR and Borrowers and their
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Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $3,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS; CERTAIN OTHER PAYMENTS.
The Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make,
give or publish notice or fix a date in respect of or set apart any sum for any
Restricted Junior Payment, enter into an agreement or make any commitment to
effect any of the foregoing or take any other similar action in furtherance of
or otherwise in connection with the foregoing; provided that the Loan Parties
may buyback shares of stock issued within three months of the Closing Date sold
to employees of BHR or its Subsidiaries as part of an employee stock purchase
plan, such buy back to be completed on or before December 31, 1998, and in no
event shall the aggregate purchase price of the shares purchased in such
buyback be greater than $2,000,000.
7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. As of the last day of any
Fiscal Quarter, BHR and Borrowers shall not permit the ratio of (i)
Consolidated EBITDA to (ii) Consolidated Interest Expense to be less than
2.5:1.0.
B. MAXIMUM LEVERAGE RATIO. BHR and Borrowers shall not permit
the ratio (the "LEVERAGE RATIO") of (i) Consolidated Total Indebtedness on the
last day of a Fiscal Quarter to (ii) Consolidated EBITDA for the four
consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter
ending on such last day to exceed the correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
------ ----------------------
October 1, 1998 - September 30, 1999 4.00:1.0
October 1, 1999 - September 30, 2000 3.75:1.0
October 1, 2000 and after 3.50:1.0
C. MINIMUM NET WORTH. Beginning December 31, 1998, Borrowers
shall not permit Consolidated Net Worth to be less than the sum of (i)
$30,000,000 plus (ii) fifty percent (50%) of Consolidated Net Income (but not
any loss other than extraordinary losses arising from write downs of assets in
respect of the period from the date of the FelCor Merger to December 31, 1998
taken in connection with the FelCor Merger) for the period (taken as a single
accounting period) commencing on the Closing Date through the last day of the
Fiscal Quarter most recently ended.
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D. MINIMUM FIXED CHARGES COVERAGE RATIO. As of the last day of
any Fiscal Quarter, BHR and Borrowers shall not permit the ratio of (i)
Consolidated EBITDA to (ii) Consolidated Fixed Charges to be less than 2.0:1.0.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, alter the corporate, capital or legal structure of BHR or
Borrowers or any of their Subsidiaries, or enter into any transaction of merger
or consolidation, or liquidate, wind-up or dissolve themselves (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sub-lessor), transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business, property or fixed assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise
all or substantially all the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line
of business of any Person, or construct hotels, except:
(i) any Subsidiary of BHR may be merged with or into BHR
or any wholly-owned Subsidiary of BHR, or may be liquidated, wound up
or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to BHR or any
wholly-owned Subsidiary of BHR; provided that BHR or such wholly-owned
Subsidiary shall be the continuing or surviving corporation;
(ii) BHR and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof;
(iii) BHR and its Subsidiaries may make Asset Sales as long
they comply with the requirements of Section 6.10;
(iv) BHR and its Subsidiaries may acquire Subsidiaries or
create Subsidiaries (other than wholly owned Subsidiaries) with the
consent of the Requisite Lenders, which consent the Requisite Lenders
may grant, withhold, condition or delay in their sole discretion;
(v) BHR and its Subsidiaries may create wholly owned
Subsidiaries; and
(vi) BHR and its Subsidiaries may acquire Other Lease and
Management Agreements pursuant to Section 7.8 and Real Property Assets
pursuant to Section 7.3 (v).
7.8 ACQUISITION OF OTHER LEASE AND MANAGEMENT AGREEMENTS.
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BHR and its Subsidiaries shall not enter into or acquire any Other
Lease and Management Agreements (but may enter into or acquire management
agreements not constituting an Other Lease and Management Agreement), provided
that:
(i) BHR or its Subsidiaries may enter into or acquire
Excluded Agreements;
(ii) so long as no Potential Event of Default or Event of
Default has occurred and is continuing or would result therefrom, with
the prior written approval of the Requisite Lenders, which approval
shall not be unreasonably withheld, conditioned or delayed, BHR or its
Subsidiaries may enter into or acquire Other Lease and Management
Agreements; provided, further, that, in any event:
(a) any Other Lessor under an Other Lease and
Management Agreement must enter into a recognition agreement
with Lenders (1) if a Lease Agreement, in substantially the
same form as Exhibit XX attached hereto and (2) if a
management agreement, in a form reasonably acceptable to the
Administrative Agent; and
(b) any Lease Agreement with an Other Lessor is
in a form approved by the Administrative Agent, which approval
shall not be unreasonably withheld, conditioned or delayed;
and
(iii) BHR or its Subsidiaries may enter into or acquire
Other Lease and Management Agreements with FelCor or any of its
Affiliates, as an Other Lessor, where the terms and conditions of each
Other Lease and Management Agreements is no less advantageous than the
terms and conditions of the Other Lease and Management Agreements
between BHR or one of its Subsidiaries and FelCor or one of its
Affiliates entered on or about the Closing Date, and the Other Lessor
must enter into a recognition agreement in substantially the same form
as Exhibit XX attached hereto.
7.9 FISCAL YEAR.
BHR and Borrowers shall not change their Fiscal Year-end from
December 31 of each calendar year without consent of the Administrative Agent,
such consent not to be unreasonably withheld.
7.10 SALES AND LEASE-BACKS.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, become or remain liable as lessee or
as a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which BHR or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than
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BHR or any of its Subsidiaries) or (ii) which BHR or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by BHR or any of its Subsidiaries to
any Person (other than BHR or any of its Subsidiaries) in connection with such
lease; provided that BHR and its Subsidiaries may become and remain liable as
lessee, guarantor or other surety with respect to any such lease if and to the
extent that (i) such lease is permitted pursuant to Section 7.8 or is between
FelCor or one of its Affiliates and BHR or one of its Subsidiaries and is
entered into on or prior to the Closing Date and (ii) the consideration
received is at least equal to the fair market value of the property sold as
determined in good faith by Borrowers' Board of Directors. BHR or its
Subsidiaries may enter into a sale and lease-back transaction with a Real
Estate Investment Trust with the written consent of the Administrative Agent,
such consent not to be unreasonably withheld.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable other than sales for collection of defaulted receivables
over 120 days past due.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Without the prior written approval of the Requisite Lenders,
which approval may be granted, withheld, conditioned or delayed in their sole
discretion, the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property, the rendering of any service or the making of any
Investment or guaranty, or the amendment, restatement, supplement or other
change of, or waiver or failure to enforce any obligations under, any
agreement) with any holder of 5% or more of any class of equity Securities of
BHR or any Affiliate of BHR unless on terms that (i) for transactions where the
total value of consideration is less than $500,000, an officer of BHR who is
not an Affiliate of BHR determines and (ii) for transactions where the total
value or consideration is $500,000 or greater, a majority of the members of the
Board of Directors of BHR who are not officers, principals, employees, partners
of BHR or any of its Affiliates or beneficiaries or holders of 25% or more of
any class of equity Securities of BHR or any of its Affiliates, including
Borrowers, determines are (x) fair and reasonable and provide for exchange of
fair consideration and reasonably equivalent value between or among the parties
thereto or (y) are not less favorable to BHR, Borrowers or such Subsidiary, as
the case may be, than those that might be obtained in a comparable transaction
at the time on an arms-length basis from Persons who are not such a holder or
Affiliate; provided, however, that this Section 7.12 shall not apply to (a) any
transaction between Borrowers and any other Affiliate Pledgor or between any of
the Affiliate Pledgors, (b) any transaction listed on Schedule 7.12 annexed
hereto (but not any amendment, restatement, supplement or other change of, or
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waiver or failure to enforce any obligations under, any agreement related
thereto), (c) reasonable and customary fees paid to members of the Boards of
Directors of BHR and its Subsidiaries and (d) reasonable compensation payable
or paid to senior management personnel of Borrowers.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
Except pursuant to the Collateral Documents and except for any
sale of 100% of the capital stock or other equity Securities of any of its
Subsidiaries in compliance with the provisions of Section 7.7, BHR shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of Capital Stock or other
equity Securities of any of its Subsidiaries, except to qualify
directors if required by Applicable Law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of Capital Stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to BHR, another Domestic
Subsidiary of BHR, or to qualify directors if required by Applicable
Law.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, BHR and Borrowers shall not,
and shall not permit any of their Subsidiaries to, engage in any business other
than (i) the businesses engaged in by BHR and its Subsidiaries on the Closing
Date and similar or related businesses including consulting on the construction
and design of lodging facilities, purchasing services for the lodging industry,
accounting services for the lodging industry and advertising services for the
lodging industry and (ii) such other lines of business as may be consented to
by the Requisite Lenders, which consent will be granted, denied or conditioned
at their sole discretion.
7.15 AMENDMENTS OF DOCUMENTS RELATING MANAGEMENT CONTRACTS, LEASES, AND THE
MASTER HOTEL AGREEMENT.
BHR and Borrowers shall not, and shall not permit any of their
Subsidiaries to, amend or otherwise change terms of any management contract,
Lease Agreement, Other Lease and Management Agreement or the Master Hotel
Agreement in any manner which would materially adversely impact Lenders or make
any payment consistent with such an amendment thereof or change thereto,
including but not limited to, changing (to earlier dates) any dates upon which
payments of principal or interest are due thereunder, changing any event of
default or condition to an event of default (other than to eliminate any such
event of default or increase any grace period related thereto or to make any
such condition more favorable to BHR,
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Borrowers or any Subsidiary), or if the effect of such amendment or change,
together with all other amendments or changes made, is otherwise to increase
materially the obligations of the obligor thereunder or to confer any
additional rights of BHR or its Subsidiaries in an manner which would be
materially adverse to Lenders, without the consent of the Requisite Lenders,
which consent the Requisite Lenders may grant, wwithhold, condition or delay in
their sole discretion.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrowers to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by
Borrowers to pay when due any amount payable to an Issuing Lender in
reimbursement of any drawing under a Standby Letter of Credit; or failure by
Borrowers to pay any interest, fee or other amount due under this Agreement
within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of BHR or any of its Subsidiaries to pay when
due any principal of or interest on one or more items of Indebtedness
(other than Indebtedness referred to in Section 8.1) or Contingent
Obligations in an individual principal amount of $100,000 or more or
with an aggregate principal amount of $500,000 or more, in each case
beyond the end of any grace period provided therefor; or
(ii) Breach or default by BHR or any of its Subsidiaries
with respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above, (b) the FelCor
Merger Agreement, the FelCor Spin-Off Agreement or any Lease Agreement
or (c) any loan agreement, mortgage, indenture or other agreement
relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the
holder or holders of that Indebtedness or Contingent Obligation(s) (or
a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
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8.3 BREACH OF CERTAIN COVENANTS.
Failure of Borrowers to perform or comply with any term or
condition contained in Section 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty or certification of any Loan
Party or any of its Subsidiaries made in this Agreement or in any other Loan
Document or in any certificate at any time given in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made and such default shall not have been
remedied or waived within 30 days after the earlier of (i) such Loan Party's or
such Subsidiary's obtaining knowledge of such default and (ii) receipt by such
Loan Party or such Subsidiary of notice from the Administrative Agent of such
default; provided, however, that if such default cannot be cured solely by the
payment of money and the cure of such default requires a period in excess of 30
days, and if such Loan Party or such Subsidiary, as applicable, is diligently
and continuously prosecuting such cure, then such default shall not be an Event
of Default unless such Loan Party or such Subsidiary fails to cure such default
within 90 days, after such Loan Party or such Subsidiary obtains knowledge or
notice thereof, as the case may be; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party or any of its Subsidiaries shall default in the
performance of or compliance with any term contained in this Agreement or any
other Loan Document other than any such term in this Agreement or other Loan
Document that is referred to in any other clause of this Article 8 and such
default shall not have been remedied or waived (other than a default referred
to in any other clause of this Article 8), within 30 days after the earlier of
(a) such Loan Party's or such Subsidiary's obtaining knowledge of such default
or (b) receipt by such Loan Party or such Subsidiary of notice from the Agent
of such default; provided, however, that if such default cannot be cured solely
by the payment of money and the cure of such default requires a period in
excess of 30 days, and such default may reasonably be expected to be cured on
or before the 90th day after such Loan Party or such Subsidiary obtains
knowledge or notice thereof, and if and so long as such Loan Party or such
Subsidiary is diligently and continuously prosecuting such cure, then such
default shall not be an Event of Default unless such Loan Party or such
Subsidiary fails to cure such default before the 90th day after any Loan Party
or any of its Subsidiaries obtains knowledge or notice thereof, as the case may
be; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of BHR, Borrowers or any
of their Subsidiaries in an involuntary
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case under the Bankruptcy Code or under any other Insolvency Laws
which decree or order is not stayed; or any other similar relief shall
be granted under any applicable Insolvency Laws; or
(ii) an involuntary case shall be commenced against BHR,
Borrowers or any of their Subsidiaries under the Bankruptcy Code or
under any other Insolvency Laws; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over BHR, Borrowers or any of their Subsidiaries, or
over all or a substantial part of their property, shall have been
entered; or there shall have occurred the involuntary appointment of
an interim receiver, trustee or other custodian of BHR, Borrowers or
any of their Subsidiaries for all or a substantial part of their
property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of
BHR, Borrowers or any of their Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) BHR, Borrowers or any of their Subsidiaries shall
have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other Insolvency
Laws, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of their property; or BHR,
Borrowers or any of their Subsidiaries shall make any assignment for
the benefit of creditors; or
(ii) Borrowers or any of their Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing their
inability, to pay its debts as such debts become due; or the Board of
Directors of BHR, Borrowers or any of their Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize
any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $150,000 or
(ii) in the aggregate at any time an amount in excess of $500,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
BHR, Borrowers or any of their Subsidiaries or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
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8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against BHR,
Borrowers or any of their Subsidiaries decreeing the dissolution or split up of
BHR, Borrowers or such Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in
liability of BHR or any of its ERISA Affiliates in excess of $1,000,000 during
the term of this Agreement; or there shall exist an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in
the aggregate for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities),
which exceeds $5,000,000; or
8.11 CHANGE IN CONTROL.
There shall have occurred a Change of Control; or
8.12 INVALIDITY OF ANY GUARANTY.
Any Guaranty for any reason, other than the satisfaction in
full of all Obligations, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan
Party denies that it has any further liability, including without limitation
with respect to future advances by Lenders, under any Loan Document to which it
is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral in
accordance with the terms thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Loan Party, or
Administrative Agent shall not have or cease to have a valid and perfected
first priority security interest in the Collateral, subject to Permitted Liens:
THEN (i) upon the occurrence of any Event of Default described
in Sections 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at
any time be drawn under all Standby Letters of Credit then outstanding (whether
or not any beneficiary under any such Standby Letter of Credit shall have
presented, or shall be entitled at such time to present, the drafts or other
documents or certificates required to draw under such Standby Letter of
Credit), and (c) all
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other Obligations shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by Borrowers, and the obligation of each
Lender to make any Loan, the obligation of Administrative Agent to issue any
Standby Letter of Credit and the right of any Lender to issue any Standby
Letter of Credit hereunder shall thereupon terminate, and (ii) upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written
consent of the Requisite Lenders, by written notice to Borrowers, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Standby Letter of Credit and the right of any Lender to
issue any Standby Letter of Credit hereunder shall thereupon terminate;
provided that the foregoing shall not affect in any way the obligations of
Lenders under Section 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Borrowers shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 10.6, then the Requisite Lenders, by
written notice to Borrowers, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of the Requisite
Lenders and are not intended to benefit Borrowers and do not grant Borrowers
the right to require Lenders to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. APPOINTMENT OF THE AGENT. Bankers Trust Company is hereby
appointed the Administrative Agent hereunder and under the other Loan Documents
and each Lender hereby authorizes the Administrative Agent to act as its agent
in accordance with the terms of this Agreement and the other Loan Documents.
The Administrative Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable.
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The provisions of this Section 9 are solely for the benefit of the
Administrative Agent and Lenders and neither BHR nor any of its Subsidiaries
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as an agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for BHR or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee
in such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by reason of any present or future law of any jurisdiction it may
not exercise any of the rights, powers or remedies granted herein or in any of
the other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that the Administrative
Agent appoint an additional individual or institutions as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that the Administrative Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and
every right, power, privilege or duty expressed or intended by this Agreement
or any of the other Loan Documents to be exercised by or vested in or conveyed
to the Administrative Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by either the Administrative Agent or such Supplemental Collateral
Agent, and (ii) the provisions of this Section 9 and of Sections 10.2 and 10.3
that refer to the Administrative Agent shall inure to the benefit of such
Supplemental Collateral Agent and all references therein to the Administrative
Agent shall be deemed to be references to the Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from any Borrower or any
other Loan Party be required by any Supplemental Collateral Agent so appointed
by the Administrative Agent for more fully and certainly vesting in and
confirming to him or it such rights, powers, privileges and duties, the
applicable Borrower shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent. In case any Supplemental Collateral Agent, or a
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and
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duties of such Supplemental Collateral Agent, to the extent permitted by law,
shall vest in and be exercised by the Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes
the Administrative Agent to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to the Administrative Agent
by the terms hereof and thereof,together with such powers, rights and remedies
as are reasonably incidental thereto. The Administrative Agent shall have only
those duties and responsibilities that are expressly specified in this
Agreement and the other Loan Documents. The Administrative Agent may exercise
such powers, rights and remedies and perform such duties by or through its
agents or employees. The Administrative Agent shall not have, by reason of
this Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. The Administrative
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by the Administrative
Agent to the Lenders or by or on behalf of BHR or any of its Subsidiaries to
the Administrative Agent or any Lender in connection with the Loan Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of BHR, the Subsidiaries of BHR or any other Person liable for
the payment of any Obligations or for the perfection of any security interest,
nor shall the Administrative Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, the Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding
Loans or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees or agents shall be liable to the
Lenders for any action taken or omitted by the Administrative Agent under or in
connection with any of the Loan Documents except to the extent caused by the
Administrative Agent's gross negligence or willful misconduct. The
Administrative Agent shall be entitled to refrain from any act or the taking of
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any action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
the Administrative Agent shall have received instructions in respect thereof
from Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), the
Administrative Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of the foregoing,
(i) the Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for BHR
and its Subsidiaries), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent acting
or (where so instructed) refraining from acting under this Agreement or any of
the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.6).
D. AGENT ENTITLED TO ACT IN OTHER CAPACITIES. Each Lender hereby
acknowledges that an Affiliate of Bankers Trust Company has acted, and may in
the future act, as an underwriter of debt or equity Securities issued by BHR,
its Subsidiaries and its Affiliates, and Bankers Trust Company or its
Affiliates have acted, and may in the future act, as financial advisers to BHR,
its Subsidiaries and its Affiliates.
The agency hereby created shall in no way impair or affect any
of the rights and powers of, or impose any duties or obligations upon, the
Administrative Agent in its individual capacity as a Lender or an Issuing
Lender hereunder. With respect to its participation in the Loans, the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties and functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with BHR or any of its Affiliates as if it were not performing duties
specified herein, and may accept fees and other consideration from BHR and its
Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
A. INDEPENDENT CREDIT ANALYSIS. Each Lender represents and
warrants that it has made its own independent investigation of the financial
condition and affairs of BHR and its
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Subsidiaries in connection with the making of the Loans hereunder and that it
has made and shall continue to make its own appraisal of the creditworthiness
of BHR and its Subsidiaries. The Administrative Agent shall not have any duty
or responsibility, either initially or on a continuing basis, (i) to make any
such investigation or any such appraisal on behalf of the Lenders or (ii)
except as provided in Section 9.3B below, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and the
Administrative Agent shall not have any responsibility with respect to the
accuracy of or the completeness of any information provided to any Lender.
B. DELIVERY OF CERTAIN DOCUMENTS. The Administrative Agent shall
deliver to the Lenders, reasonably promptly after receipt from the Borrowers,
(i) any request for extension of the Revolving Loan Commitment Termination Date
delivered pursuant to Section 2.1F and (ii) the financial statements,
certificates and other items delivered pursuant to Sections 6.1(i), (ii),
(iii), (iv), (v), (vi), (vii) and (xiv). In addition, reasonably promptly
after the effectiveness of any written amendment, waiver or consent in
accordance with the provisions of Section 10.6A, the Administrative Agent shall
deliver a copy of such amendment, waiver or consent to BHR and each Lender.
Upon the request of any Lender, the Administrative Agent shall deliver,
reasonably promptly after receipt from the Borrowers, any item required to be
delivered to the Administrative Agent pursuant to the Credit Agreement.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify the Administrative Agent to the extent that the Administrative Agent
shall not have been reimbursed by the Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including reasonable counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as the Administrative Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any fees payable
pursuant to Section 2.3B or any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.
9.5 SUCCESSOR AGENT.
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The Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and BHR and may be removed by the
Requisite Lenders for the Administrative Agent's bad faith, recklessness, gross
negligence or willful misconduct. Upon any such notice of resignation or
removal, the Requisite Lenders shall have the right, upon five Business Days'
notice to BHR, to appoint a successor Administrative Agent. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as the Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under this
Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTY.
Each Lender hereby further authorizes the Administrative Agent, on
behalf of and for the benefit of the Lenders, to enter into each Collateral
Document as secured party and to be the agent for and representative of the
Lenders under the Guaranty, and each Lender agrees to be bound by the terms of
each Collateral Document and the Guaranty; provided that the Administrative
Agent shall not (i) enter into or consent to any written amendment,
modification, termination or waiver of any provision contained in any
Collateral Document or the Guaranty, or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the
prior consent of the Requisite Lenders (or, if required pursuant to Section
10.6, all Lenders); provided further, however, that, without further written
consent or authorization from the Lenders, the Administrative Agent may execute
any documents or instruments necessary to (a) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or that is otherwise required to be released
pursuant to this Agreement or to which the Requisite Lenders have otherwise
consented or (b) release any Subsidiary of BHR from the Guaranty if all of the
capital stock of such Subsidiary is sold to any Person (other than an Affiliate
of BHR) pursuant to a sale or other disposition permitted hereunder or to which
the Requisite Lenders have otherwise consented. Anything contained in any of
the Loan Documents to the contrary notwithstanding, the Administrative Agent
and each Lender hereby agree that (1) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral
Document or to enforce the Guaranty, it being understood and agreed that all
rights and remedies under the Collateral Documents and the Guaranty may be
exercised solely by the Administrative Agent for the benefit of the Lenders in
accordance with the terms thereof, and (2) in the event of a foreclosure by the
Administrative Agent on any of the Collateral pursuant to a public or private
sale, the Administrative Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and the Administrative Agent, as agent for
and representative of the Lenders (but not any Lender or the Lenders in its or
their respective
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individual capacities unless the Requisite Lenders shall otherwise agree in
writing) shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by the Administrative
Agent at such sale.
9.7 PAYEE OF NOTE TREATED AS OWNER.
The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until written notice of
the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to Section 10.1B, each Lender shall have the
right at any time with the consent of Borrowers, such consent not to be
unreasonably withheld or delayed, and such consent to be deemed given during
the continuation of any Event of Default, to sell, assign or transfer to any
Eligible Assignee (provided that such Eligible Assignee complies with the
requirements of Section 2.7B(iii) as of the date it becomes a Lender hereunder,
to the extent applicable) and, beginning one year after the Closing Date, to
grant a participation in all or any part of its Commitments, any Loan or Loans
made by it, its Standby Letters of Credit or any other interest herein or in
any other Obligations owed to it; provided,however that for one year following
the Closing Date no Lender may grant any participation in its Commitments, any
Loan or Loans made by it, its Standby Letters of Credit or in any other
interest herein or in any other Obligations owed to it; provided further that
no such sale, assignment, transfer or participation shall, without the consent
of Borrowers, require Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an Assignment Agreement effecting such
sale, assignment or transfer shall have been accepted by Administrative Agent
and recorded in the Register as provided in Section 10.1B(ii); and provided,
further that no such sale, assignment, transfer or participation of any Standby
Letter of Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment, Standby Letter of Credit Commitment, and the
Revolving Loans of the Lender effecting such sale, assignment, transfer or
participation. Except as otherwise provided in this Section 10.1, no Lender
shall, as between Borrowers and such Lender, be
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relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any
part of its Commitments or the Loans, the Letters of Credit or participations
therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Standby Letter of Credit or participation therein, or other
Obligation may be assigned (subject to Section 10.1) in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Standby
Letters of Credit and participations therein, and other Obligations of
the assigning Lender) to any Eligible Assignee with the consent of
Administrative Agent. To the extent of any such assignment, the
assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans, Standby Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and
recordation fee of $2,500 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement
may be required to deliver to Administrative Agent pursuant to Section
2.7B(iii)(a); provided, however that in the case of an assignment to
another Lender, or to an Affiliate of the assigning Lender or another
Lender, the processing and recordation fee required under this Section
10.1B(i) shall be $500. Upon such execution, delivery, acceptance and
recordation, from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations
under this Agreement, subject to Section 10.9B (and, in the case of an
Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto; provided that, anything
contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with respect to
any outstanding Standby Letters of Credit such Lender shall continue
to have all rights and obligations of an Issuing Lender with respect
to such Standby Letters of Credit until the cancellation or expiration
of such Standby Letters of Credit and the reimbursement of any amounts
drawn thereunder). The Commitments hereunder shall be modified to
reflect the Commitment of such assignee and any remaining Commitment
of such assigning Lender and, if any such assignment occurs after the
issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent
for
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cancellation, and thereupon new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of Exhibit
IV annexed hereto, as the case may be, with appropriate insertions, to
reflect the new Commitments, of the assignee and/or the assigning
Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in Section 10.1B(i) and any forms, certificates or other evidence with
respect to United States federal income tax withholding matters that
such assignee may be required to deliver to Administrative Agent
pursuant to Section 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Borrowers have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to Section 10.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which acceptance
shall evidence any required consent of Administrative Agent to such
assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Borrowers.
Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this Section
10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting (i) the extension of the scheduled final maturity
date of any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation, and all amounts payable by Borrowers hereunder (including
without limitation amounts payable to such Lender pursuant to Sections 2.6D,
2.7 and 3.6) shall be determined as if such Lender had not sold such
participation. Borrowers and each Lender hereby acknowledges and agrees that,
solely for purposes of Sections 10.4 and 10.5, (a) any participation will give
rise to a direct obligation of Borrowers to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
Section 10.1, any Lender may assign and pledge all or any portion of its Loans,
the other Obligations owed to such Lender, and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; provided that (i) no Lender shall, as between Borrowers and such
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
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E. INFORMATION. Each Lender may furnish any information
concerning BHR, Borrowers and their Subsidiaries in the possession of that
Lender from time to time to assignees and participants (including prospective
assignees and participants), subject to Section 10.19.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Borrowers (including without limitation
any opinions requested by Lenders as to any legal matters arising hereunder)
and of Borrowers' performance of and compliance with all agreements and
conditions on their part to be performed or complied with under this Agreement
and the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Administrative Agent
(including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Borrowers; (iv) all the actual costs
and reasonable expenses of creating and perfecting Liens in favor of
Administrative Agent on behalf of Lenders pursuant to the Loan Documents,
including without limitation costs of conducting record searches, examining
Collateral, opening bank accounts and lockboxes, depositing checks, receiving
and transferring funds (including charges for checks for which there are
insufficient funds), and fees and taxes in connection with the filing of
financing statements, costs of preparing and recording Loan Documents, fees and
expenses of counsel for providing such opinions as Administrative Agent or
Requisite Lenders may reasonably request, and fees and expenses of legal
counsel to Administrative Agent; (v) all other actual and reasonable costs and
expenses incurred by Administrative Agent in connection with the syndication of
the Commitments and the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (vi) after the occurrence of an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 INDEMNITY.
A. INDEMNITY. In addition to the payment of expenses as required
by Section 10.2, whether or not the transactions contemplated hereby shall be
consummated, each Borrower
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agrees to defend, indemnify and hold harmless the Administrative Agent and
Lenders and their respective Affiliates and Persons deemed to be "controlling
persons" thereof within the meaning of the Securities Act or the Exchange Act
and the respective directors, officers, employees, agents, attorneys and
representatives of the foregoing (collectively, "INDEMNIFIED PERSONS" and
individually, an "INDEMNIFIED PERSON"), to the full extent lawful, from and
against any and all losses, claims, damages, liabilities, costs and expenses or
other obligations of any kind or nature whatsoever incurred by each such
Indemnified Person (including fees, charges and disbursements of outside
counsel and the allocated costs and expenses of internal counsel for such
Indemnified Person) which are related to, arise out of or result from (i) any
untrue statements or alleged untrue statements or omissions or alleged
omissions to state a material fact necessary to make statements, in light of
the circumstances in which they were made, not misleading, in each case made
or, to the extent contemplated by the Loan Documents, to be made, by or on
behalf of any Loan Party or any of its Affiliates, (a) in the representations
and warranties of the Loan Parties contained in the Loan Documents, (b) in or
pursuant to the Loan Documents or any related documents or (c) otherwise in
connection with the Loan Documents or the related documents, (ii) information
provided by or on behalf of any Loan Party or any of their Affiliates for use
in connection with any syndication, assignment or participation of any portion
of the Commitments, the Loans, the Notes, the other Loan Documents or the
Obligations, or in connection with any Loan Document or any transactions
contemplated hereby or thereby, (iii) the transactions contemplated by the Loan
Documents (including the Lenders' agreements to make the Loans or the use or
intended use of the proceeds thereof) or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon
any of the Collateral or the enforcement of the Guaranty), (iv) any actions
taken or omitted to be taken by an Indemnified Person with the consent of any
Borrower or in conformity with the instructions of any Borrower, or (v) any
other transactions contemplated by the Loan Documents or any related documents,
and the Borrowers will reimburse each Indemnified Person for all reasonable
costs and expenses (including fees, charges and disbursements of outside
counsel and the allocated costs and expenses of internal counsel for such
Indemnified Person) as they are incurred, in connection with investigating,
preparing for, or defending any formal or informal claim, action, suit,
investigation, inquiry or other proceeding, whether or not in connection with
pending or threatening litigation, caused by or arising out of or in connection
with the foregoing, whether or not such Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. No Borrower shall,
however, be responsible for any losses, claims, damages, liabilities, costs or
expenses or other obligations pursuant to clauses (iii), (iv) or (v) of the
preceding sentence which have resulted primarily from the bad faith,
recklessness or willful misconduct of such Indemnified Person as determined by
a final judgment of a court of competent jurisdiction. Neither the
Administrative Agent nor any other Indemnified Person shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to any of the
Loan Parties and their respective Affiliates or any director, officer,
employee, agent or representative of any of the foregoing, or any other person,
for or in connection with the foregoing, or otherwise arising out of or in any
way relating to the matters contemplated by the Loan Documents or any
commitment to lend except for such liability for losses, claims,
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damages, liabilities, costs or expenses of any Indemnified Person pursuant to
clauses (iii), (iv) or (v) of the preceding sentence to the extent they are
determined to have resulted primarily from the bad faith, recklessness or
willful misconduct of such Indemnified Person as determined by a final judgment
of a court of competent jurisdiction and in no event shall the Administrative
Agent or any other Indemnified Person be responsible for or liable to any of
the Loan Parties or any of their respective Affiliates or any other Person for
consequential, punitive or exemplary damages. Each Borrower further agrees
that the Loan Parties shall not, nor shall they permit their respective
Subsidiaries to, without the prior written consent of the Administrative Agent,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit, investigation, inquiry or other proceeding in
respect of which indemnification is actually sought hereunder unless such
settlement, compromise or consent includes an unconditional release of the
Administrative Agent and each other Indemnified Person hereunder from all
liability arising out of such claim, action, suit, investigation, inquiry or
other proceeding.
B. PROCEDURE. If any action, suit, investigation, inquiry or
other proceeding is commenced, as to which an Indemnified Person proposes to
demand indemnification hereunder, such Indemnified Person shall notify
Borrowers with reasonable promptness; provided, however, that any failure by
such Indemnified Person to notify Borrowers shall not relieve the Borrowers or
any of their respective Affiliates from their obligations hereunder, if any,
(except to the extent that the Borrowers or such Affiliate are prejudiced by
such failure to so promptly notify). Borrowers shall be entitled to assume
the defense of any such action, suit, investigation, inquiry or other
proceeding, including the employment of counsel reasonably satisfactory to the
Indemnified Person and the payment of all reasonable fees and expenses incurred
in connection therewith. The Indemnified Person shall have the right to employ
separate counsel in any such action, suit, investigation, inquiry or other
proceeding, or to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Person unless (i) a
Borrower has agreed to pay such fees and expenses, (ii) a Borrower shall have
failed promptly upon written demand therefor to assume the defense of such
action, suit, investigation, inquiry or other proceeding, and employ counsel
reasonably satisfactory to the Indemnified Person in connection therewith or
(iii) such Indemnified Person shall have been advised by counsel that there
exist actual or potential conflicting interests between a Borrower and such
Indemnified Person, including situations in which one or more legal defenses
may be available to such Indemnified Person that are different from or
additional to those available to a Borrower, in which case, if such Indemnified
Person notifies Borrowers in writing that it elects to employ separate counsel
at the expense of the Borrowers, Borrowers shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Person;
provided, however, that Borrowers shall not, in connection with any one such
action, suit, investigation, inquiry or other proceeding or separate but
substantially similar or related actions, suits, investigations, inquiries or
other proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm
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of attorneys at any time for all such Indemnified Persons (in addition to local
counsel), which firm shall be designated in writing by the Administrative
Agent.
C. CONTRIBUTION. In order to provide for just and equitable
contribution with respect to matters subject to Section 10.3A, if a claim for
indemnification is made pursuant to these provisions but it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification is not available for any reason (except, with respect
to indemnification sought solely pursuant to Section 10.3A, for the reasons
specified in the second sentence of Section 10.3A), even though the express
provisions hereof provide for indemnification in such case, or is insufficient
to hold an Indemnified Party harmless, then the Borrowers, on the one hand, and
the Administrative Agent or the Lenders, on the other hand, shall contribute to
such loss, claim, damage, liability, cost or expense for which such
indemnification or reimbursement is held unavailable or is insufficient in such
proportion as is appropriate to reflect the relative benefits to the Loan
Parties and their respective Affiliates, on the one hand, and the
Administrative Agent or Lenders, on the other hand, in connection with the
transactions described in the Loan Documents, as well as any other equitable
considerations. The parties agree that for the purpose of this Section 10.3C,
the relative benefits to the Loan Parties and their respective Affiliates, on
the one hand, and the Administrative Agent and Lenders, on the other hand,
shall be deemed to be in the same proportion as the proceeds received or to be
received by the Loan Parties from the Loan Documents bears to the fees paid or
to be paid to the Administrative Agent and Lenders under the Loan Documents.
Notwithstanding the foregoing, the Administrative Agent and Lenders shall not
be required to contribute under this Section 10.3C any amount in excess of the
amount of fees actually received by the Administrative Agent and Lenders,
respectively, in respect of the Loan Documents. The Borrowers, Administrative
Agent and the Lenders agree that it would not be just and equitable if
contribution pursuant to this Section 10.3C were determined by pro rata
allocation or by any other method which does not take into account the
equitable considerations referred to in this Section 10.3C.
D. NO LIMITATION. The foregoing rights to indemnity and
contribution shall be in addition to any rights that any Indemnified Person and
any Loan Party may have at common law or otherwise and shall remain in full
force and effect following the completion or any termination of the
transactions contemplated by the Loan Documents. In no event shall the
Administrative Agent or the Lenders be responsible or liable to any person for
consequential, punitive or exemplary damages which may be alleged as a result
of the Loan Documents or any transaction contemplated thereby.
E. INDEPENDENCE OF INDEMNITY; NO ENLARGEMENT. Each Borrower
acknowledges and agrees that the provisions of this Section 10.3 are separate
from and in addition to the provisions contained in the Environmental
Indemnity. The provisions of this Section 10.3 shall not enlarge or vary the
obligations of the Borrowers under Sections 2.6D and 2.7.
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10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and after
consultation with Administrative Agent each Lender is hereby authorized by
Borrowers at any time or from time to time, without prior notice to Borrowers
or to any other Person, any such prior notice being hereby expressly waived, to
set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Borrowers against and on account of the obligations
and liabilities of Borrowers to that Lender under this Agreement, the Standby
Letters of Credit and participations therein and the other Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Standby Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Standby
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Borrowers hereby further grant to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for
the Obligations.
10.5 RATABLE SHARING.
AMOUNTS OWED BY BORROWERS. Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code or under any other
Insolvency Laws, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, amounts payable in respect of Letters of Credit,
fees and other amounts then due and owing to that Lender from Borrowers
hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE FROM BORROWERS" to such Lender) which is greater than the
proportion received by any other Lender in respect of the Aggregate Amounts Due
From Borrowers to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due From
Borrowers to the other Lenders so that all such recoveries of Aggregate Amounts
Due From Borrowers shall be shared by all Lenders in proportion to the
Aggregate Amounts Due From Borrowers to them; provided that if all or part of
such proportionately greater payment
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received by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of Borrowers or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Borrowers expressly consent to
the foregoing arrangement and agree that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Borrowers to that
holder with respect thereto as fully as if that holder were owed the amount of
the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. AMENDMENTS; WAIVERS. No amendment, modification, termination
or waiver of any provision of this Agreement or of the Notes, and no consent to
any departure by any Borrower therefrom, shall in any event be effective
without the written concurrence of the Requisite Lenders; provided that (i) no
such amendment, modification, termination, waiver or consent shall be effective
without the written concurrence of all Lenders if such amendment, modification,
termination, waiver or consent (1) increases the amount of any of the
Commitments or reduces the principal amount of any of the Loans; (2) changes in
any manner the definition of "Pro Rata Share" or the definition of "Requisite
Lenders"; (3) changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of a specified
percentage of Lenders; (4) postpones the scheduled final maturity date of any
of the Loans; (5) postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to Section 2.2E) or the amount of any fees payable hereunder; (6)
increases the maximum duration of Interest Periods permitted hereunder; (7)
releases any Lien granted in favor of Administrative Agent with respect to all
or substantially all of the Collateral; (8) releases BHR or its Subsidiaries
from its obligations under the Loan Documents, in each case other than in
accordance with the terms of the Loan Documents; (9) changes in any manner the
provisions contained in this Section 10.6A; or (10) postpones the date or
reduces the amount of any scheduled payment (but not prepayment) of principal
of the Loans, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note; and (iii) no amendment, modification,
termination or waiver of any provision of Section 10 or of any other provision
of this Agreement which, by its terms, expressly requires the approval or
concurrence of the Administrative Agent shall be effective without the written
concurrence of the Administrative Agent. The Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any
Borrower in any case shall entitle any Borrower to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.6
shall be binding
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upon each Lender at the time outstanding, each future Lender and, if signed by
a Borrower, on such Borrower.
If the Administrative Agent notifies any Lender that one or more
requirements set forth in Section 4.2 will not be satisfied, or that
performance of all or any part of such requirement will be deferred, and,
subsequent to such notification, such Lender delivers (or continues to
authorize delivery of) its signature page hereto, then such Lender shall be
deemed to have waived (subject to any conditions set forth in the applicable
notice) such requirement as a condition precedent to the effectiveness of the
Commitments.
B. DEEMED CONSENT. If the Administrative Agent delivers a
written request for the Lenders' approval or a proposed amendment or
modification to, or waiver of, this Agreement, each Lender shall, within 12
Business Days of receiving such request for approval or proposed amendment,
modification or waiver, give Administrative Agent written notice that either
(i) it grants its consent or approves such amendment, modification or waiver or
(ii) it does not grant its consent or does not approve such amendment,
modification or waiver; provided that if any Lender does not respond within
such 12 Business Days, such Lender shall be deemed to have granted its consent
or approved such amendment, modification or waiver.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States mail, return receipt requested, or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile or telex, or three Business Days after depositing it
in the United States mail with postage prepaid, return receipt requested, and
properly addressed; provided that notices to Administrative Agent shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Borrowers and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent,
a copy of which will be delivered by the Administrative Agent to BHR.
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10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Standby Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrowers set forth in Sections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
Sections 9.2C, 9.4, 10.5, and 10.19 shall survive the payment of the Loans, the
cancellation or expiration of the Standby Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrowers or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrowers make a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor or related thereto, shall be revived and continued
in full force and effect as if such payment or payments had not been made or
such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability
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of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and, subject to Section 9, each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the permitted successors and permitted assigns of Lenders
(it being understood that Lenders' rights of assignment are subject to Section
10.1). None of Borrowers' rights or obligations hereunder nor any interest
therein may be assigned or delegated by Borrowers without the prior written
consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
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DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, COUNTY OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT EACH BORROWER ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR
SUCH OBLIGATION. Borrowers hereby agree that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Borrowers at their address provided in Section
10.8, such service being hereby acknowledged by Borrowers to be sufficient, to
the full extent permitted by applicable law, for personal jurisdiction in any
action against Borrowers in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against Borrowers in the courts of any other
jurisdiction.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.18 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
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10.19 CONFIDENTIALITY.
Each Lender and the Administrative Agent, severally and not
jointly, agrees to exercise commercially reasonable efforts to keep any
non-public information delivered or made available to such Lender or the
Administrative Agent pursuant to the Loan Documents, which any Loan Party or
its authorized representative has identified as confidential information,
confidential from any Person other than Persons employed by or retained by such
Lender or the Administrative Agent or their respective Affiliates who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans or Obligations hereunder and, financial transactions
other extensions of credit to BHR or one of its Subsidiaries; provided that
nothing herein shall prevent any Lender or the Administrative Agent from
disclosing such information to any bona fide prospective Eligible Assignee,
transferee or direct or indirect contractual counterparty in swap agreements
related to, or in which payments are calculated (in whole or in part) with
respect to, the Obligations that has agreed to be bound by the provisions of
this Section 10.19 in connection with a swap agreement related, or in which
payments are calculated (in whole or in part) with respect to, to the
Obligations or the contemplated assignment or transfer of any Commitments,
Loans or other extensions of credit or Obligations hereunder or participation
therein or as required or requested by any governmental authority or
representative thereof or pursuant to legal process or in connection with the
exercise of any remedy under the Loan Documents; provided further, that in no
event shall any swap counterparty that receives any information pursuant to
this Section 10.19 be a Person who, either directly or through one or more
Affiliates, owns or operates hotels or motels as one of its principal business
activities.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrowers and Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BRISTOL HOTEL MANAGEMENT
CORPORATION
BRISTOL MANAGEMENT, L.P.
BHMC GENPAR, L.L.C.
BHMC LIMPAR, L.L.C.
BRISTOL HOTEL TENANT COMPANY
BRISTOL HOSPITALITY TENANT COMPANY
BRISTOL LODGING TENANT COMPANY
BRISTOL SALT LAKE TENANT COMPANY
as Borrowers
By:
-------------------------------
Edward J. Nolan
Vice President
Notice Address:
14295 Midway Road
Dallas, Texas 75244
Attention: Legal Department
S-1 (Credit Agreement)
137
LENDERS:
BANKERS TRUST COMPANY,
as a Lender and as Arranging Agent
and Administrative Agent
By:
---------------------------------
Garrett W. Thelander
Vice President
Notice Address:
Bankers Trust Company
130 Liberty Street
New York, NY 10017
Attention: Garrett W. Thelander
S-2 (Credit Agreement)
138
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By:
---------------------------------
Mary P. Daly
Vice President
Notice Address:
1301 Avenue of the Americas
18th Floor
New York, New York 10019
Attention: Mary P. Daly
S-3 (Credit Agreement)
139
SOCIETE GENERALE, SOUTHWEST AGENCY,
as a Lender
By:
---------------------------------
Thomas K. Day
Director
Notice Address:
2001 Ross Avenue
Suite 4900
Dallas, Texas 75201
Attention: Thomas K. Day
S-4 (Credit Agreement)
140
NATIONSBANK, N.A.
as a Lender
By:
---------------------------------
Name:
Title:
Notice Address:
901 Main Street
51st Floor
Dallas, Texas 75202
Attention: David Howard
S-5 (Credit Agreement)
141
BRISTOL HOTELS & RESORTS,
as Guarantor
By:
---------------------------------
Edward J. Nolan
Vice President
Notice Address:
14295 Midway Road
Dallas, Texas 75244
Attention: Legal Department
S-6 (Credit Agreement)