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EXHIBIT 10.40
$125,000,000.00
CREDIT AGREEMENT
dated as of
October 29, 1996,
among
WINSTON HOTELS, INC., XXXX LIMITED PARTNERSHIP,
THE BANKS LISTED HEREIN,
WACHOVIA BANK OF NORTH CAROLINA, N.A.,
as Collateral Agent
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Administrative Agent
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TABLE OF CONTENTS
CREDIT AGREEMENT ARTICLE I DEFINITIONS
SECTION 1.01. Definitions........................................................................................1
SECTION 1.02. Accounting Terms and Determinations...............................................................16
SECTION 1.03. Use of Defined Terms..............................................................................17
SECTION 1.04. Terminology.......................................................................................17
SECTION 1.05. References........................................................................................17
ARTICLE II
THE CREDITS; LIMITATIONS ON THE USE OF LOAN PROCEEDS
SECTION 2.01. Commitments to Make Loans; Line Availability Amount. ............................................17
SECTION 2.02. Method of Borrowing...............................................................................23
SECTION 2.03. Sub-Line Restrictions; Line Use Restrictions Generally............................................25
SECTION 2.04. Notes.............................................................................................29
SECTION 2.05. Termination Date, Repayment of Loans..............................................................30
SECTION 2.06. Interest Rates....................................................................................30
SECTION 2.07. Fees..............................................................................................32
SECTION 2.08. Mandatory Termination of Commitments..............................................................33
SECTION 2.09. Optional and Mandatory Prepayments................................................................33
SECTION 2.10. Mandatory Prepayments.............................................................................33
SECTION 2.11. General Provisions as to Payments.................................................................33
SECTION 2.12. Computation of Interest and Fees..................................................................35
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ARTICLE III
SECURITY AND COLLATERAL FOR THE LOANS;
CONDITIONS TO BORROWINGS
SECTION 3.01. Typology of Hotels................................................................................35
SECTION 3.02. Release Provisions................................................................................37
SECTION 3.03. Allocation of Principal Payments..................................................................38
SECTION 3.04. Conditions to First Borrowing.....................................................................39
SECTION 3.05. Conditions to All Borrowings......................................................................40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Existence and Power...............................................................................41
SECTION 4.02. Corporate, Partnership and Governmental Authorization; No Contravention...........................41
SECTION 4.03. Binding Effect....................................................................................42
SECTION 4.04. Financial Information.............................................................................42
SECTION 4.05. Litigation........................................................................................42
SECTION 4.06. Compliance with ERISA.............................................................................42
SECTION 4.07. Taxes.............................................................................................43
SECTION 4.08. Subsidiaries......................................................................................43
SECTION 4.09. Not an Investment Company.........................................................................43
SECTION 4.10 Public Utility Holding Company Act................................................................43
SECTION 4.11. Ownership of Property; Liens......................................................................43
SECTION 4.12. No Default........................................................................................43
SECTION 4.13. Full Disclosure...................................................................................43
SECTION 4.14. Environmental Matters............................................................................44
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SECTION 4.15. Compliance with Laws..............................................................................44
SECTION 4.16. Capital Stock.....................................................................................44
SECTION 4.17. Margin Stock......................................................................................44
SECTION 4.18. Insolvency........................................................................................45
SECTION 4.19. Public Offering Proceeds..........................................................................45
SECTION 4.20. Americans with Disabilities Act...................................................................45
SECTION 4.21. Compliance with Certain Lease Provisions..........................................................45
ARTICLE V
COVENANTS
SECTION 5.01. Information.......................................................................................45
SECTION 5.02. Inspection of Property, Books and Records.........................................................47
SECTION 5.03. Negative Pledge as to Hotels......................................................................47
SECTION 5.04. Consolidated Debt Covenant........................................................................48
SECTION 5.05. Base Rent and Percentage Rent.....................................................................48
SECTION 5.06. Use of Proceeds from Subsequent Public Offerings..................................................48
SECTION 5.07. Room Reserves.....................................................................................48
SECTION 5.08. Total Funded Debt/Cash Available for Distribution Ratio...........................................48
SECTION 5.09. Consolidated Tangible Net Worth...................................................................48
SECTION 5.10. Contingent Liabilities............................................................................48
SECTION 5.11. Commitment Agreement Incorporated by Reference....................................................49
SECTION 5.12. Maintenance of Property...........................................................................49
SECTION 5.13. Maintenance of Existence..........................................................................49
SECTION 5.14. Dissolution.......................................................................................49
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SECTION 5.15. Consolidations, Mergers and Sales of Assets.......................................................49
SECTION 5.16. Use of Proceeds...................................................................................49
SECTION 5.17. Compliance with Laws; Payment of Taxes............................................................50
SECTION 5.18. Insurance.........................................................................................50
SECTION 5.19. Change in Fiscal Year or Fiscal Quarters..........................................................50
SECTION 5.20. Environmental Notices.............................................................................50
SECTION 5.21. Environmental Matters.............................................................................50
SECTION 5.22. Environmental Release.............................................................................51
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.................................................................................51
SECTION 6.02. Notice of Default.................................................................................53
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment, Powers and Immunities................................................................53
SECTION 7.02. Reliance by Each Agent............................................................................54
SECTION 7.03. Defaults..........................................................................................54
SECTION 7.04. Rights of Collateral Agent as a Bank; Rights of Agents to Lend ..............................55
SECTION 7.05. Indemnification...................................................................................55
SECTION 7.06. Consequential Damages.............................................................................55
SECTION 7.07. Payee of Note Treated as Owner....................................................................55
SECTION 7.08. Non-Reliance on Agents and Other Banks............................................................55
SECTION 7.09. Failure to Act....................................................................................55
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SECTION 7.10. Resignation or Removal of One or More Agents......................................................56
SECTION 7.11. Intercreditor Agreement...........................................................................57
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair..........................................57
SECTION 8.02. Illegality........................................................................................58
SECTION 8.03. Increased Cost and Reduced Return.................................................................58
SECTION 8.04. Adjusted CD Rate Loans Substituted for Affected Euro-Dollar Loans.................................59
SECTION 8.05. Compensation......................................................................................60
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices...........................................................................................61
SECTION 9.02. No Waivers........................................................................................61
SECTION 9.03. Expenses; Documentary Taxes; Indemnification......................................................61
SECTION 9.04. Setoffs; Sharing of Set-Offs......................................................................62
SECTION 9.05. Amendments and Waivers............................................................................63
SECTION 9.06. Margin Stock Collateral...........................................................................63
SECTION 9.07. Successors and Assigns............................................................................64
SECTION 9.08. Confidentiality...................................................................................65
SECTION 9.09. Representation by Banks...........................................................................65
SECTION 9.10. Obligations Several...............................................................................65
SECTION 9.11. Survival of Certain Obligations...................................................................65
SECTION 9.12. North Carolina Law................................................................................66
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SECTION 9.13. Severability......................................................................................66
SECTION 9.14. Interest..........................................................................................66
SECTION 9.15. Interpretation....................................................................................67
SECTION 9.16. Defaulting Bank...................................................................................67
SECTION 9.17. Consent to Jurisdiction...........................................................................67
SECTION 9.18. Counterparts......................................................................................67
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agents
EXHIBIT D Form of Closing Certificate
EXHIBIT E Form of Assistant Secretary's Certificate
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Assignment and Acceptance
EXHIBIT H Form of Notice of Borrowing
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J Form of Paydown Allocation
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CREDIT AGREEMENT
AGREEMENT dated as of October 29, 1996 among WINSTON HOTELS,
INC., a North Carolina corporation (the "Company"), XXXX LIMITED PARTNERSHIP, a
North Carolina limited partnership (the "Partnership"), the BANKS listed on the
signature pages hereof, WACHOVIA BANK OF NORTH CAROLINA, N.A., as Collateral
Agent, and WACHOVIA BANK OF GEORGIA, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment hereto
(except as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Acquisition" means (i) the purchase of fee simple title to
the Primary Hotels and Subsequent Hotels (specifically including the acquisition
of undeveloped land, subject to the provisions hereof) in the name of the
Borrower, subject to no ownership interests of third parties (e.g., ground
lessor interests) other than the rights of the Lessee pursuant to a Lease and
easement rights of third parties and Liens permitted hereunder or (ii) the
purchase of leasehold estates on which a Hotel is located, provided (a) the
ground lessor subordinates its fee interests to the lien of the Collateral Agent
on the Hotel, (b) the Collateral Agent receives a title policy insuring that the
fee simple interests are subordinate to the insured Deed of Trust for such Hotel
and (c) the limitations and conditions set out in Section 2.03(d) hereof are
met.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.06(c).
"Adjusted CD Rate" means a rate per annum equal to the rate as
of two Domestic Business Days prior to the first day of the Interest Period for
90-day secondary market certificates of deposit in denominations of at least
$100,000.00 (adjusted for Domestic Reserve Requirements and for Federal Deposit
Insurance Corporation insurance requirements) plus one and eighty-five/
one-hundredths percent (1.85%). As used herein, Domestic Reserve Requirements
refers to the maximum reserve requirements (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in respect of non-personal
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time deposits having a term comparable to the applicable Interest Period and in
an amount of $100,000 or more.
"Adjusted CD Rate Loan" means a Loan which bears or is to bear
interest at a rate based upon the Adjusted CD Rate.
"Administrative Agent" means Wachovia Bank of Georgia, N.A., a
national banking association organized under the laws of the United States of
America, in its capacity as administrative agent for the Banks hereunder, and
its successors and permitted assigns in such capacity.
"Administrative Agent's Letter Agreement" means that certain
letter agreement, dated as of October 29, 1996, between the Borrower, the
Administrative Agent and Collateral Agent relating to the structure of the
Loans, and certain fees from time to time payable by the Borrower to the Agents,
together with all amendments and modifications thereto.
"Affiliate" of any Person means (i) any other Person which
directly, or indirectly through one or more intermediaries, controls such
Person, (ii) any other Person which directly, or indirectly through one or more
intermediaries, is controlled by or is under common control with such Person, or
(iii) any other Person of which such Person owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agents" mean collectively the Administrative Agent and the
Collateral Agent, in their capacity as agents for the Banks hereunder, and their
successors and permitted assigns in such capacity. A reference to an "Agent"
shall be construed as a reference to either agent.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Margin" has the meaning set forth in
Section 2.06(c).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit G.
"Assignments of Rents" mean all assignments of rents, leases
and profits now or hereafter executed by the Borrower for the benefit of the
Collateral Agent, specifically including (but not limited to) those assignments
of rents given with respect to the Initial Hotels, and any and all amendments
and modifications thereof.
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"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, or (ii)
one-half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate and the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear
interest at a rate based upon the Base Rate.
"Borrower" means one or more of the Partnership and the
Company, and their successors and permitted assigns. Where this Agreement
imposes obligations upon the "Borrower," such reference shall mean that both the
Partnership and the Company shall be jointly and severally obligated for the
payment and performance of the obligations. Where any notice is required
hereunder to be given to or by the "Borrower," any notice given by the Company
(and any signature of a Company representative on behalf of the Company) shall
be deemed to have been given on the Company's own behalf and as general partner
of the Partnership, even though not specifically delineated in such notice.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower at the same time by the Banks pursuant to Article II or, in
the case of a Swing Line Borrowing, by the Swing Line Bank only. A Borrowing is
a "Base Rate Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans.
"Borrowing Base Certificate" has the meaning set forth in
Section 2.01(b)(3).
"Capital Stock" means any nonredeemable capital stock of the
Borrower or any Consolidated Subsidiary (to the extent issued to a Person other
than the Borrower), whether common or preferred.
"Cash Available for Distribution" has the meaning set forth in
Section 2.01(b)(2).
"Cash Flow Amount" has the meaning set forth in Section
2.01(b)(2).
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
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"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.04(e).
"Closing Date" means October 29, 1996.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Collateral Agent" means Wachovia Bank of North Carolina,
N.A., in its capacity as collateral agent for the Banks hereunder, and its
successors and permitted assigns in such capacity.
"Collateral Assignments of Franchise Agreements" means all
collateral assignments of franchise agreements, if any, now or hereafter
executed by the Lessee, and any and all amendments and modifications thereof.
"Collateral Assignments of Management Agreements" means all
collateral assignments of all the Lessee's rights (or any portion of such
rights) in and under any one or more Management Agreements, and any and all
amendments and modifications thereof.
"Commitment" means, with respect to each Bank, (i) the amount
set forth opposite the name of such Bank on the signature pages hereof, or (ii)
as to any Bank which enters into an Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.08 and 2.09.
"Commitment Agreement" means that certain loan commitment
dated April 24, 1996, among the Borrower and the Banks, as amended from time to
time.
"Commitment Fees" shall have the meaning set forth in Section
2.07(a).
"Commitment Fee Payment Date" means each January 10, April 10,
July 10, and October 10.
"Company" means Winston Hotels, Inc., and its successors and
permitted assigns.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Current Assets" and "Consolidated Current
Liabilities" mean, at any time, all assets or liabilities, respectively, of the
Borrower and its Consolidated Subsidiaries that, in accordance with GAAP, should
be classified as current assets or current liabilities, respectively, on a
consolidated balance sheet of the Borrower.
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"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"Consolidated Liabilities" means the sum of (i) all
liabilities that, in accordance with GAAP, should be classified as liabilities
on a consolidated balance sheet of Borrower, and (ii) to the extent not included
in clause (i) of this definition, all Redeemable Preferred Stock.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated financial statements
as of such date.
"Consolidated Tangible Net Worth" means, at any time,
Stockholders' Equity, less the sum of the value, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower, prepared in
accordance with GAAP, of
(A) Any surplus resulting from any write-up of assets
subsequent to March 31, 1996;
(B) All assets which would be treated as intangible
assets for balance sheet presentation purposes under GAAP,
including without limitation goodwill (whether representing
the excess of cost over book value of assets acquired, or
otherwise), trademarks, tradenames, copyrights, patents and
technologies, and unamortized debt discount and expense.
(C) To the extent not included in (B) of this
definition, any, amount at which shares of capital stock of
the Borrower appear as an asset on the consolidated balance
sheet of the Borrower;
(D) Loans or advances to stockholders, directors,
officers or employees; and
(E) To the extent not included in (B) of this
definition, deferred expenses.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the
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ordinary course of business, (iv) all obligations of such Person as lessee under
capital leases, (v) all obligations of such Person to reimburse any bank or
other Person in respect of amounts payable under a banker's acceptance, (vi) all
Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations (absolute or contingent) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (viii) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person, and
(ix) all Debt of others Guaranteed by such Person.
"Deductions from Income" has the meaning given in Section
2.01(b)(1).
"Deeds of Trust" means all deeds of trust, deeds to secure
debt, mortgages or similar instruments now or hereafter executed by the Borrower
to or for the benefit of the Collateral Agent, specifically including (but not
limited to) those deeds of trust, mortgages, and deeds to secure debt given with
respect to the Initial Hotels, and any and all amendments and modifications
thereof.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived in writing, become an Event of Default.
"Defaulting Bank" means, at any time, any Bank that (a) has
failed to make a Loan or failed to purchase a participation interest in a
Swing-Line Loan as so required pursuant to the terms of this Agreement, or (b)
has failed to pay to the Agents or to any other Bank an amount owed by such Bank
pursuant to the terms of this Agreement (but only for so long as such amount has
not been paid).
"Default Rate" means, with respect to any Loan, a rate per
annum equal to 150% of the Prime Rate.
"Delayed Acquisition Hotel" has the meaning given in Section
3.01(a).
"Depreciation" means for any period the sum of all
depreciation expenses of the Borrower and its Consolidated Subsidiaries for such
period, as determined in accordance with GAAP.
"Dividends" means for any period the sum of all dividends paid
or declared during such period in respect of any Capital Stock and Redeemable
Preferred Stock (other than dividends paid or payable in the form of additional
Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized or
required by law to close.
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"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged noncompliance
with or liability under any Environmental Requirement, including without
limitation any complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of any violation of
any Environmental Requirement or any investigations concerning any violation of
any Environmental Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA
or under any applicable state or local environmental law or regulation.
"Environmental Reports" means those Phase I environmental
reports which were rendered with respect to the Initial Hotels and copies of
which were delivered to the Banks in connection with the Loans and any Phase I
environmental reports hereafter delivered to the Banks with respect to
Subsequent Hotels. These reports include, but are not limited to, reports
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concerning asbestos located in and about one or more of the Properties.
"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to the Borrower,
any Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a Loan which bears or is to bear
interest at a rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Extension of Term" means any one year extension of the term
hereof from the Termination Date or any Extended Termination Date.
"Extended Termination Date" means the date on which the Banks'
Commitments terminate following one or more Extensions of Term.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to Wachovia on such day on
such transactions as determined by the Administrative Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
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"Franchisor" means any franchisor of a Hotel. The Franchisors
for the Initial Hotels are Promus Hotels, Inc., Holiday Inns Franchising, Inc.,
Marriott International, Inc., and Choice International Hotels, Inc
"Franchise Agreement" means the written agreement between the
Lessee and the Franchisor pursuant to which the Lessee is granted a franchise to
operate a Hotel, and any and all amendments and modifications thereof.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss.6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by- product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"Hotels" means the Initial Hotels and all Subsequent Hotels.
"Initial Hotels" mean those hotels (including land, building,
fixtures and all related personal property used or useful in connection with
such hotel operations) acquired or to be acquired by the Company or Partnership
(as the case may be) and more particularly described below:
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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Address City County State Rooms/Suites Franchise Owner
------- ---- ------ ----- ------------ --------- -----
1. 000 Xxxxxxxx Xxx. Xxxx Wake NC 130 Hampton Inn Company
2. 0000 Xxxxxxxxxx Xx. Xxxxxx Xxxxxx XX 136 Hampton Inn Partnership
3. 0000 XX Xxx-0 Xx. Xxxxx Xxxxx XX 126 Hampton Inn Partnership
4. 000 Xxxxxxx Xxxx. Xxxxxxxxxxxx Xxxxxx XX 120 Hampton Inn Partnership
5. Xxx. 000-000 Xxxxxxxx Xx. Xxxxx Watauga NC 95 Hampton Inn Partnership
6. 0000 XX Xxx-00 Xxxxx Xxxxxxxxx Xxxxxxxxxxx XX 125 Hampton Inn Partnership
7. 0000 Xxxxxx Xxxxxx Xxxxxxxxxx Xxx Xxxxxxx XX 118 Hampton Inn Partnership
8. 000 Xxxxx Xxxxxxx Xx. Xxxxxxxxxx Xxx Xxxxxxx XX 146 Comfort Inn Partnership
9. 0000 Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx XX 124 Hampton Inn Partnership
10. 000 Xxxxxxx Xxxxx Xxxxxxxxx Xxxxx GA 127 Hampton Inn Partnership
11. Xxx Xxxxxxx Xxxx Xxxxxx Xxxx Xxxxxxxx XX 125 Hampton Inn Partnership
12. 00000 Xxxxxxxx Xxxx Xx Xxxxxxx Xxxxxxxxxxxx XX 66 Hampton Inn Partnership
13. 0000 Xxxx Xxxxxxx Xx Xxxxxxx Xxxxxxxxxxxx XX 123 Comfort Inn Partnership
14. 0000 Xxxxx Xxxx Xxxxxxxxxxxx Xxxxxxxxxx XX 176 Comfort Inn Partnership
15. 0000 Xxxxx Xxxxxx Xx Xxxxxx/Xxxxxx Xxxx Xxxxxx XX 138 Comfort Inn Partnership
16. US Hwy. 1 North Raleigh Wake NC 149 Comfort Inn Partnership
17. 0000 Xxxxxxxx Xxxxxx Xxxxxxx Xxxx XX 141 Hampton Inn Partnership
18. 000 Xxx Xxxxxx Xxxxxxxxxx Xxxxxxxxxx XX 128 Comfort Inn Partnership
19. 0000 Xxxxx Xxxx Xxxx Xxxxxxxxxx Xxxxxxxxxx XX 168 Quality Suites Partnership
20. 000 Xxxxxxxx Xx Xxxxxxx Xxxxxxxx XX 123 Comfort Inn Partnership
21. 00000 XXX Xxxxxxx Xxxxxxx Xxxxxx XX 244 Holiday Inn Select Partnership
22. 000 Xxxx Xxxx Xxxxxx Xxxxxxxx Xxxxxxxxxx XX 80 Holiday Inn Express Partnership
23. 0000 Xxxxxxxxx Xxxxx Xxxxxxxxxxxx Xxxxxx XX 119 Hampton Inn Partnership
24. 000 Xxxxxxx Xxxxx Xxxxxxx Xxxxxx XX 133 Hampton Inn Partnership
25. NE Corner of Pineland Drive Duluth Gwinnett GA 134 Hampton Inn & Suites Partnership
and Crestwood Parkway
26. 000 Xxx Xxxxxx Xxxxx Xxxxxxxxxx Xxx Xxxxxxx XX 000 Xxxxxxxx Xxxxxxxxx Partnership
27. 000 XxxXxxxxx Xxxxx Xxxx Xxxx XX 140 Homewood Suites Partnership
28. 000 Xxx Xxxx Xxxxxxxxx Xxxxx Xxxx Xxxxxx XX 92 Homewood Suites Partnership
----
3554
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing other than a Swing Line Borrowing or a Working Capital Sub-Line
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first or third month thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall, subject to clause (c) below, end on the last Euro-Dollar
Business Day of the appropriate subsequent calendar month; and
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(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending one day thereafter; provided that any Interest
Period which would otherwise end on a day which is not a Domestic Business Day
shall be extended to the next succeeding Domestic Business Day.
(3) with respect to each Swing Line Borrowing and each Working Capital Sub-Line
Borrowing, the period commencing on the date of such Borrowing and (i), in the
case of a Swing Line Borrowing or a Working Capital Sub-Line Borrowing that is a
Euro-Dollar Borrowing, ending 7 days thereafter or ending on the numerically
corresponding day in the first or third month thereafter (such 7 day, 1 month or
3 month period being determined as the Borrower may elect in the applicable
Notice of Borrowing), or (ii) in the case of a Base Rate Borrowing, ending one
day thereafter, provided that:
(a) in the case of a Swing Line Borrowing or Working Capital
Sub-Line Borrowing that is a Base Rate Borrowing, any Interest Period
(subject to clause (c) below) which would otherwise end on a day which
is not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day;
(b) in the case of a Swing Line Borrowing or Working Capital
Sub-Line Borrowing that is a Euro-Dollar Loan, any Interest Period
(subject to clause (c) below) which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
"Interim Borrowing Base Credit Period" shall have the meaning
given in Section 2.01(b).
"Investment" means any investment in any Person, whether by
means of purchase or acquisition of obligations or securities of such Person,
capital contribution to such Person, loan or advance to such Person, making of a
time deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise (in either case, whether direct or indirect).
"Leases" means any and all lease agreements now or hereafter
executed between the Borrower and any lessee (including the Lessee) and any and
all amendments and modifications thereof, pursuant to which the Lessee operates
the Hotels.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the
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Borrower and the Administrative Agent.
"Lessee" means Winston Hospitality, Inc., its successors and
assigns, or any other party operating a Hotel pursuant to a Lease.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, servitude or encumbrance of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means any loan made by any Bank to the Borrower
pursuant to the provisions hereof, and "Loans" means any of all such loans, as
the context shall require.
"Loan Documents" means this Agreement, the Notes, all Deeds of
Trust, all Assignments of Rents, all Security Agreements, all Collateral
Assignments of Franchise Agreements, all Collateral Assignments of Management
Agreements, any other document evidencing, relating to or securing the Loans,
and any other document or instrument delivered from time to time in connection
with this Agreement, the Notes or the Loans, as such documents and instruments
may be amended or supplemented from time to time.
"Loan to Value Amount" has the meaning set forth in Section
2.01(b)(1).
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"Manager" means any manager of a Hotel.
"Management Agreement" means the written agreement between the
Lessee and the Manager pursuant to which the Manager undertakes the management
of a Hotel, and any and all amendments and modifications thereof.
"Margin Stock" means "margin stock" as defined in Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System, as in
effect from time to time, together with all official rulings and interpretations
issued thereunder.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations, business or properties of the Borrower
and its Consolidated Subsidiaries
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taken as a whole, (b) the rights and remedies of the Administrative Agent, the
Collateral Agent, or the Banks under the Loan Documents, or the ability of the
Borrower to perform its obligations under the Loan Documents to which it is a
party, as applicable, or (c) the legality, validity or enforceability of any
Loan Document.
"Maximum Line Amount" shall mean $125,000,000 or such lesser
sum as shall be available upon reduction in the Maximum Line Amount if less than
all of the Banks have consented to an Extension of Term and such nonconsenting
Banks have not assigned their interests to another Bank or another financial
institution.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Net Operating Income" has the meaning set forth in Section
2.01(b)(1).
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, together with all amendments, consolidations, modifications,
renewals and supplements thereto, and "Note" means any one of such Notes.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Officer's Certificate" has the meaning set forth in Section
3.04(f).
"Participant" has the meaning set forth in Section 9.07(b).
"Partnership" means XXXX Limited Partnership, a North Carolina
limited partnership, its successors and permitted assigns.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership
(including without limitation, a joint venture), an unincorporated association,
a trust or any other entity or organization, including, but not limited to, a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of any member of
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21
the Controlled Group or (ii) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding 5 plan
years made contributions.
"Primary Hotel" has the meaning set forth in Section 3.01(c)
hereof.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever located.
"Public Offering" has the meaning set forth in Section 3.04
hereof.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"Renovations" means restoration, renovation, refurbishment and
equipping which the Borrower may incur in bringing a Subsequent Hotel or a
Primary Hotel up to the quality, standard and condition the Borrower deems
appropriate, provided such costs are typically capitalized on the Borrower's
balance sheet. The cost of ongoing renovations typically required in the
year-to-year operation of a hotel (such as the replacement and repair of
furniture, fixtures and equipment, the replacement of carpeting, etc.) do not
constitute "Renovations" for purposes of this Agreement.
"Rents" means the rents in fact received pursuant to the
"annual base rent" and the "annual percentage rent formula" schedule for Primary
Hotels and Subsequent Hotels. Attached to the Commitment Agreement are the
"annual base rent" and "annual percentage rent formula" schedule for the Initial
Hotels.
"Required Banks" means at any time Banks (exclusive of
Defaulting Banks) having at least 66 2/3% of the aggregate amount of the
Commitments (exclusive of Commitments of Defaulting Banks) or, if the
Commitments are no longer in effect, Banks (exclusive of Defaulting Banks)
holding at least 66 2/3% of the aggregate outstanding principal amount of the
Notes (exclusive of Notes payable to Defaulting Banks).
"Room Reserves" means five percent (5%) of gross room revenues
(excluding other revenues) in the case of each Hotel, except for "full service
hotels," in which case the Room Reserves shall be seven percent (7%) of such
gross room revenues.
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22
"Security Agreements" mean all security agreements now or
hereafter executed by the Borrower and the Collateral Agent, specifically
including (but not limited to) those security agreements given with respect to
the Initial Hotels, and any and all amendments and modifications thereof.
"Standard Lease Form" means (i) the form of the Lease to be
used by the Borrower and the Lessee on all Hotels and previously approved by the
Banks and (ii) any other form of Lease proposed by the Borrower and approved by
the Banks for use with respect to all or any Hotels.
"Stockholders' Equity" means, at any time, the shareholders'
equity of the Borrower and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower prepared
in accordance with GAAP, but excluding any Redeemable Preferred Stock of the
Borrower or any of its Consolidated Subsidiaries. Shareholders' equity generally
would include, but not be limited to (i) the par or stated value of all
outstanding Capital Stock, (ii) capital surplus, (iii) retained earnings, and
(iv) various deductions such as (A) purchases of treasury stock, (B) valuation
allowances, (C) receivables due from an employee stock ownership plan, (D)
employee stock ownership plan debt guarantees, and (E) translation adjustments
for foreign currency transactions.
"Subordination Agreements" mean collectively those agreements
pursuant to which a Lease is subordinated to the lien of a Deed of Trust given
with respect to such Hotel.
"Subsequent Hotels" means all hotels (with the exclusion of
Initial Hotels) that have become Primary Hotels, all hotels now or hereafter
acquired with equity proceeds or cash flow of the Borrower, all existing hotels
that are not Primary Hotels and any other hotel now or hereafter acquired by the
Borrower in its own name (specifically excluding any hotel acquired by a
partnership or joint venture in which the Borrower or any subsidiary is a
partner or joint venturer).
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Substitute Hotels" has the meaning given such term in Section
3.02(i).
"Supermajority of Banks" means at any time Banks (exclusive of
Defaulting Banks) having at least 85% of the aggregate amount of the Commitments
(exclusive of the Commitments of Defaulting Banks) or, if the Commitments are no
longer in effect, Banks (exclusive of Defaulting Banks) holding at least 85% of
the aggregate outstanding principal amount of the Notes (exclusive of Notes
payable to Defaulting Banks).
"Swing Line Bank" shall mean Wachovia (N.C.), in its capacity
as one of the Banks providing a Commitment hereunder.
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23
"Swing Line Borrowing" is a borrowing pursuant to the Swing
Line established under Section 2.03(c).
"Swing Line Loan" means a loan constituting a borrowing under
the Swing Line established under Section 2.03(c).
"Taxes" has the meaning set forth in Section 2.12(c).
"Termination Date" means the later of November 1, 1998, or any
Extended Termination Date if any Extension of Term is granted pursuant to
Section 2.01(c).
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
"Total Funded Debt" has the meaning given to such term under
Section 5.08.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unused Commitment" means at any date, with respect to any
Bank, an amount equal to its Commitment less the aggregate outstanding principal
amount of its Loans.
"Wachovia" means Wachovia Bank of Georgia, N.A., a national
banking association, and its successors.
"Wachovia (N.C.)" means Wachovia Bank of North Carolina, N.A.,
a national banking association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
"Working Capital Line Amount" has the meaning given in Section
2.03(a).
"Working Capital Sub-Line" has the meaning set forth in
Section 2.03(a).
A "Working Capital Sub-Line Borrowing" is a Borrowing under
the Working Capital Sub-Line.
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24
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower delivered to the Banks, unless with respect
to any such change concurred in by the Borrower's independent public accountants
or required by GAAP, in determining compliance with any of the provisions of
this Agreement or any of the other Loan Documents: (i) the Borrower shall have
objected to determining such compliance on such basis at the time of delivery of
such financial statements, or (ii) the Required Banks shall so object in writing
within 30 days after the delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first financial statements delivered under Section 5.01 hereof, shall mean
the financial statements referred to in Section 4.04).
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 1.05. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", and
"Sections" are references to articles, exhibits, schedules and sections hereof.
ARTICLE II
THE CREDITS; LIMITATIONS ON THE USE OF LOAN PROCEEDS
SECTION 2.01. Commitments to Make Loans; Line Availability
Amount.
(a) Generally. Each Bank severally agrees, on the terms and conditions
set forth herein, to make Loans to the Borrower from time to time before the
Termination Date; provided that,
(i) immediately after each such Loan is made, the aggregate
outstanding principal amount of Loans by such Bank shall not exceed the
amount of its Commitment;
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25
(ii) the aggregate principal amount of all Loans, at any one
time outstanding, shall not exceed the aggregate amount of the
Commitments of all of the Banks at such time; and
(iii) the aggregate principal amount of all the Loans, at any
one time outstanding, shall not exceed the Line Availability Amount at
such time.
Each Borrowing under this Section shall be in an aggregate principal
amount of $1,000,000 or any larger multiple of $100,000 (except that any such
Borrowing may be in the aggregate amount of the Unused Commitments) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Each Swing Line Borrowing, however, shall be in an aggregate
principal amount of $100,000 or any larger multiple of $50,000, except that any
such Swing Line Borrowing may be in the aggregate amount of the unused portion
of the Swing Line. Within the foregoing limits, the Borrower may borrow under
this Section, repay or, to the extent permitted by Section 2.10, prepay Loans
and reborrow under this Section at any time before the Termination Date.
(b) Line Availability Amount. The amount of credit available to be
drawn upon from time to time under this Agreement shall at no time, however,
exceed that amount which is the lesser of the "Loan to Value Amount" [as
hereinafter defined in Subsection 2.01(b)(1) below] and the "Cash Flow Amount"
[as hereinafter defined in Subsection 2.01(b)(2) below]. During the one-year
period following the Closing Date and any remaining period of the Fiscal Quarter
in which such one-year anniversary occurs (the "Interim Borrowing Base Credit
Period"), such amount shall be increased by adding the Interim Borrowing Base
Credit (as hereinafter defined) to such lesser amount.
(1) Loan to Value Amount. The "Loan to Value Amount" shall be
determined as follows:
a. Net Operating Income (as hereinafter defined) of all
the Primary Hotels [as defined in Section 3.01(c)]
shall be divided by the capitalization rate of 13%.
b. The resulting number from a. above shall be
multiplied by 45%.
c. The resulting number from b. above is the "Loan to
Value Amount."
NOI / .13 = Value x .45 = Loan to Value Amount
"Net Operating Income" shall mean (i) all income derived by
the Lessee from the operation of all the applicable hotels
(specifically including all room, food, beverage and other
revenues but specifically excluding all sums collected on
behalf of taxing authorities and required to be forwarded to
such taxing authorities) less (ii) "Deductions from Income"
for such hotels.
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26
"Deductions from Income" for the applicable hotels shall be
limited to the following: (i) all operating expenses in fact
incurred in the operation of such hotels, specifically
including franchise fees, insurance premiums, real estate
taxes and personal property taxes but specifically excluding
lease payments paid pursuant to the Lease for such hotel; (ii)
management fees in an amount equal to 4% of gross room
revenues for each such hotel, even though management fees may
not be in fact paid or payable and even though management fees
may be greater or less than that in fact incurred for such
hotel; (iii) capital expenditures incurred in connection with
each such hotel (which, for purposes of such calculation shall
be an amount equal to 4% of gross room revenues, even though
such amount of capital expenditures may be greater or less
than that in fact incurred for such hotel).
(2) Cash Flow Amount. The "Cash Flow Amount" shall be determined
by multiplying the "Cash Available for Distribution" for the
Primary Hotels by 4.0. Cash Available for Distribution with
respect to any hotel or group of hotels shall be determined as
follows:
From Total Lease Revenues (Base Rent plus Percentage
Rent) derived by the Borrower from the Lessee with
respect to such hotel or hotels, subtract the
required Room Reserves for such hotel or hotels,
property taxes and casualty insurance premiums for
such hotel or hotels and actual "general and
administrative" expenses for the Borrower (prorated
among all the hotels owned by the Borrower in a
manner satisfactory to the Administrative Agent),
defined in accordance with GAAP.
(3) Calculation of Loan to Value Amount and Cash Flow Amount. Both
the Loan to Value Amount and the Cash Flow Amount shall be
calculated from time to time in accordance with the following
procedure:
a. The Borrower shall provide to the Administrative
Agent, together with the quarterly financial
statements required by Section 5.01 of this
Agreement, a financial statement with respect to the
operations of the Primary Hotels during the preceding
twelve calendar months ending as of the last day of
such preceding Fiscal Quarter. If a Primary Hotel has
not been operated as a hotel for twelve calendar
months, such lesser period during which the Borrower
or such other operator has operated the Primary Hotel
shall be included in the calculation of the Loan to
Value Amount and the Cash Flow Amount. Such
calculations shall be made on a pro forma basis for
operations by a prior owner as if such operations
were subject to a lease having terms and conditions
as those set out in the Lease in fact entered into by
the Borrower and approved by the Banks for such
Primary Hotel. During the Interim Borrowing Base
Credit Period, the Recent Acquisition
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27
Hotels identified in Section 2.01(b)(5) below shall
be excluded from the Primary Hotels for purposes of
calculating the Loan to Value Amount and the Cash
Flow Amount. The Delayed Acquisition Hotel shall be
excluded from such calculations until all conditions
for inclusion of such hotel as a Primary Hotel (such
as, but not limited to, the recordation of a Deed of
Trust, the issuance of a title policy, the
satisfaction of all documentation matters required to
be satisfied for Initial Hotels) have been satisfied.
Such financial statements shall be delivered no later
than 55 days after the end of the preceding Fiscal
Quarter. Such financial statements shall be in form
and detail satisfactory to the Banks with respect to
each Primary Hotel individually and with respect to
all Primary Hotels in the aggregate.
b. Simultaneously with the submission of the financial
statements required in a., the Borrower shall provide
to the Administrative Agent a certification, signed
by the chief financial officer of the Borrower,
providing its calculation of the Loan to Value Amount
and the Cash Flow Amount, such certification to be in
a form set out in Exhibit I and otherwise in form
satisfactory to the Banks (the "Borrowing Base
Certificate"). The Administrative Agent shall
promptly forward such Borrowing Base Certificate to
each of the Banks and to the Collateral Agent.
c. The Administrative Agent shall be entitled to review
such information and to request such additional
information as it or any of the Banks deems necessary
to verify and assess such calculations. The
Administrative Agent may receive and shall take into
consideration any information or comments made by the
Banks as to such calculations. Within twenty-five
(25) days of receipt of the certified Borrowing Base
Certificate, the Administrative Agent shall notify
the Borrower (i) whether it has accepted the
Borrower's Borrowing Base Certificate determinations,
and (ii) if not, the Administrative Agent's
computation of the Loan to Value Amount and the Cash
Flow Amount. The Administrative Agent's determination
of the Loan to Value Amount and the Cash Flow Amount
(so long as the Collateral Agent concurs with such
determination) shall be conclusive, absent manifest
error.
d. Such Loan to Value Amount and Cash Flow Amount shall
be effective as of the first day of the next Fiscal
Quarter commencing after such determination. [For
example, for the Fiscal Quarter ending March 31, the
Borrower would supply financial statements and the
Borrowing Base Certificate on or before May 25; the
Administrative Agent would review and respond to the
Borrowing Base Certificate (and establish the Loan to
Value Amount and Cash Flow Amount) on or before June
20, with such computations to be effective on July 1,
the first day of the next Fiscal Quarter.]
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28
e. Prior to the time that a Primary Hotel is released or
added, the Borrower shall supply to the
Administrative Agent a new Borrowing Base
Certificate. In the case of a reduction in the Line
Availability Amount, such reduction shall be
effective immediately subject to review and
adjustment by the Administrative Agent as described
in c. above. In the case of an increase in the Line
Availability Amount, such an increase shall be
effective only following review and approval of the
Borrowing Base Certificate by the Administrative
Agent as set out above.
(4) Required Paydown Due to a Reduction in the Line Availability
Amount. If, upon a reduction in the Line Availability Amount
as a result of a reduction in the Loan to Value Amount or the
Cash Flow Amount, the outstanding principal balance of the
Loans exceeds the permitted Line Availability Amount available
as of the first day of the next Fiscal Quarter, then on or
before such date the Borrower shall pay down the principal
balance to that amount available under the new Line
Availability Amount. No prepayment premium shall be due and
payable in connection with such paydown, regardless of which
interest rate option or options have been selected by the
Borrower. In addition, the Borrower at any time (but subject
to the limitations for approval set out in Section 3.01(c)
entitled Primary Hotels) may request the Banks to approve one
or more additional hotels as Primary Hotels. If, after
reviewing the information to which they are entitled to review
in connection with their determination of Primary Hotels, the
Banks consent to such addition or additions, the Borrower
shall provide a replacement Borrowing Base Certificate that
includes such additional Primary Hotels. The recomputed Line
Availability Amount shall be effective as of the date on which
the Administrative Agent establishes the recomputed Line
Availability Amount.
(5) Interim Inclusion of Credit for Four Hotels. During the
Interim Borrowing Base Credit Period, the Borrower shall be
entitled to receive the following credit (the "Interim
Borrowing Base Credit") to the Line Availability Amount for
the following four hotels (which are collectively referred to
as the "Recent Acquisition Hotels"):
Hotel Hotel No. Credit
----- --------- ------
a. Marriott Courtyard - Wilmington, NC 26 $2,550,000.00
x. Xxxxxxx Xxx xxx Xxxxxx - Xxxxxx, XX 25 $2,822,000.00
x. Xxxxxxx Inn - Atlanta, GA 24 $2,788,000.00
d. Homewood Suites - Clear Lake, TX 28 $2,351,000.00
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Such Interim Borrowing Base Credit shall be effective
throughout the Interim Borrowing Base Credit Period, subject
to the following limitations and conditions. If one or more of
such hotels have not yet been acquired (i.e., the Delayed
Acquisition Hotel) or are no longer subject to a Deed of Trust
securing the Loans (i.e., as a result of a release), no credit
shall be given for such hotel. During the Interim Borrowing
Base Credit Period, these hotels shall be excluded from the
calculations of the Loan to Value Amount and the Cash Flow
Amount. During the Interim Borrowing Base Credit Period,
however, the amount of Interim Borrowing Base Credit for each
of these hotels shall be added to the Line Availability
Amount, provided such hotel continues to serve as a Primary
Hotel. Following the Interim Borrowing Base Credit Period, the
Interim Borrowing Base Credit shall no longer be applicable,
and these hotels shall be included in the calculations of the
Loan to Value Amount and the Cash Flow Amount. The Interim
Borrowing Base Credit Period expires approximately one year
from the Closing Date, even though the Delayed Acquisition
Hotels have not been owned by the Borrower for a full year. If
the Interim Borrowing Base Credit Period would otherwise
expire during a Fiscal Quarter, the Interim Borrowing Base
Credit Period shall nevertheless be extended automatically to
the end of such Fiscal Quarter.
Notwithstanding the foregoing, a Recent Acquisition Hotel
shall be included in the calculations of the overall Loan to
Value Amount and the overall Cash Flow Amount in the
determination of the Line Availability Amount (and the
Borrower shall not receive the Interim Borrowing Base Credit
for such hotel) when the lesser of the Cash Flow Amount or the
Loan to Value Amount for such hotel exceeds the Interim
Borrowing Base Credit for such hotel. Once a Recent
Acquisition Hotel has met such criteria, it shall thereafter
no longer be eligible for Interim Borrowing Base Credit, but
shall thereafter be included in the calculations of the
overall Loan to Value Amount and the overall Cash Flow Amount.
(6) Title Insurance Amounts Subject to Increases Upon Increases in
Line Availability Amount. At Closing, the Borrower has
obtained title insurance policies aggregating $90,000,000. If
at any time the Line Availability Amount equals or exceeds
$85,000,000, the Borrower shall obtain additional title
coverage such that, at all times, the amount of title coverage
(i) shall be at least equal to the Line Availability Amount
and (ii), if requested by the Banks, shall be at least $5
million greater than the Line Availability Amount (the "Title
Coverage Spread"). Amounts of title insurance coverage
provided for Subsequent Hotels that become Primary Hotels
shall be included for purposes of determining whether this
requirement has been satisfied. The Banks may require a
greater Title Coverage Spread if a "Tie In Endorsement" cannot
be issued in any jurisdiction other than Texas.
(c) Extension of Term. The Borrower may request one-year annual
Extensions of the Term no sooner than 90 days and no later than 30 days prior to
November 1, 1997, or the
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Termination Date. The Banks may, in their sole discretion and without any
obligation, determine whether to grant such an extension and shall be entitled
to receive whatever information the Banks deem necessary for the consideration
of such request. The fact that the Borrower may request one year annual
extensions of the Term as described herein is not an option of the Borrower to
renew or extend the Term, but merely evidences the fact that the Borrower may
request an Extension of the Term, and none of the Banks is under any obligation
to grant such a request. Any such decision to extend the Termination Date for
all of the Commitments shall require unanimous approval by the Banks, but any
Bank may elect to extend the Termination Date of its own Commitment without an
Extension of the Term by one or more other Banks. A Bank which has not elected
to grant such an extension (a "Non-Extending Bank") shall offer to assign, at
par, its Note and its interests hereunder to those remaining Banks which have
elected to grant such extensions. No Bank, however, shall be obligated to
purchase all or any portion of the interests of a Non-Extending Bank. If the
Banks electing to extend the Term do not purchase the Note of any Non-Extending
Bank, the interests of a Non-Extending Bank may be assigned by such
Non-Extending Bank to a bank or other financial institution pursuant to the
assignment provisions of Section 9.07(c) of this Agreement. If one or more of
the Banks do not grant such an extension and the interests of such Non-Extending
Banks are not assigned to other Banks or to banks or other financial
institutions as described herein, (i) the Maximum Line Amount shall be
automatically reduced on the date such Banks' Commitments expire by the amount
of such Banks' Commitments and (ii) the extension shall be applicable only with
respect to those Banks which have elected to grant such an extension. In
particular (without limiting the foregoing), any extension is subject to the
Banks' prior review and written approval of the Borrower's financial condition.
In order for the Banks to complete their financial review and as a condition for
any Extension of Term, Borrower must have delivered to the Banks the financial
information required in Section 5.01 to be supplied on a quarterly and/or annual
basis.
SECTION 2.02. Method of Borrowing.
(a) The Administrative Agent, upon receipt of a request of the
Borrower, shall promptly notify the Borrower of the interest rates then
applicable for any interest rate option identified by the Borrower prior to the
Borrower's submission of a Notice of Borrowing. The Administrative Agent shall
use good faith efforts to provide the Borrower with notice of the maturity of
each Borrowing (other than a Base Rate Borrowing) within five business days of
the maturity of such Borrowing. The Administrative Agent, however, shall not be
liable to the Borrower for any failure to provide such a notice, and the
Administrative Agent's failure to provide such a notice shall not affect or
mitigate against the Borrower's obligation to repay Loans as such loans mature
(including the resetting of interest rates through rollover borrowings described
in Section 2.02(e) hereof).
The Borrower shall give the Administrative Agent notice in the
form attached hereto as Exhibit H (a "Notice of Borrowing") prior to 11:00 A.M.
(Atlanta, Georgia time) at least 2 Domestic Business Days before each Base Rate
Borrowing, and at least 2 Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
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(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans, or Euro-Dollar Loans, and whether any portion of such
Loans comprising such Borrowing are to be Swing Line Loans,
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period, and
(v) such other information as is required to be provided in
the Notice of Borrowing.
(b) Upon receipt of a Notice of Borrowing other than for a Swing
Line Borrowing, the Administrative Agent shall promptly notify each Bank of the
contents thereof [such notice to be given in any event by 11:00 A.M. (Atlanta,
Georgia, time) one Business Day before a Borrowing] and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the date
of each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in Atlanta, Georgia, to the Administrative Agent at
its address referred to in or specified pursuant to Section 9.01. Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make the funds
that the Administrative Agent has so received from the Banks available to the
Borrower (1) by initiating on the Federal wire transfer system on the date of
such Borrowing a transfer of such funds as specified in the applicable Notice of
Borrowing; or (2) by crediting the Borrower's account that the Borrower hereby
agrees that it will maintain with Wachovia (N.C.) on the date of such Borrowing,
with a transfer of such funds as specified in the applicable Notice of
Borrowing; provided, however, in no event shall the Administrative Agent have
any obligation to make funds available to the Borrower (i) by wire transfer on
such date except to the extent that the Administrative Agent has in fact
received funds from the Banks on or prior to 11:00 A.M. (Atlanta, Georgia, time)
on the date of such Borrowing, or (ii) by crediting the Borrower's account
maintained with Wachovia (N.C.) on such date except to the extent that the
Administrative Agent has in fact received funds from the Banks on or prior to
2:30 P.M. (Atlanta Georgia time) on the date of such Borrowing. Each Bank agrees
that the Borrower shall not be liable for interest for funds disbursed hereunder
until such funds have been made available to Borrower through one of the methods
described above. The Administrative Agent shall promptly notify the Borrower
that a Bank has not made
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funds available (or intends not to make funds available) upon the earlier to
occur of the following: (i) the Administrative Agent's receipt of notice from a
Bank that it will not make a Loan in connection with a Borrowing or (ii) a
Bank's failure to deliver funds to the Administrative Agent as of the time by
which such funds are required to be delivered to the Administrative Agent by
this Agreement. The foregoing limitation on the obligations of the
Administrative Agent where a Bank has not made funds available shall not affect
the obligation of such Bank to make Loans as so required pursuant to the terms
of this Agreement.
(d) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived in writing.
(e) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, such Loans shall be made as Base Rate Loans.
If the Borrower is otherwise entitled under this Agreement to
repay any Loans maturing at the end of an Interest Period applicable thereto
with the proceeds of a new Borrowing, and the Borrower does not repay such Loans
using its own moneys and fails to give a Notice of Borrowing in connection with
such new Borrowing, a new Borrowing shall be deemed to be made on the date such
Loans mature in an amount equal to the principal amount of the Loans so
maturing, and the Loans comprising such Borrowing shall be Base Rate Loans.
(f) Notwithstanding anything to the contrary contained herein, (i)
there shall not be more than eight different Euro-Dollar Borrowings (each
request for a Borrowing being treated as a single Borrowing, even though more
than one Bank may provide funds for such Borrowing) outstanding at the same time
and (ii) the proceeds of any Base Rate Borrowing shall be applied first to repay
the unpaid principal amount of all Base Rate Loans (if any) outstanding
immediately before such Base Rate Borrowing.
SECTION 2.03. Sub-Line Restrictions; Line Use Restrictions
Generally.
(a) Working Capital Sub-Line. The Commitments include a sub-line (the
"Working Capital Sub-Line") amount of up to seventeen percent (17%) of the Line
Availability Amount, as such Line Availability Amount is determined from time to
time (the "Working Capital Line Amount"), the proceeds of which may be utilized
for the four uses set out below. The Borrower may utilize funds otherwise
available in the Working Capital Sub-Line for any other use permitted under
Section 2.03(d) if such funds are not being utilized for such four purposes, but
such borrowings shall not be deemed to be drawings under the Working Capital
Sub-Line.
(1) Working Capital: The Working Capital Sub-Line may be used
to fund those costs and expenses associated with the
normal day-to-day operations of the Borrower's business
of owning multiple hotel properties located in multiple
states.
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(2) Dividends: The Borrower intends to make dividend
payments on a quarterly basis. The Borrower may draw
under the Working Capital Sub-Line to make its
dividend payments.
(3) Capital Expenditures: The Borrower may utilize the
Working Capital Sub- Line to pay for "Capital
Expenditures," as that term is defined in accordance
with GAAP, subject to the limitations herein set out.
As used herein, Capital Expenditures shall not
include "Renovations" and also shall not include
capital expenditures incurred in the construction and
development of new hotels.
(4) Swing Line Payout or Paydown. The Borrower may
utilize the Working Capital Sub-Line to pay off or
pay down the Swing Line.
At any one time, no more than the Working Capital Line Amount may be outstanding
under the Working Capital Sub-Line for cumulative payments associated with the
four uses identified above. DURING EACH TWELVE (12)-MONTH PERIOD, THE WORKING
CAPITAL SUB-LINE MUST BE FULLY PAID OUT TO A ZERO BALANCE FOR 30 CONSECUTIVE
CALENDAR DAYS UTILIZING THE BORROWER'S INTERNALLY GENERATED CASH FLOW OR
PROCEEDS FROM EQUITY OFFERINGS (THE "REQUIRED CLEAN-UP"). The first twelve-month
period shall commence on the first day funds are originally drawn under the
Working Capital Sub-Line. Each subsequent twelve-month period shall commence on
the first day funds are readvanced under the Working Capital Sub-Line following
the Required Clean-Up. The Borrower's failure to comply with the Required
Clean-Up shall constitute an event of default hereunder.
(b) Development/Construction Sub-Line. The Commitments also include a
development/construction sub-line (the "Development Sub-Line") amount of up to
fifty percent (50%) of the Line Availability Amount, as such Line Availability
Amount shall be determined from time to time, the proceeds of which may be
utilized for the following two uses. The Borrower may utilize funds otherwise
available in the Development Sub-Line for any other use permitted under Section
2.03(d) if such funds are not being utilized for such two purposes, but such
borrowings shall not be deemed to be drawings under the Development Sub-Line.
1. Acquisition of real estate and construction costs
incurred by the Borrower in constructing any hotel (a
"Construction Hotel").
2. Acquisition of any land and improvements constructed
by a third party and not operated as a hotel for a
continuous 12 month period prior to such acquisition
by the Borrower (a "Development Hotel").
A hotel may be a Primary Hotel (if accepted as a Primary Hotel
by a Supermajority of Banks) even though it is still considered a
Development Hotel or a Construction Hotel.
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For each draw made under the Development Sub-Line, the
Borrower shall identify the amount associated with each of the two
allowable categories and shall identify the name and address of the
hotel for such drawing is being made.
If such drawing is made for the acquisition of undeveloped
real estate for anticipated construction of a hotel in the future, then
in addition, the Borrower shall specify the amount of such draw
utilized for such purpose. The Borrower shall not be entitled to have
more than $5,000,000 outstanding at any one time for such purpose where
"Hotel Development" is not in process on such site within eighteen
months following the acquisition by the Borrower of such site. "Hotel
Development" means active, continuous and diligent undertaking of the
construction of a hotel on such site. Any amount allocated towards such
calculation of the maximum limitation hereof shall be deducted
therefrom once and so long as the Borrower actively undertakes Hotel
Development for such site.
Amounts borrowed for expenditures relating to a Construction
Hotel or a Development Hotel shall continue to be allocated under the
Development Sub-Line until all amounts for such hotel have been
deducted from the Development Sub-Line as set out below. The
computation of the amount to be deducted from the Development Sub-Line
for a hotel for which the Development Sub-Line is still being allocated
shall be calculated as follows: During any period that Loan proceeds
remain allocated for a Construction Hotel or a Development Hotel, the
Borrower shall supply the Administrative Agent with a
"Development/Construction Sub-Line Sheet" at the same time the
Borrowing Base Certificate is provided. Such Development/Construction
Sub-Line Sheet shall provide information concerning the Net Operating
Income [as defined in Section 2.01(b)(1)] derived during the preceding
Fiscal Quarter from each Construction Hotel and Development Hotel on a
hotel-by-hotel basis. Such Net Operating Income for each of such hotels
shall be divided by the capitalization rate of 13%, rounded to the
nearest one thousand dollar. For each such hotel, the resulting amount
(but never a negative number) shall be deducted from the Development
Sub-Line allocated to such hotel as of the beginning of the next Fiscal
Quarter and shall again be available for draws under the Development
Sub-Line, subject to the requirements of this Agreement generally and
such Development Sub-Line in particular.
(c) Swing Line. The Commitment of Wachovia (N.C.), as a Bank, includes
a Swing Line available to the Borrower. Swing Line Loans may be used for any of
the purposes for which the Working Capital Sub-Line may be utilized. Borrowings
under the Swing Line may be pursuant to Option C (Base Rate Option), Option A
(One-Month LIBOR Option), Option B (Three-Month LIBOR Option), or Option D
(7-Day LIBOR Option) described in Section 2.06.
(i) The Borrower may prior to the Termination Date, as see forth
in this subsection, request the Swing Line Bank to make, and the
Swing Line Bank prior to the Termination Date will make, Swing Line
Loans to the Borrower, in an aggregate principal amount at any one time
outstanding not exceeding $6,000,000, provided that:
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(y) the aggregate principal amount of all Loans
(including Swing Line Loans) at any one time outstanding shall
not exceed the lesser of (i) the aggregate amount of the
Commitments of all of the Banks at such time; or (ii) the Line
Availability Amount; and
(z) the aggregate principal amount of all Swing Line
Loans, together with all other outstanding Loans made by the
Swing Line Bank, at any one time outstanding shall not exceed
the Commitment of the Swing Line Bank.
(ii) When the Borrower wishes to request a Swing Line Loan,
it shall give the Administrative Agent notice of such a borrowing (a
"Swing Line Loan Request") on the Notice of Borrowing hereunder
described, so as to be received no later than 11:00 A.M. (Atlanta,
Georgia time) on or before the date of the Swing Line Borrowing
proposed therein (or such other time and date as the Borrower and the
Swing Line Bank may agree). The Borrower may have no more than six
Swing Line Loans outstanding at any time.
(iii) The Swing Line Bank shall make the amount of such Swing
Line Loan available to the Borrower on such date by depositing the
proceeds of such Swing Line Loan in immediately available funds, in an
account of such Borrower maintained with the Swing Line Bank.
(iv) Swing Line Loans shall be considered a utilization of
the Commitment of the Swing Line Bank under this Agreement for
purposes of calculating the Commitment Fee. Subject to the limitations
contained in this Agreement, the Borrower may borrow under this
Section, repay and reborrow under this Section at any time before the
Termination Date.
(v) At any time, upon the request of the Swing Line Bank,
each Bank other than the Swing Line Bank shall, on the third Domestic
Business Day after such request is made, purchase a participating
interest in Swing Line Loans in an amount equal to its ratable share
(based upon its respective Commitment) of such Swing Line Loans. On
such third Domestic Business Day, each Bank will immediately transfer
to the Swing Line Bank, in immediately available funds, the amount of
its participation. Whenever, at any time after the Swing Line Bank has
received from any such Bank its participating interest in a Swing Line
Loan, the Administrative Agent receives any payment on account thereof,
the Administrative Agent will distribute to such Bank its participating
interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Bank's participating interest was outstanding and funded); provided,
however, that in the event that such payment received by the
Administrative Agent is required to be returned, such Bank will return
to the Administrative Agent any portion thereof previously distributed
by the Administrative Agent to it. Each Bank's obligation to purchase
such participating interests shall be absolute and unconditional and
shall not be affected by any circumstance, including, without
limitation: (v) any set-off,
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counterclaim, recoupment, defense, or other right which such Bank or
any other Person may have against the Swing Line Bank requesting such
purchase or any other Person for any reason whatsoever; (w) the
occurrence or continuance of a Default or an Event of Default or the
termination of the Commitments; (x) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person; (y) any
breach of this Agreement by the Borrower or any other Bank; or (z) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(vi) The Borrower has elected to borrow and to continuously
reborrow from time to time $781,000 (the "Cary Refinancing Loan") as a
Swing Line Loan commencing upon the date hereof and continuing through
and including September 30, 1998, in order to refinance a loan with
respect to a hotel in Cary, North Carolina (the "Xxxx Refinancing Loan
Maturity Date"). Such borrowing shall be made pursuant to Option B,
unless the Borrower shall by Notice of Borrowing timely elect
otherwise. The Administrative Agent shall segregate all payment
information with respect to the Cary Refinancing Loan as if it were a
distinct loan of the Swing Line Bank but, except as herein described,
the Cary Refinancing Loan shall, for all purposes hereof, shall be
considered to be a Swing Line Loan.
(d) Use Restrictions for Loans Generally.
(i) The Borrower may use Loan proceeds for the purchase of
Subsequent Hotels located in the following states: North Carolina,
South Carolina, Virginia, West Virginia, Maryland, Georgia, Florida,
Tennessee, Mississippi, Alabama, Ohio, Kentucky, Louisiana, Texas and
the District of Columbia. Notwithstanding the preceding sentence,
proceeds from Borrowings may be used to purchase Subsequent Hotels
located outside of these states without the Banks' prior written
approval so long as the cumulative amount of outstanding Loans used to
purchase, renovate, or equip properties outside of the states listed
above does not exceed fifty percent (50%) of the Line Availability
Amount, as such Line Availability Amount shall be determined from time
to time. Should the Borrower desire to exceed this amount, the prior
written approval of a Supermajority of Banks shall be required, and
such approval may be withheld by any Bank in its sole discretion.
(ii) Proceeds may not be used to fund debt service
(principal; interest; principal and interest) on any other debt other
than debt service due with respect to the Loans. The foregoing,
however, shall not preclude the Borrower from paying such debt service
with funds other than Loan proceeds.
(iii) Other than those uses allowed under the Working Capital
Sub-Line, the Development Sub-Line, and the Swing Line, Loan proceeds
may be used solely to purchase fee simple title to Subsequent Hotels or
leasehold interests in Subsequent Hotels (subject to the limitations
set out in the following sentence) in the name of the Borrower along
with furniture, fixtures and equipment ancillary to the proper
operation and management of such Subsequent Hotels. Notwithstanding the
foregoing, the Borrower
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may use Loan proceeds to acquire leasehold estates on which Subsequent
Hotels are located, provided: (x) the amount outstanding for such
purposes does not at any one time exceed $10,000,000, (y) the Banks
have reviewed and approved the ground leases for such hotel sites, and
(z) the ground lessor agrees in such ground lease to subordinate its
fee simple interest to the lien of any deed of trust subsequently
encumbering the leased property in favor of the Banks. Should the
Borrower desire to exceed this amount, the prior written approval of
the Required Banks shall be necessary, and such approval may be
withheld by the Banks in their sole discretion.
(iv) Loan proceeds may be used for Renovations, as defined
herein, associated with the refurbishment and/or renovation of a
Subsequent Hotel or a Primary Hotel subject to the limitations on the
use of the Working Capital Sub-Line for any Renovations.
(v) The Borrower may not use Loan proceeds for the
acquisition or renovation of a hotel if that hotel is to remain
subject to pre-existing secured indebtedness. Notwithstanding the
foregoing, the Borrower may utilize Loan proceeds for such purposes so
long as the aggregate amount of Loans outstanding used to purchase
such hotels and to effect Renovations of such hotels with pre-existing
secured indebtedness does not exceed $10,000,000.
(vi) Proceeds may not be used for the pre-development,
development or construction of hotel properties without the prior
written approval of a Supermajority of Banks, except to the extent of
the Development Sub-Line.
SECTION 2.04. Notes.
(a) The Loans of each Bank shall be evidenced by a single Note payable
to the order of such Bank for the account of its Lending Office in an amount
equal to the original principal amount of such Bank's Commitment.
(b) Upon receipt of each Bank's Note pursuant to Section 3.04, the
Administrative Agent shall deliver such Note to such Bank. Each Bank shall
record, and prior to any transfer of its Notes shall endorse on the schedule
forming a part thereof appropriate notations to evidence, the date, amount and
maturity of, and effective interest rate for, each Loan made by it, the date and
amount of each payment of principal made by the Borrower with respect thereto
and whether, in the case of such Bank's Note, such Loan is a Base Rate Loan or
Euro-Dollar Loan, and such schedule shall constitute rebuttable presumptive
evidence of the principal amount owing and unpaid on such Bank's Note; provided
that the failure of any Bank to make, or any error in making, any such
recordation or endorsement shall not affect the obligation of the Borrower
hereunder or under the Note or the ability of any Bank to assign its Note. Each
Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of its Note a continuation of any such schedule as
and when required.
SECTION 2.05. Termination Date, Repayment of Loans.
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(a) As provided in Section 2.01(a) of this Agreement, the Borrower is
entitled to borrow and reborrow Loans at any time before the Termination Date.
(b) Each Loan included in any Borrowing shall mature and the principal
amount thereof shall be due and payable on the first to occur of (1) the
Termination Date, or (2), except where principal is repaid through a rollover
borrowing as described in Section 2.02(e) of this Agreement, the last day of the
Interest Period applicable to such Borrowing. As provided in Section 2.02(e) in
this Agreement, a new Borrowing sufficient to repay the principal of such Loans
shall be deemed to have been made where the Borrower does not repay such
otherwise maturing Loans.
SECTION 2.06. Interest Rates.
(a) Options Generally. Subject to the provisions hereof, the Borrower
may elect one or more of the following Interest Rate Options:
(i) Option A: One-Month LIBOR Option.
(ii) Option B: Three-Month LIBOR Option.
(iii) Option C: One-Day Base Rate Option.
(iv) Option D: Seven-Day LIBOR Option
[available for Swing Line Borrowings and Working Capital
Sub-Line Borrowings only].
(b) Base Rate Loan Provisions. Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it is repaid, at a rate per annum equal to the Base Rate for
each day. Such interest shall be payable on the last day of each calendar month.
Any overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the Default Rate.
(c) Euro-Dollar Loan Provisions. Each Euro-Dollar Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin plus the applicable Adjusted London Interbank Offered Rate for such
Interest Period; provided that if any Euro-Dollar Loan shall, as a result of
clause (1)(c) of the definition of Interest Period, have an Interest Period of
less than one month, such Euro-Dollar Loan shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on the last day thereof.
Any overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Euro- Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.
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"Applicable Margin" means for any Euro-Dollar Loan, 1.75% for
the period commencing on the Closing Date and continuing to and including the
Termination Date.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward or downward, if necessary, to the closest 1/100th of 1%, with 50/100's
being rounded upward) by dividing (i) the applicable London Interbank Offered
Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan the rate
per annum determined on the basis of the offered rate for deposits in Dollars of
amounts equal or comparable to the principal amount of such Euro-Dollar Loan
offered for a term comparable to such Interest Period, which rate appears on the
display designated as Page "3750" of the Telerate Service in the case of the
One-Month LIBOR Option or the Three-Month LIBOR Option and "Page 3875" of the
Telerate Service in the case of the Seven-Day LIBOR Option or, in the case of
any LIBOR Option, such other page as may replace such page of that service or
such other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying the London Interbank Offered Rates for
United States dollar deposits (the "Telerate Service") determined as of 11:00
a.m. London time, as that rate is set two (2) Euro-Dollar Business Days prior to
the first day of the Interest Period, provided that (i) if more than one such
offered rate appears on the applicable Telerate Service, the "London Interbank
Offered Rate" will be the arithmetic average (rounded upward or downward, if
necessary, to the closest 1/100th of 1%, with 50/100's being rounded upward) of
such offered rates; and (ii) if no such offered rates appear on such page, or if
there is no such service nominated by the British Bankers' Association, the
"London Interbank Offered Rate" for such Interest Period will be the arithmetic
average (rounded upward or downward, if necessary, to the closest 1/100th of 1%,
with 50/100's being rounded upward) of rates quoted by not less than 2 major
banks in New York City, selected by the Administrative Agent, at approximately
10:00 a.m., New York City time, 2 Euro- Dollar Business Days prior to the first
day of such Interest Period, for deposits in Dollars offered to leading European
banks for a period comparable to such Interest Period in an amount comparable to
the principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro- Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) Administrative Agent Calculation of Rates and Notice of
Rates. The
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Administrative Agent, using the formulas set out herein for the various options
hereunder, shall calculate (for selection by the Borrower pursuant to Section
2.02 hereof) each interest rate applicable to the Loans hereunder. The
Administrative Agent shall give prompt notice to the Borrower and the Banks by
telecopy of each rate of interest so calculated, and the Administrative Agent's
calculation thereof shall be conclusive in the absence of manifest error.
(e) Default Rate. Any overdue principal of and, to the extent permitted
by law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
After the occurrence and during the continuance of a Default, the principal
amount of the Loans (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Required Banks, bear interest at
the Default Rate.
SECTION 2.07. Fees.
(a) Commitment Fee for Unused Commitment. The Borrower shall pay to the
Administrative Agent for the ratable account of each Bank a commitment fee
calculated at the rate of 1/16 of one percent (.0625%) per quarter on the daily
average amount of such Bank's Unused Commitment (collectively, the "Commitment
Fees"). Such Commitment Fees shall accrue from and including the Closing Date to
but excluding the Termination Date and shall be payable on each Commitment Fee
Payment Date and on the Termination Date; provided, that should the Commitments
be terminated at any time prior to the Termination Date for any reason, the
entire accrued and unpaid Commitment Fee shall be paid on the date of such
termination. The Commitment Fees shall be based upon the Maximum Line Amount
available (without deduction for the Swing Line), even though the Line
Availability Amount may be a lesser sum. For example, even though the Maximum
Line Amount is $125,000,000, if the Line Availability Amount is $100,000,000,
and the average used portion of the Maximum Line Amount is $50,000,000, the
Commitment Fees shall be calculated on the Maximum Line Amount of $125,000,000
less the average used portion of the Maximum Line Amount of $50,000,000, and
would be $75,000,000 x .0625% = $46,875.00. In the case of any period not
constituting a full Fiscal Quarter (specifically including both the initial and
final Fiscal Quarters within which the Commitment is available), the amount of
the Commitment Fees shall be prorated and shall be payable only for the period
in which the Commitment is available.
(b) Extension Fees. Upon the request by the Borrower that the
Commitments be further extended in accordance with the terms and conditions
contained in Section 2.01(c), within 10 days of the Banks' written approval of
such request, the Borrower shall pay to the Administrative Agent, for the pro
rata benefit of the Banks, a non-refundable Extension Fee of 1/10 of one percent
(.100%) of the Maximum Line Amount available during the Extension of Term for
the first extension and thereafter 1/8 of one percent (.125%) of the Maximum
Line Amount available during the Extension of Term, irrespective of any
limitations concerning the Line Availability Amount then applicable. This
Extension Fee shall be due and payable with each annual extension requested by
the Borrower and approved by the Banks.
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(c) Agents' Fees. The Borrower shall pay to the Agents, for the account
and sole benefit of the Agents, such fees and other amounts at such times as set
forth in the Administrative Agent's Letter Agreement.
SECTION 2.08. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.09. Optional and Mandatory Prepayments.
(a) The Borrower may repay any Base Rate Borrowing in whole or in part
at any time, or from time to time, by paying the principal amount to be repaid
together with accrued interest thereon to the date of repayment. Each such
repayment shall be applied to repay ratably the Base Rate Loans of the several
Banks included in such Base Rate Borrowing.
(b) Except as provided in Section 8.02 and except for prepayment
arising out of a reduction in the Line Availability Amount, the Borrower may not
prepay all or any portion of the principal amount of any Euro-Dollar Loan prior
to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
(d) At no time shall the principal balance of all Loans outstanding
exceed the Line Availability Amount, as calculated from time to time as provided
herein. In the event the outstanding principal balance exceeds such amount, the
Borrower shall immediately repay such excess to the Administrative Agent.
SECTION 2.10. Mandatory Prepayments. On each date on which the
Commitments are terminated pursuant to Section 2.08, the Borrower shall repay or
prepay such principal amount of the outstanding Loans, if any together with
interest accrued thereon and any amounts due under Section 8.05(a).
SECTION 2.11. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of Commitment Fees and other fees due hereunder, not later
than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in Federal or
other funds immediately available in Atlanta, Georgia, to the Administrative
Agent at its address referred to in Section 9.01. The Administrative Agent will
promptly distribute to each Bank its ratable share of each such payment received
by the Administrative Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of
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fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this Agreement with respect to any Loan
or fee relating thereto shall be paid without deduction for, and free from, any
tax, imposts, levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding in the case of each Bank, taxes imposed
on or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, imposts, levies, duties, deductions or withholdings of any nature being
"Taxes"). In the event that the Borrower is required by applicable law to make
any such withholding or deduction of Taxes with respect to any Loan or fee or
other amount, the Borrower shall pay such deduction or withholding to the
applicable taxing authority, shall promptly furnish to any Bank in respect of
which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as may be
necessary in order that the amount received by such Bank after the required
withholding or other payment shall equal the amount such Bank would have
received had no such withholding or other payment been made. If no withholding
or deduction of Taxes are payable in respect of any Loan or fee relating
thereto, the Borrower shall furnish any Bank, at such Bank's request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to such Bank, in either case stating that such payments are exempt
from or not subject to withholding or deduction of Taxes. If the Borrower fails
to provide such original or certified copy of a receipt evidencing payment of
Taxes or certificate(s) or opinion of counsel of exemption, the Borrower hereby
agrees to compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11, it will pay to the Borrower the amount
of such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall be applicable with respect to any Participant, Assignee
or other Transferee, and any calculations required by such provisions (i) shall
be made based upon the circumstances of such Participant, Assignee or other
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Transferee, and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or cancellation of the
Notes.
SECTION 2.12. Computation of Interest and Fees. Interest on
the Base Rate Loans shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day). Interest on Euro-Dollar Loans shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed,
calculated as to each Interest Period from and including the first day thereof
to but excluding the last day thereof. Commitment Fees and any other fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day).
ARTICLE III
SECURITY AND COLLATERAL FOR THE LOANS;
CONDITIONS TO BORROWINGS
SECTION 3.01. Typology of Hotels.
(a) Initial Hotels. As of the Closing Date, the Borrower has granted to
the Collateral Agent, for the ratable benefit of the Banks, a first lien on
twenty-seven of the twenty-eight Initial Hotels. One of the hotels identified in
the schedule of Initial Hotels, Hotel 26 (Wilmington, North Carolina), is not
yet completed (and thus has not been acquired by the Borrower) but is under
contract for such acquisition by the Borrower (the "Delayed Acquisition Hotel").
Such hotel is, however, to be subject to a first-priority lien in favor of the
Collateral Agent, for the ratable benefit of the Banks, upon acquisition. Along
with the other Initial Hotels, this Delayed Acquisition Hotel has been approved
by the Banks as a Primary Hotel, subject to such acquisition and subject to
receipt of and approval of all documentation required to be submitted for a
Primary Hotel. Until such acquisition and the satisfaction of all requirements
specified in the Commitment Agreement for Initial Hotels, (e.g., title policy,
recorded Deed of Trust) for the Delayed Acquisition Hotel, the Borrowing Base
Certificate shall exclude the Delayed Acquisition Hotel. It shall not constitute
an event of default if the Delayed Acquisition Hotel is not acquired.
Hotel 28 (located on Xxx Xxxx Xxxxxxxxx xx Xxxxx Xxxx, Xxxxx) has been
approved by the Banks as a Primary Hotel, notwithstanding questions raised by
the Banks as to issues of access and subsurface mineral rights retained by a
third party. If at any time (i) the adjoining owner to the northeast of Hotel 28
takes any action causing or initiates any legal proceeding seeking or asserting
a significant impairment of access, or (ii) a third party exercises its rights
to subsurface mineral extraction reserved pursuant to that certain General
Warranty Deed recorded in Volume 4915, Page 272, Xxxxxx County Registry, the
Banks may elect to revoke the status of Hotel 28 as a Primary Hotel.
Notwithstanding the foregoing, if such litigation regarding access is resolved
through a final judgment or dismissal of such litigation with prejudice, and as
a result of such judgment or dismissal, access is not significantly impaired,
the Banks shall reinstate Hotel 28 as
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a Primary Hotel.
(b) Subsequent Hotels. Subsequent to the date hereof, the Borrower may
utilize the Loan proceeds to purchase in the name of the Borrower additional
hotel properties subject to those terms and conditions contained in Section
2.03(d). Such hotels acquired with Loan proceeds are included within the
definition of "Subsequent Hotels," but the definition of Subsequent Hotels is
not limited to such hotels.
The Borrower shall be entitled to utilize Loan proceeds at the time of
acquisition of a Subsequent Hotel, without contemporaneously granting a first
lien to the Collateral Agent on such Subsequent Hotel and without providing to
the Collateral Agent, the Administrative Agent or the Banks any information with
respect to such Subsequent Hotel. If the Borrower elects to submit such
Subsequent Hotel for consideration as a Primary Hotel, however, the Borrower
shall provide to the Collateral Agent the information and documentation (e.g.,
survey, title commitment, environmental report, appraisals, etc.), in form and
scope meeting the requirements for Initial Hotels as specified in the Commitment
Agreement, for each such Subsequent Hotel at the time of such request by the
Borrower.
If a Supermajority of Banks agree that such Subsequent Hotel is to be
considered a Primary Hotel, the Borrower shall cause a Deed of Trust to be
recorded with respect to such Subsequent Hotel and shall thereafter promptly
provide such other related documentation (for example, the title policy) that
can be obtained only after recordation of a Deed of Trust.
(c) Primary Hotels. The Banks' right to review and approve certain
matters set out herein differentiate between those hotels that are "Primary
Hotels" and other hotels. "Primary Hotels" are (i) all Initial Hotels, and (ii)
any Subsequent Hotel a Supermajority of Banks in their discretion deem
acceptable as a Primary Hotel. The Banks shall not consider any hotel as a
potential Primary Hotel unless the Banks can be given a first-priority lien on
such hotel, and the Banks shall have sole and absolute discretion in determining
whether to accept the offered hotel as a "Primary Hotel." In that regard, the
Banks can take into consideration their determination of the appraised value of
the hotel, its geographic location, the Rents (as hereinabove defined) generated
by such hotel, its cash flow, the management company for such hotel, the
management contract with the management company for operation of the hotel, and
any other factors the Banks deem pertinent, in their sole discretion. Prior to
determining whether to accept a hotel as a Primary Hotel, the Banks (i) shall
require all underwriting documentation for each such hotel received in
connection with an Initial Hotel (appraisal, environmental, title policy, etc.),
(ii) shall have the right to review and approve the lessee, the Rent schedule,
and lease associated with such hotel, and (iii) shall have a right of
review/approval over all other matters for which it has review/approval for an
Initial Hotel. The Borrower is not obligated to offer any Subsequent Hotel to
the Banks for consideration as a Primary Hotel. If the Borrower has requested
that the Banks accept a Subsequent Hotel as a Primary Hotel and has submitted
all documentation required hereby for such consideration, the Collateral Agent
shall within 45 days of its receipt of such request and information inform the
Borrower whether the Banks will accept such hotel as a Primary Hotel. COVENANTS
PROVIDED FOR HEREIN WITH RESPECT TO THE INITIAL HOTELS SHALL BE
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AUTOMATICALLY APPLICABLE TO ANY SUBSEQUENT HOTEL THAT BECOMES A PRIMARY HOTEL.
SECTION 3.02. Release Provisions.
(a) Generally. If the Borrower seeks to obtain the release of a
Primary Hotel, the Borrower shall provide to the Administrative Agent and
Collateral Agent a replacement Borrowing Base Certificate (and the Collateral
Agent shall forward such replacement Borrowing Base Certificate to the Banks)
reflecting the deletion of such hotel from the calculations of the Loan to Value
Amount and the Cash Flow Amount, as previously described in Section 2.01(b). The
Collateral Agent shall not release such hotel until the Administrative Agent and
the Collateral Agent have reviewed and approved such Borrowing Base Certificate.
The Borrower may obtain a release of any Primary Hotel or Primary Hotels,
provided (x) such Primary Hotel is being sold by the Borrower to a third party
that is unrelated to the Borrower, (y) provided there is no existing Default
hereunder, and also (z) provided that one of the following conditions is
satisfied:
(i) Substitute Hotel. The Borrower may offer to substitute another
hotel or hotels to serve as a "Primary Hotel" (a "Substitute
Hotel"), in which case the replacement Borrowing Base
Certificate shall reflect the inclusion of such hotel in the
calculations of the Line Availability Amount, and the Borrower
shall provide the documentation necessary for the Banks to
consider such hotel as a Primary Hotel.
(ii) Alternative Collateral. The Borrower may offer alternative
collateral for release of a Primary Hotel. The Banks shall
have full discretion over whether such alternative collateral
is satisfactory.
(iii) Line Availability Amount Reduction. The Borrower shall be
entitled to a release of any Primary Hotel upon a reduction in
the Line Availability Amount as reflected in the revised
Borrowing Base Certificate submitted by the Borrower following
confirmation by the Administrative Agent of the new Line
Availability Amount. Should the Loans then outstanding exceed
the Line Availability Amount as evidenced by the approved
replacement Borrowing Base Certificate, the Borrower shall
also reduce the outstanding principal balance by such excess
on or before the release of such Hotel. The reduction in the
Line Availability Amount shall be effective upon the release
of such Hotel.
(b) Release Provisions Relating to Particular Hotels. The following
provisions regarding release of hotels are applicable to the following hotels.
(i) Hotel 15 (Mt. Xxxxxx Xxxx, Xxxxxx, Xxxxx Xxxxxxxx). Hotel 15
has approximately 3.941 acres of excess land believed to be
unnecessary for the operation of such hotel. Subject to the
satisfaction of the Banks' requirements for release of such
excess acreage, the Banks have agreed to release such excess
land without payment of a release fee (other than an
administrative fee not exceeding $2,000.00 and reimbursement
of the Banks' actual out-of-pocket expenses).
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(ii) Hotel 00 (Xxx Xxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxx). If the Banks
elect to exclude Hotel 28 as a Primary Hotel pursuant to the
provisions of Section 3.01 (a) hereof, the Borrower shall
submit a revised Borrowing Base Certificate reflecting the
exclusion of such hotel. The Borrower shall also pay down the
Loans if the principal amount of the Loans exceeds the revised
Line Availability Amount, as evidenced by the revised
Borrowing Base Certificate. The Collateral Agent shall, upon
the request of the Borrower, promptly release such hotel from
the first-priority lien in favor of the Collateral Agent.
SECTION 3.03. Allocation of Principal Payments. At the time of
any paydown of outstanding principal of the Loans (a "Principal Paydown"), the
Borrower shall provide to the Administrative Agent an allocation of such
Principal Paydown among the various categories or sub- lines for which principal
amounts are outstanding. Such allocation shall be pursuant to the standard form
attached hereto as Exhibit J. The Administrative Agent shall be entitled to
review and confirm such allocation, and in the event of a dispute as to such
amounts and such calculation, the Administrative Agent's determination as to
such matters shall be conclusive.
Such allocation of Principal Paydowns shall be subject to the
following conditions:
1. Certain categories and sublimits are not mutually exclusive.
For example, a Development Hotel located in Montana is to be
included in both the Development Sub-Line calculation [Section
2.03(b).] and the geographical proximity limitation [Section
2.03(d)(i)]. To the extent that a draw has been so "double
counted" under such sub-lines or categories, a Principal
Paydown with respect to such a draw shall be likewise "double
counted."
2. Any Principal Paydown allocation made by the Borrower as to
Hotels shall be made on a hotel-by-hotel basis, and, to the
extent possible, the Borrower shall be required to allocate a
Principal Paydown to all draws for one Hotel before making an
allocation for draws for another Hotel. The Borrower cannot
allow more than one Hotel to have partial outstanding draws
allocated to it. The Borrower may elect to allocate all or any
portion of a Principal Paydown to the Working Capital Sub-Line
or the Swing Line, and is not required to repay such a
sub-line in its entirety with a Principal Paydown prior to
allocating the balance of a Principal Paydown to a Hotel.
Where, for example, $10 million has been drawn down and is still
outstanding with respect to the Montana Development Hotel mentioned above, but
only $5 million of the Development Sub- Line is then allocated to such Hotel
(pursuant to a reduction in the Development Sub-Line for such Hotel based on Net
Operating Income of such Hotel), if the Borrower elects to allocate a portion of
a $11 million Principal Paydown to such Hotel, the Borrower could (i) allocate
$10 million of the Principal Paydown to such Hotel and allocate the residue to
another Hotel or purpose (e.g., Swing Line or Working Capital Sub-Line) or (ii)
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allocate the bulk of such Principal Paydown to another purpose (e.g., Swing Line
or Working Capital Sub-Line) and apply the residue to the Montana Hotel,
provided no other Hotel had drawings partially repaid.
SECTION 3.04. Conditions to First Borrowing. The obligation of
each Bank to make a Loan on the occasion of the first Borrowing is subject to
the satisfaction of the conditions set forth in Section 3.05 and the following
additional conditions:
(a) receipt by the Administrative Agent from each of the
parties hereto of either (i) a duly executed counterpart of this
Agreement signed by such party or (ii) a facsimile transmission stating
that such party has duly executed a counterpart of this Agreement and
sent such counterpart to the Administrative Agent;
(b) receipt by the Administrative Agent of a duly executed
Note for the account of each Bank complying with the provisions of
Section 2.04;
(c) receipt by the Administrative Agent of (i) an opinion
(together with any opinions of local counsel relied on therein) of
Xxxxx and Bunch, counsel for the Borrower, dated as of the Closing
Date, substantially in the form of Exhibit C hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Administrative Agent or any Bank may reasonably request and (ii)
opinions as to enforceability and related matters of the Deeds of
Trust, the Assignments of Rents, and other documents with respect to
the Collateral Agent's security interest in and lien upon the Initial
Hotels;
(d) receipt by the Administrative Agent of an opinion of
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, special counsel for the Agents,
dated as of the Closing Date, substantially in the form of Exhibit D
hereto and covering such additional matters relating to the
transactions contemplated hereby as the Agents may reasonably request;
(e) receipt by the Administrative Agent of a certificate (the
"Closing Certificate"), dated the date of the first Borrowing,
substantially in the form of Exhibit G hereto, signed by the principal
financial officer of the Borrower, to the effect that (i) no Default
has occurred and is continuing on the date of the first Borrowing and
(ii) the representations and warranties of the Borrower contained in
Article IV are true on and as of the date of the first Borrowing
hereunder;
(f) receipt by the Administrative Agent of all documents which
the Administrative Agent or any Bank may reasonably request relating to
the existence of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the
Administrative Agent, including without limitation a certificate of
incumbency of the Borrower (the "Officer's Certificate"), signed by the
Secretary or an Assistant Secretary of the Company, substantially in
the form of Exhibit E hereto, certifying as to the names, true
signatures
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and incumbency of the officer or officers of the Company authorized to
execute and deliver the Loan Documents on behalf of the Company and the
Partnership, and certified copies of the following items: (i) the
Company's Articles of Incorporation, (ii) the Company's Bylaws, (iii) a
certificate of the Secretary of State of the State of North Carolina as
to the good standing of the Company as a North Carolina corporation,
(iv) a Certificate of Limited Partnership for the Partnership issued by
the Secretary of State for North Carolina, and (v) the action taken by
the Board of Directors of the Company authorizing on behalf of the
Company and on behalf of the Partnership the Borrower's execution,
delivery and performance of this Agreement, the Notes and the other
Loan Documents to which the Company and the Partnership are a party;
(g) receipt by the Administrative Agent of a Notice of
Borrowing;
(h) receipt and recordation of the Deeds of Trust and the
Assignments of Rents with respect to the Initial Hotels (other than the
Delayed Acquisition Hotel);
(i) evidence satisfactory to the Banks that the public
offering of shares of the Company completed in June of 1996 and the
private placement of Company stock with Promus Hotels, Inc. (such
public offering and the private placement being collectively referred
to as the "Public Offering") has provided to the Company proceeds in an
amount required by the Commitment Agreement;
(j) receipt of certified copies of the executed Leases, any
Management Agreements, Franchise Agreements, and other documentation
required in the Commitment Agreement for the Initial Hotels. The form
and substance of such Leases (including the base rents and percentage
rents due thereunder) are subject to the Banks' prior written approval;
(k) receipt by the Administrative Agent of the non-refundable
Commitment Fee required by the Commitment Agreement;
(l) receipt of such other documents, instruments, opinions,
and agreements as the Administrative Agent or the Banks may require in
their discretion, specifically including (but not limited to) all those
items required by the Commitment Agreement; and
(m) receipt of all other documentation and matters described
in the Commitment Agreement.
SECTION 3.05. Conditions to All Borrowings. The obligation of
each Bank to make a Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Administrative Agent of Notice of Borrowing
as required by Section 2.02 unless the Borrowing is a "rollover
borrowing" described in Section 2.02(f);
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(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Loans of each Bank will
not exceed the amount of its Commitment and (ii) the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Line Availability Amount or the Maximum Line Amount for
all of the Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in clauses (b), (c) and (d) of this Section; provided that such
Borrowing shall not be deemed to be such a representation and warranty to the
effect set forth in Section 4.04(b) as to any event, act or condition having a
Material Adverse Effect which has theretofore been disclosed in writing by the
Borrower to the Banks if the aggregate outstanding principal amount of the Loans
immediately after such Borrowing will not exceed the aggregate outstanding
principal amount thereof immediately before such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Existence and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
The Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, is duly qualified to transact business in every jurisdiction where,
by the nature of its business, such qualification is necessary, and has all
partnership powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate, Partnership and Governmental
Authorization; No Contravention. The execution, delivery and performance by the
Borrower of this Agreement, the Notes and the other Loan Documents (i) are
within the Company's corporate powers and the
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Partnership's partnership powers, (ii) have been duly authorized by all
necessary corporate and partnership action, (iii) require no action by or in
respect of, or filing with, any governmental body, agency or official, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Company
or the partnership agreement for the Partnership or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries, and (v) do not result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries other than the
Liens securing the Loans.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower enforceable in accordance with its
terms, and the Notes and the other Loan Documents, when executed and delivered
in accordance with this Agreement, will constitute valid and binding obligations
of the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower as of December 31,
1995, and the related consolidated statements of income, shareholders' equity
and cash flows for the Fiscal Year then ended, audited by Coopers & Xxxxxxx,
L.L.P., copies of which have been delivered to each of the Banks, and the
unaudited consolidated financial statements of the Borrower for the interim
period ended March 31, 1996, copies of which have been delivered to each of the
Banks, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such dates and
their consolidated results of operations and cash flows for such periods stated.
(b) Since March 31, 1996, there has been no event, act, condition or
occurrence having a Material Adverse Effect.
SECTION 4.05. Litigation. There is no action, suit or
proceeding pending, or to the knowledge of the Borrower threatened, against or
affecting the Borrower or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official which could have a Material Adverse
Effect or which in any manner draws into question the validity or enforceability
of, or could impair the ability of the Borrower to perform its obligations
under, this Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA.
(a) The Borrower and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or a Plan under Title IV of
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ERISA.
(b) Neither the Borrower nor any member of the Controlled Group
is or ever has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the
Borrower and its Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Borrower or any Subsidiary have been paid. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
SECTION 4.08. Subsidiaries. Each of the Borrower's
Subsidiaries is a corporation or partnership duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, is
duly qualified to transact business in every jurisdiction where, by the nature
of its business, such qualification is necessary, and has all powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. The Borrower has no Subsidiaries except those
Subsidiaries listed on Schedule 4.08, which accurately sets forth each such
Subsidiary's complete name and jurisdiction of incorporation.
SECTION 4.09. Not an Investment Company. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the
Borrower and its Consolidated Subsidiaries has title to its properties
sufficient for the conduct of its business, and none of its Hotels is subject to
any Lien except as permitted in this Agreement.
SECTION 4.12. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore
furnished by the Borrower to the Administrative Agent, the Collateral Agent or
any Bank for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent, the Collateral Agent or any Bank will be,
true, accurate and complete in every material respect or based on reasonable
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estimates on the date as of which such information is stated or certified. The
Borrower has disclosed to the Banks in writing any and all facts which could
have or cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters.
(a) Except as disclosed in the Environmental Reports, neither the
Borrower nor any Subsidiary is subject to any Environmental Liability which
could have or cause a Material Adverse Effect and neither the Borrower nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified on any current or proposed (i) National Priorities List under 40
C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state statute
similar to CERCLA.
(b) Except as disclosed in the Environmental Reports, no Hazardous
Materials have been or are being used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Properties or are otherwise present
at, on, in or under the Properties, or, to the best of the knowledge of the
Borrower, at or from any adjacent site or facility, except for Hazardous
Materials, such as cleaning solvents, pesticides and other materials used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, and managed or otherwise handled in minimal amounts in the ordinary
course of business in compliance with all applicable Environmental Requirements.
(c) The Borrower, and each of its Subsidiaries and Affiliates, has
procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses.
SECTION 4.15. Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all applicable laws, including, without
limitation, all Environmental Laws, except where any failure to comply with any
such laws would not, alone or in the aggregate, have a Material Adverse Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of the Borrower and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including, but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. The issued shares of
Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by the
Borrower free and clear of any Lien or adverse claim. At least a majority of the
issued shares of Capital Stock of each of the Borrower's other Subsidiaries
(other than Wholly Owned Subsidiaries) is owned by the Borrower free and clear
of any Lien or adverse claim.
SECTION 4.17. Margin Stock. Neither the Borrower nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of purchasing or
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carrying any Margin Stock, and no part of the proceeds of any Loan will be used
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock, or be used for any purpose
which violates, or which is inconsistent with, the provisions of Regulation X.
SECTION 4.18. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of the Loans under this
Agreement, the Borrower will not be "insolvent," as defined in ss. 101 of Title
11 of the United States Code or Section 2 of the Uniform Fraudulent Transfer
Act, or any other applicable state law pertaining to fraudulent transfers, as
each may be amended from time to time, or be unable to pay its debts generally
as such debts become due, or have an unreasonably small capital to engage in any
business or transaction, whether current or contemplated.
SECTION 4.19. Public Offering Proceeds. The Public Offering
provided the Borrower with proceeds, net of closing and transaction expenses, of
at least $45,000,000.
SECTION 4.20. Americans with Disabilities Act. The Borrower,
to the best of its knowledge, is in compliance with all laws and regulations
governing accessibility of public facilities to the handicapped, specifically
including, but not limited to the physical accessibility requirements of Title
III of the Americans with Disabilities Act of 1990, and the implementing
Regulations promulgated thereunder by the Department of Justice and the
Americans with Disabilities Act Accessibility Guidelines (ADAAG) associated
therewith (the "Accessibility Laws"), except as disclosed to the Lender in
writing. The Borrower agrees to notify the Collateral Agent of any grievance,
complaint or governmental investigation into whether the Borrower is in
compliance with the Accessibility Laws. The Borrower agrees to indemnify and
hold the Banks harmless from any loss, cost or expense in fact incurred by the
Banks as a result of such a violation of the Accessibility Laws.
SECTION 4.21. Compliance with Certain Lease Provisions. The
Borrower has spent or set aside all sums required to be spent or set aside under
the Leases and has paid to the Lessee all sums required to be paid to the Lessee
as room reserves under the Leases.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the
Borrower as of the end of such Fiscal Year and the related
consolidated statements of income, shareholders' equity and cash flows
for
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such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all audited by Coopers & Xxxxxxx,
L.L.P. or other independent public accountants of nationally recognized
standing, and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited as
to the scope of the audit or qualified in any manner, except as
acceptable to the Required Banks;
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Borrower as of the end of such Fiscal
Quarter and the related statement of income and statement of cash flows
for such Fiscal Quarter and for the portion of the Fiscal Year ended at
the end of such Fiscal Quarter, setting forth in each case in
comparative form the figures for the corresponding Fiscal Quarter and
the corresponding portion of the previous Fiscal Year;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.04, 5.08 and 5.09 on the date of such
financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto. In addition, simultaneously with
the delivery of the Compliance Certificate, such officer shall deliver
a Borrowing Base Certificate substantially in the form of Exhibit I.
(d) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of
the firm of independent public accountants which reported on such
statements to the effect that nothing has come to their attention to
cause them to believe that any Default existed on the date of such
financial statements;
(e) within 5 Domestic Business Days after the Borrower becomes
aware of the occurrence of any Default, a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Borrower shall have filed with
the Securities and Exchange Commission;
(h) if and when the Borrower or any member of the Controlled
Group (i) gives or
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is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA, a copy of such notice; or (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;
(i) promptly after the Borrower knows of the commencement
thereof, notice of any litigation, dispute or proceeding involving a
claim against the Borrower and/or any Subsidiary for $1,000,000 or
more; and
(j) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The
Borrower will (i) keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities; and (ii) permit, and will cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense prior to the occurrence of an
Event of Default and at the Borrower's expense after the occurrence of an Event
of Default to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable times
and as often as may reasonably be desired.
SECTION 5.03. Negative Pledge as to Hotels. The Borrower may
incur additional debt other than that evidenced hereby and may incur normal
trade debt, in each case subject to the limitations contained herein and
compliance with the financial covenant ratios contained herein. Such additional
debt, however, may not be secured by a Lien on the Primary Hotels. Unless a
Supermajority of Banks consent in writing to such additional debt being so
secured (which consent may be granted or withheld by the Banks, in their sole
discretion), any additional debt may not be secured by a Lien on any of the
Subsequent Hotels.
Neither the Borrower nor any Subsidiary shall place a lien on
any Subsequent Hotel at any time unless a Supermajority of Banks agree in
advance and in writing that such Subsequent Hotel shall not be subject to such a
restriction. The Borrower may request the Banks to release any Subsequent Hotel
from this restriction, but a Supermajority of Banks shall be entitled to
withhold such consent in their sole discretion without specifying any reason for
the withholding of such consent. Violation of this covenant shall be a default
under this Agreement.
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SECTION 5.04. Consolidated Debt Covenant. Consolidated Debt of
the Borrower, excluding normal trade debt, shall not exceed 45% of the
Borrower's aggregate investment in Hotel properties, at Borrower's cost, as
defined in the Company's existing charter documents.
SECTION 5.05. Base Rent and Percentage Rent. The Borrower
shall not adjust the Base Rents and Percentage Rents as to the Primary Hotels
without the prior written consent of a Supermajority of Banks. The Base Rent and
Percentage Rent for any Primary Hotel is subject to review and approval by the
Banks.
SECTION 5.06. Use of Proceeds from Subsequent Public
Offerings. All net proceeds generated from any and all subsequent stock
issuances of the Company must be used to reduce and/or pay out the Loans as the
proceeds will allow, except where the proceeds of such sale are used to acquire
additional Properties or where common stock is issued in exchange for total
equity/ownership interest in one or more Subsequent Hotels or an entity owning
one or more Subsequent Hotels.
SECTION 5.07. Room Reserves. The Borrower shall establish, and
shall make available to each Lessee on all of its Hotels on an annual basis,
Room Reserves for such hotel for each lease year, to be used by the Lessee in
the restoration and refurbishment of the Hotel for which the Room Reserve was
established. The Borrower is not, however, required to establish a separate
account in which Room Reserves shall be held.
SECTION 5.08. Total Funded Debt/Cash Available for
Distribution Ratio. Total Funded Debt (as hereinafter defined) of the Borrower
and its Subsidiaries divided by "Cash Available for Distribution" shall be no
greater than 5.00 tested quarterly on a rolling twelve calendar month basis.
Cash Available for Distribution, as used herein, has the same meaning as used in
calculating the Cash Flow Amount, but for purposes of such calculation shall
include all Hotels now or hereafter owned by the Borrower from time to time
(Primary and Subsequent Hotels). For purposes hereof, "Total Funded Debt," as
used herein, means all Debt, but specifically excluding contingent liability
arising under franchise agreements and normal trade debt.
SECTION 5.09. Consolidated Tangible Net Worth. The Borrower
shall maintain at all times a minimum Consolidated Tangible Net Worth of at
least $70,000,000, which amount shall be increased by not less than eighty-five
percent of the net proceeds of any future offerings of the Company's capital
stock, including the Public Offering. In the event that any subsequent public
offering of the Company is oversubscribed, this minimum Consolidated Tangible
Net Worth requirement shall be increased by an amount equal to 85% of the net
proceeds of such oversubscription.
SECTION 5.10. Contingent Liabilities. The Borrower and any
Subsidiaries or corporate or partnership entities constituting Affiliates of the
Borrower may not incur contingent liabilities or contingent debt other than
contingent liability associated with franchise agreements.
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The foregoing shall not preclude the Borrower from incurring direct or
contingent liabilities in connection with any partnership or joint venture with
Buckhead Strategic Corp. II, a Delaware corporation, or its assigns, but such
direct or contingent liabilities of the Borrower and its Subsidiaries shall be
included within the calculation of Total Funded Debt calculation in Section 5.08
above.
SECTION 5.11. Commitment Agreement Incorporated by Reference.
All terms and conditions of the Commitment Agreement are incorporated herein by
reference. Should the Borrower default with respect to any term or provision
thereof, such default shall constitute a default hereunder and under each of the
Notes. To the extent that the provisions of this Agreement conflict with any
provisions of the Commitment Agreement, the terms of this Agreement shall
prevail. To the extent, however, that the provisions of any other Loan Documents
conflict with any provision of the Commitment Agreement, the terms of the
Commitment Agreement shall prevail.
SECTION 5.12. Maintenance of Property. The Borrower shall, and
shall cause each Subsidiary to, maintain all of its Properties and assets in
good condition, repair and working order, ordinary wear and tear excepted.
SECTION 5.13. Maintenance of Existence. The Borrower shall,
and shall cause each Subsidiary to, maintain its existence as a corporation (in
the case of the Company) and as a partnership (in the case of the Partnership)
and carry on its business in substantially the same manner and in substantially
the same fields as such business is now carried on and maintained. The Company
shall maintain its status as a Real Estate Investment Trust and shall be in
compliance with all applicable laws with respect to Real Estate Investment
Trusts as well as other applicable laws. The Borrower shall not make any
material modifications to its partnership agreement (in the case of the
Partnership) or to its articles of incorporation or by-laws (in the case of the
Company) without the Bank's prior written consent. The issuance of limited
partnership interests in the Partnership shall not constitute a "material
modification" to the Partnership's partnership agreement.
SECTION 5.14. Dissolution. Neither the Borrower nor any of its
Subsidiaries shall suffer or permit dissolution or liquidation either in whole
or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except through corporate reorganization to the extent permitted by
Section 5.15.
SECTION 5.15. Consolidations, Mergers and Sales of Assets. The
Borrower will not, nor will it permit any Subsidiary to, consolidate or merge
with or into, or sell, lease or otherwise transfer all or any substantial part
of its assets to, any other Person, unless (i) the Company is the surviving
entity under any such transaction, and (ii) such transaction does not create a
Default or Event of Default hereunder.
SECTION 5.16. Use of Proceeds. No portion of the proceeds of
the Loans will be used by the Borrower or any Subsidiary (i) in connection with,
either directly or indirectly, any
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tender offer for, or other acquisition of, stock of any corporation with a view
towards obtaining control of such other corporation, (ii) directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock, or (iii) for any purpose in violation
of any applicable law or regulation.
SECTION 5.17. Compliance with Laws; Payment of Taxes. The
Borrower will, and will cause each of its Subsidiaries and each member of the
Controlled Group to, comply with applicable laws (including but not limited to
ERISA), regulations and similar requirements of governmental authorities
(including but not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate proceedings
diligently pursued. The Borrower will, and will cause each of its Subsidiaries
to, pay promptly when due all taxes, assessments, governmental charges, claims
for labor, supplies, rent and other obligations which, if unpaid, might become a
lien against the property of the Borrower or any Subsidiary, except liabilities
being contested in good faith by appropriate proceedings diligently pursued and
against which, if requested by the Administrative Agent, the Borrower shall have
set up reserves in accordance with GAAP.
SECTION 5.18. Insurance. The Borrower will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of the Borrower
or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its Property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
In addition, the Borrower shall satisfy all requirements for insurance set out
in each Deed of Trust with respect to each Primary Hotel.
SECTION 5.19. Change in Fiscal Year or Fiscal Quarters. The
Borrower will not change its Fiscal Year or Fiscal Quarters without the consent
of the Required Banks.
SECTION 5.20. Environmental Notices. The Borrower shall
furnish to the Banks and the Administrative Agent prompt written notice of all
Environmental Liabilities, pending, threatened or anticipated Environmental
Proceedings, Environmental Notices, Environmental Judgments and Orders, and
Environmental Releases at, on, in, under or in any way affecting the Properties
or any adjacent property, and all facts, events, or conditions that could lead
to any of the
foregoing.
SECTION 5.21. Environmental Matters. The Borrower and its
Subsidiaries will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at, or
otherwise handle or ship or transport to or from the Properties any Hazardous
Materials except for Hazardous Materials such as cleaning solvents, pesticides
and other similar materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed, managed or otherwise handled in minimal
amounts in the ordinary course of business in compliance with all applicable
Environmental Requirements.
With respect to any Hotels that Environmental Reports disclose
as having asbestos or asbestos-containing material within the Property, the
Borrower agrees to establish an
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operations and maintenance plan satisfactory to the Required Banks (the "O&M
Plans") so as to minimize the risks associated with such asbestos. The Banks may
require periodic inspection of such Hotels in order to assess such condition and
to assess compliance with such O&M Plans and may require modifications to the
O&M Plans as necessary to minimize or eliminate such risks.
SECTION 5.22. Environmental Release. The Borrower agrees that
upon the occurrence of an Environmental Release at or on any of the Properties
it will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not ordered
or otherwise directed to do so by any Environmental Authority.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within five
Domestic Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within five
Domestic Business Days after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Article V; or
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement
(other than those covered by clause (a) or (b) above) or under any of
the other Loan Documents for thirty days after the earlier of (i) the
first day on which the Borrower has knowledge of such failure or (ii)
written notice thereof has been given to the Borrower by the
Administrative Agent or the Collateral Agent at the request of any
Bank; or
(d) any representation, warranty, certification or statement
made or deemed made by the Borrower in Article IV of this Agreement or
in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Debt outstanding (other than the Notes) when due
or within any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of the Borrower or
any Subsidiary or the mandatory
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prepayment or purchase of such Debt by the Borrower (or its designee)
or such Subsidiary (or its designee) prior to the scheduled maturity
thereof, or enables (or, with the giving of notice or lapse of time or
both, would enable) the holders of such Debt or any Person acting on
such holders' behalf to accelerate the maturity thereof or require the
mandatory prepayment or purchase thereof prior to the scheduled
maturity thereof, without regard to whether such holders or other
Person shall have exercised or waived their right to do so; or
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally, or shall admit in
writing its inability, to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or
a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
the Borrower or any other member of the Controlled Group shall enter
into, contribute or be obligated to contribute to, terminate or incur
any withdrawal liability with respect to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $100,000 shall be rendered against
the Borrower or any Subsidiary and such judgment or order shall
continue unsatisfied and unstayed for a period of 30
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days; or
(k) a federal tax lien shall be filed against the Borrower
under Section 6323 of the Code or a lien of the PBGC shall be filed
against the Borrower or any Subsidiary under Section 4068 of ERISA and
in either case such lien shall remain undischarged for a period of 25
days after the date of filing; or
(l) Failure of Xxxxxx X. Xxxxxxx III and/or Xxxx X. Xxxxxx,
Xx., to maintain at all times a majority ownership interest in and
voting control of the Lessee unless a Supermajority of Banks consent in
advance and in writing to such a change in ownership interest and
voting control of the Lessee (such consent to be within the sole
discretion of each Bank); or
(m) The Lessee shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in any of the
Subordination Agreements for thirty days after the earlier of (i) the
first day on which the Borrower has knowledge of such failure or (ii)
written notice thereof has been given to the Borrower by the
Administrative Agent or the Collateral Agent at the request of any
Bank.
then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Banks, by notice to the Borrower terminate the Commitments
(specifically including, but not limited to, the Swing Line) and they shall
thereupon terminate, (ii) if requested by the Required Banks, by notice to the
Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents to be, and
the Notes (together will all accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that if
any Event of Default specified in clause (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments (specifically including, but
not limited to, the Swing Line) shall thereupon automatically terminate and the
Notes (together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower, and (iii) exercise
any rights, powers and remedies under any of the Loan Documents. Notwithstanding
the foregoing, the Administrative Agent shall have available to it all rights
and remedies provided under the Loan Documents and in addition thereto, all
other remedies at law or equity, and shall exercise any one or all of them at
the request of the Required Banks.
SECTION 6.02. Notice of Default. The Administrative Agent
shall give notice to the Borrower of any Default under Section 6.01(c) and
6.01(n) promptly upon being requested to do so by any Bank and shall thereupon
notify all the Banks thereof.
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ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agents to act as its agents
hereunder and under the other Loan Documents with such powers as are
specifically delegated to each Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. Each Agent: (a)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by the Borrower to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agents, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. Each Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of each Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, each Agent shall act solely
as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
the Borrower. The duties of each Agent shall be ministerial and administrative
in nature, and each Agent shall not have by reason of this Agreement or any
other Loan Document a fiduciary relationship in respect of any Bank.
SECTION 7.02. Reliance by Each Agent. Each Agent shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telefax, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants or other experts selected by such Agent. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
each Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder and thereunder in accordance with instructions signed by
the Required Banks, and such instructions of the Required Banks in any action
taken or failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agents shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans) unless such Agent has
received notice from a Bank or the Borrower
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specifying such Default or Event of Default and stating that such notice is a
"Notice of Default". The Administrative Agent shall give each Bank prompt notice
of each non-payment of principal of or interest on the Loans, whether or not it
has received any notice of the occurrence of such non-payment. The Agents shall
(subject to Section 9.05) take such action with respect to such Default or Event
of Default as shall be directed by the Required Banks, provided that, unless and
until such Agent shall have received such directions, such Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
SECTION 7.04. Rights of Collateral Agent as a Bank; Rights of
Agents to Lend. With respect to the Loans made by it, Wachovia (N.C.) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though Wachovia (N.C.) were not
acting as the Collateral Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Wachovia (N.C.) in its individual capacity.
The Agents may (without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Borrower (and any of its Affiliates) as if it were not acting
as an Agent, and the Agents may accept fees and other consideration from the
Borrower (in addition to any agency fees and arrangement fees heretofore agreed
to between the Borrower and Agents) for services in connection with this
Agreement or any other Loan Document or otherwise without having to account for
the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify each Agent, to the extent such Agent shall not have been reimbursed by
the Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of an Agent. If any indemnity furnished to the
Agents for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06. Consequential Damages. THE AGENTS SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
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SECTION 7.07. Payee of Note Treated as Owner. The Agents may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Administrative Agent and the provisions of
Section 9.07(c) have been satisfied. Any requests, authority or consent of any
Person 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 or replacement thereof.
SECTION 7.08. Non-Reliance on Agents and Other Banks. Each
Bank agrees that it has, independently and without reliance on the Agents or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agents or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agents shall not be required to keep themselves (or
any Bank) informed as to the performance or observance by the Borrower of this
Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower or any other Person. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by such Agent
hereunder or under the other Loan Documents, each Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Person (or any of their Affiliates) which may come into the possession of
such Agent.
SECTION 7.09. Failure to Act. Except for action expressly
required of an Agent hereunder or under the other Loan Documents, each Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by such Agent by reason of
taking, continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of One or More Agents.
(a) Subject to the appointment and acceptance of a successor
Agent as provided in this Section 7.10(a), each Agent may resign at any time
by giving notice thereof to the Banks and the Borrower and each Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, except as provided in Section 7.10(b), the Required
Banks shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks and shall have accepted such
appointment within 30 days after the retiring Agent's notice of resignation or
the Required Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent. Any successor Agent shall
be a bank which has a combined capital and surplus of at least
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$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
an Agent hereunder.
(b) At any time after the occurrence of an Event of Default and
the declaration by the Administrative Agent that the Notes (together with
accrued interest thereon) and all other amounts payable hereunder and under the
other Loan Documents are immediately due and payable, Wachovia, as
Administrative Agent, may resign by giving notice to the Banks and the Borrower
that Wachovia wishes to resign as Administrative Agent under this Agreement
pursuant to this Section 7.10(b) and that Wachovia desires to appoint, as
successor Administrative Agent, Wachovia (NC). On the date that such notice is
provided by Wachovia, Wachovia (NC), as successor Administrative Agent, shall
succeed to and become vested with all the rights, powers, privileges and
duties of Wachovia, as Administrative Agent, and Wachovia shall be discharged
from its duties and obligations hereunder as Administrative Agent. After
Wachovia's resignation and removal hereunder as Administrative Agent, the
provisions of this Article VII shall continue in effect for the benefit of
Wachovia in respect of any actions taken or admitted to be taken by Wachovia
while Wachovia was acting as Administrative Agent hereunder.
SECTION 7.11. Intercreditor Agreement. The Banks have entered
into an Intercreditor Agreement dated of even date herewith governing rights and
responsibilities of the Agents to the Banks and certain obligations of the
Agents. The Borrower acknowledges and agrees that it is not a third-party
beneficiary of any provisions of the Intercreditor Agreement and is not entitled
to rely thereon or enforce any provisions thereof. The Borrower also
acknowledges that the Intercreditor Agreement may be amended by the Banks
without prior notice to or approval by the Borrower. The Intercreditor Agreement
and any such amendment, however, shall not waive or amend any provision of this
Agreement to the contrary. The Administrative Agent shall provide the Borrower
with a photocopy of the Intercreditor Agreement and any amendment thereto within
10 days after execution by all parties to such document.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period:
(a) the Administrative Agent determines that deposits in
Dollars (in the applicable amounts) are not being offered in the
relevant market for such Interest Period, or
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(b) the Required Banks advise the Administrative Agent that
the London Interbank Offered Rate, as determined by the Administrative
Agent will not adequately and fairly reflect the cost to such Banks of
funding the Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless
the Borrower notifies the Administrative Agent at least 1 Domestic Business Day
before the date of any Borrowing of Euro-Dollar Loans for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as an Adjusted CD Rate Loan.
SECTION 8.02. Illegality. If, after the date hereof, the
adoption of any applicable law, rule or regulation, or any change in any
existing or future law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof (any
such authority, bank or agency being referred to as an "Authority" and any such
event being referred to as a "Change of Law"), or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any Authority shall make it unlawful or impossible for any Bank (or
its Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice
to the Administrative Agent pursuant to this Section, such Bank shall designate
a different Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon and any amount due such Bank
pursuant to Section 8.05(a). Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow an Adjusted CD Rate Loan in an equal principal
amount from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such an Adjusted CD Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If after the date hereof, a Change of Law or compliance by any
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge
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with respect to its Euro-Dollar Loans, its Notes or its obligation to
make Euro-Dollar Loans, or shall change the basis of taxation of
payments to any Bank (or its Lending Office) of the principal of or
interest on its Euro-Dollar Loans or any other amounts due under this
Agreement in respect of its Euro-Dollar Loans or its obligation to make
Euro-Dollar Loans (except for changes in the rate of tax on the overall
net income of such Bank or its Lending Office imposed by the
jurisdiction in which such Bank's principal executive office or Lending
Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office) or on
the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-Dollar
Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any existing or future law, rule or regulation, or any change
in the interpretation or administration thereof, or compliance by any Bank (or
its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15 days after demand by
such Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any
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Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 8.04. Adjusted CD Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make or maintain
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, and the Borrower shall, by at
least 5 Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans, shall be made instead as Adjusted CD Rate Loans, as
the Borrower may elect in the notice to such Bank through the
Administrative Agent referred to hereinabove (in all cases interest
and principal on such Loans shall be payable contemporaneously with
the related Euro- Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans and
its Adjusted CD Rate Loans instead.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all amounts due such Bank under Section 8.03 in
respect of the period preceding the date of conversion of such Bank's Loans
resulting from the Borrower's election.
SECTION 8.05. Compensation. Upon the request of any Bank,
delivered to the Borrower and the Administrative Agent, the Borrower shall pay
to such Bank such amount or amounts as shall compensate such Bank for any loss,
cost or expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09,
Section 2.10, Section 8.02 or otherwise) of a Euro-Dollar Loan on a
date other than the last day of an Interest Period for such Euro-Dollar
Loan;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan
on the date for such prepayment specified in the relevant notice of
prepayment hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan
on the date for
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the Borrowing of which such Euro-Dollar Loan is a part specified in the
applicable Notice of Borrowing delivered pursuant to Section 2.02.
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its address
or telecopy number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopy number specified in this Section and the telecopy machine used by the
sender provides a written confirmation that such telecopy has been so
transmitted or receipt of such telecopy transmission is otherwise confirmed,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, and (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agents under Article II or Article VIII
shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agents or
any Bank in exercising any right, power or privilege hereunder or under any Note
or other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the
Agents, including fees and disbursements of special counsel for the Banks and
the Agents, in connection with the preparation of this Agreement and the other
Loan Documents, any waiver or consent hereunder or thereunder or any amendment
hereof or thereof or any Default or alleged Default hereunder or
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thereunder and (ii) if a Default occurs, all out-of-pocket expenses incurred by
the Agents or any Bank, including fees and disbursements of counsel, in
connection with such Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing this
Agreement and the other Loan Documents.
(b) The Borrower shall indemnify the Agents and each Bank against any
transfer taxes, documentary taxes, assessments or charges made by any Authority
by reason of the execution and delivery of this Agreement or the other Loan
Documents.
(c) The Borrower shall indemnify the Agents, the Banks and each
Affiliate thereof and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims or damages to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by any
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from investigation, litigation (including, without limitation, any
actions taken by the Agents or any of the Banks to enforce this Agreement or any
of the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Agents and each Bank, and each Affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any expenses (including, without limitation, legal fees) incurred in connection
with any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
SECTION 9.04. Setoffs; Sharing of Set-Offs.
(a) The Borrower hereby grants to each Bank, as security for the full
and punctual payment and performance of the obligations of the Borrower under
this Agreement, a continuing lien on and security interest in all deposits and
other sums credited by or due from such Bank to the Borrower or subject to
withdrawal by the Borrower; and regardless of the adequacy of any collateral or
other means of obtaining repayment of such obligations, each Bank may at any
time upon or after the occurrence of any Event of Default, and without notice to
the Borrower, set off the whole or any portion or portions of any or all such
deposits and other sums against such obligations, whether or not any other
Person or Persons could also withdraw money therefrom.
(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Note held
by it which is greater than the proportion received by any other Bank in respect
of the aggregate amount of all principal and interest owing with respect to the
Note held by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Note held by the other Banks,
and/or such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to a Note shall be shared by the
Banks pro rata; provided that (i) nothing in this Section shall impair the right
of any Bank to exercise any right of set-off or counterclaim it may have and to
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apply the amount subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under a Note, and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter recovered
from such purchasing Bank, such purchase from each other Bank shall be rescinded
and such other Bank shall repay to the purchasing Bank the purchase price of
such participation to the extent of such recovery together with an amount equal
to such other Bank's ratable share (according to the proportion of (x) the
amount of such other Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 9.05. Amendments and Waivers.
(a) Any provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of an Agent are affected thereby, by such Agent); provided that
no such amendment or waiver shall, unless signed by the Borrower and by each of
the Banks, (i) change the Commitment of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or rate of interest on any
Loan or any fees payable to the Banks hereunder, (iii) change the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder
specifically including any Extension of Term, subject to the provisions of
Section 2.01(c), (iv) change the amount of principal, interest or fees due on
any date fixed for the payment thereof, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
percentage of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement,
(vi) change the manner of application of any payments made under this Agreement,
the Notes, or any other Loan Document, (vii) release or substitute all or any
substantial part of the collateral (if any) held as security for the Loans
except where this Agreement or other Loan Documents explicitly entitle the
Borrower to such a release, or (viii) release any guaranty given to support
payment of the Loans.
(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrower to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks. The
Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the
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72
entering into by such Bank of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks
represents to the Administrative Agent and each of the other Banks that it in
good faith is not, directly or indirectly (by negative pledge or otherwise),
relying upon any Margin Stock as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 9.07. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agents shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Loan or Loans, (ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the related Loan
or Loans, (iii) the change of the principal of the related Loan or Loans, (iv)
any change in the rate at which either interest is payable thereon or (if the
Participant is entitled to any part thereof) commitment fee is payable hereunder
from the rate at which the Participant is entitled to receive interest or
commitment fee (as the case may be) in respect of such participation, (v) the
release or substitution of all or any substantial part of the collateral (if
any) held as security for the Loans, or (vi) the release of any guaranty given
to support payment of the Loans. Each Bank selling a participating interest in
any Loan, Note, Commitment or other interest under this Agreement shall, within
10 Domestic Business Days of such sale, provide the Borrower and the
Administrative Agent with written notification stating that such sale has
occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in Loans outstanding
from time to time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such
65
73
rights and obligations, pursuant to an Assignment and Acceptance in the form
attached hereto as Exhibit G, executed by such Assignee, such transferor Bank
and the Administrative Agent (and, in the case of an Assignee that is not then a
Bank or an Affiliate of a Bank, by the Borrower); provided that (i) no interest
may be sold by a Bank pursuant to this paragraph (c) unless the Assignee shall
agree to assume ratably equivalent portions of the transferor Bank's Commitment,
(ii) the amount of the Commitment of the assigning Bank subject to such
assignment (determined as of the effective date of the assignment) shall be
equal to $5,000,000 (or any larger multiple of $1,000,000), (iii) no interest
may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not
then a Bank or an Affiliate of a Bank without the consent of the Borrower, which
consent is within the sole and absolute discretion of the Borrower, provided,
however, that upon the occurrence and continuation of an Event of Default, the
consent of the Borrower shall not be required as to such an assignment, and (iv)
a Bank may not have more than two Assignees that are not then Banks at any one
time. Upon (A) execution of the Assignment and Acceptance by such transferor
Bank, such Assignee, the Administrative Agent and (if applicable) the Borrower,
(B) delivery of an executed copy of the Assignment and Acceptance to the
Borrower and the Administrative Agent, (C) payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, and (D) payment of a processing and
recordation fee of $2,000 to the Administrative Agent, such Assignee shall for
all purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement (including, without limitation, the
rights of a Bank under Section 2.03) to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Borrower, the Banks or the Administrative Agent shall be required. Upon the
consummation of any transfer to an Assignee pursuant to this paragraph (c), the
transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to each of
such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.08, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning the Borrower which has been
delivered to such Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection with such Bank's
credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary notwithstanding, any
Bank may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve
66
74
Bank or the United States Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Loans and/or obligations made by the Borrower to the assigning
and/or pledging Bank in accordance with the terms of this Agreement shall
satisfy the Borrower's obligations hereunder in respect of such assigned Loans
and/or obligations to the extent of such payment. No such assignment shall
release the assigning and/or pledging Bank from its obligations hereunder.
SECTION 9.08. Confidentiality. Each Bank agrees to exercise
its best efforts to keep any information delivered or made available by the
Borrower to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided, however, that nothing herein shall prevent
any Bank from disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agents, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby
represents that it is a commercial lender or financial institution which makes
loans in the ordinary course of its business and that it will make its Loans
hereunder for its own account in the ordinary course of such business; provided,
however, that, subject to Section 9.07, the disposition of the Note held by that
Bank shall at all times be within its exclusive control.
SECTION 9.10. Obligations Several. The obligations of each
Bank hereunder are several, and no Bank shall be responsible for the obligations
or commitment of any other Bank hereunder. Nothing contained in this Agreement
and no action taken by the Banks pursuant hereto shall be deemed to constitute
the Banks to be a partnership, an association, a joint venture or any other kind
of entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.11. Survival of Certain Obligations. Sections
8.03(a), 8.03(b), 8.05 and 9.03, and the obligations of the Borrower thereunder,
shall survive, and shall continue to be enforceable notwithstanding, the
termination of this Agreement and the Commitments and the payment in full of the
principal of and interest on all Loans.
SECTION 9.12. North Carolina Law. This Agreement and each Note
shall be construed in accordance with and governed by the law of the State of
North Carolina.
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75
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of
interest due or payable hereunder or under the Notes exceed the maximum rate of
interest allowed by applicable law, and in the event any such payment is
inadvertently made to any Bank by the Borrower or inadvertently received by any
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify such Bank in writing that it elects to have such
excess sum returned forthwith. It is the express intent hereof that the Borrower
not pay and the Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid by the Borrower
under applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement
or any of the other Loan Documents shall be construed against or interpreted to
the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.
SECTION 9.16. Defaulting Bank. Each Bank understands and
agrees that if such Bank is a Defaulting Bank, then notwithstanding any
provisions of this Agreement to the contrary, it shall not be entitled to vote
on any matter requiring the consent of the Banks or to object to any matter
requiring the consent of the Banks; provided, however, that all other benefits
and obligations under the Loan Documents shall apply to such Defaulting Bank.
SECTION 9.17. Consent to Jurisdiction. The Borrower (a)
submits to personal jurisdiction in the State of North Carolina, the courts
thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Notes and the other Loan Documents, (b)
waives any and all personal rights under the law of any jurisdiction to object
on any basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of North Carolina for the purpose of
litigation to enforce this Agreement, the Notes or the other Loan Documents, and
(c) agrees that service of process may be made upon it in the manner prescribed
in Section 9.01 for the giving of notice to the Borrower. Nothing herein
contained, however, shall prevent the Agents, or either of them, from bringing
any action or exercising any rights against any security and against the
Borrower personally, and against any assets of the Borrower, within any other
state or jurisdiction.
SECTION 9.18. Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
68
76
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
WINSTON HOTELS, INC., a North Carolina
corporation
[Corporate Seal] By:
-----------------------------------
Senior Vice President
Attest:
----------------------
Assistant Secretary
Address:
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
XXXX LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., a North Carolina
corporation, its general partner
[Corporate Seal] By:
-------------------------------
Senior Vice President
Attest:
---------------------
Assistant Secretary
Address:
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
69
77
WACHOVIA BANK OF GEORGIA, N.A., as
Administrative Agent
By:
-------------------------------------
Title:
----------------------------------
[CORPORATE SEAL]
Lending Office
Wachovia Bank of Georgia, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Syndicate Services
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
70
78
WACHOVIA BANK OF NORTH CAROLINA, N.A.,
as Collateral Agent
By:
-------------------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
Wachovia Bank of North Carolina, N.A.
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
$50,000,000.00 WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:
-------------------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
Wachovia Bank of North Carolina, N.A.
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
$35,000,000.00 BRANCH BANKING AND TRUST COMPANY
By:
-------------------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
Branch Banking and Trust Company
71
79
434 Fayetteville Xxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
$20,000,000.00 NATIONSBANK, N.A.
By:
-------------------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
NationsBank, N.A.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
72
80
$20,000,000.00 SOUTHTRUST BANK OF ALABAMA, N.A.
By:
-------------------------------------
Title:
-----------------------------------
[CORPORATE SEAL]
Lending Office
SouthTrust Bank of Alabama, N.A.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
------------
TOTAL COMMITMENTS:
$125,000,000.00
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SCHEDULE 4.08
Existing Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
None None
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82
EXHIBIT A
NOTE
$__________ [SPECIFY AMOUNT] Raleigh, North Carolina
as of October 29, 1996
For value received, the undersigned, WINSTON HOTELS, INC., a
North Carolina corporation (the "Company"), and XXXX LIMITED PARTNERSHIP, a
North Carolina limited partnership (the "Partnership") (the Company and the
Partnership shall hereinafter be referred to, jointly and severally, as the
"Borrower"), jointly and severally promise to pay to the order of
____________________________ [SPECIFY NAME OF BANK], A ___________________
[SPECIFY WHETHER A STATE BANK OR NATIONAL BANKING ASSOCIATION] (the "Bank"), for
the account of its Lending Office, the principal sum of
_________________________________ DOLLARS ($__________ ) [SPECIFY AMOUNT], or
such lesser amount as shall equal the unpaid principal amount of each Loan made
by the Bank to the Borrower pursuant to the Credit Agreement referred to below,
on the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest on
any overdue principal of and, to the extent permitted by law, overdue interest
on the principal amount hereof shall bear interest at the Default Rate, as
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Wachovia Bank of Georgia, N.A., 000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or such other address as may be
specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make, or any error of the Bank in making, any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of October 29, 1996, among the Borrower, the banks listed on
the signature pages thereof and their successors and assigns, Wachovia Bank of
North Carolina, N.A., as Collateral Agent and Wachovia Bank of Georgia, N.A., as
Administrative Agent (as the same may be amended or modified from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for provisions
for the prepayment and the repayment hereof and the acceleration of the maturity
hereof.
Time is of the essence of this Note. In the event all or any
part of any installment due under the terms of this Note is delinquent for more
than fifteen (15) days (excluding the final
1
83
payment of principal and interest due on the Maturity Date), there shall be due
to the Bank, in addition to the delinquent installment or part thereof and in
order to compensate the Bank for extra costs and expenses caused by such late
payment, a sum equal to four percent (4%) of the amount so delinquent.
THIS NOTE MAY NOT BE CHANGED ORALLY AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA.
The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided for
in the Credit Agreement.
The Borrower agrees, in the event that this Note or any
portion hereof is collected by law or through an attorney at law, to pay all
reasonable costs of collection, including, without limitation, reasonable
attorneys' fees.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed under seal, by its duly authorized officers as of the day and year
first above written.
BORROWER:
WINSTON HOTELS, INC., a North
Carolina corporation
By:
-----------------------------
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
2
84
XXXX LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., its sole general partner
By:
------------------------------
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
3
85
Note
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------
Type Amount Amount of
of Interest of Principal Maturity Notation
Date Loan(1) Rate Loan Repaid Date Made By
---- ---- ---- ---- --------- -------- --------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------
(1) I.e., a Base Rate or Euro-Dollar Loan.
1
86
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
[Borrower's Counsel has provided form]
2
87
EXHIBIT C
OPINION OF
XXXXXX XXXXXXX XXXXXXXXX & XXXX, PLLC, SPECIAL COUNSEL
FOR THE AGENTS
[Date as provided in Section 3.04 of the Credit Agreement]
To the Banks and the Administrative Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Dear Ladies/Gentlemen:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of October 29, 1996 among Winston Hotels, Inc., a
North Carolina corporation (the "Company"), and XXXX Limited Partnership, a
North Carolina limited partnership (the "Partnership"), the banks listed on the
signature pages thereof (the "Banks") and Wachovia Bank of Georgia, N.A., as
Administrative Agent (the "Administrative Agent"), and Wachovia Bank of North
Carolina, N.A., as Collateral Agent (the "Collateral Agent") (the Collateral
Agent and the Administrative Agent being collectively referred to as the
"Agents"), and have acted as special counsel for the Agents for the purpose of
rendering this opinion pursuant to Section 3.04(d) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions, which Interpretive
Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, we are of the opinion that the Credit Agreement
constitutes a valid and binding agreement of the
1
88
Borrower and each Note constitutes valid and binding obligations of the
Borrower, in each case enforceable in accordance with its terms except as: (i)
the enforceability thereof may be affected by bankruptcy, insolvency,
reorganization, fraudulent conveyance, voidable preference, moratorium or
similar laws applicable to creditors' rights or the collection of debtors'
obligations generally; (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; and (iii) the enforceability of certain of the remedial, waiver
and other provisions of the Credit Agreement and the Notes may be further
limited by the laws of the State of North Carolina; provided, however, such
additional laws do not, in our opinion, substantially interfere with the
practical realization of the benefits expressed in the Credit Agreement and the
Notes, except for the economic consequences of any procedural delay which may
result from such laws.
In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction except the State of North
Carolina. We express no opinion as to the effect of the compliance or
noncompliance of the Agents or any of the Banks with any state or federal laws
or regulations applicable to the Agents or any of the Banks by reason of the
legal or regulatory status or the nature of the business of the Agents or any of
the Banks.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you and any Assignee,
Participant or other Transferee under the Credit Agreement without our prior
written consent.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXXX & XXXX, PLLC
By:
-----------------------------
Manager
2
89
EXHIBIT D
CLOSING CERTIFICATE
OF
XXXX LIMITED PARTNERSHIP AND
WINSTON HOTELS, INC.
Reference is made to the Credit Agreement (the "Credit Agreement")
dated as of October 29, 1996, among XXXX Limited Partnership, a North Carolina
limited partnership (the "Partnership"), Winston Hotels, Inc., a North Carolina
corporation (the "Company") (the Company and the Partnership being collectively
referred to as the "Borrower"), Wachovia Bank of Georgia, N.A., as
Administrative Agent, Wachovia Bank of North Carolina, N.A., and the other Banks
listed on the signature pages thereof. Capitalized terms used herein have the
meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.04(e) of the Credit Agreement, Xxxx X. Xxxxxx,
the duly authorized Senior Vice President of the Company, on its own behalf and
as the general partner of the Partnership, hereby certifies to the
Administrative Agent and the Banks that: (i) no Default has occurred and is
continuing on the date hereof; and (ii) the representations and warranties of
the Borrower contained in Article IV of the Credit Agreement are true on and as
of the date hereof.
Certified as of the ___ day of October, 1996.
XXXX LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., a North Carolina
corporation, its general partner
By:
-------------------------------------
Senior Vice President
WINSTON HOTELS, INC., a North Carolina
corporation
By:
--------------------------------------
Senior Vice President
90
EXHIBIT E
WINSTON HOTELS, INC.
ASSISTANT SECRETARY'S CERTIFICATE
The undersigned, Xxxxxx X. Xxxxx, Assistant Secretary of Winston
Hotels, Inc., a North Carolina corporation (the "Company"), on behalf of the
Company and on behalf of XXXX Limited Partnership, a North Carolina limited
partnership in which the Company is the general partner (the "Partnership"),
(the Company and the Partnership being collectively referred to as the
"Borrower") hereby certifies that he has been duly elected, qualified and is
acting in such capacity as Secretary of the Company and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Credit Agreement
dated as of October 29, 1996 among the Borrower, Wachovia Bank of Georgia, N.A.,
as Administrative Agent, Wachovia Bank of North Carolina, N.A., as Collateral
Agent, and the Banks listed on the signature pages thereof that:
1. Attached hereto as Exhibit A is a complete and correct copy of the
Articles of Incorporation of the Company as in full force and effect on the date
hereof as certified by the Secretary of State of the State of North Carolina,
the Company's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy of the
Bylaws of the Company as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of the
limited partnership agreement of the Partnership as in full force and effect on
the date hereof.
4. Attached hereto as Exhibit D is a complete and correct copy of the
resolutions duly adopted by the Board of Directors of the Company on __________,
1996 approving, and authorizing, on behalf of the Company and the Partnership,
the execution and delivery of the Credit Agreement, the Notes (as such term is
defined in the Credit Agreement) and the other Loan Documents (as such term is
defined in the Credit Agreement) to which the Borrower is a party. Such
resolutions have not been repealed or amended and are in full force and effect,
and no other resolutions or consents have been adopted by the Board of Directors
of the Company in connection therewith.
5. Xxxx X. Xxxxxx, who as Senior Vice President of the Company signed
the Credit Agreement, the Notes and the other Loan Documents to which the
Borrower is a party, was duly elected, qualified and acting as such at the time
he signed the Credit Agreement, the Notes and other Loan Documents to which the
Borrower is a party, and his signature appearing on the Credit Agreement, the
Notes and the other Loan Documents to which the Borrower is a party is his
genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
the ____ day of October, 1996.
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary, Winston Hotels, Inc.
91
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
__________, 199_
Wachovia Bank of Georgia, N.A.
as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Re: Credit Agreement (as amended and modified from time to time,
the "Credit Agreement") dated as of October 29, 1996 by and
among Winston Hotels, Inc. (the "Company"), XXXX Limited
Partnership (the "Partnership") (the Company and the
Partnership being collectively referred to as the
"Borrower"), the Banks from time to time parties thereto,
Wachovia Bank of North Carolina, N.A., as Collateral Agent,
and Wachovia Bank of Georgia, N.A., as Administrative Agent.
Ladies and Gentlemen:
This Compliance Certificate is delivered pursuant to Section 5.01(c) of
the Credit Agreement. All terms used herein but not defined herein shall have
the meaning given to such terms in the Credit Agreement.
1. The Borrower hereby certifies that, as of the date hereof, no
"Default" exists on the date of such certificate [, other than
those "Defaults" described in Schedule 1 attached hereto and
incorporated herein by reference]. [IF SCHEDULE 1 IS ATTACHED,
SCHEDULE 1 SHOULD IDENTIFY THE DEFAULT WITH PARTICULARITY AND
SHOULD IDENTIFY THE ACTION THE BORROWER IS TAKING OR PROPOSES
TO TAKE WITH RESPECT TO SUCH DEFAULT.]
2. Attached hereto are computations setting forth in reasonable
detail the compliance by the Borrower with the following
Sections of the Credit Agreement:
a. Section 5.04 Consolidated Debt
b. Section 5.08 Total Funded Debt for Distribution Cash
Available
c. Section 5.09 Consolidated Tangible Net Worth
WINSTON HOTELS, INC., on its own behalf
and as general partner of XXXX LIMITED
PARTNERSHIP
By:
--------------------------------------
Senior Vice President
92
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated ________________ __, 199_
Reference is made to the Credit Agreement dated as of______________
__________________ __, ____ (together with all amendments and modifications
thereto, the "Credit Agreement") among Winston Hotels, Inc., a North Carolina
corporation (the "Company") and XXXX Limited Partnership, a North Carolina
limited partnership (the "Partnership") (the Company and the Partnership being
collectively referred to as the "Borrower"), the Banks (as defined in the Credit
Agreement), Wachovia Bank of Georgia, N.A., as Administrative Agent (the
"Administrative Agent") and Wachovia Bank of North Carolina, N.A., as Collateral
Agent (the "Collateral Agent") (the Administrative Agent and the Collateral
Agent being collectively referred to as the "Agents"). Terms defined in the
Credit Agreement are used herein with the same meaning.
___________________________________________________ (the "Assignor")
and ________________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse to
the Assignor, and the Assignee hereby purchases and assumes from the Assignor, a
______% interest in and to all of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below) (including,
without limitation, a ______% interest (which on the Effective Date hereof is
$_______________) in the Assignor's Commitment and a ______% interest (which on
the Effective Date hereof is $_______________) in the Loans owing to the
Assignor a ______% interest in the Note held by the Assignor (which on the
Effective Date hereof is
$__________________)).
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder, that such interest is free and clear of any
adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$_________________ and the aggregate outstanding principal amount of Loans owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $_________________; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches the
Note[s] referred to in paragraph 1 above and requests that the Administrative
Agent exchange such Note[s] as
93
follows: [a new Note dated _______________, ____ in the principal amount of
_________________ payable to the order of the Assignee in the principal amount
of $_______________ payable to the order of the Assignor and a Note dated
______________, ____ in the principal amount of $______________ payable to the
order of the Assignee].
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.04(a) thereof (or any more recent financial statements of the
Borrower delivered pursuant to Section 5.01(a) or (b) thereof) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Agents, the Assignor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is a bank
or financial institution; (iv) appoints and authorizes the Agents to take such
action as agents on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agents by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; (vi)
specifies as its Lending Office (and address for notices) the office set forth
beneath its name on the signature pages hereof, (vii) represents and warrants
that the execution, delivery and performance of this Assignment and Acceptance
are within its corporate powers and have been duly authorized by all necessary
corporate action[, and (viii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and the Notes or such other documents as are necessary to indicate that all such
payments are subject to such taxes at a rate reduced by an applicable tax
treaty].(2)
4. The Effective Date for this Assignment and Acceptance shall be
_______________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
execution and acceptance by the Administrative Agent [and to the Borrower for
execution by the Borrower](3).
5. Upon such execution and acceptance by the Administrative Agent
[and execution by the Borrower]**, from and after the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent rights and
obligations have been transferred to it by this Assignment and Acceptance, have
the rights and obligations of a Bank thereunder and (ii) the Assignor shall, to
the extent its rights and obligations have been transferred to the Assignee by
this
(2) If the Assignee is organized under the laws of a jurisdiction
outside the United States.
(3) If the Assignee is not a Bank or an Affiliate of a Bank prior to
the Effective Date.
2
94
this Assignment and Acceptance, relinquish its rights (other than under Section
8.03 and Section 9.03 of the Credit Agreement) and be released from its
obligations under the Credit Agreement.
6. Upon such execution and acceptance by the Administrative Agent [and
execution by the Borrower]**, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the interest assigned
hereby to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to such acceptance by the
Administrative Agent directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By:____________________________________
Title:
[NAME OF ASSIGNEE]
By:____________________________________
Title:
Lending Office:
_______________________________________
_______________________________________
_______________________________________
Telecopy number:_______________________
Telephone number:______________________
WACHOVIA BANK OF GEORGIA, N.A., as
Administrative Agent
By:____________________________________
Title:
BORROWER:*
WINSTON HOTELS, INC., a North Carolina
corporation
---------------
*If the Assignee is not a Bank or an Affiliate of a Bank prior to the
Effective Date.
3
95
By:
-----------------------------
Senior Vice President
XXXX LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., its sole general
partner
By:
-----------------------------
Senior Vice President
4
96
EXHIBIT H
NOTICE OF BORROWING
[To Be Provided by Borrower and Wachovia]
97
EXHIBIT I
FORM OF BORROWING BASE CERTIFICATE
[To be provided by Borrower and Wachovia]
98
EXHIBIT J
FORM OF PAYDOWN ALLOCATION
[To be provided by Borrower and Wachovia]
