EXHIBIT 10.1
THIRD AMENDED AND RESTATED
SENIOR UNSECURED CREDIT AGREEMENT
Dated as of June 26, 2001
Among
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
as the Borrower,
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SOCIETE GENERALE, SOUTHWEST AGENCY
as Joint Book Runner and Administrative Agent,
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BANK OF MONTREAL, CHICAGO BRANCH
as Syndication Agent,
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DEUTSCHE BANC ALEX. XXXXX
as Joint Book Runner and Documentation Agent
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and
THE BANKS NAMED HEREIN
as the Banks
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 2
SECTION 1.01 CERTAIN DEFINED TERMS..........................................2
SECTION 1.02 COMPUTATION OF TIME PERIODS...................................29
SECTION 1.03 ACCOUNTING TERMS; CHANGES IN GAAP.............................29
SECTION 1.04 TYPES OF ADVANCES.............................................29
SECTION 1.05 MISCELLANEOUS.................................................29
SECTION 1.06 AMENDMENT AND RESTATEMENT; COMMITMENT INCREASES...............29
ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT 30
SECTION 2.01 THE ADVANCES..................................................30
SECTION 2.02 METHOD OF BORROWING...........................................31
SECTION 2.03 FEES..........................................................34
SECTION 2.04 REDUCTION OF THE COMMITMENTS..................................35
SECTION 2.05 REPAYMENT OF ADVANCES.........................................35
SECTION 2.06 INTEREST, LATE PAYMENT FEE....................................35
SECTION 2.07 PREPAYMENTS...................................................36
SECTION 2.08 BREAKAGE COSTS................................................37
SECTION 2.09 INCREASED COSTS...............................................37
SECTION 2.10 PAYMENTS AND COMPUTATIONS.....................................39
SECTION 2.11 TAXES.........................................................40
SECTION 2.12 ILLEGALITY....................................................42
SECTION 2.13 LETTERS OF CREDIT.............................................42
SECTION 2.14 DETERMINATION OF BORROWING BASE...............................45
SECTION 2.15 BANK REPLACEMENT..............................................46
SECTION 2.16 SHARING OF PAYMENTS, ETC......................................46
ARTICLE III CONDITIONS OF LENDING 47
SECTION 3.01 CONDITIONS PRECEDENT TO INITIAL ADVANCE.......................47
SECTION 3.02 CONDITIONS PRECEDENT FOR EACH BORROWING OR LETTER OF CREDIT...49
SECTION 3.03 CONDITIONS PRECEDENT TO A HOTEL PROPERTY QUALIFYING
AS AN ELIGIBLE PROPERTY.......................................50
ARTICLE IV REPRESENTATIONS AND WARRANTIES 53
SECTION 4.01 EXISTENCE; QUALIFICATION; PARTNERS; SUBSIDIARIES..............53
SECTION 4.02 PARTNERSHIP AND CORPORATE POWER...............................54
SECTION 4.03 AUTHORIZATION AND APPROVALS...................................55
SECTION 4.04 ENFORCEABLE OBLIGATIONS.......................................55
SECTION 4.05 PARENT COMMON STOCK...........................................55
SECTION 4.06 FINANCIAL STATEMENTS..........................................55
SECTION 4.07 TRUE AND COMPLETE DISCLOSURE..................................55
SECTION 4.08 LITIGATION....................................................56
SECTION 4.09 USE OF PROCEEDS...............................................56
SECTION 4.10 INVESTMENT COMPANY ACT........................................56
SECTION 4.11 TAXES.........................................................56
SECTION 4.12 PENSION PLANS.................................................57
SECTION 4.13 CONDITION OF HOTEL PROPERTY; CASUALTIES; CONDEMNATION.........57
SECTION 4.14 INSURANCE.....................................................58
SECTION 4.15 NO BURDENSOME RESTRICTIONS; NO DEFAULTS.......................58
SECTION 4.16 ENVIRONMENTAL CONDITION.......................................58
SECTION 4.17 LEGAL REQUIREMENTS, ZONING, UTILITIES, ACCESS.................59
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SECTION 4.18 EXISTING INDEBTEDNESS.........................................59
SECTION 4.19 TITLE; ENCUMBRANCES...........................................59
SECTION 4.20 LEASING ARRANGEMENTS..........................................60
SECTION 4.21 APPROVED MANAGEMENT AGREEMENTS................................60
ARTICLE V AFFIRMATIVE COVENANTS 60
SECTION 5.01 COMPLIANCE WITH LAWS, ETC.....................................61
SECTION 5.02 PRESERVATION OF EXISTENCE, SEPARATENESS, ETC..................61
SECTION 5.03 PAYMENT OF TAXES, ETC.........................................62
SECTION 5.04 VISITATION RIGHTS; BANK MEETING...............................62
SECTION 5.05 REPORTING REQUIREMENTS........................................63
SECTION 5.06 MAINTENANCE OF PROPERTY AND REQUIRED WORK.....................66
SECTION 5.07 INSURANCE.....................................................67
SECTION 5.08 BORROWING BASE REQUIREMENTS...................................67
SECTION 5.09 SUPPLEMENTAL GUARANTIES.......................................67
SECTION 5.10 INTENTIONALLY DELETED.........................................67
SECTION 5.11 USE OF PROCEEDS...............................................67
SECTION 5.12 NEW GUARANTORS................................................67
ARTICLE VI NEGATIVE COVENANTS 68
SECTION 6.01 LIENS, ETC....................................................68
SECTION 6.02 INDEBTEDNESS..................................................68
SECTION 6.03 AGREEMENTS RESTRICTING DISTRIBUTIONS FROM SUBSIDIARIES........69
SECTION 6.04 RESTRICTED PAYMENTS...........................................70
SECTION 6.05 FUNDAMENTAL CHANGES; ASSET DISPOSITIONS.......................70
SECTION 6.06 APPROVED PARTICIPATING LESSEE OWNERSHIP.......................71
SECTION 6.07 INVESTMENTS, LOANS, FUTURE PROPERTIES.........................71
SECTION 6.08 AFFILIATE TRANSACTIONS........................................72
SECTION 6.09 SALE AND LEASEBACK............................................72
SECTION 6.10 SALE OR DISCOUNT OF RECEIVABLES...............................72
SECTION 6.11 NO FURTHER NEGATIVE PLEDGES...................................73
SECTION 6.12 INTENTIONALLY DELETED.........................................73
SECTION 6.13 MATERIAL DOCUMENTS............................................73
SECTION 6.14 LIMITATIONS ON DEVELOPMENT, CONSTRUCTION, RENOVATION
AND PURCHASE OF HOTEL PROPERTIES..............................73
ARTICLE VII FINANCIAL COVENANTS 74
SECTION 7.01 PARENT'S FIXED CHARGE COVERAGE RATIO..........................74
SECTION 7.02 PARENT'S INTEREST COVERAGE RATIO..............................74
SECTION 7.03 UNSECURED INTEREST COVERAGE RATIO.............................74
SECTION 7.04 MAINTENANCE OF NET WORTH......................................74
SECTION 7.05 LIMITATIONS ON TOTAL LIABILITIES..............................74
SECTION 7.06 LIMITATIONS ON SECURED RECOURSE INDEBTEDNESS..................74
SECTION 7.07 LIMITATIONS ON SECURED INDEBTEDNESS...........................74
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES 75
SECTION 8.01 EVENTS OF DEFAULT.............................................75
SECTION 8.02 OPTIONAL ACCELERATION OF MATURITY.............................78
SECTION 8.03 AUTOMATIC ACCELERATION OF MATURITY............................79
SECTION 8.04 CASH COLLATERAL ACCOUNT.......................................79
SECTION 8.05 NON-EXCLUSIVITY OF REMEDIES...................................80
SECTION 8.06 RIGHT OF SET-OFF..............................................80
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ARTICLE IX AGENCY AND ISSUING BANK PROVISIONS 80
SECTION 9.01 AUTHORIZATION AND ACTION......................................80
SECTION 9.02 ADMINISTRATIVE AGENT' RELIANCE, ETC...........................81
SECTION 9.03 ADMINISTRATIVE AGENT AND ITS AFFILIATES.......................81
SECTION 9.04 BANK CREDIT DECISION..........................................82
SECTION 9.05 INDEMNIFICATION...............................................82
SECTION 9.06 SUCCESSOR ADMINISTRATIVE AGENT AND ISSUING BANKS..............82
SECTION 9.07 JOINT BOOK RUNNERS, SYNDICATION AGENT AND
DOCUMENTATION AGENT...........................................83
ARTICLE X MISCELLANEOUS 83
SECTION 10.01 AMENDMENTS, ETC...............................................83
SECTION 10.02 NOTICES, ETC..................................................85
SECTION 10.03 NO WAIVER; REMEDIES...........................................85
SECTION 10.04 COSTS AND EXPENSES............................................85
SECTION 10.05 BINDING EFFECT................................................86
SECTION 10.06 BANK ASSIGNMENTS AND PARTICIPATIONS...........................86
SECTION 10.07 INDEMNIFICATION...............................................88
SECTION 10.08 EXECUTION IN COUNTERPARTS.....................................89
SECTION 10.09 SURVIVAL OF REPRESENTATIONS, INDEMNIFICATIONS, ETC............89
SECTION 10.10 SEVERABILITY..................................................89
SECTION 10.11 ENTIRE AGREEMENT..............................................89
SECTION 10.12 USURY NOT INTENDED............................................89
SECTION 10.13 GOVERNING LAW.................................................90
SECTION 10.14 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.......90
SECTION 10.15 KNOWLEDGE OF BORROWER.........................................92
SECTION 10.16 BANKS NOT IN CONTROL..........................................92
SECTION 10.17 HEADINGS DESCRIPTIVE..........................................92
SECTION 10.18 TIME IS OF THE ESSENCE........................................92
SECTION 10.19 SCOPE OF INDEMNITIES..........................................92
SECTION 10.20 CONFIDENTIALITY...............................................93
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EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Environmental Indemnity
Exhibit F - Form of Guaranty
Exhibit G - Form of Notice of Borrowing
Exhibit H - Form of Notice of Conversion or Continuation
Exhibit I - Form of Property Adjustment Report
SCHEDULES:
Schedule 1.01(a) - Commitments
Schedule 1.01(b) - Initial Properties, Initial Investment Amount and
Initial Hotel Value
Schedule 1.01(c) - Approved Managers
Schedule 1.01(d) - Approved Participating Leases
Schedule 1.01(e) - Engineer Report Scope of Services
Schedule 1.01(f) - Approved Engineers
Schedule 1.01(g) - Environmental Report Scope of Services
Schedule 1.01(h) - Approved Environmental Consultants
Schedule 1.01(i) - Guarantors
Schedule 1.01(j) - Qualified Ground Leases
Schedule 1.01(k) - Approved Participating Lessees
Schedule 1.01(l) - Existing Letters of Credit
Schedule 4.01 - Subsidiaries
Schedule 4.08 - Litigation
Schedule 4.17 - Legal Requirements; Zoning; Utilities; Access
Schedule 4.18 - Existing Indebtedness
Schedule 4.21 - Approved Management Agreements
Schedule 5.07 - Insurance
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THIRD AMENDED AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT, dated as of
June 26, 2001, is among LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as the Borrower, SOCIETE GENERALE, SOUTHWEST AGENCY, as
Joint Book Runner and Administrative Agent, BANK OF MONTREAL, CHICAGO BRANCH,
as Syndication Agent, DEUTSCHE BANC ALEX. XXXXX, as Joint Book Runner and
Documentation Agent, and the Banks.
PRELIMINARY STATEMENTS:
WHEREAS, many of the parties hereto previously entered into a Second
Amended and Restated Senior Unsecured Credit Agreement, dated as of November
13, 2000, by and between LaSalle Hotel Operating Partnership, L.P., a Delaware
limited partnership, as the Borrower, Societe Generale, Southwest Agency, as
Joint Book Runner and Administrative Agent, Bank of Montreal, Chicago Branch,
as Syndication Agent, Deutsche Banc Alex. Xxxxx, as Joint Book Runner and
Documentation Agent, and the banks and other lenders a party thereto; as
amended by First Amendment to Second Amended and Restated Senior Unsecured
Credit Agreement dated as of May 15, 2001, all executed by and among such
parties (as so amended, the "Existing Credit Agreement") pursuant to which the
banks and other lenders party to the Existing Credit Agreement (the "Existing
Lenders") have made Advances (as defined in the Existing Credit Agreement) to
the Borrower, and have issued or participated in Letters of Credit (as defined
in the Existing Credit Agreement) for the account of the Borrower, in each
case on the terms and conditions set forth therein;
WHEREAS, the Borrower has requested that the Existing Lenders amend the
Existing Credit Agreement and the other Credit Documents (as defined in the
Existing Credit Agreement, and as used herein, the "Existing Credit
Documents") in order to increase the Commitments under this Agreement and
revise certain terms thereof and the Existing Lenders have agreed to do so on
the terms and conditions set forth herein; and
WHEREAS, the parties hereto have agreed to amend and restate the Existing
Credit Agreement in its entirety for clarity only, and amend the other
Existing Credit Documents, in order to memorialize such amendments;
WHEREAS, this Third Amended and Restated Credit Agreement constitutes for
all purposes an amendment to the Existing Credit Agreement and not a new or
substitute agreement and each reference to an "Advance" and "Letter of Credit"
herein shall mean such Advance made and each Letter of Credit issued
heretofore under the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions contained in this Agreement, the parties hereto do hereby agree as
follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms
of the terms defined):
"Accession Agreement" means an Accession Agreement in the form attached
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respectively to the Guaranty and Environmental Indemnity as Annex 1 thereto,
which agreement causes the Person executing and delivering the same to the
Administrative Agent to become a party to the Guaranty and Environmental
Indemnity.
"Acquisition Agreements" means for any Hotel Property the agreements
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entered into in connection with the acquisition of such Hotel Property.
"Adjusted Base Rate" means, for any day, the fluctuating rate per annum
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of interest equal to the greater of (a) the Prime Rate in effect on such day
and (b) the Federal Funds Rate in effect on such day plus 2%.
"Adjusted Net Worth" means, for the Parent as of any date, the sum of (a)
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the Parent's Net Worth on such date plus (b) the minority interest reflected
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in the Parent's balance sheet on such date determined in accordance with GAAP.
"Adjusted NOI" means, for any Hotel Property for any period, the EBITDA
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of such Hotel Property for such period less the aggregate FF&E Reserves for
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such period for such Hotel Property.
"Adjustment Event" has the meaning set forth in Section 2.14(b).
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"Administrative Agent" means Societe Generale, Southwest Agency, in its
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capacity as Administrative Agent for the Banks pursuant to Article IX and any
successor Administrative Agent appointed pursuant to Section 9.06.
"Advisory Fee Letter" has the meaning set forth in Section 2.03(d).
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"Advance" means an Advance by a Bank to the Borrower, any such Advance
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being either a Base Rate Advance or a LIBOR Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
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indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person.
The term "control" (including the terms "controlled by" or "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of a Control Percentage, by contract or otherwise.
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"Agreement" has the meaning given such term in the initial paragraph of
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this agreement.
"Allocation Percentage" means, for any Person, with respect to a Person's
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Joint Venture Subsidiary, the percentage ownership interest of such Person in
such Joint Venture Subsidiary.
"Applicable Lending Office" means, with respect to each Bank, such Bank's
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Domestic Lending Office in the case of a Base Rate Advance and such Bank's
LIBOR Lending Office in the case of a LIBOR Advance.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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"Applicable Margin" means, (a) with respect to each Type of Advance at
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any date, the applicable percentage per annum set forth below based upon the
Status then in effect under the column for such Type of Advance, (b) with
respect to the letter of credit fee payable under Section 2.03(b) at any date,
the applicable percentage per annum set forth below under the column "Letters
of Credit & LIBOR Advances," based upon the Status then in effect, and (c)
with respect to the commitment fee payable under Section 2.03(a) at any date,
the applicable percentage per annum set forth below under the column "Unused
Commitment Fee," based upon the Status then in effect.
Base Rate Letters of Credit & Unused
Advances LIBOR Advances Commitment Fee
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Level I
Status .250% 1.750% .20%
Level II
Status .375% 1.875% .25%
Level III
Status .500% 2.000% .25%
Level IV
Status .625% 2.125% .25%
Level V
Status 1.000% 2.500% .50%
"Approved Management Agreements" means those certain management
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agreements listed on Schedule 4.22 attached hereto and any future management
agreement for an Eligible Property in substantially the same form or as
otherwise approved by the Administrative Agent in writing which approval shall
not be unreasonably withheld or delayed.
"Approved Manager" means those certain managers listed as "Approved
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Managers" on Schedule 1.01(c) attached hereto, or any other reputable,
nationally known, third party manager of a Hotel Property approved by the
Administrative Agent in writing which approval shall not be unreasonably
withheld or delayed.
"Approved Other Country" means each of the following countries: Canada,
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Mexico, United Kingdom, France, Germany, Spain, Belgium, The Netherlands,
Luxembourg, Italy, Portugal, Austria, Switzerland, Norway, Sweden, Denmark,
U. S. Virgin Islands, Bahamas, and Puerto Rico.
"Approved Participating Leases" means those certain Approved
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Participating Leases listed on Schedule 1.01(d) attached hereto and any future
___ participating ___ lease for an Eligible Property approved by the
Administrative Agent in writing (which approval shall not be unreasonably
withheld if such participating lease permits the lessor under such
participating lease to terminate such lease upon the lessee's failure to
achieve reasonable revenue targets for the applicable Hotel Property).
"Approved Participating Lessee" means LaSalle Leasing, each of the other
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Persons listed on Schedule 1.01(k) attached hereto, and any future
participating lessee for a Hotel Property (a)
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which is approved by the Administrative Agent in writing and (b) does not
jeopardize the Parent's REIT status; provided, however, that any lessee that
is an Approved Manager or its Affiliate shall automatically be deemed an
Approved Participating Lessee.
"Asset Disposition" means any sale, lease of substantially all of a Hotel
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Property (in which the Borrower or a Guarantor is lessor but exclusive of the
Approved Participating Leases), conveyance, exchange, transfer, or assignment
of any Property by the Borrower or a Guarantor to a Person other than the
Borrower or a Guarantor.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Bank and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of the attached Exhibit B.
"Banks" means the lenders listed on the signature pages of this Agreement
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and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 10.06.
"Base Rate Advance" means an Advance which bears interest as provided in
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Section 2.06(a).
"Borrower" means LaSalle Hotel Operating Partnership, L.P., a Delaware
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limited partnership.
"Borrowing" means a borrowing consisting of simultaneous Advances of the
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same Type made by each Bank pursuant to Section 2.01 or Converted by each Bank
to Advances of a different Type pursuant to Section 2.02(b).
"Borrowing Base" means, at any date of its determination, an amount equal
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to (a) 50% of the Borrowing Base Hotel Value on such date minus (b) the
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Unsecured Indebtedness (except for the Obligations) of the Parent and its
Subsidiaries outstanding on such date.
"Borrowing Base Hotel Value" means, at any date of its determination, an
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amount equal to the sum of the Hotel Values for all Eligible Properties on
such date.
"Borrowing Base Certificate" means a certificate of the Borrower in
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substantially the form of the attached Exhibit C, certified by a Responsible
Officer of Borrower to be true, correct and accurate in all material respects.
"Borrowing Base Determination Date" means any date the Borrowing Base is
---------------------------------
determined in accordance with Section 2.14.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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"Borrowing Base Requirements" means collectively that (a) no more than
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15% of the Borrowing Base Hotel Value may be comprised of Eligible Properties
which are located outside the United States and shall only be in an Approved
Other Country; (b) no more than 10% of the Borrowing Base Hotel Value may be
comprised of Eligible Properties which are limited service hotels; (c) no more
than 20% of the Borrowing Base Hotel Value may be comprised of Renovating
Properties; (d) no more than 20% of the Borrowing Base Hotel Value may be
comprised of Hotel Properties owned or leased by Joint Venture Subsidiaries;
(e) no more than 30% of the Borrowing Base Hotel Value may be comprised of any
one Eligible Property (except for the San Diego Paradise Point which shall not
comprise more than 40% of the Borrowing Base Hotel Value); (f) the Borrowing
Base shall be comprised of at least four (4) Eligible Properties; (g) no Hotel
Property or other Property shall cause the Parent to forfeit the Parent's tax
status as a REIT; and (h) no more than one Renovating Property shall be in the
Borrowing Base at any time; provided that the Boutique Properties may all be
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deemed Renovating Properties and included in the Borrowing Base.
Notwithstanding anything in the foregoing to the contrary, (1) for purposes of
clause (f) in the preceding sentence, the Boutique Properties collectively may
only be deemed to constitute one Eligible Property, (2) in the event that one
or more of the Boutique Properties no longer qualifies as an Eligible
Property, the remaining one or more Boutique Properties may continue as one
Eligible Property; (3) no other Hotel Property may be designated as a
Renovating Property while any of the Boutique Properties is designated as a
Renovating Property; and (4) notwithstanding the actual timing of the
renovations for the Boutique Properties, each Boutique Property will again be
deemed a "Seasoned Property" on the date applicable to such Boutique Property
in the following table:
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HOTEL PROPERTY DATE OF REVERSION TO SEASONED PROPERTY
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Canterbury Hotel October 1, 2002
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Quality Hotel & Suites October 1, 2002
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Clarion Hampshire Hotel April 1, 2003
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Xxxxxx Xxxxxxx Plaza Hotel April 1, 2003
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"Boutique Property" means each of the following four (4) Hotel Properties
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in the Washington, D.C. metropolitan area: Canterbury Hotel, Quality Hotel &
Suites, Clarion Hampshire Hotel, and Xxxxxx Xxxxxxx Plaza Hotel, as the same
may be rebranded, and "Boutique Properties" means all such Hotel Properties.
"Business Day" means a day of the year on which banks are not required or
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authorized to close in New York City or Dallas, Texas and, if the applicable
Business Day relates to any LIBOR Advances, any day other than a Saturday or
Sunday or a day on which banking institutions are generally authorized or
obligated by law or executive order to close in the City of London, England.
"Calculated Value" means for any Hotel Property the product of (a) the
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lesser of (i) the Adjusted NOI for such Hotel Property for the preceding
Rolling Period or (ii) the actual rental payments received by the Parent or
its Subsidiary under the participating lease for such Hotel Property during
such Rolling Period times (b) ten (10).
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"Capital Expenditure" means any payment made directly or indirectly for
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the purpose of acquiring or constructing fixed assets, Real Property or
equipment which in accordance with GAAP would be capitalized in the fixed
asset accounts of such Person making such expenditure, including, without
limitation, amounts paid or payable for such purpose under any conditional
sale or other title retention agreement or under any Capital Lease, but
excluding repairs of Property in the normal and ordinary course of business.
"Capitalization Event" means any sale or issuance by the Parent or any of
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its Subsidiaries of equity securities except for the issuance of the
Borrower's operating partnership units in exchange for a direct or indirect
ownership interest in a Person that owns a Hotel Property.
"Capital Lease" means, for any Person, any lease of any Property (whether
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real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"Capitalized Lease Obligations" means, as to any Person, the capitalized
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amount of all obligations of such Person or any of its Subsidiaries under
Capitalized Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cash Collateral Account" means a special cash collateral account
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containing cash deposited pursuant to the terms of this Agreement to be
maintained at Societe Generale, New York Branch's office in accordance with
Section 8.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
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and Liability Act of 1980, as amended, state and local analogs, and all rules
and regulations and requirements thereunder in each case as now or hereafter
in effect.
"Closing Date" means June 26, 2001.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Commitment" means, with respect to any Bank, the amount set opposite
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such Bank's name on Schedule 1.01(a) as its Commitment, or if such Bank has
entered into any Assignment and Acceptance, the amount set forth for such Bank
as its Commitment in the Register maintained by the Administrative Agent
pursuant to Section 10.06(c), as such amount may be reduced pursuant to
Section 2.04.
"Compliance Certificate" means a certificate of the Borrower in
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substantially the form of the attached Exhibit D.
"Conditions to Asset Disposition" shall for any Asset Disposition include
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all of the following requirements: (a) no Default has occurred and is
continuing or would occur upon the consummation of such Asset Disposition, as
certified by the Borrower; (b) the Borrower shall have delivered to the
Administrative Agent a Property Adjustment Report in connection with such
Asset Disposition; and (c) if required pursuant to the provisions of Section
2.07(c)(i), the
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Borrower makes a prepayment of the Advances in an amount of not less than the
amount of Advances that would need to be repaid, if any, to cure a Borrowing
Base deficiency under Section 2.07(c)(i).
"Consolidated" refers to the consolidation of the accounts of the
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Borrower with the Borrower's Subsidiaries and the Parent with the Parent's
Subsidiaries, as applicable, in accordance with GAAP.
"Control Percentage" means, with respect to any Person, the percentage of
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the outstanding capital stock of such Person having ordinary voting power
which gives the direct or indirect holder of such stock the power to elect a
majority of the Board of Directors of such Person.
"Controlled Group" means all members of a controlled group of
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corporations and all trades (whether or not incorporated) under common control
which, together with the Parent and the Borrower, are treated as a single
employer under Section 414 of the Code.
"Convert", "Conversion", and "Converted" each refers to a conversion of
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Advances of one Type into Advances of another Type pursuant to Section
2.02(b).
"Credit Documents" means this Agreement, the Notes, the Guaranties, the
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Environmental Indemnities, the Fee Letter, the Advisory Fee Letter, and each
other agreement, instrument or document executed by the Borrower or any of its
Subsidiaries at any time in connection with this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition
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which with notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Development Property" means either (a) a new Hotel Property under
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construction including the conversion of a non-Hotel Property into a Hotel
Property or (b) an existing Hotel Property which is undergoing an expansion
pursuant to which the total guest rooms for such Hotel Property will be
increased by 50% or more.
"Dollar Equivalent" means the equivalent in another currency of an amount
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in U.S. Dollars to be determined by reference to the rate of exchange quoted
by the Administrative Agent, at 12:00 Noon (Dallas, Texas time) on the date of
determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
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"Domestic Lending Office" means, with respect to any Bank, the office of
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such Bank specified as its "Operations Contact" in the questionnaire such Bank
provided to the Administrative Agent, or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Administrative
Agent.
"EBITDA" means for any Person or Hotel Property, as applicable, for any
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period for which such amount is being determined, an amount equal to (a) the
Net Income for such Person
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or Hotel Property, as applicable, for such period plus (b) to the extent
----
deducted in determining Net Income, Interest Expense, income taxes,
depreciation, amortization, and other non-cash items for such period, as
determined in accordance with GAAP plus (c) for the Hyatt Boston and Hyatt
----
Boston Lessee, as applicable, the Hyatt Boston Deemed Interest.
"Effective Date" means the date all of the conditions precedent set forth
--------------
in Section 3.01 have been satisfied.
"Eligible Assignee" means (a) a commercial bank (or other financial
-----------------
institution acceptable to the Administrative Agent and the Borrower) organized
under the laws of the United States, or any State thereof, and having primary
capital of not less than $250,000,000 and approved by the Administrative Agent
and the Issuing Bank, which approvals will not be unreasonably withheld, (b) a
commercial bank (or other financial institution acceptable to the
Administrative Agent and the Borrower) organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development and having primary capital (or its equivalent) of not less than
$250,000,000 (or its Dollar Equivalent) and approved by the Administrative
Agent and the Issuing Bank, which approvals will not be unreasonably withheld,
(c) a Bank, and (d) an Affiliate of the respective assigning Bank, without
approval of any Person but otherwise meeting the eligibility requirements of
(a) or (b) above.
"Eligible Property" means, as of any Borrowing Base Determination Date,
-----------------
any Hotel Property which is owned or leased by the Borrower or any Guarantor
on such date and was so owned or leased on the date of the most recent
Borrowing Base Certificate delivered to the Banks, and which satisfies the
conditions to qualifying as an Eligible Property set forth in Section 3.03 on
such Borrowing Base Determination Date.
"Engineering Report" means with respect to any Hotel Property, an
------------------
engineering report in accordance with the scope of services attached hereto as
Schedule 1.01(e) reasonably satisfactory to the Administrative Agent prepared
for the Banks by a Person set forth on Schedule 1.01(f) or otherwise
satisfactory to the Administrative Agent covering the physical condition of
the Hotel Property, including without limitation the structural, electrical,
plumbing, mechanical and other essential components of the Hotel Property.
"Environment" or "Environmental" shall have the meanings set forth in 42
----------- -------------
U.S.C. ss. 9601(8), as amended.
"Environmental Claim" means any third party (including governmental
-------------------
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating
to health or safety of employees) which seeks to impose liability under any
Environmental Law.
"Environmental Indemnity" means one or more environmental indemnity
-----------------------
agreements dated of even date herewith in substantially the form of the
attached Exhibit E executed or to be executed by the Borrower, the Parent and
all Subsidiaries of the Borrower (excluding the
-9-
Permitted Other Subsidiaries), and any future environmental indemnities
executed in connection with any Hotel Property, as any of such environmental
indemnities may be amended hereafter in accordance with the terms of such
agreements.
"Environmental Law" means all Legal Requirements arising from, relating
-----------------
to, or in connection with the Environment, health, or safety, including
without limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other
natural resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous, medical,
infectious, or toxic substances, materials or wastes; (d) the safety or health
of employees; or (e) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of hazardous, medical,
infectious, or toxic substances, materials or wastes.
"Environmental Permit" means any permit, license, order, approval or
--------------------
other authorization under Environmental Law.
"Environmental Report" means with respect to any Hotel Property, an
--------------------
environmental report in accordance with the scope of services attached hereto
as Schedule 1.01(g) reasonably satisfactory to the Administrative Agent
prepared for the Banks by a Person set forth on Schedule 1.01(h) or otherwise
satisfactory to the Administrative Agent certifying to the Administrative
Agent and the Banks that the Hotel Property and the soil and the groundwater
thereunder do not contain Hazardous Substances except for Permitted Hazardous
Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Federal Reserve Board (or any successor), as in effect
from time to time.
"Exchange Act" has the meaning set forth in Section 2.04.
------------
"Existing Credit Agreement" has the meaning set forth in the preliminary
-------------------------
statements to this Agreement.
"Existing Credit Documents" has the meaning set forth in the preliminary
-------------------------
statements to this Agreement.
"Existing Lenders" has the meaning set forth in the preliminary
----------------
statements to this Agreement.
"Existing Letters of Credit" means the letters of credit outstanding on
--------------------------
the date of this Agreement issued for the account of the Borrower or its
Subsidiaries which are described in the attached Schedule 1.01(l), as the same
may be amended, supplemented, and otherwise modified from time to time.
-10-
"Existing Notes" means the promissory notes payable under the Existing
--------------
Credit Agreement.
"Event of Default" has the meaning set forth in Section 8.01.
----------------
"Expiration Date" means, with respect to any Letter of Credit, the date
---------------
on which such Letter of Credit will expire or terminate in accordance with its
terms.
"Facilitators" means Societe Generale, Southwest Agency, Bank of
------------
Montreal, Chicago Branch, and Bankers Trust Company.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
------------------
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for any
such day on such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System or any of its successors.
"Fee Letter" means the letter agreement dated as of June ___, 2001 among
----------
the Borrower, the Parent, and the Facilitators.
"FF&E" means furniture, fixtures and equipment.
----
"FF&E Reserve" means, for any Person or any Hotel Property for any
------------
period, a reserve equal to four percent (4%) of gross revenues from any Hotel
Property owned by such Person or from such Hotel Property, as applicable, for
such period.
"Fiscal Quarter" means each of the three-month periods ending on March
--------------
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve-month period ending on December 31.
-----------
"Free Cash Flow" means, for any Person for any period, the Funds From
--------------
Operations for such period plus any amortization not included in the
----
calculation of Funds From Operations less (a) the aggregate FF&E Reserves for
----
such Person and its Subsidiaries for such period, and (b) the aggregate amount
of scheduled principal payments on the Total Liabilities of such Person
(excluding optional prepayments and scheduled principal payments in respect of
any such Indebtedness which is payable in a single installment at final
maturity) required to be made during such period.
-11-
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
---- ---------- ---------
Response Trust Fund, established pursuant to 42 U.S.C. ss. 9631 (1988) and the
Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. ss. 9641
(1988), which statutory provisions have been amended or repealed by the
Superfund Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund," or "Superfund" that are now maintained pursuant to 42 U.S.C. ss. 9507.
"Funding Deadline" means July 20, 2001.
----------------
"Funds From Operations" means, for any Person for any period for which
---------------------
such amount is being determined, an amount equal to such Person's Net Income
for such period excluding gains (losses) from debt restructuring and sales of
property (including furniture and equipment), plus depreciation and
amortization of Real Property and after adjustments for unconsolidated
partnerships and joint ventures, and excluding any payments made in connection
with one-time charges referenced in the definition of Parent's Adjusted
EBITDA.
"Future Property" means any Hotel Property except for the Initial
---------------
Properties which the Borrower or any Subsidiary of the Borrower acquires.
"GAAP" means United States generally accepted accounting principles as in
----
effect from time to time, applied on a basis consistent with the requirements
of Section 1.03.
"Governmental Authority" means any foreign governmental authority, the
----------------------
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Parent, the Borrower, any Subsidiaries of the Borrower or the
Parent, any participating lessee, a manager or any of their respective
Properties.
"Governmental Proceedings" means any action or proceedings by or before
------------------------
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Guarantor" means (a) the Parent, (b) each Subsidiary which owns an
---------
Eligible Property, (c) each other direct or indirect Wholly-Owned Subsidiary
of the Borrower (except for any direct or indirect Wholly-Owned Subsidiary
which is contractually prohibited from acting as a Guarantor by the terms of
any document evidencing or securing Indebtedness of the Borrower or its
Subsidiaries permitted by the terms of this Agreement), and (d) each other
direct or indirect Joint Venture Subsidiary or Unconsolidated Entity of the
Borrower designated by the Administrative Agent (except for any such Person
which is contractually prohibited from acting as a Guarantor by the terms of
(i) any document evidencing or securing Indebtedness of the Borrower or its
Subsidiaries permitted by the terms of this Agreement or (ii) the
organizational documents of such Person). The Guarantors on the Effective Date
are identified on Schedule 1.01(i).
"Guaranty" means one or more Guaranty and Contribution Agreements in
--------
substantially the form of the attached Exhibit F executed by the Parent, the
Borrower and all of the Subsidiaries of the Borrower (excluding the Permitted
Other Subsidiaries), evidencing the joint
-12-
and several guaranty by the signatories thereto of the obligations of Borrower
in respect of the Credit Documents, and any future guaranty and contribution
agreement executed to secure Advances except for Supplemental Guaranties, as
any of such agreements may be amended hereafter in accordance with the terms
of such agreements.
"Hazardous Substance" means the substances identified as such pursuant to
-------------------
CERCLA and those regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum, petroleum products,
radio nuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
---------------
Environmental Law.
"Hotel Property" for any hotel means the Real Property and the Personal
--------------
Property for such hotel, and the property referred to in Section 10.13.
"Hotel Value" means, with respect to any Hotel Property, at any date, the
-----------
value thereof to be calculated as follows:
(a) For a Seasoned Property, the Calculated Value for such Seasoned
Property; and
(b) For a New Property, the Investment Amount in such New Property;
provided that if the Borrower can provide the Administrative Agent financial
--------
reports for such New Property for the period prior to the acquisition of such
New Property which have been reviewed by KPMG Peat Marwick L.L.P. or other
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent, then at the Borrower's
election the Hotel Value for such New Property will be the lesser of (i) the
Calculated Value for such New Property or (ii) 120% of the Investment Amount
in such New Property.
However, the Hotel Value of a Hotel Property owned or leased by a Joint
Venture Subsidiary shall be deemed to be the Allocation Percentage of the
value calculated above for such Hotel Property. The initial Hotel Value for
the Initial Properties is set forth on Schedule 1.01(b) attached hereto.
"Hyatt Boston" means the Hotel Property called the Hyatt Harborside
------------
Hotel, located in Boston, Massachusetts.
"Hyatt Boston Bond Overlap Period" has the meaning set forth in Section
--------------------------------
10.21.
"Hyatt Boston Deemed Interest" means approximately $200,000 per year of
----------------------------
payments made or to be made by the Hyatt Boston Lessee under the Hyatt Boston
Lease which terminate upon the redemption of the Hyatt Boston Existing Bonds.
-13-
"Hyatt Boston Existing Bonds" means Massachusetts Port Authority Special
---------------------------
Project Revenue Bonds, Series 2001-A (Tax Exempt) and 2001-B (Taxable) issued
by the Hyatt Boston Issuer.
"Hyatt Boston Issuer" means the Massachusetts Port Authority.
-------------------
"Hyatt Boston Lease" means that certain Amended and Restated Ground
------------------
Lease, by and between the Hyatt Boston Issuer and the Hyatt Boston Lessee, as
amended.
"Hyatt Boston Lessee" means LHO Harborside Hotel, LLC.
-------------------
"Improvements" for any hotel means all buildings, structures, fixtures,
------------
tenant improvements and other improvements of every kind and description now
or hereafter located in or on or attached to the Land for such hotel; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof.
"Indebtedness" means (without duplication), at any time and with respect
------------
to any Person, (a) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
price of property or services purchased (other than amounts constituting trade
payables, accruals or bank drafts arising in the ordinary course of business);
(b) indebtedness of others in the amount which such Person has directly or
indirectly assumed or guaranteed or otherwise provided credit support therefor
or for which such Person is liable as a partner of such Person; (c)
indebtedness of others in the amount secured by a Lien on assets of such
Person, whether or not such Person shall have assumed such indebtedness; (d)
obligations of such Person in respect of letters of credit, acceptance
facilities, or drafts or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person (other than trade
payables or bank drafts arising in the ordinary course); (e) obligations of
such Person under Capital Leases; and (f) obligations under interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements or
other similar agreements or arrangements designed to protect against
fluctuations in interest rates.
"Initial Properties" means collectively the Hotel Properties listed on
------------------
Schedule 1.01(b), and "Initial Property" means any of such Hotel Properties.
----------------
"Interest Expense" means, for any Person for any period for which such
----------------
amount is being determined, the total interest expense (including that
properly attributable to Capital Leases in accordance with GAAP) and all
charges incurred with respect to letters of credit determined on a
consolidated basis in conformity with GAAP, plus capitalized interest of such
----
Person and its Subsidiaries plus for the Hyatt Boston Lessee, the Hyatt Boston
----
Deemed Interest.
"Interest Period" means, for each LIBOR Advance comprising part of the
---------------
same Borrowing, the period commencing on the date of such Advance or the date
of the Conversion of any Base Rate Advance into such an Advance and ending on
the last day of the period selected by the Borrower pursuant to the provisions
below and Section 2.02 and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below
-14-
and Section 2.02. The duration of each such Interest Period shall be
one, two, three, six, nine or twelve months, in each case as the Borrower may
select, upon notice received by the Administrative Agent not later than 12:00
Noon (Dallas, Texas time) on the third Business Day prior to the first day of
such Interest Period, provided, however, that:
-------- -------
(a) Interest Periods for Advances of the same Borrowing shall be of the
same duration;
(b) whenever the last day of any Interest Period would otherwise occur on
a day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
--------
extension would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month in which it would have ended if there
were a numerically corresponding day in such calendar month; and
(d) each successive Interest Period shall commence on the day on which
the next preceding Interest Period expires; and
(e) no Interest Period with respect to any portion of any Advance shall
extend beyond the Maturity Date.
"Interest Rate Agreements" means any interest rate swap agreement,
------------------------
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Borrower, the Parent or any
of their respective Subsidiaries against fluctuations in interest rates.
"Investment" means, with respect to any Person, (a) any loan or advance
----------
to any other Person, (b) the ownership, purchase or other acquisition of, any
Stock, Stock Equivalents, other equity interest, obligations or other
securities of, (i) any other Person, or (ii) all or substantially all of the
assets of any other Person, or (iii) all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
other Person, or (c) any joint venture or partnership with, or any capital
contribution to, or other investment in, any other Person or any real
property.
"Investment Amount" means (a) for any Hotel Property the sum of (i) for
-----------------
any Initial Property, the amount set forth for such Initial Property on
Schedule 1.01(b) attached hereto, and for any other Hotel Property, the
aggregate purchase price paid by the Borrower or its Subsidiary for such other
Hotel Property (giving effect to any securities used to purchase a Hotel
Property at the fair market value of the securities at the time of purchase
based upon the price at which such securities could be exchanged into the
Parent's common stock assuming such exchange occurred on the date of acquiring
the Hotel Property), and (ii) 95% of (A) the actual cost of any Capital
Expenditures or FF&E expenditures for such Hotel Property made by the Borrower
or its
-15-
Subsidiaries during any period minus (B) the FF&E Reserve for such Hotel
Property for such period, and (b) for any other Investment the aggregate
purchase price paid by the Borrower or its Subsidiary for such other
Investment (giving effect to any securities used to purchase such Investment
at the fair market value of the securities at the time of purchase based upon
the price at which such securities could be exchanged into the Parent's common
stock assuming such exchange occurred on the date of acquiring such
Investment).
"Issuing Bank" means Societe Generale, Southwest Agency; any Bank
------------
approved by the Administrative Agent and the Borrower as an "Issuing Bank"; or
any Bank acting as a successor issuing bank pursuant to Section 9.06, and
"Issuing Banks" means, collectively, all of such Banks.
-------------
"Joint Venture Subsidiary" of a Person means any Subsidiary of such
------------------------
Person which is controlled and managed by such Person, except for a
Wholly-Owned Subsidiary.
"Land" for any hotel means the real property upon which the hotel is
----
located, together with all rights, title and interests appurtenant to such
real property, including without limitation all rights, title and interests to
(a) all strips and gores within or adjoining such property, (b) the streets,
roads, sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, (d) all reversions and remainders, (e) all air space
rights, and all water, sewer and wastewater rights, (e) all mineral, oil, gas,
hydrocarbon substances and other rights to produce or share in the production
of anything related to such property, and (f) all other appurtenances
appurtenant to such property, including without limitation, any now or
hereafter belonging or in anywise appertaining thereto.
"LaSalle Leasing" means LaSalle Hotel Lessee, Inc.
---------------
"Legal Requirement" means any law, statute, ordinance, decree,
-----------------
requirement, order, judgment, rule, regulation (or official interpretation of
any of the foregoing) of, and the terms of any license or permit issued by,
any Governmental Authority.
"Letter of Credit" means, individually, any letter of credit issued by
----------------
the Issuing Bank in accordance with the provisions of Section 2.13 of this
Agreement including any Existing Letter of Credit, and "Letters of Credit"
-----------------
means all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
--------------------------
such Letter of Credit and any reimbursement or other agreements, documents,
and instruments entered into in connection with or relating to such Letter of
Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
-------------------------
aggregate undrawn maximum face amount of each Letter of Credit and (b) the
aggregate unpaid amount of all Letter of Credit Obligations at such time.
-16-
"Letter of Credit Obligations" means all obligations of the Borrower
----------------------------
arising in respect of the Letter of Credit Documents, including without
limitation the aggregate drawn amounts of Letters of Credit which have not
been reimbursed by the Borrower or converted into an Adjusted Base Rate
Advance pursuant to the provisions of Section 2.13(c).
"Leverage Ratio" means the percentage obtained by dividing (a) the
--------------
Parent's Total Liabilities by (b) the Parent Aggregate Asset Value.
"LIBOR" means, for the Interest Period for each LIBOR Advance comprising
-----
part of the same Borrowing, an interest rate per annum (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum) equal to (A) the rate per
annum at which deposits in Dollars are offered by the Administrative Agent to
leading banks and accepted by leading banks in the London interbank eurodollar
market at approximately 12:00 Noon (London time) two (2) Business Days before
the first day of such Interest Period, in an amount substantially equal to the
Administrative Agent's LIBOR Advance comprising part of such Borrowing and for
a period equal to such Interest Period divided by (B) one minus the LIBOR
Reserve Requirement. It is agreed that for purposes of this definition, LIBOR
Advances made hereunder shall be deemed to constitute Eurocurrency Liabilities
as defined in Regulation D and to be subject to the reserve requirements of
Regulation D.
"LIBOR Advance" means any Advance which bears interest as provided in
-------------
Section 2.06(b).
"LIBOR Lending Office" means, with respect to any Bank, the office of
--------------------
such Bank specified as its "Operations Contact" in the questionnaire such Bank
provided to the Administrative Agent, or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Administrative
Agent.
"LIBOR Reserve Requirement" shall mean, on any day, that percentage
-------------------------
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal
Reserve Board comparable in size and type to the Administrative Agent
(including, without limitation, basic, supplemental, marginal and emergency
reserves) under Regulation D with respect to "Eurocurrency liabilities" as
currently defined as Regulation D, or under any similar or successor
regulation with respect to Eurocurrency liabilities or Eurocurrency funding
(or other category of liabilities which includes deposits by reference to
which the interest rate on a LIBOR Advance is determined or any category or
extensions of credit which includes loans by a non-United States office of the
Administrative Agent to United States residents). Each determination by the
Administrative Agent of the LIBOR Reserve Requirement, shall, in the absence
of manifest error, be conclusive and binding upon the Borrower.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
----
interest, encumbrance or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise
-17-
(including, without limitation, the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement).
"Liquid Investments" means cash and the following:
------------------
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days from
the date of acquisition thereof ("bank debt securities"), issued by (A) any
Bank or (B) any other bank or trust company which has a combined capital
surplus and undivided profit of not less than $250,000,000 or the Dollar
Equivalent thereof, if at the time of deposit or purchase, such bank debt
securities are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's, and (ii) commercial paper issued by (A) any Bank
or (B) any other Person if at the time of purchase such commercial paper is
rated not less than "A-2" (or the then equivalent) by the rating service of
S&P or not less than "P-2" (or the then equivalent) by the rating service of
Moody's, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall
be selected by the Borrower with the consent of the Administrative Agent;
(c) repurchase agreements relating to investments described in clauses
(a) and (b) above with a market value at least equal to the consideration paid
in connection therewith, with any Person who regularly engages in the business
of entering into repurchase agreements and has a combined capital surplus and
undivided profit of not less than $250,000,000 or the Dollar Equivalent
thereof, if at the time of entering into such agreement the debt securities of
such Person are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's; and
(d) such other instruments (within the meaning of New York's Uniform
Commercial Code) as the Borrower may request and the Administrative Agent may
approve in writing, which approval will not be unreasonably withheld.
"Material Adverse Change" shall mean a material adverse change in the
-----------------------
business, financial condition, or results of operations of the Borrower, the
Parent or any Guarantor, in each case since the date of the most recent
financial statements of the Borrower or the Parent delivered to the Banks.
"Maturity Date" means December 31, 2003.
-------------
"Maximum Rate" means the maximum nonusurious interest rate under
------------
applicable law.
"Minimum Tangible Net Worth" means, with respect to the Parent, at any
--------------------------
time, the sum of (a) $210,000,000 plus (b) 75% of the aggregate net proceeds
----
received by the Parent or any of its Subsidiaries after the Closing Date in
connection with any offering of Stock or Stock Equivalents of the Parent or
its Subsidiaries, plus (c) 75% of the value of any partnership
----
-18-
interests in Borrower issued after the Closing Date for the acquisition of a
Hotel Property or any interest in a Hotel Property permitted hereunder.
"Moody's" means Xxxxx'x Investor Service Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA to which the Parent, the Borrower or any member of a
Controlled Group is making or accruing an obligation to make contributions.
"Net Cash Proceeds" means (a) the aggregate cash proceeds (including,
-----------------
without limitation, insurance proceeds) received by the Parent, the Borrower
or any of their respective Subsidiaries (as applicable) in connection with any
Asset Disposition or Capitalization Event, minus (b) the reasonable expenses
-----
of such Person in connection with such Asset Disposition or such
Capitalization Event.
"Net Income" means, for any Person or Hotel Property for any period for
----------
which such amount is being determined, the net income of such Person (on a
consolidated basis) or Hotel Property, as applicable, after taxes, as
determined in accordance with GAAP, excluding, however, extraordinary items,
including but not limited to (i) any net gain or loss during such period
arising from the sale, exchange, or other disposition of capital assets (such
term to include all fixed assets and all securities) other than in the
ordinary course of business and (ii) any write-up or write-down of assets;
provided that to the extent that the Net Income for any Hotel Property does
--------
not include a reasonable allocation of administrative, accounting or other
overhead of the Person or Persons who directly or indirectly own or lease such
Hotel Property which directly pertains to the operation of Hotel Properties,
then such allocation amount shall be deemed subtracted from such Net Income
for purposes of the financial tests and other definitions contained in this
Agreement which utilize Hotel Property Net Income.
"Net Worth" means, for any Person, stockholders equity of such Person
---------
determined in accordance with GAAP.
"New Property" means, as at any date, any Hotel Property (including a
------------
Renovating Property) that is not a Seasoned Property.
"Note" means a promissory note of the Borrower payable to the order of
----
any Bank, in substantially the form of the attached Exhibit A, evidencing
indebtedness of the Borrower to such Bank resulting from Advances owing to
such Bank, and "Notes" means all of such promissory notes.
-----
"Notice of Borrowing" means a notice of borrowing in the form of the
-------------------
attached Exhibit G signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
------------------------------------
continuation in the form of the attached Exhibit H signed by a Responsible
Officer of the Borrower.
-19-
"Obligations" means all Advances, Letter of Credit Obligations, and other
-----------
amounts payable by the Borrower to the Administrative Agent or the Banks under
the Credit Documents.
"Parent" means LaSalle Hotel Properties, a Maryland trust.
------
"Parent Aggregate Asset Value" means the sum of (a) the aggregate Hotel
----------------------------
Value of the Parent Hotel Properties which meet the Parent Hotel Property
Requirements, (b) the Parent's and the Parent's Subsidiaries' Liquid
Investments, (c) for Investments in Unconsolidated Entities which are in the
form of loans to such Unconsolidated Entities, the Investment Amount of all
such Investments and (d) for Investments in Unconsolidated Entities which are
not in the form of loans to such Unconsolidated Entities, the aggregate sum of
the products obtained by multiplying the Hotel Value for each Hotel Property
owned or leased by an Unconsolidated Entity by the Parent's Unconsolidated
Entity Percentage for such Unconsolidated Entity.
"Parent Common Stock" means the common shares of beneficial interest of
-------------------
Parent, par value $.01 per share.
"Parent Hotel Properties" means all Hotel Properties owned or leased by
-----------------------
the Parent or one of the Parent's Subsidiaries, including without limitation
Eligible Properties.
"Parent Hotel Property Requirements" means (a) that all Parent Hotel
----------------------------------
Properties are (i) in either the United States of America or an Approved Other
Country and (ii) either (A) full service hotels primarily located in a resort,
convention or urban market or (B) limited service hotels primarily located in
an urban market, (b) that all Parent Hotel Properties would not, if all were
deemed Eligible Properties, cause a material variation to the Borrowing Base
Requirements, (c) no Parent Hotel Property has a Hotel Value which exceeds 25%
of the difference of (i) the Parent Aggregate Asset Value minus (ii) to the
-----
extent added in determining the Parent Aggregate Asset Value, the amount of
Liquid Investments, (d) no Parent Hotel Property is subject to a ground lease
which fails in a material way to qualify as a Qualified Ground Lease, and (e)
no Parent Hotel Property (i) fails to comply in any material respect with all
applicable Environmental Laws, and (ii) is subject to any material
Environmental Claim, all as evidenced by an Environmental Report for such
Parent Hotel Property delivered by the Parent to the Administrative Agent.
"Parent's Adjusted EBITDA" means, for the Parent and the Parent's
------------------------
Subsidiaries on a Consolidated basis for any period, (a) the EBITDA for such
period plus (b) to the extent deducted in determining EBITDA, any one-time
----
charges on of before December 31, 2001 which in the aggregate do not exceed
$1,800,000 and which are (i) taken in connection with the acquisition of the
stock of LaSalle Leasing or a write-off of intangible assets pertaining to
LaSalle Leasing or (ii) otherwise approved by the Administrative Agent less
----
(c) the aggregate FF&E Reserves for such period in respect of each Hotel
Property owned by the Parent or its Subsidiaries (whether located on land
owned by or land leased to such owner of the Hotel Property).
-20-
"Parent's Fixed Charge Coverage Ratio" means, as of the end of any
------------------------------------
Rolling Period, a ratio of (a) the Parent's Adjusted EBITDA for such Rolling
Period to (b) the Parent's Fixed Charges for such Rolling Period.
"Parent's Fixed Charges" means, for the period for which such amount is
----------------------
being determined, the sum of the following amounts for the Parent and the
Parent's Subsidiaries on a Consolidated basis: (a) the amount (without
duplication) of all mandatory principal payments scheduled to be made
(excluding optional prepayments and scheduled principal payments in respect of
any such Indebtedness which is payable in a single installment at final
maturity), (b) Parent's Interest Expense, (c) all payments scheduled to be
made in respect of Capital Leases, and (d) all preferred stock dividends.
"Parent's Interest Coverage Ratio" means, as of the end of any Rolling
--------------------------------
Period, a ratio of (a) Parent's Adjusted EBITDA for such Rolling Period to (b)
the Parent's Interest Expense for such Rolling Period.
"Parent's Interest Expense" means, for the period for which such amount
-------------------------
is being determined, the Interest Expense for the Parent and the Parent's
Subsidiaries on a Consolidated basis.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means the Liens permitted to exist pursuant to
----------------------
Section 6.01.
"Permitted Hazardous Substances" means (a) Hazardous Substances,
------------------------------
petroleum and petroleum products which are (i) used in the ordinary course of
business and in typical quantities for a hotel and (ii) generated, used and
disposed of in accordance with all Legal Requirements and good hotel industry
practice and (b) non-friable asbestos to the extent (i) that no applicable
Legal Requirements require removal of such asbestos from the Hotel Property
and (ii) such asbestos is encapsulated in accordance with all applicable Legal
Requirements and such reasonable operations and maintenance program as may be
required by the Administrative Agent.
"Permitted Hotel Sale" means the Asset Disposition of all, but not a
--------------------
portion, of (a) a Hotel Property or (b) the ownership interest in a Subsidiary
of the Borrower which owns a Hotel Property, in either case for which the
Conditions to Asset Disposition are satisfied or will be satisfied within the
time periods required under this Agreement.
"Permitted Non-Eligible Property" means any Hotel Property (a) which
-------------------------------
either (i) does not satisfy the conditions to qualifying as an Eligible
Property set forth in Section 3.03, (ii) has not been submitted to the Banks
as a potential Eligible Property or (iii) has been removed as an Eligible
Property by the Borrower; (b) which is owned by a Permitted Other Subsidiary;
(c) which neither is subject to any Environmental Claim, nor contains any
Hazardous Substance which could reasonably be expected to cause a Material
Adverse Change as evidenced by an Environmental Report delivered to the
Administrative Agent at least 10 days prior to the
-21-
acquisition of such Hotel Property by Borrower or one of Borrower's
Subsidiaries; and (d) which, with all other Parent Hotel Properties, will not
cause a violation of the Parent Hotel Property Requirements.
"Permitted Other Subsidiaries" means a Wholly-Owned Subsidiary or a Joint
----------------------------
Venture Subsidiary of the Borrower which (a) does not own any Eligible
Property, and (b) is a bankruptcy remote, single purpose Person.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association,
limited liability company, joint venture or other entity, or a government or
any political subdivision or agency thereof or any trustee, receiver,
custodian or similar official.
"Personal Property" for any Hotel Property means all FF&E, inventory and
-----------------
other personal property of every kind, whether now existing or hereafter
acquired, tangible and intangible, now or hereafter located on or about the
Land, and used or to be used in the future in connection with the operation of
such Hotel Property.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
----
maintained for employees of the Parent, the Borrower or any member of a
Controlled Group and covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
"Preliminary Property Plan" means for any Hotel Property, the preliminary
-------------------------
financial projections of the Capital Expenditures and the expenditures for
FF&E for such Hotel Property in connection with a renovation or expansion (but
not maintenance) of such Hotel Property, as such projections may be amended by
the Borrower from time to time.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
----------
effect from time to time equal to the rate of interest publicly announced by
the Administrative Agent as its prime commercial lending rate (which may not
be the lowest rate offered to its customers), whether or not the Borrower has
notice thereof.
"Property" of any Person means any property or assets (whether real,
--------
personal, or mixed, tangible or intangible) of such Person.
"Property Adjustment Report" means a certificate of the Borrower in
--------------------------
substantially the form of the attached Exhibit I.
"Property Information" for any Hotel Property means the information and
--------------------
documentation for such Hotel Property listed in Sections 3.03(f), 3.03(g),
3.03(j)(i)-(iii) and (v) and a commitment for a title policy for such Hotel
Property, together with a legible copy of all documents referred to in such
commitment.
"Property Owner" for any Initial Property or Future Property, means the
--------------
Person who owns fee or leasehold title interest (as applicable) in, and to
such Property.
-22-
"Pro Rata Share" means, at any time with respect to any Bank, either (a)
--------------
the ratio (expressed as a percentage) of such Bank's Commitment at such time
to the aggregate Commitments at such time or (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Bank's aggregate
outstanding Advances and participation interest in the Letter of Credit
Exposure at such time to the aggregate outstanding Advances and Letter of
Credit Exposure of all the Banks at such time.
"Prescribed Forms" means such duly executed form(s) or statement(s), and
----------------
in such number of copies, which may, from time to time, be prescribed by law
and which, pursuant to applicable provisions of (a) an income tax treaty
between the United States and the country of residence of the Bank providing
the form(s) or statement(s), (b) the Code, or (c) any applicable rule or
regulation under the Code, permit the Borrower to make payments hereunder for
the account of such Bank free of deduction or withholding of income or similar
taxes (except for any deduction or withholding of income or similar taxes as a
result of any change in or in the interpretation of any such treaty, the Code
or any such rule or regulation).
"Public Offering" means the initial public offering of approximately
---------------
14,200,000 shares of Parent Common Stock.
"Qualified Ground Lease" means each of the ground leases or subground
----------------------
leases set forth on Schedule 1.01(j) hereto and for a Future Property means
any ground lease (a) which is a direct ground lease granted by the fee owner
of real property, (b) which may be transferred and/or assigned without the
consent of the lessor (or as to which the lease expressly provides that (i)
such lease may be transferred and/or assigned with the consent of the lessor
and (ii) such consent shall not be unreasonably withheld or delayed) or
subject to certain reasonable pre-defined requirements, (c) which has a
remaining term (including any renewal terms exercisable at the sole option of
the lessee) of at least twenty (20) years, (d) under which no material default
has occurred and is continuing, (e) with respect to which a Lien may be
granted without the consent of the lessor, (f) which contains lender
protection provisions acceptable to the Administrative Agent, including,
without limitation, provisions to the effect that (i) the lessor shall notify
any holder of a Lien in such lease of the occurrence of any default by the
lessee under such lease and shall afford such holder the option to cure such
default, and (ii) in the event that such lease is terminated, such holder
shall have the option to enter into a new lease having terms substantially
identical to those contained in the terminated lease and (g) which is
otherwise acceptable in form and substance to the Administrative Agent.
"Real Property" for any hotel means the Land and the Improvements for
-------------
such hotel, including without limitation, parking and other ancillary
functions necessary for the operation of such hotel.
"Register" has the meaning set forth in paragraph (c) of Section 10.06.
--------
"REIT" means a real estate investment trust under Sections 856-860 of the
----
Code.
"Release" shall have the meaning set forth in CERCLA or under any other
-------
Environmental Law.
-23-
"Renovating Property" means a Hotel Property (a) that has been designated
-------------------
as such in writing by the Borrower to the Administrative Agent, and (b) with
respect to which a renovation (i) was commenced consisting of alterations,
remodeling and other similar work having an aggregate cost exceeding ten
percent (10%) of the Investment Amount in such Hotel Property and (ii) was
completed, or is reasonably expected to be completed, within twenty-four (24)
months of the commencement of such renovation; provided that, except as
--------
provided in the definition of "Borrowing Base Requirements", the Borrower
shall only be able to designate (y) one (1) Hotel Property as a Renovating
Property at any one time and (z) a Hotel Property as a Renovating Property
only during the Fiscal Quarters for which the renovation is occurring (not
exceeding eight (8) Fiscal Quarters) and the Rolling Period following such
period.
"Reportable Event" means any of the events set forth in Section 4043(b)
----------------
of ERISA.
"Required Lenders" means, at any time, Banks holding at least 51% of the
----------------
then aggregate unpaid principal amount of the Notes and the Letter of Credit
Exposure of the Banks at such time, or, if no such principal amount of the
Notes and Letter of Credit Exposure is then outstanding, Banks having at least
51% of the aggregate amount of the Commitments at such time.
"Required Work" means, for the Boutique Properties and any Future
-------------
Property which the Borrower requests be an Eligible Property, the work agreed
upon by the Borrower and the Administrative Agent, if any, as the Required
Work for the Boutique Properties or such Future Property, as applicable.
"Response" shall have the meaning set forth in CERCLA or under any other
--------
Environmental Law.
"Responsible Officer" means the Chief Executive Officer, President,
-------------------
Executive Vice President, Chief Operating Officer, Chief Financial Officer, or
Treasurer of any Person.
"Restricted Payment" means (a) any direct or indirect payment,
------------------
prepayment, redemption, purchase, or deposit of funds or Property for the
payment (including any sinking fund or defeasance), prepayment, redemption or
purchase of Indebtedness not permitted by this Agreement, and (b) the making
by any Person of any dividends or other distributions (in cash, property, or
otherwise) on, or payment for the purchase, redemption or other acquisition
of, any shares of any capital stock, any limited liability company interests
or any partnership interests of such Person, other than dividends or
distributions payable in such Person's stock, limited liability company
interests or any partnership interests.
"Rolling Period" means, as of any date, the four Fiscal Quarters ending
--------------
immediately preceding such date.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
---
Inc., or any successor thereof.
-24-
"Seasoned Property" means, as at any date, a Hotel Property (excluding
-----------------
any Renovating Property) that has been owned for four (4) or more Fiscal
Quarters, by the Parent or by a Person that has been a Subsidiary of the
Parent during such entire period.
"Secured Non-Recourse Indebtedness" of any Person means all Indebtedness
---------------------------------
of such Person with respect to which recourse for payment is limited to
specific assets encumbered by a Lien securing such Indebtedness; provided,
--------
however, that personal recourse of a holder of Indebtedness against any
-------
obligor with respect thereto for fraud, misrepresentation, misapplication of
cash, non-payment of real estate taxes or ground lease rent, waste and other
circumstances customarily excluded from non-recourse provisions in
non-recourse financing of real estate shall not, by itself, prevent any
Indebtedness from being characterized as Secured Non-Recourse Indebtedness,
provided further that if a personal recourse claim is made in connection
-------- ------- ----
therewith, such claim shall not constitute Secured Non-Recourse Indebtedness
for the purposes of this Agreement.
"Secured Recourse Indebtedness" of any Person means any Total Liabilities
-----------------------------
(excluding any Secured Non-Resource Indebtedness) of such Person for which the
obligations thereunder are secured by a Lien on any assets of such Person or
its Subsidiaries.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
-25-
"Status" means the existence of Level I Status, Level II Status, Level
------
III Status, Level IV Status, or Level V Status as the case may be. As used in
this definition:
"Level I Status" exists at any date if, at such date, the Leverage
--------------
Ratio is less than or equal to 35%;
"Level II Status" exists at any date if, at such date, the Leverage
---------------
Ratio is greater than 35% but less than or equal to 40%;
"Level III Status" exists at any date if, at such date, the Leverage
----------------
Ratio is greater than 40% but less than or equal to 45%;
"Level IV Status" exists at any date if, at such date, the Leverage
---------------
Ratio is greater than 45% but less than or equal to 50%; and
"Level V Status" exists at any date if, at such date, the Leverage
--------------
Ratio is greater than 50%.
Status shall be determined and changed as of the 45th day following any Fiscal
Quarter. The Leverage Ratio shall be based upon the components of the
calculation of the Leverage Ratio for the Rolling Period just ended or as of
the end of such Rolling Period, as applicable.
"Stock" means shares of capital stock, beneficial or partnership
-----
interests, participations or other equivalents (regardless of how designated)
of or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities (other than Stock) convertible
-----------------
into or exchangeable for Stock and all warrants, options or other rights to
purchase or subscribe for any stock, whether or not presently convertible,
exchangeable or exercisable.
"Subsidiary" of a Person means any corporation, association, partnership
----------
or other business entity of which more than 50% of the outstanding shares of
capital stock (or other equivalent interests) having by the terms thereof
ordinary voting power under ordinary circumstances to elect a majority of the
board of directors or Persons performing similar functions (or, if there are
no such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more Subsidiaries of such Person or by one or more Subsidiaries of such
Person.
"Supplemental Guarantor" means any partner of the Borrower except for the
----------------------
Parent or the Guarantors that executes a Supplemental Guaranty.
"Supplemental Guaranty" means any future assumption of liability in a
---------------------
form reasonably acceptable to the Administrative Agent executed by a
Supplemental Guarantor to secure Advances, as such future supplemental
guaranties may be amended hereafter in accordance with their terms.
-26-
"Termination Event" means (a) the occurrence of a Reportable Event with
-----------------
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of
the Parent, the Borrower or any of a Controlled Group from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the giving of a notice of intent to terminate a Plan
under Section 4041(c) of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC, or (e) any other event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"Total Commitments" means the aggregate amount of the Banks' Commitments
-----------------
which shall initially be Two Hundred Ten Million Dollars ($210,000,000); as
such amount may be increased pursuant to the provisions of Section 1.06 or
decreased pursuant to the provisions of Section 2.04 or other applicable
provisions of this Agreement.
"Total Liabilities" of any Person means the sum of the following (without
-----------------
duplication): (a) all Indebtedness of such Person and its Subsidiaries
determined on a Consolidated basis in conformity with GAAP, plus (b) such
----
Person's Unconsolidated Entity Percentage of Indebtedness (including Secured
Non-Recourse Indebtedness) of such Person's Unconsolidated Entities, plus (c)
----
to the extent not already included in the calculation of either of the
preceding clauses (a) or (b), the aggregate amount of letters of credit for
which such Person or any of its Subsidiaries would have a direct or contingent
obligation to reimburse the issuers of such letters of credit upon a drawing
under such letters of credit minus (d) to the extent included in the
-----
calculation of any of the preceding clauses (a), (b) or (c), (i) trade
payables and accruals incurred in the ordinary course of business, (ii) the
amount of any minority interests and (iii) Capital Lease Obligations for a
ground lease for any Hotel Property for which the annual rental payments for
such ground lease do not exceed 30% of the Adjusted NOI for such Hotel
Property.
"Type" has the meaning set forth in Section 1.04.
----
"Unconsolidated Entity" means, with respect to any Person, at any date,
---------------------
any other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting or as a loan or advance to the other Person, and whose financial
results would not be consolidated under GAAP with the financial results of
such Person on the consolidated financial statements of such Person, if such
statements were prepared as of such date.
"Unconsolidated Entity Percentage" means, for any Person, with respect to
--------------------------------
a Person's Unconsolidated Entity, the percentage ownership interest of such
Person in such Unconsolidated Entity; provided that, in the event that such
--------
Person is the general partner of such Unconsolidated Entity, such Person's
Unconsolidated Entity Percentage with respect to such Unconsolidated Entity
shall be 100% with respect to any Indebtedness for which recourse may be made
against any general partner of such Unconsolidated Entity (provided that such
Indebtedness shall not be deemed to be recourse to such general partner solely
because of certain customary carveouts to non-recourse Indebtedness); provided
--------
further that when the Investment in an Unconsolidated
-------
-27-
Entity is in the form of preferred stock or a loan or advance, the
Unconsolidated Entity Percentage shall be a percentage equal to (a) the amount
of such Investment divided by (b) the aggregate amount of the Investments by
-------
all Persons in the Unconsolidated Entity.
"Unencumbered" means, with respect to any Hotel Property, at any date of
------------
determination, the circumstance that such Hotel Property on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability) of any kind (including any such Lien
or restriction imposed by (i) any agreement governing Indebtedness, and (ii)
the organizational documents of the Borrower or any of its Subsidiaries, but
excluding Permitted Encumbrances and, in the case of any Qualified Ground
Lease (to the extent permitted by the definition thereof), restrictions on
transferability or assignability in respect of such Qualified Ground Lease);
(b) is not subject to any agreement (including (i) any agreement
governing Indebtedness, and (ii) if applicable, the organizational documents
of the Borrower or any of its Subsidiaries) which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon such Hotel Property, other than Permitted
Encumbrances (excluding any agreement or organizational document which limits
generally the amount of Indebtedness which may be incurred by the Borrower or
its Subsidiaries); and
(c) is not subject to any agreement (including any agreement
governing Indebtedness) which entitles any Person to the benefit of any Lien
(other than Permitted Encumbrances) on such Hotel Property, or would entitle
any Person to the benefit of any such Lien upon the occurrence of any
contingency (including, without limitation, pursuant to an "equal and ratable"
clause).
For the purposes of this Agreement, any Hotel Property owned by a Subsidiary
of the Borrower shall not be deemed to be Unencumbered unless both (i) such
Hotel Property and (ii) all Stock owned directly or indirectly by Borrower in
such Subsidiary is Unencumbered.
"Unsecured Indebtedness" of any Person means the Total Liabilities of
----------------------
such Person minus the sum of the Secured Recourse Indebtedness and Secured
-----
Non-Recourse Indebtedness of such Person.
"Unsecured Interest Coverage Ratio" means, as of the end of any Rolling
---------------------------------
Period, a ratio of (a) the amount of (i) the aggregate Adjusted NOI for all
Eligible Properties for such Rolling Period minus (ii) for any Eligible
-----
Property the Adjusted NOI attributable to the period of time prior to a Hotel
Property qualifying as an Eligible Property plus (iii) for any previous
----
Eligible Property that no longer qualifies as an Eligible Property during such
Rolling Period the Adjusted NOI for such Hotel Property for the portion of
such Rolling Period that such Hotel Property qualified as an Eligible Property
to (b) the portion of Parent's Interest Expense attributable to Unsecured
Indebtedness for such Rolling Period.
"Wholly-Owned Subsidiary" of a Person means any Subsidiary for which such
-----------------------
Person's ownership interest is 99% or more.
-28-
Section 1.02 Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding".
Section 1.03 Accounting Terms; Changes in GAAP.
---------------------------------
(a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis.
(b) Unless otherwise indicated, all financial statements of the
Borrower and the Parent, all calculations for compliance with covenants in
this Agreement, and all calculations of any amounts to be calculated under the
definitions in Section 1.01 shall be based upon the Consolidated accounts of
the Borrower, the Parent and their respective Subsidiaries (as applicable) in
accordance with GAAP.
(c) If any changes in accounting principles after June 30, 2001
required by GAAP or the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or similar agencies results in a
change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found in
this Agreement, then the parties shall enter into and diligently pursue
negotiations in order to amend such financial covenants, standards or terms so
as to equitably reflect such change, with the desired result that the criteria
for evaluating the financial condition of Borrower and its Subsidiaries
(determined on a Consolidated basis) shall be the same after such change as if
such change had not been made.
Section 1.04 Types of Advances. Advances are distinguished by "Type".
-----------------
The "Type" of an Advance refers to the determination whether such Advance is a
LIBOR Advance or Base Rate Advance, each of which constitutes a Type.
Section 1.05 Miscellaneous. Article, Section, Schedule and Exhibit
-------------
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
Section 1.06 Amendment and Restatement; Commitment Increases. The parties
-----------------------------------------------
hereto agree to use reasonable efforts to accomplish the matters set forth in
the preliminary statements of this Agreement and, without limitation, agree to
the following:
(a) For each Bank which does not have an Existing Note, the Borrower
will execute a Note payable to such Bank in the amount of such Bank's
Commitment which Note will constitute the Note the Borrower is obligated to
deliver to such Bank as provided in Section 3.01.
(b) For each Bank which has an Existing Note, the Borrower will
execute a Note payable to such Bank in the amount of such Bank's Commitment
which Note (i) will replace in its entirety such Bank's Existing Note and
either increase or decrease, as applicable, the Indebtedness evidenced by the
Existing Note and (ii) constitute the Note the Borrower is obligated to
deliver to such Bank as provided in Section 3.01.
-29-
(c) The Borrower shall be entitled to request that the Total
Commitments be increased to an amount not exceeding Three Hundred Million
Dollars ($300,000,000); provided that (i) no Default then exists, (ii) the
--------
Borrower gives the Banks thirty (30) days prior written notice of such
election, (iii) no Bank shall be obligated to increase such Bank's Commitment
without such Bank's written consent which may be withheld in such Bank's sole
discretion, (iv) the Borrower, not the Banks or the Administrative Agent, is
responsible for arranging for Persons to provide the additional Commitment
amounts; and (v) any Person providing any additional Commitment amount must
qualify as an Eligible Assignee and be reasonably acceptable to the
Administrative Agent if such Person is not already a Bank. In connection with
any such increase in the Total Commitments the parties shall execute any
documents reasonably requested in connection with or to evidence such
increase, including without limitation an amendment to this Agreement.
(d) On the date ("Funding Date") the conditions precedent set forth
in Section 3.01 are satisfied, or, in connection with any future increase in
the Total Commitments permitted by this Agreement, the date designated by the
Administrative Agent, the Banks whose Commitments have increased in connection
with this Agreement or such future increase in the Total Commitments, as
applicable, shall fund to the Administrative Agent such amounts as may be
required to cause each of them to hold its Pro Rata Share of Advances based
upon the Commitments as of such Funding Date, and the Administrative Agent
shall distribute the funds so received to the other Banks in such amounts as
may be required to cause each of them to hold its Pro Rata Share of Advances
as of such Funding Date. The Banks and the Existing Lenders, as applicable,
receiving such amounts to be applied to LIBOR Advances may demand payment of
the breakage costs under Section 2.08 as though Borrower had elected to prepay
such LIBOR Advances on such date and the Borrower shall pay the amount so
demanded as provided in Section 2.08. The first payment of interest and letter
of credit fees received by the Administrative Agent after such Funding Date
shall be paid to the Banks in amounts adjusted to reflect the adjustments of
their respective Pro Rata Shares of the Advances as of the Funding Date. On
the Funding Date each Bank shall be deemed to have either sold or purchased,
as applicable, participations in the Letter of Credit Exposure sold to the
Banks pursuant to Section 2.13(b) of the Original Credit Agreement so that
upon consummation of all such sales and purchases each Bank holds
participations in the Letter of Credit Exposure equal to such Bank's Pro Rata
Share of the total Letter of Credit Exposure as of such Funding Date.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01 The Advances. Each Bank severally agrees, on the terms and
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conditions set forth in this Agreement, to make Advances to the Borrower from
time to time on any Business Day up to 30 days prior to the Maturity Date in
an aggregate amount not to exceed at any time outstanding an amount equal to
such Bank's Commitment less such Bank's Pro Rata Share of the Letter of Credit
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Exposure at such time. The aggregate amount of all outstanding Advances and
Letter of Credit Exposure at any time may not exceed either the lesser of (i)
the Total Commitments at such time or (ii) the Borrowing Base at such time.
Within the limits of
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each Bank's Commitment and the Borrowing Base limitation set forth above, the
Borrower may from time to time prepay pursuant to Section 2.07 and reborrow
under this Section 2.01. Notwithstanding any notice requirement in this
Agreement to the contrary, for the initial Advance only the Banks and the
Borrower agree that if the conditions precedent for the initial Advance set
forth in Section 3.01 are satisfied on or prior to June 29, 2001, the initial
Advance shall be on June 29, 2001 and shall be a LIBOR Advance if requested by
the Borrower.
Section 2.02 Method of Borrowing.
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(a) Notice. Each Borrowing shall be made by telephone (promptly
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confirmed in writing on the same day) pursuant to a Notice of Borrowing, given
not later than 12:00 Noon (Dallas, Texas time) (i) on the third Business Day
before the date of the proposed Borrowing, in the case of a Borrowing
consisting of LIBOR Advances, or (ii) on the Business Day before the date of
the proposed Borrowing, in the case of a Borrowing consisting of Base Rate
Advances, by the Borrower to the Administrative Agent, which shall give each
Bank prompt notice on the day of receipt of such timely telephone call or
Notice of Borrowing of such proposed Borrowing by telecopier. Each Notice of
Borrowing shall be in writing or by telecopier specifying the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) if such Borrowing is to be
comprised of LIBOR Advances, the Interest Period for each such Advance. In the
case of a proposed Borrowing comprised of LIBOR Advances, the Administrative
Agent shall promptly notify each Bank of the applicable interest rate under
Section 2.06(b). Each Bank shall, before 12:00 Noon (Dallas, Texas time) on
the date of such Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address referred to in
Section 10.02, or such other location as the Administrative Agent may specify
by notice to the Banks, in same day funds, such Bank's Pro Rata Share of such
Borrowing. Upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower
at its account with the Administrative Agent or to such other account as the
Borrower shall specify to the Administrative Agent in writing.
(b) Conversions and Continuations. In order to elect to Convert or
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continue Advances comprising part of the same Borrowing under this Section,
the Borrower shall deliver an irrevocable Notice of Conversion or Continuation
to the Administrative Agent at the Administrative Agent's office no later than
12:00 Noon (Dallas, Texas time) (i) on the date which is at least three
Business Days in advance of the proposed Conversion or continuation date in
the case of a Conversion to or a continuation of a Borrowing comprised of
LIBOR Advances and (ii) on the Business Day prior to the proposed conversion
date in the case of a Conversion to a Borrowing comprised of Base Rate
Advances. Each such Notice of Conversion or Continuation shall be in writing
or by telecopier, specifying (i) the requested Conversion or continuation date
(which shall be a Business Day), (ii) the Borrowing amount and Type of the
Advances to be Converted or continued, (iii) whether a Conversion or
continuation is requested, and if a Conversion, into what Type of Advances,
and (iv) in the case of a Conversion to, or a continuation of, LIBOR Advances,
the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Administrative Agent
shall provide each Bank with a copy thereof and, in the case of a Conversion
to or a continuation of LIBOR Advances, notify each Bank of the applicable
interest rate under Section 2.06(b). For
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purposes other than the conditions set forth in Section 3.02, the portion of
Advances comprising part of the same Borrowing that are Converted to Advances
of another Type shall constitute a new Borrowing. If the Borrower shall fail
to specify an Interest Period for a LIBOR Advance including the continuation
of a LIBOR Advance, the Borrower shall be deemed to have selected a Base Rate
Advance.
(c) Certain Limitations. Notwithstanding anything in paragraphs (a)
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and (b) above:
(i) in the case of LIBOR Advances each Borrowing shall be in an
aggregate amount of not less than $1,000,000 or greater multiples of
$100,000;
(ii) except for Borrowings for the acquisition by the Borrower
or its Subsidiary of Investments permitted under Sections 6.07 (c)
and (d), the Borrower may not request Borrowings on more than three
days in any calendar month.
(iii) at no time shall there be more than eight (8) Interest
Periods applicable to outstanding LIBOR Advances;
(iv) the Borrower may not select LIBOR Advances for any
Borrowing to be made, Converted or continued if a Default has
occurred and is continuing;
(v) if any Bank shall, at any time prior to the making of any
requested Borrowing comprised of LIBOR Advances, notify the
Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation after the date hereof
makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Bank or its LIBOR
Lending Office to perform its obligations under this Agreement to
make LIBOR Advances or to fund or maintain LIBOR Advances, then such
Bank's Pro Rata Share of such Borrowing shall be made as a Base Rate
Advance, provided that such Base Rate Advance shall be considered
part of the same Borrowing and interest on such Base Rate Advance
shall be due and payable at the same time that interest on the LIBOR
Advances comprising the remainder of such Borrowing shall be due and
payable; and such Bank agrees to use commercially reasonable efforts
(consistent with its internal policies and legal and regulatory
restrictions) to designate a different Applicable Lending Office if
the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of such Bank, be
otherwise materially disadvantageous to such Bank;
(vi) if the Administrative Agent is unable to determine the
LIBOR for LIBOR Advances comprising any requested Borrowing, the
right of the Borrower to select LIBOR Advances for such Borrowing or
for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Banks that
the circumstances causing such suspension no longer exist, and each
Advance comprising such Borrowing shall be a Base Rate Advance;
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(vii) if the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the
Administrative Agent that the LIBOR for LIBOR Advances comprising
such Borrowing will not adequately reflect the cost to such Banks of
making or funding their respective LIBOR Advances, as the case may
be, for such Borrowing, the right of the Borrower to select LIBOR
Advances for such Borrowing or for any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the Borrower
and the Banks that the circumstances causing such suspension no
longer exist, and each Advance comprising such Borrowing shall be a
Base Rate Advance; and
(viii) if the Borrower shall fail to select the duration or
continuation of any Interest Period for any LIBOR Advances in
accordance with the provisions contained in the definition of
"Interest Period" in Section 1.01 and paragraph (a) or (b) above,
the Administrative Agent will forthwith so notify the Borrower and
the Banks and such Advances will be made available to the Borrower
on the date of such Borrowing as Base Rate Advances or, if an
existing Advance, Converted into Base Rate Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of
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Conversion or Continuation shall be irrevocable and binding on the Borrower.
In the case of any Borrowing which the related Notice of Borrowing specifies
is to be comprised of LIBOR Advances, the Borrower shall indemnify each Bank
against any loss, out-of-pocket cost or expense incurred by such Bank as a
result of any condition precedent for Borrowing set forth in Article III not
being satisfied for any reason, including, without limitation, any loss, cost
or expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund the Advance to be made
by such Bank as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Administrative Agent Reliance. Unless the Administrative Agent
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shall have received notice from a Bank before the date of any Borrowing that
such Bank will not make available to the Administrative Agent such Bank's Pro
Rata Share of the Borrowing, the Administrative Agent may assume that such
Bank has made its Pro Rata Share of such Borrowing available to the
Administrative Agent on the date of such Borrowing in accordance with
paragraph (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made its Pro Rata Share of such Borrowing available to the Administrative
Agent, such Bank and the Borrower severally agree to immediately repay to the
Administrative Agent on demand such corresponding amount, together with
interest on such amount, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable on each such day to Advances comprising such Borrowing and (ii) in
the case of such Bank, the Federal Funds Rate for each such day. If such Bank
shall repay to the Administrative Agent such corresponding amount and interest
as provided above, such corresponding amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising such
Borrowing.
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(f) Bank Obligations Several. The failure of any Bank to make the
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Advance to be made by it as part of any Borrowing shall not relieve any other
Bank of its obligation, if any, to make its Advance on the date of such
Borrowing. No Bank shall be responsible for the failure of any other Bank to
make the Advance to be made by such other Bank on the date of any Borrowing.
(g) Notes. The indebtedness of the Borrower to each Bank resulting
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from Advances owing to such Bank shall be evidenced by the Note of the
Borrower payable to the order of such Bank in substantially the form of
Exhibit A.
Section 2.03 Fees.
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(a) Commitment Fees. For the period from the Effective Date to but
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excluding the Maturity Date the Borrower agrees to pay to the Administrative
Agent for the account of each Bank a commitment fee on the average daily
amount by which such Bank's Commitment exceeds the sum of such Bank's
outstanding Advances and Pro Rata Share of the Letter of Credit Exposure at a
rate per annum equal to the Applicable Margin based upon a 360-day year. Such
fees shall be due and payable quarterly in arrears (i) on the date which is 30
days following the last Business Day of each March, June, September and
December and (ii) on the Maturity Date.
(b) Letter of Credit Fees. The Borrower agrees to pay to the
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Administrative Agent for the benefit of the Banks, fees in respect of all
Letters of Credit outstanding at a rate per annum equal to the Applicable
Margin calculated based upon a 360-day year and in respect of the maximum
amount available from time to time to be drawn under such outstanding Letters
of Credit, payable quarterly in arrears (i) on the date which is 30 days
following the last Business Day of each March, June, September and December
and (ii) on the Maturity Date. In addition, the Borrower agrees to pay to the
Issuing Bank for its own account a fee on the average daily amount of the
aggregate undrawn maximum face amount of each Letter of Credit issued by such
Issuing Bank at a rate per annum equal to .125%, such fees due and payable
quarterly in arrears (i) on the date which is 30 days following the last
Business Day of each March, June, September and December and (ii) on the
Maturity Date.
(c) Facilitators' Fees. The Borrower agrees to pay to the
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Facilitators for their benefit the fees set forth in the Fee Letter as and
when the same are due and payable pursuant to the terms of the Fee Letter.
(d) XX Xxxxx'x Fees. The Borrower agrees to pay to XX Xxxxx for SG
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Xxxxx'x account the fees set forth in the Advisory Fee Letter (the "Advisory
Fee Letter") dated September 18, 2000, by and between such parties, as and
when the same are due and payable pursuant to the terms of such Advisory Fee
Letter.
Section 2.04 Reduction of the Commitments. The Borrower may, upon at
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least three Business Days' prior notice to the Administrative Agent,
permanently terminate in whole or permanently reduce ratably in part the
Commitments of the Banks; provided, however, that (i) each partial reduction
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shall be in the aggregate amount of not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, (ii) no such reduction shall result
in a Borrowing Base
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deficiency as provided in Section 2.07(c)(i), and (iii) no such reduction
shall result in the Total Commitments of the Banks being less than
$100,000,000.
Section 2.05 Repayment of Advances. The Borrower shall repay the
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outstanding principal amount of each Advance on the Maturity Date.
Section 2.06 Interest, Late Payment Fee. The Borrower shall pay interest
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on the unpaid principal amount of each Advance made by each Bank from the date
of such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance, a
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rate per annum (computed on the actual number of days elapsed, including the
first day and excluding the last, based on a 365 day year) equal at all times
to the lesser of (i) the Adjusted Base Rate in effect from time to time plus
the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the
first day of each calendar month, provided that during the continuance of an
Event of Default, Base Rate Advances shall bear interest at a rate per annum
equal at all times to the lesser of (i) the rate required to be paid on such
Advance immediately prior to the date on which such Event of Default commenced
plus two percent (2%) and (ii) the Maximum Rate.
(b) LIBOR Advances. If such Advance is a LIBOR Advance, a rate per
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annum (computed on the actual number of days elapsed, including the first day
and excluding the last, based on a 360 day year) equal at all times during the
Interest Period for such Advance to the lesser of (i) the LIBOR for such
Interest Period plus the Applicable Margin and (ii) the Maximum Rate, payable
in arrears on the last day of such Interest Period, and on the date such LIBOR
Advance shall be paid in full, and, with respect to LIBOR Advances having an
Interest Period in excess of one month, the first day of each calendar month
during such Interest Period; provided that during the continuance of an Event
of Default, LIBOR Advances shall bear interest at a rate per annum equal at
all times to the lesser of (i) the rate required to be paid on such Advance
immediately prior to the date on which such Event of Default commenced plus
two percent (2%) and (ii) the Maximum Rate.
(c) Usury Recapture. In the event the rate of interest chargeable
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under this Agreement or the Notes at any time is greater than the Maximum
Rate, the unpaid principal amount of the Notes shall bear interest at the
Maximum Rate until the total amount of interest paid or accrued on the Notes
equals the amount of interest which would have been paid or accrued on the
Notes if the stated rates of interest set forth in this Agreement had at all
times been in effect. In the event, upon payment in full of the Notes, the
total amount of interest paid or accrued under the terms of this Agreement and
the Notes is less than the total amount of interest which would have been paid
or accrued if the rates of interest set forth in this Agreement had, at all
times, been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Administrative Agent for the account of the Banks an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on the Notes if the Maximum Rate had,
at all times, been in effect and (B) the amount of interest which would have
accrued on the Notes if the rates of interest set forth in this Agreement had
at all times been in effect and (ii) the amount of interest actually paid or
accrued under this Agreement on the Notes. In the event the Banks ever
receive, collect or apply as interest any sum in
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excess of the Maximum Rate, such excess amount shall, to the extent permitted
by law, be applied to the reduction of the principal balance of the Notes, and
if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrower.
(d) Other Amounts Overdue. If any amount payable under this
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Agreement other than the Advances is not paid when due and payable, including
without limitation, accrued interest and fees, then such overdue amount shall
accrue interest hereon due and payable on demand at a rate per annum equal to
the Adjusted Base Rate plus two percent (2%), from the date such amount became
due until the date such amount is paid in full.
Section 2.07 Prepayments.
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(a) Right to Prepay. The Borrower shall have no right to prepay any
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principal amount of any Advance except as provided in this Section 2.07.
(b) Optional Prepayments. The Borrower may elect to prepay any of
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the Advances, after giving by 12:00 Noon (Dallas, Texas time) (i) in the case
of LIBOR Advances, at least three Business Days' prior written notice or (ii)
in case of Base Rate Advances, at least one Business Day's prior written
notice to the Administrative Agent stating the proposed date and aggregate
principal amount of such prepayment, and if applicable, the relevant Interest
Period for the Advances to be prepaid. If any such notice is given, the
Borrower shall prepay Advances comprising part of the same Borrowing in whole
or ratably in part in an aggregate principal amount equal to the amount
specified in such notice, and with respect to LIBOR Advances shall also pay
accrued interest to the date of such prepayment on the principal amount
prepaid and amounts, if any, required to be paid pursuant to Section 2.08 as a
result of such prepayment being made on such date; provided, however, that
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each partial prepayment shall be in an aggregate principal amount not less
than $1,000,000 and in integral multiples of $100,000.
(c) Mandatory Prepayments.
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(i) Borrowing Base Deficiency. On or prior to the fifth (5th)
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Business Day following a Borrowing Base Determination Date occurring
under the provisions of Section 2.14, the Borrower shall be required
to prepay Advances in an aggregate amount equal to the excess of (A)
the aggregate amount of outstanding Advances and Letter of Credit
Exposure on such date over (B) the lesser of (1) the Borrowing Base,
as determined on such Borrowing Base Determination Date or (2) the
Total Commitments at such time (or, upon payment in full of all
outstanding Advances, to deposit into the Cash Collateral Account an
amount equal to the amount of the Letter of Credit Exposure which
exceeds the Borrowing Base).
(ii) Accrued Interest. Each prepayment pursuant to this Section
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2.07(c) of a LIBOR Advance shall be accompanied by accrued interest
on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.08 as a result of
such prepayment being made on such date.
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(d) Ratable Payments. Each payment of any Advance pursuant to this
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Section 2.07 or any other provision of this Agreement shall be made in a
manner such that all Advances comprising part of the same Borrowing are paid
in whole or ratably in part.
(e) Effect of Notice. All notices given pursuant to this Section
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2.07 shall be irrevocable and binding upon the Borrower.
Section 2.08 Breakage Costs. If (a) any payment of principal of any
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LIBOR Advance is made other than on the last day of the Interest Period for
such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VIII or
otherwise; (b) any Conversion of a LIBOR Advance is made other than on the
last day of the Interest Period for such Advance pursuant to Section 2.12 or
otherwise; or (c) the Borrower fails to make a principal or interest payment
with respect to any LIBOR Advance on the date such payment is due and payable,
the Borrower shall, within 10 days of any written demand sent by any Bank to
the Borrower through the Administrative Agent, pay to the Administrative Agent
for the account of such Bank any amounts (without duplication of any other
amounts payable in respect of breakage costs) required to compensate such Bank
for any losses (other than lost profit), out-of-pocket costs or expenses which
it may reasonably incur as a result of such payment or nonpayment, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Bank to
fund or maintain such Advance.
Section 2.09 Increased Costs.
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(a) LIBOR Advances. If, due to either (i) the introduction of or any
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change (other than any change by way of imposition or increase of reserve
requirements included in the calculation of the LIBOR) in or in the
interpretation of any law or regulation enacted, issued or promulgated after
the date of this Agreement or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) enacted, issued or promulgated after the date of this
Agreement, there shall be any increase in the cost to any Bank of agreeing to
make or making, funding or maintaining LIBOR Advances, then the Borrower shall
from time to time, within 10 days of written demand by such Bank (with a copy
of such demand to the Administrative Agent), pay to the Administrative Agent
for the account of such Bank additional amounts (without duplication of any
other amounts payable in respect of increased costs) sufficient to compensate
such Bank for such increased cost; provided, however, that, before making any
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such demand, each Bank agrees to use commercially reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate as to the amount of such increased
cost and detailing the calculation of such cost submitted to the Borrower and
the Administrative Agent by such Bank at the time such Bank demands payment
under this Section shall be conclusive and binding for all purposes, absent
manifest error.
(b) Capital Adequacy. If any Bank or the Issuing Bank determines in
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good faith that compliance with any law or regulation or any guideline or
request from any central bank or
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other Governmental Authority (whether or not having the force of law) enacted,
issued or promulgated after the date of this Agreement affects or would affect
the amount of capital required or expected to be maintained by such Bank or
the Issuing Bank and that the amount of such capital is increased by or based
upon the existence of such Bank's commitment to lend or the Issuing Bank's
commitment to issue Letters of Credit or any Bank's commitment to risk
participate in Letters of Credit and other commitments of this type, then,
upon 30 days prior written notice by such Bank or the Issuing Bank (with a
copy of any such demand to the Administrative Agent), the Borrower shall
immediately pay to the Administrative Agent for the account of such Bank or to
the Issuing Bank, as the case may be, from time to time as specified by such
Bank or the Issuing Bank, additional amounts (without duplication of any other
amounts payable in respect of increased costs) sufficient to compensate such
Bank or the Issuing Bank, in light of such circumstances, (i) with respect to
such Bank, to the extent that such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's commitment to lend
under this Agreement or its commitment to risk participate in Letters of
Credit and (ii) with respect to the Issuing Bank, to the extent that such
Issuing Bank reasonably determines such increase in capital to be allocable to
the issuance or maintenance of the Letters of Credit. A certificate as to such
amounts and detailing the calculation of such amounts submitted to the
Borrower and the Administrative Agent by such Bank or the Issuing Bank shall
be conclusive and binding for all purposes, absent manifest error.
(c) Letters of Credit. If any change in any law or regulation or in
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the interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof enacted, issued or
promulgated after the date of this Agreement shall either (i) impose, modify,
or deem applicable any reserve, special deposit, or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, Issuing Bank or any Bank or (ii) impose on Issuing Bank or any
Bank any other condition regarding the provisions of this Agreement relating
to the Letters of Credit or any Letter of Credit Obligations, and the result
of any event referred to in the preceding clause (i) or (ii) shall be to
increase the cost to Issuing Bank of issuing or maintaining any Letter of
Credit, or increase the cost to such Bank of its risk participation in any
Letter of Credit (which increase in cost shall be determined by Issuing Bank's
or such Bank's reasonable allocation of the aggregate of such cost increases
resulting from such event), then, within 10 days of written demand by Issuing
Bank or such Bank (with a copy sent to the Administrative Agent), as the case
may be, the Borrower shall pay to the Administrative Agent for the account of
Issuing Bank or Bank, as the case may be, from time to time as specified by
Issuing Bank or such Bank, additional amounts which shall be sufficient to
compensate such Issuing Bank or such Bank for such increased cost. Issuing
Bank and each Bank agrees to use commercially reasonable efforts (consistent
with internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office for the booking of its Letters of Credit
or risk participations if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of Issuing
Bank or such Bank, be otherwise disadvantageous to Issuing Bank or such Bank,
as the case may be. A certificate as to such increased cost incurred by
Issuing Bank or such Bank, as the case may be, as a result of any event
mentioned in clause (i) or (ii) above, and detailing the calculation of such
increased costs submitted by Issuing Bank or such Bank to the Borrower and the
Administrative Agent, shall be conclusive and binding for all purposes, absent
manifest error.
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Section 2.10 Payments and Computations.
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(a) Payment Procedures. Except if otherwise set forth herein, the
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Borrower shall make each payment under this Agreement and under the Notes not
later than 12:00 Noon (Dallas, Texas time) on the day when due in Dollars to
the Administrative Agent without setoff, deduction or counterclaim at the
location referred to in the Notes (or such other location as the
Administrative Agent shall designate in writing to the Borrower) in same day
funds. The Administrative Agent will on the same day such payment is deemed
received from the Borrower cause to be distributed like funds relating to the
payment of principal, interest or fees ratably (other than amounts payable
solely to the Administrative Agent, the Issuing Banks, or a specific Bank
pursuant to Section 2.03(b), 2.03(c), 2.06(c), 2.08, 2.09, 2.11, 2.12, or
2.13(c) but after taking into account payments effected pursuant to Section
10.04) to the Banks in accordance with each Bank's Pro Rata Share for the
account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Bank or Issuing
Bank for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. If and to the extent
that the Administrative Agent shall not have so made payment to a Bank on the
day required under this Agreement, the Administrative Agent agrees to
immediately pay such Bank such payment, together with interest on such amount,
for each day from the date such amount was deemed received by the
Administrative Agent until the date such amount is paid to such Bank at the
Federal Funds Rate for each such day.
(b) Computations. All computations of interest based on the Adjusted
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Base Rate shall be made by the Administrative Agent on the basis of a year of
365 days and all computations of fees and interest based on the LIBOR and the
Federal Funds Rate shall be made by the Administrative Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day, but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent
of an interest rate shall be conclusive and binding for all purposes, absent
manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be stated
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to be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the
case may be; provided, however, that if such extension would cause payment of
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interest on or principal of LIBOR Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(d) Administrative Agent Reliance. Unless the Administrative Agent
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shall have received written notice from the Borrower prior to the date on
which any payment is due to the Banks that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank,
together with interest, for each day from the date such amount is
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distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate for each such day.
(e) Application of Payments. Unless otherwise specified in Section
-----------------------
2.07 hereof, whenever any payment received by the Administrative Agent under
this Agreement is insufficient to pay in full all amounts then due and payable
under this Agreement and the Notes, such payment shall be distributed and
applied by the Administrative Agent and the Banks in the following order:
first, to the payment of fees and expenses due and payable to the
----
Administrative Agent under and in connection with this Agreement or any other
Credit Document; second, to the payment of all expenses due and payable under
------
Section 2.11(c), ratably among the Banks in accordance with the aggregate
amount of such payments owed to each such Bank; third, to the payment of fees
-----
due and payable to the Issuing Bank pursuant to Section 2.03(b); fourth, to
------
the payment of all other fees due and payable under Section 2.03; and fifth,
-----
to the payment of the interest accrued on and the principal amount of all of
the Notes and the interest accrued on and all Letter of Credit Obligations,
regardless of whether any such amount is then due and payable, ratably among
the Banks in accordance with the respective Pro Rata Share.
(f) Register. The Administrative Agent shall record in the Register
--------
the Commitment and the Advances from time to time of each Bank and each
repayment or prepayment in respect to the principal amount of such Advances of
each Bank. Any such recordation shall be conclusive and binding on the
Borrower and each Bank, absent manifest error; provided however, that failure
-------- -------
to make any such recordation, or any error in such recordation, shall not
affect the Borrower's obligations hereunder in respect of such Advances.
Section 2.11 Taxes.
-----
(a) No Deduction for Certain Taxes. Any and all payments by the
------------------------------
Borrower shall be made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank, Issuing Bank, and the Administrative
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank, Issuing Bank, or the
Administrative Agent (as the case may be) is organized or any political
subdivision of such jurisdiction or by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision of such jurisdiction
(all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable to any Bank, Issuing Bank, or the Administrative Agent, (i)
the sum payable shall be increased as may be necessary so that, after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.11), such Bank, Issuing Bank, or the
Administrative Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made; provided, however,
--------
that if the Borrower's obligation to deduct or withhold Taxes is caused solely
by such Bank's, Issuing Bank's, or the Administrative Agent's failure to
provide the forms described in paragraph (e) of this Section 2.11 and such
Bank, Issuing Bank, or the Administrative Agent could have provided such
forms, no such increase shall be required; (ii) the Borrower shall make such
deductions; and
-40-
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Legal Requirements.
(b) Other Taxes. In addition, the Borrower agrees to pay any present
-----------
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes, or the other Credit Documents (hereinafter referred to
as "Other Taxes").
(c) Indemnification. Subject to the proviso of Section 2.11(a), the
---------------
Borrower indemnifies each Bank, Issuing Bank, and the Administrative Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any Governmental Authority on amounts payable
under this Section 2.11) paid by such Bank, Issuing Bank, or the
Administrative Agent (as the case may be) and any liability (including
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. Each payment
required to be made by the Borrower in respect of this indemnification shall
be made to the Administrative Agent for the benefit of any party claiming such
indemnification within 30 days from the date the Borrower receives written
demand detailing the calculation of such amounts therefor from the
Administrative Agent on behalf of itself as Administrative Agent, Issuing
Bank, or any such Bank. If any Bank, the Administrative Agent, or Issuing Bank
receives a refund in respect of any Taxes or Other Taxes paid by the Borrower
under this paragraph (c), such Bank, the Administrative Agent, or Issuing
Bank, as the case may be, shall promptly pay to the Borrower the Borrower's
share of such refund.
(d) Evidence of Tax Payments. The Borrower will pay prior to
------------------------
delinquency all Taxes and Other Taxes payable in respect of any payment.
Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Administrative Agent, at its address referred to in Section
10.02, the original or a certified copy of a receipt evidencing payment of
such Taxes or Other Taxes.
(e) Foreign Bank Withholding Exemption. Each Bank and each Issuing
----------------------------------
Bank that is not incorporated under the laws of the United States of America
or a state thereof agrees that it will deliver to the Borrower and the
Administrative Agent on the date of this Agreement or upon the effectiveness
of any Assignment and Acceptance two duly completed copies of the Prescribed
Forms, certifying in each case that such Bank is entitled to receive payments
under this Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes. Each Bank which
delivers to the Borrower and the Administrative Agent a Prescribed Form
further undertakes to deliver to the Borrower and the Administrative Agent two
further copies of a replacement Prescribed Form, on or before the date that
any such Prescribed Form expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form previously delivered
by it to the Borrower and the Administrative Agent, and such extensions or
renewals thereof as may reasonably be requested by the Borrower and the
Administrative Agent certifying that such Bank is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes. If an event (including without limitation any change in
treaty, law or regulation) has occurred prior to
-41-
the date on which any delivery required by the preceding sentence would
otherwise be required which renders all such forms inapplicable or which would
prevent any Bank from duly completing and delivering any such Prescribed Form
with respect to it and such Bank advises the Borrower and the Administrative
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, such Bank shall not be
required to deliver such forms. The Borrower shall withhold tax at the rate
and in the manner required by the laws of the United States with respect to
payments made to a Bank failing to timely provide the requisite Prescribed
Forms.
Section 2.12 Illegality. If any Bank shall notify the Administrative
----------
Agent and the Borrower that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Bank
or its LIBOR Lending Office to perform its obligations under this Agreement to
maintain any LIBOR Advances of such Bank then outstanding hereunder, then,
notwithstanding anything herein to the contrary, the Borrower shall, if
demanded by such Bank by notice to the Borrower and the Administrative Agent
no later than 12:00 Noon (Dallas, Texas time), (a) if not prohibited by Legal
Requirement to maintain such LIBOR Advances for the duration of the Interest
Period, on the last day of the Interest Period for each outstanding LIBOR
Advance of such Bank or (b) if prohibited by Legal Requirement to maintain
such LIBOR Advances for the duration of the Interest Period, on the second
Business Day following its receipt of such notice from such Bank, Convert all
LIBOR Advances of such Bank then outstanding to Base Rate Advances, and pay
accrued interest on the principal amount Converted to the date of such
Conversion and amounts, if any, required to be paid pursuant to Section 2.08
as a result of such Conversion being made on such date. Each Bank agrees to
use commercially reasonable efforts (consistent with its internal policies and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.
Section 2.13 Letters of Credit.
-----------------
(a) Issuance. From time to time from the date of this Agreement
--------
until three months before the Maturity Date, at the request of the Borrower,
the Issuing Bank shall, on any Business Day and on the terms and conditions
hereinafter set forth, issue, increase, decrease, amend, or extend the
expiration date of Letters of Credit for the account of the Borrower (for its
own benefit or for the benefit of any of its Subsidiaries). Upon the Effective
Date, but subject to the limitations contained in the following sentence, each
Existing Letter of Credit shall be automatically converted to a Letter of
Credit. No Letter of Credit will be issued, increased, or extended and no
Existing Letter of Credit will be converted to a Letter of Credit (i) if such
issuance, increase, or extension would cause the Letter of Credit Exposure to
exceed the lesser of (x) $25,000,000 or (y) an amount equal to (A) the lesser
of the Borrowing Base or the Total Commitments less (B) the aggregate
----
outstanding Advances and Letter of Credit Exposure at such time; (ii) unless
such Letter of Credit has an Expiration Date not later than the earlier of (A)
one year after the date of issuance thereof and (B) one day prior to the
Maturity Date; (iii) unless such Letter of Credit is in form and substance
acceptable to the respective Issuing Bank; (iv) unless such Letter of Credit
is a standby letter of credit not supporting the repayment of
-42-
indebtedness for borrowed money of any Person; (v) unless the Borrower has
delivered to the respective Issuing Bank the completed and executed Letter of
Credit Documents (other than the Letter of Credit) on such Issuing Bank's
standard form, which shall contain terms no more restrictive than the terms of
this Agreement; (vi) unless such Letter of Credit is governed by the
International Standby Practices (1998) ("ISP") or any successor to the ISP;
and (vii) unless no Default has occurred and is continuing or would result
from the issuance of such Letter of Credit. If the terms of any of the Letter
of Credit Documents referred to in the foregoing clause (v) conflicts with the
terms of this Agreement, the terms of this Agreement shall control.
(b) Participations. On the date of the issuance or increase of any
--------------
Letter of Credit on or after the Effective Date or the conversion of any
Existing Letter of Credit to a Letter of Credit in accordance with provisions
of the preceding Section 2.13(a), each Issuing Bank shall be deemed to have
sold to each other Bank and each other Bank shall have been deemed to have
purchased from such Issuing Bank a participation in the Letter of Credit
Exposure related to the Letters of Credit issued by such Issuing Bank equal to
such Bank's Pro Rata Share at such date and such sale and purchase shall
otherwise be in accordance with the terms of this Agreement. Each Issuing Bank
shall promptly notify each such participant Bank by telex, telephone, or
telecopy of each Letter of Credit of such Issuing Bank issued, increased or
decreased, and the actual dollar amount of such Bank's participation in such
Letter of Credit. Each Bank's obligation to purchase participating interests
pursuant to this Section and to reimburse the respective Issuing Bank for such
Bank's Pro Rata Share of any payment under a Letter of Credit by such Issuing
Bank not reimbursed in full by the Borrower shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any of the circumstances described in paragraph (d)
below, (ii) the occurrence and continuance of a Default, (iii) an adverse
change in the financial condition of the Borrower or any Guarantor, or (iv)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing, except for any such circumstance, happening or event
constituting or arising from gross negligence or willful misconduct on the
part of such Issuing Bank.
(c) Reimbursement. The Borrower shall pay promptly on demand to each
-------------
Issuing Bank in respect of each Letter of Credit issued by such Issuing Bank
an amount equal to any amount paid by such Issuing Bank under or in respect of
such Letter of Credit. In the event any Issuing Bank makes a payment pursuant
to a request for draw presented under a Letter of Credit and such payment is
not promptly reimbursed by the Borrower upon demand, such Issuing Bank shall
give notice of such payment to the Administrative Agent and the Banks, and
each Bank shall promptly reimburse such Issuing Bank for such Bank's Pro Rata
Share of such payment, and such reimbursement shall be deemed for all purposes
of this Agreement to constitute a Base Rate Advance to the Borrower from such
Bank. If such reimbursement is not made by any Bank to any Issuing Bank on the
same day on which such Issuing Bank shall have made payment on any such draw,
such Bank shall pay interest thereon to such Issuing Bank for each such day
from the date such payment should have been made until the date repaid at a
rate per annum equal to the Federal Funds Rate for each such day. The Borrower
hereby unconditionally and irrevocably authorizes, empowers, and directs the
Administrative Agent and the Banks to record and otherwise treat each payment
under a Letter of Credit not immediately reimbursed by the Borrower as a
Borrowing comprised of Base Rate Advances to the Borrower.
-43-
(d) Obligations Unconditional. Except to the extent provided in
-------------------------
Section 2.13(e), the obligations of the Borrower under this Agreement in
respect of each Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit Documents;
(ii) any amendment or waiver of or any consent to departure
from any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower or any Bank or any other Person may have at
any time against any beneficiary or transferee of such Letter of
Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the respective Issuing Bank or any other
Person or entity, whether in connection with this Agreement, the
transactions contemplated in this Agreement or in any Letter of
Credit Documents or any unrelated transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect to the extent the respective Issuing Bank
would not be liable therefor pursuant to the following paragraph
(e);
(v) payment by the respective Issuing Bank under such Letter of
Credit against presentation of a draft or certificate which does not
comply with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
(e) Liability of Issuing Banks. The Borrower assumes all risks of
--------------------------
the acts or omissions of any beneficiary or transferee of any Letter of Credit
with respect to its use of such Letter of Credit. No Issuing Bank, nor any
other Bank, nor any of their respective officers or directors shall be liable
or responsible for:
(i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection
therewith;
(ii) the validity, sufficiency or genuineness of documents, or
of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or
forged;
(iii) payment by such Issuing Bank against presentation of
documents which do not comply with the terms of a Letter of Credit,
including failure of any
-44-
documents to bear any reference or adequate reference to the
relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit (including such Issuing
Bank's own negligence);
except that the Borrower shall have a claim against such Issuing Bank, and
------
such Issuing Bank shall be liable to, and shall promptly pay to, the Borrower,
to the extent of any direct, as opposed to consequential, damages suffered by
the Borrower which the Borrower proves were caused by (A) such Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (B) such Issuing Bank's gross negligence in failing to make lawful
payment under any Letter of Credit after the presentation to it of a draft and
certificate strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing, any Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation.
Section 2.14 Determination of Borrowing Base. The Borrowing Base shall be
-------------------------------
determined by the Administrative Agent, as follows:
(a) Quarterly. On the 45th day following each calendar quarter the
---------
Administrative Agent shall determine the Borrowing Base upon receipt of a
Borrowing Base Certificate setting forth the components of the Borrowing Base
dated as of the last day of the immediately preceding calendar quarter.
(b) Property Adjustments. Following each addition or deletion of a
--------------------
Hotel Property as an Eligible Property (an "Adjustment Event"), and the
----------------
Administrative Agent's receipt of a Property Adjustment Report with respect
thereto, the Administrative Agent shall adjust the Borrowing Base accordingly.
(c) Reduction of Commitments. Following each reduction of the
------------------------
Commitments pursuant to the provisions of Section 2.04.
(d) Notice of Borrowing Base Change. Promptly following any date the
-------------------------------
Borrowing Base is re-determined in accordance with the preceding paragraphs,
the Administrative Agent shall give notice to the Banks and the Borrower of
the new Borrowing Base.
Section 2.15 Bank Replacement.
----------------
(a) Right to Replace. The Borrower shall have the right to replace
----------------
each Bank affected by a condition under Section 2.02(c)(v), 2.09, 2.11, or
2.12 for more than 90 days (each such affected Bank, an "Affected Bank") in
accordance with the procedures in this Section 2.15 and provided that no
reduction of the total Commitments occurs as a result thereof.
-45-
(b) First Right of Refusal; Replacement.
-----------------------------------
(i) Upon the occurrence of any condition permitting the
replacement of a Bank, the Administrative Agent in its sole
discretion shall have the right to reallocate the amount of the
Commitments of the Affected Banks, including without limitation to
Persons which are not already party to this Agreement but which
qualify as Eligible Assignees, which election shall be made by
written notice within 30 days after the date such condition occurs.
(ii) If the aggregate amount of the reallocated Commitments is
less than the Commitments of the Affected Banks, (A) the respective
Commitments of the Banks which have received such reallocated
Commitments shall be increased by the respective amounts of their
proposed reallocations, and (B) the Borrower shall have the right to
add additional Banks which are Eligible Assignees to this Agreement
to replace such Affected Banks, which additional Banks would have
aggregate Commitments no greater than those of the Affected Banks
minus the amounts of the Commitments already reallocated.
-----
(c) Procedure. Any assumptions of Commitments pursuant to this
---------
Section 2.15 shall be (i) made by the purchasing Bank or Eligible Assignee and
the selling Bank entering into an Assignment and Assumption and by following
the procedures in Section 10.06 for adding a Bank. In connection with the
reallocation of the Commitments of any Bank pursuant to the foregoing
paragraph (b), each Bank with a reallocated Commitment shall purchase from the
Affected Banks at par such Bank's ratable share of the outstanding Advances of
the Affected Banks and assume such Bank's ratable share of the Affected Banks'
Letter of Credit Exposure.
Section 2.16 Sharing of Payments, Etc. If any Bank shall obtain any
------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of its Advances or its share of Letter of
Credit Obligations in excess of its Pro Rata Share of payments on account of
the Advances or Letter of Credit Obligations obtained by all the Banks, such
Bank shall notify the Administrative Agent and forthwith purchase from the
other Banks such participations in the Advances made by them or Letter of
Credit Obligations held by them as shall be necessary to cause such purchasing
Bank to share the excess payment ratably in accordance with the requirements
of this Agreement with each of them; provided, however, that if all or any
--------
portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and such Bank shall
repay to the purchasing Bank the purchase price to the extent of such Bank's
ratable share (according to the proportion of (a) the amount of the
participation sold by such Bank to the purchasing Bank as a result of such
excess payment to (b) the total amount of such excess payment) of such
recovery, together with an amount equal to such Bank's ratable share
(according to the proportion of (a) the amount of such Bank's required
repayment to the purchasing Bank to (b) the total amount of all such required
repayments to 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 that any Bank so purchasing a participation from another
Bank pursuant to this Section 2.16 may, to the fullest extent permitted by
Legal Requirement, unless and until rescinded as provided above, exercise all
its rights of payment (including the right of set-off) with respect to such
participation
-46-
as fully as if such Bank were the direct creditor of the Borrower in the
amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to initial Advance. The obligation of
---------------------------------------
each Bank to make its initial Advance as part of the initial Borrowing and of
the Issuing Bank to issue the initial Letter of Credit are subject to the
following conditions precedent being satisfied on or prior to the Funding
Deadline:
(a) Documentation. The Administrative Agent shall have received
-------------
counterparts of this Agreement executed by the Borrower and the Banks, and the
following duly executed by all the parties thereto, in form and substance
satisfactory to the Administrative Agent, and, with respect to this Agreement,
all Guaranties and the Environmental Indemnity, in sufficient copies for each
Bank:
(i) the Notes, all Guaranties, and the Environmental Indemnity;
(ii) a certificate from the Chief Executive Officer, President
or Chief Financial Officer of the Parent on behalf of the Borrower
dated as of the Effective Date stating that as of the Effective Date
(A) all representations and warranties of the Borrower set forth in
this Agreement and the Credit Documents are true and correct in all
material respects; (B) no Default has occurred and is continuing;
(C) the conditions in this Section 3.01 have been met or waived in
writing; and (D) to the best of the Borrower's knowledge there are
no claims, defenses, counterclaims or offsets by the Borrower
against the Banks under the Credit Documents;
(iii) a certificate of the Secretary or an Assistant Secretary
of the Parent on behalf of the Borrower and each Guarantor dated as
of the date of this Agreement certifying as of the date of this
Agreement (A) the names and true signatures of officers or
authorized representatives of the general partner of the Borrower
and such Guarantor authorized to sign the Credit Documents to which
such Person is a party as general partner of such Person, (B)
resolutions of the Board of Directors or the members of the general
partner of such Person with respect to the transactions herein
contemplated, (C) either (x) the copies of the organizational
documents of the general partner of such Person delivered to the
Banks are still true and correct and have not been amended or
modified since such date or (y) copies of any modification or
amendment to the organizational documents of the general partner of
such Person made since such date, (D) a true and correct copy of the
partnership agreement for such Person, and (E) a true and correct
copy of all partnership authorizations necessary or desirable in
connection with the transactions herein contemplated;
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(iv) a certificate of the Secretary or an Assistant Secretary
of the Parent dated as of the date of this Agreement certifying as
of the date of this Agreement (A) resolutions of the Board of
Directors of such Person with respect to the transactions herein
contemplated, (B) the copies of the charter and bylaws of the Parent
and any modification or amendment to the articles or certificate of
incorporation or bylaws of the Parent made since such date, and (C)
that the Parent owns 100% of the general partner interests and at
least 70% of the limited partnership interests in the Borrower;
(v) (A) one or more favorable written opinions of Sidley Xxxxxx
Xxxxx & Xxxx L.L.P., special counsel for the Borrower, the Parent,
and their Subsidiaries, in a form reasonably acceptable to the
Administrative Agent, in each case dated as of the Closing Date and
with such changes as the Administrative Agent may approve, and (B)
such other legal opinions as the Administrative Agent shall
reasonably request, in each case dated as of the Closing Date and
with such changes as the Administrative Agent may approve;
(vi) a Borrowing Base Certificate dated as of the Closing Date,
duly completed and executed by the Chief Financial Officer or
Treasurer of the Parent on behalf of the Borrower; and
(vii) such other documents, governmental certificates,
agreements, and lien searches as the Administrative Agent may
reasonably request.
(b) Representations and Warranties. The representations and
------------------------------
warranties contained in Article IV hereof, the Guaranties, and the
Environmental Indemnity shall be true and correct in all material respects.
(c) Certain Payments. The Borrower shall have paid the fees required
----------------
to be paid as of the execution of this Credit Agreement pursuant to the Fee
Letter.
(d) Requirements. The Borrowing Base Requirements and the Parent
------------
Hotel Property Requirements are met.
(e) Other. The Administrative Agent shall have received such other
-----
approvals, opinions or documents deemed necessary or desirable by any Bank or
the Administrative Agent as such party may reasonably request.
If the conditions set forth in this Section 3.01 are not satisfied on or prior
to the Funding Deadline, the obligation of each Bank to make Advances and the
obligation of each Issuing Bank to issue, increase, or extend Letters of
Credit shall immediately and automatically be terminated and the Notes, all
interest on the Notes, all Letter of Credit Obligations, and all other amounts
payable under this Agreement shall immediately and automatically become and be
due and payable in full, without presentment, demand, protest or any notice of
any kind (including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are
-48-
hereby expressly waived by the Borrower. However, Borrower shall pay to the
Facilitators all fees and expenses as set forth in the Fee Letter.
Section 3.02 Conditions Precedent for each Borrowing or Letter of Credit.
-----------------------------------------------------------
The obligation of each Bank to fund an Advance on the occasion of each
Borrowing (other than the Conversion or continuation of any existing
Borrowing) and of any Issuing Bank to issue or increase or extend any Letter
of Credit shall be subject to the further conditions precedent that on the
date of such Borrowing or the issuance or increase or extension of such Letter
of Credit:
(a) the following statements shall be true (and each of the giving
of the applicable Notice of Borrowing and the acceptance by the Borrower of
the proceeds of such Borrowing or the issuance or increase or extension of
such Letter of Credit shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing or the issuance or increase or
extension of such Letter of Credit such statements are true):
(i) the representations and warranties contained in Article IV
hereof, the Guaranties, and the Environmental Indemnity are correct
in all material respects on and as of the date of such Borrowing or
the issuance or increase or extension of such Letter of Credit,
before and after giving effect to such Borrowing or to the issuance
or increase or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on
and as of such date; and
(ii) no Default has occurred and is continuing or would result
from such Borrowing or from the application of the proceeds
therefrom;
(b) the Borrower shall have executed and delivered to the
Administrative Agent a Borrowing Base Certificate dated not earlier than the
date 10 days prior to the anticipated date of such Borrowing and a Notice of
Borrowing delivered in accordance with Section 2.02; and
(c) the Administrative Agent shall have received such other
approvals, opinions or documents deemed necessary or desirable by any Bank or
the Administrative Agent as such party may reasonably request.
Section 3.03 Conditions Precedent to a Hotel Property Qualifying as an
---------------------------------------------------------
Eligible Property. In order for an Initial Property or a Future Property to
-----------------
qualify initially and thereafter to continue to qualify as an Eligible
Property, the following conditions precedent must be satisfied and remain
satisfied for that Property:
(a) Title. Such Hotel Property (i) is Unencumbered, (ii) free of all
-----
material title defects, and (iii) either (A) owned (together with the land on
which it is located) in fee simple by the Borrower or its direct or indirect
Wholly-Owned Subsidiary or Joint Venture Subsidiary or (B) owned by the
Borrower or its direct or indirect Wholly-Owned Subsidiary or Joint Venture
Subsidiary and located on land leased to the Borrower or such Subsidiary
pursuant to a Qualified Ground Lease, all as evidenced by a copy of the most
recent ALTA Owner's
-49-
Policy of Title Insurance (or commitment to issue such a policy to the
Borrower or its Subsidiary owning or to own such Hotel Property) relating to
such Hotel Property showing the identity of the fee titleholder thereto and
all matters of record as of its date.
(b) Guarantor. In addition, if the Property Owner for such Hotel
---------
Property is not the Borrower, the following:
(i) The Property Owner shall be either a Wholly-Owned
Subsidiary or a Joint Venture Subsidiary of the Borrower whose sole
assets are Eligible Properties, who is not liable for any
Indebtedness other than the Obligations, who complies in all
material respects with all of the covenants and requirements of
Guarantors under the Credit Documents and who has delivered to the
Administrative Agent either (A) an original Guaranty and
Environmental Indemnity executed by such Subsidiary or (B) an
Accession Agreement executed by such Subsidiary; and
(ii) a written opinion of the Borrower's counsel or counsels
covering such matters relating to the Property Owner as the
Administrative Agent reasonably requires.
(c) Approved Participating Lease. (i) Such Hotel Property is leased
----------------------------
to an Approved Participating Lessee pursuant to an Approved Participating
Lease, (ii) no material default by the Approved Participating Lessee or the
Property Owner under the Approved Participating Lease exists beyond any
applicable cured period (provided that for purposes of this subsection (c)
such cure period will be deemed to commence running when the Borrower, the
Parent or a Guarantor has knowledge of such default), (iii) the Approved
Participating Lease remains in full force and effect, and (iv) no failure to
achieve specified financial results under such Approved Participating Lease
has occurred which would allow the Property Owner for such Hotel Property to
terminate such Approved Participating Lease.
(d) Approved Management Agreement. Except for those Hotel Properties
-----------------------------
managed pursuant to an Approved Participating Lease for such Hotel Property,
(i) such Hotel Property is managed by an Approved Manager pursuant to an
Approved Management Agreement, (ii) no material default by the owner under the
Approved Management Agreement exists, and (iii) the Approved Management
Agreement remains in full force and effect;
(e) Qualified Ground Leases. In addition, if the Hotel Property is
-----------------------
subject to a Qualified Ground Lease, no default by the lessee under the
Qualified Ground Lease exists and the Qualified Ground Lease remains in full
force and effect.
(f) Property Condition. Such Hotel Property is free of all material
------------------
structural defects, as evidenced by an Engineering Report.
(g) Environmental Condition. Such Hotel Property is (1) in
-----------------------
compliance, in all material respects, with all applicable Environmental Laws,
and (2) not subject to any material Environmental Claim, all as evidenced by
an Environmental Report.
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(h) Adverse Property Situation. Neither all nor any material portion
--------------------------
of the Hotel Property shall be the subject of any proceeding by a governmental
authority for the condemnation, seizure or appropriation thereof, nor the
subject of any negotiations for sale in lieu of condemnation, seizure or
appropriation.
(i) Type and Location. Such Hotel Property is (i) located in either
-----------------
the United States of America or in an Approved Other Country and (ii) either
(A) a full service hotel located in a resort, convention or urban market or
(B) a limited service hotel located in an urban market.
(j) Documents and Information. The Administrative Agent shall have
-------------------------
received each of the following executed by the Borrower, the Property Owner or
other appropriate person, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) a copy of each of the following for such Hotel Property
certified as true and correct by the Borrower:
A. if the Hotel Property is subject to an Approved
Management Agreement, the Approved Management
Agreement for the Hotel Property;
B. the Approved Participating Lease;
C. if the Hotel Property is subject to a Qualified
Ground Lease, the Qualified Ground Lease; and
D. if the Property Owner is not the Borrower, the
Property Owner's articles of incorporation, by-laws,
partnership agreements, as applicable, and
certificates of existence, good standing and
authority to do business from each appropriate state
authority, and partnership or corporate, as
applicable, authorizations authorizing the execution,
delivery and performance of the Accession Agreement
all certified to be true and complete by a duly
authorized officer of such Property Owner;
(ii) if the Borrower has received a survey of the Real
Property, a copy of such survey;
(iii) (A) a description of such Hotel Property, such
description to include the age, location and number of rooms or
suites of such Hotel Property, and (B) to the extent available,
statistics with respect to the occupancy of the Hotel Property,
operating statements, and an analysis of the revenue per available
room, in each case for the three (3) prior Fiscal Years and the
completed Fiscal Quarters of the current Fiscal Year;
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(iv) certificates and, to the extent within the Borrower's
control, policies of insurance evidencing that the Hotel Property is
covered by the insurance required pursuant to Section 5.07 hereof;
and
(v) all other documents reasonably required by the
Administrative Agent.
(k) Other Requirements. In addition, the following:
------------------
(i) As certified in writing by the Borrower to the
Administrative Agent and the Banks at least 10 Business Days prior
to the date the Borrower proposes such Hotel Property qualify as an
Eligible Property, the Hotel Property individually qualifies as an
Eligible Property and the addition of the Hotel Property as an
Eligible Property shall not (A) cause the Eligible Properties in the
aggregate to violate the Borrowing Base Requirements, (B) cause a
Default, or (C) cause or result in the Borrower or the Parent
failing to comply with any of the financial covenants contained
herein; and
(ii) The Borrower shall have delivered to the Administrative
Agent the Property Information for such Hotel Property 10 Business
Days prior to the date the Borrower proposes such Hotel Property
qualify as an Eligible Property.
(l) Other Actions. Borrower shall have executed and acknowledged (or
-------------
caused to be executed and acknowledged) and delivered to the Administrative
Agent, on behalf of the Banks, all documents, and taken all actions reasonably
required by the Administrative Agent from time to time to confirm the rights
created or now or hereafter intended to be created under the Credit Documents,
or otherwise to carry out the purposes of the Credit Documents, and the
transactions contemplated thereunder. The Administrative Agent shall have
received all other evidence and information that they may reasonably require.
As of the date of this Agreement, (a) the Borrower represents to the Banks and
the Administrative Agent that to the best of the Borrower's knowledge the
Initial Properties qualify as Eligible Properties, and (b) the Banks and the
Administrative Agent agree with the Borrower that to their actual knowledge,
without investigation, the Initial Properties qualify as Eligible Properties.
Upon 10 Business Days prior written notice from the Borrower to the
Administrative Agent, the Borrower can designate that a Hotel Property be
added (subject to the other requirements for a Hotel Property qualifying as an
Eligible Property) or deleted as an Eligible Property. Such notice shall be
accompanied by a Property Adjustment Report with respect to such addition or
deletion and (a) with respect to an addition, the certificate required under
Section 3.03(k)(i) and (b) with respect to a deletion, Borrower's
certification in such detail as reasonably required by the Administrative
Agent that such deletion shall not (A) cause the Eligible Properties in the
aggregate to violate the Borrowing Base Requirements, (B) cause a Default, or
(C) cause or result in the Borrower or the Parent failing to comply with any
of the financial covenants contained herein.
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Notwithstanding anything contained in this Agreement to the contrary, the
Required Lenders in their reasonable discretion may upon 30 days prior written
notice to the Borrower designate that a Hotel Property is no longer an
Eligible Property upon their determination that such Hotel Property does not
satisfy the requirements for qualifying as an Eligible Property; provided that
--------
if during such 30 day period the Borrower can satisfy those requirements
deemed unsatisfied by the Required Lenders, such Hotel Property shall remain
an Eligible Property.
If no Default exists at such time, then in connection with any deletion of a
Hotel Property from qualifying as an Eligible Property, any Borrower's
Subsidiary which owned or leased such Hotel Property, but not any other
Eligible Property, shall be released from such Subsidiaries obligations under
the Guaranty.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01 Existence; Qualification; Partners; Subsidiaries.
------------------------------------------------
(a) The Borrower is a limited partnership duly organized, validly
existing, and in good standing under the laws of Delaware and in good standing
and qualified to do business in each jurisdiction where its ownership or lease
of property or conduct of its business requires such qualification, except
where the failure to so qualify would not cause a Material Adverse Change.
(b) The Parent is a real estate investment trust duly organized,
validly existing, and in good standing under the laws of Maryland and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of property or conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse
effect on the Parent. The Parent has no first tier Subsidiaries except for the
Borrower or members of Permitted Other Subsidiaries.
(c) The Parent is the Borrower's sole general partner with full
power and authority to bind the Borrower to the Credit Documents.
(d) The Parent owns a 1.1% general partner interest in and an
approximately 89.7% limited partnership interest in the Borrower.
(e) Each Subsidiary of the Borrower is a limited partnership,
general partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its jurisdiction of formation
and in good standing and qualified to do business in each jurisdiction where
its ownership or lease of property or conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on such Subsidiary. The Borrower has no Subsidiaries
on the date of this Agreement other than the
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Subsidiaries listed on the attached Schedule 4.01, and Schedule 4.01 lists the
jurisdiction of formation and the address of the principal office of each such
Subsidiary existing on the date of this Agreement. As of the date of this
Agreement, the Borrower and/or the Parent owns, directly or indirectly, at
least 99% of the interests in each such Subsidiary.
(f) As of the date of this Agreement, neither the Borrower, nor the
Parent, nor any of the Subsidiaries own directly or indirectly (i) such a
percentage of the beneficial ownership interest in any Approved Participating
Lessee or (ii) such an Investment in the Personal Property for any Hotel
Property as would cause a potential Event of Default under Section 8.01(o).
Section 4.02 Partnership and Corporate Power. The execution, delivery,
-------------------------------
and performance by the Borrower, the Parent, and each Guarantor of the Credit
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby (a) are within such Persons' trust,
partnership, limited liability company and corporate powers, as applicable,
(b) have been duly authorized by all necessary trust, corporate, limited
liability company and partnership action, as applicable, (c) do not contravene
(i) such Person's declaration of trust, certificate or articles, as the case
may be, of incorporation or by-laws, operating agreement or partnership
agreement, as applicable, or (ii) any law or any contractual restriction
binding on or affecting any such Person, the contravention of which could
reasonably be expected to cause a Material Adverse Change, and (d) will not
result in or require the creation or imposition of any Lien prohibited by this
Agreement. At the time of each Borrowing, such Borrowing and the use of the
proceeds of such Borrowing will be within the Borrower's partnership xxxxxx,
xxxx have been duly authorized by all necessary partnership action, (a) will
not contravene (i) the Borrower's partnership agreement or (ii) any law or any
contractual restriction binding on or affecting the Borrower, the
contravention of which could reasonably be expected to cause a Material
Adverse Change, and (b) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.
Section 4.03 Authorization and Approvals. No authorization or approval or
---------------------------
other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by the Borrower,
the Parent, or any Guarantor of the Credit Documents to which it is a party or
the consummation of the transactions contemplated thereby. At the time of each
Borrowing, no authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority will be required for such Borrowing
or the use of the proceeds of such Borrowing the absence of which could
reasonably be expected to cause a Material Adverse Change.
Section 4.04 Enforceable Obligations. This Agreement, the Notes, and the
-----------------------
other Credit Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower; each Guaranty and the other Credit
Documents to which each Guarantor and the Parent is a party have been duly
executed and delivered by such Guarantor and the Environmental Indemnity has
been duly executed and delivered by the parties thereto. Each Credit Document
is the legal, valid, and binding obligation of the Borrower, the Parent, and
each Guarantor which is a party to it enforceable against the Borrower, the
Parent, and each such Guarantor in accordance with its terms, except as such
enforceability may be limited by any
-54-
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and by general principles of equity
(whether considered in proceeding at law or in equity).
Section 4.05 Parent Common Stock. The entire authorized capital stock of
-------------------
the Parent consists of 100,000,000 shares of Parent Common Stock of which
18,439,098 shares of Parent Common Stock are duly and validly issued and
outstanding, fully paid and nonassessable as of the Effective Date. The
issuance and sale of such Parent Common Stock either (i) has been registered
under applicable federal and state securities laws or (ii) was issued pursuant
to an exemption therefrom. The Parent meets the requirements for taxation as a
REIT under the Code.
Section 4.06 Financial Statements. The Consolidated balance sheet of the
--------------------
Parent and its Subsidiaries, and the related Consolidated statements of
operations, shareholders' equity and cash flows, of the Parent and its
Subsidiaries contained in the most recent financial statements delivered to
the Banks, fairly present the financial condition in all material respects and
reflects the Indebtedness of the Parent and its Subsidiaries as of the
respective dates of such statements and the results of the operations of the
Initial Properties for the periods indicated, and such balance sheet and
statements were prepared in accordance with GAAP, subject to year-end
adjustments. Since the date of the statements for the Fiscal Quarter ending
March 31, 2001, neither a Material Adverse Change, nor any material adverse
change to the prospects or the Property of the Parent or the Borrower has
occurred.
Section 4.07 True and Complete Disclosure. No representation, warranty,
----------------------------
or other statement made by the Borrower (or on behalf of the Borrower) in this
Agreement or any other Credit Document contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made as of the date of this Agreement. There is no fact known
to the Borrower or the Parent on the date of this Agreement that has not been
disclosed to the Administrative Agent which could reasonably be expected to
cause a Material Adverse Change. All projections, estimates, and pro forma
financial information furnished by the Borrower and the Parent or on behalf of
the Borrower or the Parent were prepared on the basis of assumptions, data,
information, tests, or conditions believed to be reasonable at the time such
projections, estimates, and pro forma financial information were furnished. No
representation, warranty or other statement made in any filing required by the
Exchange Act contains any untrue statement of material fact or omits to state
any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which they were made as of the
date same were made. Borrower and/or Parent have made all filings required by
the Exchange Act.
Section 4.08 Litigation. Except as set forth in the attached Schedule
----------
4.08, as of the date of this Agreement there is no pending or, to the best
knowledge of the Borrower, threatened action or proceeding affecting the
Borrower, the Parent, any Approved Participating Lessee or any of their
respective Subsidiaries before any court, Governmental Authority or
arbitrator.
-55-
Section 4.09 Use of Proceeds.
---------------
(a) Advances. The proceeds of the Advances have been, and will be
--------
used by the Borrower (i) to refinance existing Indebtedness, (ii) to make
investments permitted pursuant to the provisions of Section 6.07, (iii) to
finance the renovation, repair, restoration and expansion of Hotel Properties,
Capital Expenditures and expenditures for FF&E for any Hotel Properties in
accordance with the provisions of Section 5.06 and as permitted pursuant to
the provisions of Sections 6.07 and 6.14, (iv) for general corporate purposes
of the Borrower and its Subsidiaries, (v) to repurchase Parent Common Stock as
permitted pursuant to the provisions of Section 6.04(f), and (vi) for costs
incurred in connection with any Capitalization Event done in compliance with
this Agreement.
(b) Regulations. No proceeds of Advances will be used to purchase or
-----------
carry any margin stock in violation of Regulations T, U or X of the Federal
Reserve Board, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Federal Reserve
Board).
Section 4.10 Investment Company Act. Neither the Borrower, the Parent nor
----------------------
any of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 4.11 Taxes. All federal, state, local and foreign tax returns,
-----
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Parent, the Borrower, their
respective Subsidiaries, or any member of a Controlled Group have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and where the
failure to file could reasonably be expected to cause a Material Adverse
Change, except where contested in good faith and by appropriate proceedings;
and all taxes and other impositions due and payable (which are material in
amount) have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss (which are material in amount) may be added
thereto for non-payment thereof except where contested in good faith and by
appropriate proceedings. As of the date of this Agreement, neither the Parent,
the Borrower nor any member of a Controlled Group has given, or been requested
to give, a waiver of the statute of limitations relating to the payment of any
federal, state, local or foreign taxes or other impositions. None of the
Property owned by the Parent, the Borrower or any other member of a Controlled
Group is Property which the Parent, the Borrower or any member of a Controlled
Group is required to be treated as being owned by any other Person pursuant to
the provisions of Section 168(f)(8) of the Code. Proper and accurate amounts
have been withheld by the Borrower and all members of each Controlled Group
from their employees for all periods to comply in all material respects with
the tax, social security and unemployment withholding provisions of applicable
federal, state, local and foreign law. Timely payment of all material sales
and use taxes required by applicable law have been made by the Parent, the
Borrower and all other members of each Controlled Group, the failure to timely
pay of which could reasonably be expected to cause a Material Adverse Change.
The amounts shown on all tax returns to be due and payable have been paid in
full or adequate
-56-
provision therefor is included on the books of the appropriate member of the
applicable Controlled Group.
Section 4.12 Pension Plans. All Plans are in compliance in all material
-------------
respects with all applicable provisions of ERISA. No Termination Event has
occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. No Reportable Event has occurred with respect
to any Multiemployer Plan, and each Multiemployer Plan has complied with and
been administered in all material respects with applicable provisions of ERISA
and the Code. Neither the Parent, the Borrower, nor any member of a Controlled
Group has had a complete or partial withdrawal from any Multiemployer Plan for
which there is any material withdrawal liability. As of the most recent
valuation date applicable thereto, neither the Parent, the Borrower nor any
member of a Controlled Group has received notice that any Multiemployer Plan
is insolvent or in reorganization.
Section 4.13 Condition of Hotel Property; Casualties; Condemnation.
-----------------------------------------------------
Except as disclosed in an Engineering Report, each Initial Property and any
Future Property (a) is and will continue to be in good repair, working order
and condition, normal wear and tear excepted, (b) is free of structural
defects, (c) is not subject to material deferred maintenance and (d) has and
will have all building systems contained therein and all other FF&E in good
repair, working order and condition, normal wear and tear excepted. The FF&E
Reserve for each Hotel Property provides or will provide adequate financial
reserves for the payment of the maintenance of the Hotel Properties, including
replacement of FF&E, in accordance with Section 5.06. None of the Properties
of the Borrower or of any of its Subsidiaries has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by a Governmental Authority, riot, activities of armed forces or
acts of God or of any public enemy. No condemnation or other like proceedings
that has had, or could reasonably be expected to result in, a Material Adverse
Change, are pending and served nor, to the knowledge of the Borrower,
threatened against any Property in any manner whatsoever. No casualty has
occurred to any Property that could reasonably be expected to have a Material
Adverse Change.
Section 4.14 Insurance. The Borrower and each of its Subsidiaries carry,
---------
or are the beneficiaries under, the insurance required pursuant to the
provisions of Section 5.07.
Section 4.15 No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) Except in connection with Indebtedness which is (i) either
permitted pursuant to the provisions of Section 6.02, or (ii) being repaid
with the proceeds of the initial Borrowing, neither the Parent, the Borrower
nor any of their respective Subsidiaries is a party to any indenture, loan or
credit agreement. Neither the Borrower, the Parent nor any of their respective
Subsidiaries is a party to any agreement or instrument or subject to any
charter or corporate restriction or provision of applicable law or
governmental regulation which could reasonably be
-57-
expected to cause a Material Adverse Change. Neither the Borrower, the Parent
nor any of their Subsidiaries is in default under or with respect to (i) any
contract, agreement, lease or other instrument which could reasonably be
expected to cause a Material Adverse Change or (ii) any Qualified Ground
Lease, Approved Participating Lease, franchise agreement or Approved
Management Agreement. Neither the Borrower, the Parent nor any of their
Subsidiaries has received any notice of default under any material contract,
agreement, lease or other instrument which is continuing and which, if not
cured, could reasonably be expected to cause a Material Adverse Change.
(b) No Default has occurred and is continuing.
Section 4.16 Environmental Condition.
-----------------------
(a) Except as disclosed in the Environmental Reports, to the
knowledge of the Borrower, the Borrower and its Subsidiaries (i) have obtained
all Environmental Permits material for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii)
have been and are in material compliance with all terms and conditions of such
Environmental Permits and with all other requirements of applicable
Environmental Laws; (iii) have not received notice of any violation or alleged
violation of any Environmental Law or Environmental Permit; and (iv) are not
subject to any actual or contingent Environmental Claim.
(b) Except as set forth in the Environmental Reports, to the
knowledge of Borrower, none of the present or previously owned or operated
Property of the Borrower or of any of its present or former Subsidiaries,
wherever located, (i) has been placed on or proposed to be placed on the
National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local
analogs, or have been otherwise investigated, designated, listed, or
identified as a potential site for removal, remediation, cleanup, closure,
restoration, reclamation, or other response activity under any Environmental
Laws which could reasonably be expected to cause a Material Adverse Change;
(ii) is subject to a Lien, arising under or in connection with any
Environmental Laws, that attaches to any revenues or to any Property owned or
operated by the Borrower or any of its Subsidiaries, wherever located; (iii)
has been the site of any Release, use or storage of Hazardous Substances or
Hazardous Wastes from present or past operations except for Permitted
Hazardous Substances, which Permitted Hazardous Substances have not caused at
the site or at any third-party site any condition that has resulted in or
could reasonably be expected to result in the need for Response or (iv) none
of the Improvements are constructed on land designated by any Governmental
Authority having land use jurisdiction as wetlands.
Section 4.17 Legal Requirements, Zoning, Utilities, Access. Except as set
---------------------------------------------
forth on Schedule 4.17 attached hereto, the use and operation of each Hotel
Property as a commercial hotel with related uses constitutes a legal use under
applicable zoning regulations (as the same may be modified by special use
permits or the granting of variances) and complies in all material respects
with all Legal Requirements, and does not violate in any material respect any
material approvals, material restrictions of record or any material agreement
affecting any Hotel Property (or any portion thereof). The Borrower and its
Subsidiaries possess all certificates of public convenience, authorizations,
permits, licenses, patents, patent rights or licenses, trademarks,
-58-
trademark rights, trade names rights and copyrights (collectively "Permits")
required by Governmental Authority to own and operate the Hotel Properties,
except for those Permits if not obtained would not cause a Material Adverse
Change. The Borrower and its Subsidiaries own and operate their business in
material compliance with all applicable Legal Requirements. To the extent
necessary for the full utilization of each Hotel Property in accordance with
its current use, telephone services, gas, steam, electric power, storm sewers,
sanitary sewers and water facilities and all other utility services are
available to each Hotel Property, are adequate to serve each such Hotel
Property, exist at the boundaries of the Land and are not subject to any
conditions, other than normal charges to the utility supplier, which would
limit the use of such utilities. All streets and easements necessary for the
occupancy and operation of each Hotel Property are available to the boundaries
of the Land.
Section 4.18 Existing Indebtedness. Except for the Obligations, the only
---------------------
Indebtedness of the Borrower, the Parent or any of their respective
Subsidiaries existing as of the Effective Date is the Secured Non-Recourse
Indebtedness, Secured Recourse Indebtedness and other Indebtedness set forth
on Schedule 4.18 attached hereto and certain other Indebtedness incurred in
the ordinary course of business not to exceed $50,000. No "default" or "event
of default", however defined, has occurred and is continuing under any such
Indebtedness (or with respect to the giving of this representation after the
date of this Agreement, as otherwise disclosed to the Administrative Agent in
writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.19 Title; Encumbrances. With respect to the Initial Properties,
-------------------
the Borrower or any Guarantor, as the case may be, has (i) good and marketable
fee simple title to the Real Property (other than for Real Property subject to
a ground lease, as to which it has a valid leasehold interest) and (ii) good
and marketable title to the Personal Property (other than Personal Property
for any Hotel Property for which the Property Owner has a valid leasehold
interest) free and clear of all Liens, and there exists no Liens or other
charges against such Property or leasehold interest or any of the real or
personal, tangible or intangible, Property of the Borrower or any Guarantor
(including without limitation statutory and other Liens of mechanics, workers,
contractors, subcontractors, suppliers, taxing authorities and others;
provided that certain Capital Expenditures have been made to the Hotel
Properties prior to the Effective Date for which the payment is not past due),
except (A) Permitted Encumbrances and (B) the Personal Property (plus any
replacements thereof) owned by an Approved Participating Lessee.
Section 4.20 Leasing Arrangements. Except for those leases between a
--------------------
Property Owner and LaSalle Leasing or a wholly-owned Subsidiary of LaSalle
Leasing, the only material leases of Eligible Properties for which either the
Borrower or a Guarantor is a lessee are the Qualified Ground Leases. The
Property Owner for a Real Property subject to a Qualified Ground Lease is the
lessee under such Qualified Ground Lease and no consent is necessary to such
Person being the lessee under such Qualified Ground Lease which has not
already been obtained. The Qualified Ground Leases are in full force and
effect and no defaults exist thereunder. The only material leases burdening
the Hotel Properties for which the lessee is entitled to participate in the
increased revenues of the Hotel Properties are the Approved Participating
Leases. The Approved
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Participating Leases are in full force and effect and no defaults by the
Borrower or any Subsidiary exist thereunder.
Section 4.21 Approved Management Agreements. The only management
------------------------------
agreements burdening the Initial Properties (excluding the Permitted
Non-Eligible Properties) are the Approved Management Agreements set forth on
Schedule 4.21 attached hereto. To the knowledge of the Borrower, the Approved
Participating Lessee for a Hotel Property subject to a Approved Management
Agreement is a party to such Approved Management Agreement and no consent is
necessary to such Person being the owner under such Approved Management
Agreement which has not already been obtained. To the knowledge of the
Borrower, the Approved Management Agreements are in full force and effect and
no material defaults by the Approved Participating Lessee exist thereunder.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Commitment hereunder, unless the Administrative Agent shall otherwise
consent in writing (subject to the provisions of Section 10.01), the Borrower
agrees to comply with the following covenants.
Section 5.01 Compliance with Laws, Etc. The Borrower will comply, and
-------------------------
cause each of its Subsidiaries to comply, in all material respects with all
Legal Requirements.
Section 5.02 Preservation of Existence, Separateness, Etc.
--------------------------------------------
(a) The Borrower will (i) preserve and maintain, and cause each of
its Subsidiaries and the Parent to preserve and maintain, its partnership,
limited liability company, corporate or trust (as applicable) existence,
rights, franchises and privileges in the jurisdiction of its formation, and
(ii) qualify and remain qualified, and cause each such Subsidiary and the
Parent to qualify and remain qualified, as a foreign partnership, limited
liability company, corporation or trust, as applicable, in each jurisdiction
in which qualification is necessary or desirable in view of its business and
operations or the ownership of its properties, and, in each case, where
failure to qualify or preserve and maintain its rights and franchises could
reasonably be expected to cause a Material Adverse Change.
(b) (i) The Parent Common Stock shall at all times be duly listed on
the New York Stock Exchange, Inc. and (ii) the Parent shall timely file all
reports required to be filed by it with the New York Stock Exchange, Inc. and
the Securities and Exchange Commission.
(c) The Borrower shall cause the Permitted Other Subsidiaries which
have Indebtedness and own a Hotel Property to, (i) maintain financial
statements, payroll records, accounting records and other corporate records
and other documents separate from each other
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and any other Person, (ii) maintain its own bank accounts in its own name,
separate from each other and any other Person, (iii) pay its own expenses and
other liabilities from its own assets and incur (or endeavor to incur)
obligations to other Persons based solely upon its own assets and
creditworthiness and not upon the creditworthiness of each other or any other
Person, and (iv) file its own tax returns or, if part of a consolidated group,
join in the consolidated tax return of such group as a separate member
thereof. The Borrower shall use reasonable efforts to correct any known
misunderstanding or misrepresentation regarding the independence of the
Permitted Other Subsidiaries from the Borrower and the Borrower's other
Subsidiaries.
(d) The Borrower shall, and shall cause the Permitted Other
Subsidiaries which have Indebtedness and own a Hotel Property to, take all
actions necessary to keep such Permitted Other Subsidiaries separate from the
Borrower and the Borrower's other Subsidiaries, including, without limitation,
(i) the taking of action under the direction of the Board of Directors,
members or partners, as applicable, of such Permitted Other Subsidiaries and,
if so required by the Certificate of Incorporation or the bylaws, operating
agreement or partnership agreement, as applicable, of such Permitted Other
Subsidiaries or by any Legal Requirement, the approval or consent of the
stockholders, members or partners, as applicable, of such Permitted Other
Subsidiaries, (ii) the preparation of corporate, partnership or limited
liability company minutes for or other appropriate evidence of each
significant transaction engaged in by such Permitted Other Subsidiaries, (iii)
the observance of separate approval procedures for the adoption of resolutions
by the Board of Directors or consents by the partners, as applicable, of such
Permitted Other Subsidiaries, on the one hand, and of the Borrower and the
Borrower's other Subsidiaries, on the other hand, (iv) the holding of the
annual stockholders meeting, if applicable, of such Permitted Other
Subsidiaries, which are corporations on a date other than the date of the
annual stockholders' meeting of the Parent, and (v) preventing the cash, cash
equivalents, credit card receipts or other revenues of the Hotel Properties
owned by such Permitted Other Subsidiaries or any other assets of such
Permitted Other Subsidiaries from being commingled with the cash, cash
equivalents, credit card receipts or other revenues collected by the Borrower
or the Borrower's other Subsidiaries.
(e) The Borrower shall, and shall cause the Permitted Other
Subsidiaries to, manage the business of and conduct the administrative
activities of the Permitted Other Subsidiaries independently from the business
of the Borrower, any of the Borrower's other Subsidiaries and any other
Person. Any moneys earned by the Permitted Other Subsidiaries on their assets
or proceeds of the sale of any of their assets shall be deposited in bank
accounts separate from any of the assets of the Borrower, any of the
Borrower's other Subsidiaries and any other Person, and no assets of the
Permitted Other Subsidiaries shall become commingled with assets of such
Persons.
(f) The Borrower shall hold itself out, and shall continue to hold
itself out, to the public and to its creditors as a legal entity, separate and
distinct from all other entities, and shall continue to take all steps
reasonably necessary to avoid (i) misleading any other Person as to the
identity of the entity with which such Person is transacting business or (ii)
implying that the Borrower is, directly or indirectly, absolutely or
contingently, responsible for the Indebtedness or other obligations of the
Permitted Other Subsidiaries or any other Person.
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Section 5.03 Payment of Taxes, Etc. The Borrower will pay and discharge,
---------------------
and cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent (a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or Property that are
material in amount, prior to the date on which penalties attach thereto and
(b) all lawful claims that are material in amount which, if unpaid, might by
Legal Requirement become a Lien upon its Property; provided, however, that
-------- -------
neither the Borrower nor any such Subsidiary shall be required to pay or
discharge any such tax, assessment, charge, levy, or claim (a) which is being
contested in good faith and by appropriate proceedings, (b) with respect to
which reserves in conformity with GAAP have been provided, (c) such charge or
claim does not constitute and is not secured by any xxxxxx Xxxx on any portion
of any Hotel Property and no portion of any Hotel Property is in jeopardy of
being sold, forfeited or lost during or as a result of such contest, (d)
neither the Administrative Agent nor any Bank could become subject to any
civil fine or penalty or criminal fine or penalty, in each case as a result of
non-payment of such charge or claim and (e) such contest does not, and could
not reasonably be expected to, result in a Material Adverse Change.
Section 5.04 Visitation Rights; Bank Meeting. At any reasonable time and
-------------------------------
from time to time and so long as any visit or inspection will not unreasonably
interfere with the Borrower's or any of its Subsidiaries' operations, upon
reasonable notice and during normal business hours, the Borrower will, and
will cause its Subsidiaries and the Approved Participating Lessees to, permit
the Administrative Agent or any of its agents or representatives thereof (at
Borrower's expense) and any Bank or any of its agents or representatives
thereof (at such Bank's expense), to examine and make copies of and abstracts
from the records and books of account of, and visit and inspect at its
reasonable discretion the properties of, the Borrower and any such Subsidiary,
to discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers or directors. Without in any
way limiting the foregoing, the Borrower will, upon the request of the
Administrative Agent, participate in a meeting with the Administrative Agent
and the Banks once during each calendar year to be held at a location as may
be agreed to by the Borrower and the Administrative Agent at such time as may
be agreed to by the Borrower and the Administrative Agent; provided that the
Borrower shall not be obligated to reimburse the Banks for such Persons'
travel expenses in connection with such meeting.
Section 5.05 Reporting Requirements. The Borrower will furnish to the
----------------------
Administrative Agent and, with respect to those items set forth in clauses
(a)-(f) and (k), furnish copies to each Bank:
(a) Quarterly Financials. As soon as available and in any event not
--------------------
later than 45 days after the end of each Fiscal Quarter of the Parent, the
unaudited Consolidated balance sheets of the Parent and its Subsidiaries as of
the end of such quarter and the related unaudited statements of income,
shareholders' equity and cash flows of the Parent and its Subsidiaries for
such Fiscal Quarter and the period commencing at the end of the previous year
and ending with the end of such Fiscal Quarter, and the corresponding figures
as at the end of, and for, the corresponding periods in the preceding Fiscal
Year, all duly certified with respect to such statements (subject to year-end
audit adjustments) by a Responsible Officer of the Parent as having been
prepared in accordance with GAAP, together with (i) a Compliance Certificate
duly executed by a Responsible Officer of the Parent, (ii) a completed
Borrowing Base Certificate
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duly executed by a Responsible Officer of the Parent setting forth the
components of the Borrowing Base as of the last day of the immediately
preceding Fiscal Quarter, and (iii) a certificate in form similar to the
Borrowing Base Certificate duly executed by a Responsible Officer of the
Parent setting forth for those Hotel Properties owned or leased by the Parent
or any of its Subsidiaries except for the Eligible Properties the Adjusted NOI
for the Rolling Period just ended and Investment Amount, separately totaled
for those Hotel Properties which are unencumbered, those Hotel Properties
which secure Secured Recourse Indebtedness and those Hotel Properties which
secure Secured Non-Recourse Indebtedness. As soon as available and in any
event not later than 60 days after the end of each Fiscal Quarter of the
Parent, (i) written notice of any anticipated material variation to an
operating budget prepared pursuant to Section 5.05(e) and (ii) a report
certified by a Responsible Officer of the Parent setting forth for each of the
Hotel Properties owned or leased by the Parent or any of its Subsidiaries for
the Fiscal Quarter just ended the average daily rate, the average occupancy,
the RevPAR, the total gross revenues, the total expenses, the Adjusted NOI and
the payments made under the participating leases for such Hotel Properties.
(b) Annual Financials. As soon as available and in any event not
-----------------
later than 90 days after the end of each Fiscal Year of the Parent, a copy of
the Consolidated balance sheets of the Parent and its Subsidiaries as of the
end of such Fiscal Year and the related Consolidated statements of income,
shareholders' equity and cash flows of the Parent and its Subsidiaries for
such Fiscal Year, and the corresponding figures as at the end of, and for, the
preceding Fiscal Year, and certified by KPMG Peat Marwick L.L.P. or other
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent in an opinion, without
qualification as to the scope, and including, if requested by the
Administrative Agent, any management letters delivered by such accountants to
the Parent in connection with such audit, together with (i) a Compliance
Certificate duly executed by a Responsible Officer of the Parent, (ii) a
completed Borrowing Base Certificate duly executed by a Responsible Officer of
the Parent setting forth the components of the Borrowing Base as of the day of
such financial statements and (iii) the document required in clauses (iii) of
the first sentence of the preceding Section 5.05(a). As soon as available and
in any event not later than 105 days after the end of each Fiscal Year of the
Parent, the documents required in the second sentence of the preceding Section
5.05(a).
(c) LaSalle Leasing Financials. As soon as available and in any
--------------------------
event not later than 60 days after the end of each Fiscal Quarter of LaSalle
Leasing, the unaudited Consolidated balance sheets of LaSalle Leasing and its
Subsidiaries as of the end of such quarter and the related unaudited
statements of income, shareholders' equity and cash flows of LaSalle Leasing
and its Subsidiaries for the period commencing at the end of the previous year
and ending with the end of such Fiscal Quarter, and the corresponding figures
as at the end of, and for, the corresponding period in the preceding Fiscal
Year, all duly certified with respect to such statements (subject to year-end
audit adjustments) by a Responsible Officer of LaSalle Leasing as having been
prepared in accordance with GAAP. As soon as available and in any event not
later than 120 days after the end of each Fiscal Year of LaSalle Leasing, as
applicable, (i) a copy of the annual audit report for such year for LaSalle
Leasing and its Subsidiaries, if any, including therein audited Consolidated
balance sheets of LaSalle Leasing and its Consolidated Subsidiaries as of the
end of such fiscal year and the related Consolidated statements of income,
shareholders'
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equity and cash flows of LaSalle Leasing and its Subsidiaries for such fiscal
year, and the corresponding figures as at the end of, and for, the preceding
fiscal year, in each case certified by an independent certified public
accountant reasonably acceptable to the Administrative Agent and including, if
requested by the Administrative Agent, any management letters delivered by
such accountants to LaSalle Leasing in connection with such audit.
(d) Annual Budgets. No later than 60 days after the start of each
--------------
Fiscal Year, the annual operating budget and Capital Expenditure and FF&E
expenditure budget for such Fiscal Year for each Hotel Property owned or
leased by the Parent or one of its Subsidiaries and such budgets on a
Consolidated basis for the Parent and its subsidiaries, all in reasonable
detail and duly certified by a Responsible Officer of the Parent as the
budgets presented or to be presented to the Parent's Board of Directors for
their review.
(e) Securities Law Filings. Promptly and in any event within 10
----------------------
Business Days after the sending or filing thereof, copies of all proxy
material, reports and other information which the Borrower, the Parent or any
of their respective Subsidiaries sends to or files with the United States
Securities and Exchange Commission or sends to all shareholders of the Parent
or partners of the Borrower.
(f) Defaults. As soon as possible and in any event within five days
--------
after the occurrence of each Default known to a Responsible Officer of the
Borrower, the Parent or any of their respective Subsidiaries, a statement of
an authorized financial officer or Responsible Officer of the Borrower setting
forth the details of such Default and the actions which the Borrower has taken
and proposes to take with respect thereto.
(g) ERISA Notices. As soon as possible and in any event (i) within
-------------
30 days after the Parent, the Borrower or any of a Controlled Group knows that
any Termination Event described in clause (a) of the definition of Termination
Event with respect to any Plan has occurred, (ii) within 10 days after the
Parent, the Borrower or any of a Controlled Group knows that any other
Termination Event with respect to any Plan has occurred, a statement of the
Chief Financial Officer of the Parent describing such Termination Event and
the action, if any, which the Parent, the Borrower or such member of such
Controlled Group proposes to take with respect thereto; (iii) within 10 days
after receipt thereof by the Parent, the Borrower or any of a Controlled Group
from the PBGC, copies of each notice received by the Parent, the Borrower or
any such member of such Controlled Group of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any Plan; and (iv)
within 10 days after receipt thereof by the Parent, the Borrower or any member
of a Controlled Group from a Multiemployer Plan sponsor, a copy of each notice
received by the Parent, the Borrower or any member of such Controlled Group
concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA.
(h) Environmental Notices. Promptly upon receipt thereof by the
---------------------
Parent, the Borrower or any of their Subsidiaries, a copy of any form of
notice, summons or citation received from the United States Environmental
Protection Agency, or any other Governmental Authority concerning (i)
violations or alleged violations of Environmental Laws, which seeks to impose
liability therefor, (ii) any action or omission on the part of the Parent or
Borrower or any
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of their present or former Subsidiaries in connection with Hazardous Waste or
Hazardous Substances which, based upon information reasonably available to the
Borrower, could reasonably be expected to cause a Material Adverse Change or
an Environmental Claim in excess of $1,000,000, (iii) any notice of potential
responsibility under CERCLA, or (iv) concerning the filing of a Lien upon,
against or in connection with the Parent, Borrower, their present or former
Subsidiaries, or any of their leased or owned Property, wherever located.
(i) Other Governmental Notices or Actions. Promptly and in any event
-------------------------------------
within five Business Days after receipt thereof by the Borrower, the Parent or
any of their respective Subsidiaries, (i) a copy of any notice, summons,
citation, or proceeding seeking to adversely modify in any material respect,
revoke, or suspend any license, permit, or other authorization from any
Governmental Authority, which action could reasonably be expected to cause a
Material Adverse Change, and (ii) any revocation or involuntary termination of
any license, permit or other authorization from any Governmental Authority,
which revocation or termination could reasonably be expected to cause a
Material Adverse Change.
(j) Reports Affecting the Borrowing Base. On or prior to the 5th day
------------------------------------
following any Adjustment Event, a Property Adjustment Report with respect to
such Adjustment Event.
(k) Press Releases. Promptly and in any event within 5 days after
--------------
the sending or releasing thereof, copies of all press releases or other
releases of information to the public by the Borrower, the Parent or any of
their respective Subsidiaries or releases of information to the Parent's
shareholders.
(l) Other Notices.
-------------
(i) Promptly, a copy of any notice of default or any other
material notice (including without limitation property condition
reviews) received by the Borrower or any Guarantor from any
franchisor, Approved Manager, or any ground lessor under a Qualified
Ground Lease, and
(ii) Promptly following any merger or dissolution of any
Subsidiary of the Borrower which is permitted hereunder or event
which would make any of the representations in Section 4.01-4.04
untrue, notice thereof.
(m) Material Litigation. As soon as possible and in any event within
-------------------
five days of any of the Borrower, the Parent or any of their respective
Subsidiaries having knowledge thereof, notice of any litigation, claim or any
other event which could reasonably be expected to cause a Material Adverse
Change.
(n) Preliminary Property Plan. Prior to making Capital Expenditures
-------------------------
or FF&E expenditures for the renovation or expansion of a Hotel Property, the
Preliminary Property Plan for such renovation or expansion in sufficient
detail as the Administrative Agent shall reasonably request.
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(o) Other Information. Such other information respecting the
-----------------
business or Properties, or the condition or operations, financial or
otherwise, of the Borrower, the Parent or any of their respective
Subsidiaries, as the Administrative Agent may from time to time reasonably
request.
Section 5.06 Maintenance of Property and Required Work. The Borrower
-----------------------------------------
will, and will cause each of its Subsidiaries to, (a) maintain their owned,
leased, or operated Property in a manner consistent for hotel properties and
related property of the same quality and character and shall keep or cause to
be kept every part thereof and its other properties in good condition and
repair, reasonable wear and tear excepted, and make all reasonably necessary
repairs, renewals or replacements thereto as may be reasonably necessary to
conduct the business of the Borrower and its Subsidiaries, (b) not remove,
demolish or structurally alter, or permit or suffer the removal, demolition or
structural alteration of, any of the Improvements except for the renovation or
expansion of a Hotel Property (i) for which the Borrower has delivered a
Preliminary Property Plan to the Administrative Agent and (ii) which complies
with the limitations set forth in this Agreement on the aggregate amount of
renovations and expansions the Borrower, the Parent and their Subsidiaries are
permitted at any one time, (c) not knowingly or willfully permit the
commission of waste or other injury, or the occurrence of pollution,
contamination or any other condition in, on or about any Hotel Property, (d)
maintain and repair each Hotel Property as required by any franchise
agreement, license agreement, management agreement or ground lease for such
Hotel Property, (e) commence the Required Work for any Hotel Property by a
date which would allow a reasonable period of time to complete such work on or
prior to the deadline set for such Required Work agreed to by the Borrower and
the Administrative Agent, and (f) after any commencement of any of work for
any Hotel Property diligently perform such work (i) for the Required Work, by
the required deadline, (ii) in a good and workmanlike manner and (iii) in
compliance in all material respects with all Legal Requirements. Except as may
be required to maintain the Parent's status as a REIT under the Code, any
Capital Expenditures or expenditures or leases for FF&E made for any Hotel
Property shall be in the name of the Property Owner for such Hotel Property.
Section 5.07 Insurance. The Borrower will maintain and/or remain the
---------
beneficiary under, and cause each of its Subsidiaries to maintain and/or
remain the beneficiary under, the insurance required pursuant to Schedule
5.07.
Section 5.08 Borrowing Base Requirements. The Borrower shall cause the
---------------------------
Hotel Properties in the Borrowing Base to at all times comply with the
Borrowing Base Requirements; provided that (a) if the requirements of clauses
--------
(a), (b), (c), or (e) of the definition of Borrowing Base Requirements are not
met, then within 2 Business Days of notice of such failure either (i) the
Borrower shall have cured such failure or (ii) for Borrowing Base purposes the
Borrower shall have lowered the Hotel Value of those Eligible Properties that
contributed to such failure to the point that such failure no longer exists,
(b) if the requirements of clause (f) of the definition of Borrowing Base
Requirements are not met, then within 180 days of notice of such failure
either (i) the Borrower shall have cured such failure or (ii) for Borrowing
Base purposes the Borrower shall have lowered the Hotel Value of those
Eligible Properties that contributed to such failure to the point that such
failure no longer exists, and (c) if the requirements of clause (g) of the
definition of Borrowing Base Requirements are not met and such failure remains
uncured
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180 days after notice of the commencement of such failure, then such failure
shall constitute an Event of Default without any notice being given to the
Borrower or any Guarantor in connection therewith.
Section 5.09 Supplemental Guaranties. The Borrower has requested and the
-----------------------
Administrative Agent has agreed that any partner of the Borrower except the
Parent or any other Guarantor may execute a Supplemental Guaranty. However,
the execution of or release of any Supplemental Guaranty shall not be
construed as a release or modification of any obligation of a Guarantor under
a Guaranty or Environmental Indemnity.
Section 5.10 Intentionally Deleted.
---------------------
Section 5.11 Use of Proceeds. The proceeds of the Advances have been, and
---------------
will be used by the Borrower for the purposes set forth in Section 4.09(a).
Section 5.12 New Guarantors. Within ten (10) days of the creation of or
--------------
Investment in a Person which falls within the definition of a Guarantor,
Borrower shall cause such Person to deliver to the Administrative Agent either
(A) an original Guaranty and Environmental Indemnity executed by such Person
or (B) an Accession Agreement executed by such Person.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Commitment, the Borrower agrees, unless the Administrative Agent shall
otherwise consent in writing (subject to the provisions of Section 10.01), to
comply with the following covenants.
Section 6.01 Liens, Etc. The Borrower will not create, assume, incur or
----------
suffer to exist, or permit any of its Subsidiaries (except for Permitted Other
Subsidiaries) to create, assume, incur, or suffer to exist, any Lien on or in
respect of any of its Property whether now owned or hereafter acquired, or
assign any right to receive income, except that the Borrower and its
Subsidiaries may create, incur, assume or suffer to exist Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on
Property of the Borrower or any Guarantor to the extent not required to be
paid pursuant to Sections 5.03;
(c) Liens imposed by law (such as landlords', carriers',
warehousemen's and mechanics' liens or otherwise arising from litigation) (a)
which are being contested in good faith and by appropriate proceedings, (b)
with respect to which reserves in conformity with GAAP have been provided, (c)
which have not resulted in any Hotel Property being in jeopardy of being
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sold, forfeited or lost during or as a result of such contest, (d) neither the
Administrative Agent nor any Bank could become subject to any civil fine or
penalty or criminal fine or penalty, in each case as a result of non-payment
of such charge or claim and (e) such contest does not, and could not
reasonably be expected to, result in a Material Adverse Change;
(d) on leased personal property to secure solely the lease
obligations associated with such property; and
(e) Liens securing Secured Recourse Indebtedness and Secured
Non-Recourse Indebtedness permitted pursuant to the provisions of Section
6.02.
Section 6.02 Indebtedness. The Borrower, the Parent and their respective
------------
Subsidiaries will not incur or permit to exist any Indebtedness other than the
Obligations and the following:
(a) Unsecured Indebtedness which is less than or equal to
$50,000,000;
(b) Secured Recourse Indebtedness and Secured Non-Recourse
Indebtedness incurred by Permitted Other Subsidiaries to the extent (i) that
the covenants contained in Article VII are complied with, (ii) the Secured
Recourse Indebtedness secured by a Hotel Property does not exceed 65% of the
Hotel Value of such Hotel Property and all Secured Recourse Indebtedness in
the aggregate secured by Hotel Properties does not exceed 65% of the aggregate
Hotel Value of such Hotel Properties, and (iii) the Secured Non-Recourse
Indebtedness secured by a Hotel Property does not exceed 70% of the Hotel
Value of such Hotel Property and all Secured Non-Recourse Indebtedness in the
aggregate secured by Hotel Properties does not exceed 70% of the aggregate
Hotel Value of such Hotel Properties;
(c) Indebtedness in the form of Interest Rate Agreements; provided
that (i) such agreements shall be unsecured, (ii) the dollar amount of
indebtedness subject to such agreements and the indebtedness subject to
Interest Rate Agreements in the aggregate shall not exceed the sum of the
amount of the Commitments and other Indebtedness permitted pursuant to this
Section 6.02 which bears interest at a variable rate, and (iii) the agreements
shall be at such interest rates and otherwise in form and substance reasonably
acceptable to the Administrative Agent; and
(d) Any of the following Indebtedness incurred by the Parent:
(i) guaranties in connection with the Indebtedness secured by a
Hotel Property of (A) if the Hotel Property is subject to a ground
lease, the payment of rent under such ground lease, (B) real estate
taxes relating to such Hotel Property, and (C) capital reserves
required under such Indebtedness; and
(ii) indemnities for certain acts of malfeasance,
misappropriation and misconduct and an environmental indemnity for
the lender under Indebtedness permitted under this Agreement; and
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(iii) indemnities for certain acts of malfeasance,
misappropriation and misconduct by the Permitted Other Subsidiaries
and environmental indemnities, all for the benefit of the lenders of
other Permitted Other Subsidiary Indebtedness in connection with
such Indebtedness; and
(iv) guaranties of franchise agreements; and
(v) extensions, renewals and refinancing of any of the
Indebtedness specified in paragraphs (a) - (d) above so long as the
principal amount of such Indebtedness is not thereby increased.
Section 6.03 Agreements Restricting Distributions From Subsidiaries. The
------------------------------------------------------
Borrower will not, nor will it permit any of its Subsidiaries (other than
Permitted Other Subsidiaries) to, enter into any agreement (other than a
Credit Document) which limits distributions to or any advance by any of the
Borrower's Subsidiaries to the Borrower.
Section 6.04 Restricted Payments. Neither the Parent, the Borrower, nor
-------------------
any of their respective Subsidiaries, will make any Restricted Payment, except
that:
(a) provided no Default has occurred and is continuing or would
result therefrom, the Parent may in any Fiscal Quarter, based on the
immediately preceding Rolling Period, make cash payments to its shareholders
(including in connection with the repurchase of Stock or Stock Equivalents)
which with the previous such cash payments in the three immediately preceding
Fiscal Quarters are not in excess of the greater of (i) the lesser of (A)
ninety percent (90%) of the Funds From Operations of the Parent during such
preceding Rolling Period or (B) one hundred percent (100%) of Free Cash Flow
of the Parent during such preceding Rolling Period and (ii) the greater of (A)
the amount required for the Parent to maintain its status as a REIT or (B) the
amount required to ensure that the Parent will avoid imposition of an excise
tax for failure to make certain minimum distributions on a calendar year
basis;
(b) provided no Default has occurred and is continuing or would
result therefrom, the Borrower shall be entitled to make cash distributions to
its partners, including the Parent;
(c) a Subsidiary of the Borrower may make a Restricted Payment to
the Borrower,
(d) the limited partners of the Borrower shall be entitled to
exchange limited partnership interests in the Borrower for the Parent's stock
or redeem such interests for cash, as provided in the Borrower's limited
partnership agreement;
(e) the Borrower shall be entitled to issue limited partnership
interests in the Borrower in exchange of ownership interests in Subsidiaries
and Unconsolidated Entities which own a Future Property to the extent such
Investment is permitted pursuant to the provisions of Section 6.07; and
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(f) provided no Default has occurred and is continuing or would
result therefrom, the Parent may repurchase up to $25,000,000 of Parent Common
Stock in the aggregate.
Section 6.05 Fundamental Changes; Asset Dispositions. Neither the Parent,
---------------------------------------
the Borrower, nor any of their respective Subsidiaries (other than the
Permitted Other Subsidiaries) will, (a) merge or consolidate with or into any
other Person, unless (i) a Guarantor is merged into the Borrower or another
Guarantor and the Borrower or such other Guarantor, as the case may be, is the
surviving Person or a Subsidiary (other than a Permitted Other Subsidiary
which has Indebtedness other than the Obligations) is merged into any
Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness
other than the Obligations), and (ii) immediately after giving effect to any
such proposed transaction no Default would exist; (b) sell, transfer, or
otherwise dispose of all or any of the such Person's material property except
for a Permitted Hotel Sale, dispositions or replacements of personal property
in the ordinary course of business, or Hotel Properties which are not Eligible
Properties; (c) enter into a lease (other than an Approved Participating
Lease) of all or substantially all of any Eligible Property with any Person
without the consent of the Administrative Agent; (d) sell or otherwise dispose
of any material shares of capital stock, membership interests or partnership
interests of any Subsidiary (except for a Permitted Other Subsidiary); (e)
except for sales of ownership interests permitted under this Agreement and the
issuance of limited partnership interests in the Borrower in exchange for
ownership interests in Subsidiaries and Unconsolidated Entities to the extent
permitted pursuant to the provisions of Section 6.04, materially alter the
corporate, capital or legal structure of any such Person (except for a
Permitted Other Subsidiary); (f) liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution) provided that nothing herein shall
prohibit the Borrower from dissolving any Subsidiary which has no assets on
the date of dissolution or (g) materially alter the character of their
respective businesses from that conducted as of the date of this Agreement.
Section 6.06 Approved Participating Lessee Ownership. Neither the Parent
---------------------------------------
nor the Borrower shall, nor shall permit any of their respective Subsidiaries
to own directly or indirectly such a percentage of the beneficial ownership
interest in any Approved Participating Lessee as would cause a potential Event
of Default under Section 8.01(o) of this Agreement.
Section 6.07 Investments, Loans, Future Properties. Neither the Parent
-------------------------------------
nor the Borrower shall, nor shall permit any of their respective Subsidiaries
to, acquire by purchase, or otherwise, all or substantially all of the
business, property or fixed assets of any Person or any Hotel Property, make
or permit to exist any loans, advances or capital contributions to, or make
any Investments in (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or purchase or commit to purchase any
evidences of Indebtedness of, stock or other securities, partnership
interests, member interests or other interests in any Person, except the
following (provided that after giving effect thereto there shall exist no
Default):
(a) the purchase of Liquid Investments with any Person which
qualifies as an Eligible Assignee;
(b) trade and customer accounts receivable which are for goods
furnished or services rendered in the ordinary course of business and are
payable in accordance with
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customary trade terms, and other assets owned in the ordinary course of owning
the Parent Hotel Properties;
(c) a Future Property which qualifies as an Eligible Property or a
Permitted Non-Eligible Property;
(d) Investments in (i) unimproved land which do not in the aggregate
have an Investment Amount which exceeds 5% of the Parent Aggregate Asset
Value; (ii) Development Properties which do not in the aggregate have an
Investment Amount which exceeds 20% of the Parent Aggregate Asset Value, (iii)
Unconsolidated Entities (A) which do not in the aggregate have an Investment
Amount which exceeds 20% of the Parent Aggregate Asset Value, (B) for which
the Investment Amounts for those Investments which are in the form of
preferred stock or a loan or advance do not exceed $5,000,000 in the
aggregate, and (C) which have not for any individual Unconsolidated Entity
incurred Indebtedness which exceeds 75% of the lesser of the appraised value
or the Investment Amount of the Hotel Properties owned by such Unconsolidated
Entity, and (iv) mortgages, deeds of trust, deeds to secure debt or similar
instruments that are a lien on real property which are improved by fully
operational hotels and secure Indebtedness evidenced by a note or bond which
do not in the aggregate have an Investment Amount which exceeds 10% of the
Parent Aggregate Asset Value; provided that the aggregate Investment Amount
--------
for all Investments made pursuant to this Section 6.07(d) shall not exceed 30%
of the Parent Aggregate Asset Value; and
(e) The Investment in LaSalle Leasing.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their
respective Subsidiaries shall acquire a Future Property or otherwise make an
Investment which would (a) cause the Eligible Properties in the aggregate to
violate the Borrowing Base Requirements, (b) cause the Parent Hotel Properties
in the aggregate to violate in any material way the Parent Hotel Property
Requirements without the Administrative Agent's written consent, (c) cause a
Default, (d) cause or result in the Borrower or the Parent failing to comply
with any of the financial covenants contained herein, (e) cause the aggregate
Investment Amount for (i) all Future Properties located outside the United
States and (ii) all Investments made pursuant to Section 6.07(d) which are
either located outside the United States or in an Unconsolidated Entity which
has at least 50% of its assets located outside the United States to exceed 15%
of the Parent Aggregate Asset Value, (f) cause the Parent's or any
Subsidiary's Investment in the Personal Property for any Hotel Property to
cause a potential Event of Default under Section 8.01(o) of this Agreement.
Section 6.08 Affiliate Transactions. Except for the Approved
----------------------
Participating Leases, and as otherwise approved by a majority of the Board of
Trustees of the Parent including a majority of the independent trustees, the
Borrower will not, and will not permit any of its Subsidiaries to, make,
directly or indirectly (a) any transfer, sale, lease, assignment or other
disposal of any assets to any Affiliate of the Borrower which is not a
Guarantor or any purchase or acquisition of assets from any such Affiliate; or
(b) any arrangement or other transaction directly or indirectly with or for
the benefit of any such Affiliate (including without limitation, guaranties
and
-71-
assumptions of obligations of an Affiliate), other than in the ordinary course
of business and at market rates.
Section 6.09 Sale and Leaseback. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, enter into any arrangement with any Person,
whereby in contemporaneous transactions the Borrower or such Subsidiary sells
essentially all of its right, title and interest in a material asset and the
Borrower or such Subsidiary acquires or leases back the right to use such
property.
Section 6.10 Sale or Discount of Receivables. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable.
Section 6.11 No Further Negative Pledges. The Borrower will not, and will
---------------------------
not permit any of its Subsidiaries to, enter into or suffer to exist any
agreement (other than this Agreement and the Credit Documents) (a) prohibiting
the creation or assumption of any Lien upon the Properties of the Borrower or
any of its Subsidiaries (except for the Permitted Other Subsidiaries), whether
now owned or hereafter acquired, or (b) requiring an obligation to be secured
if some other obligation is or becomes secured.
Section 6.12 Intentionally Deleted.
---------------------
Section 6.13 Material Documents. The Borrower will not, nor will it
------------------
permit any of its Subsidiaries (other than Permitted Other Subsidiaries) or
any Approved Participating Lessee (other than as a lessee of a Permitted
Non-Eligible Property) to, enter into any termination, material modification
or material amendment any of the following documents without the written
consent of the Administrative Agent:
(a) Approved Management Agreement;
(b) Approved Participating Lease;
(c) Qualified Ground Lease; and
(d) Any other material agreement.
Any termination, modification or amendment prohibited under this Section 6.13
shall, to the extent permitted by applicable law, be void and of no force and
effect.
Section 6.14 Limitations on Development, Construction, Renovation and
--------------------------------------------------------
Purchase of Hotel Properties. Neither the Parent nor the Borrower shall or
----------------------------
shall permit any of their respective Subsidiaries to (a) engage in the
development, construction or expansion of any Hotel Properties (except for
Development Properties permitted by the provisions of Section 6.07 or
Renovating Properties) or (b) enter into any binding agreements to purchase
Hotel Properties or other assets; provided that the Parent, the Borrower and
their Subsidiaries may enter into binding agreements to purchase Hotel
Properties or other assets if at all times such Person has available
-72-
sources of capital equal to the portion of the purchase price of such Hotel
Properties or other assets which constitutes a recourse obligation of the
Parent, the Borrower or its Subsidiary, which available sources of capital may
include Advances to the extent that the Borrower may borrow the same for the
purposes required or other Indebtedness permitted by the terms of this
Agreement.
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Commitment hereunder, unless the Administrative Agent shall otherwise
consent in writing (subject to the provisions of Section 10.01), the Borrower
agrees to comply and cause the Parent to comply with the following covenants.
Section 7.01 Parent's Fixed Charge Coverage Ratio. The Parent shall
------------------------------------
maintain at the end of each Rolling Period a Parent's Fixed Charge Coverage
Ratio of not less than 2.00 to 1.0.
Section 7.02 Parent's Interest Coverage Ratio. The Parent shall maintain
--------------------------------
at the end of each Rolling Period a Parent's Interest Coverage Ratio of not
less than 2.25 to 1.0.
Section 7.03 Unsecured Interest Coverage Ratio. The Parent shall maintain
---------------------------------
at the end of each Rolling Period an Unsecured Interest Coverage Ratio of not
less than 2.25 to 1.0.
Section 7.04 Maintenance of Net Worth. The Parent shall at all times
------------------------
maintain an Adjusted Net Worth of not less than the Minimum Tangible Net
Worth.
Section 7.05 Limitations on Total Liabilities. The Parent shall not (a)
--------------------------------
on any date prior to November 15, 2002 permit the Leverage Ratio to be greater
than 55% and (b) on any date on or after November 15, 2002 permit the Leverage
Ratio to be greater than 50%.
Section 7.06 Limitations on Secured Recourse Indebtedness. The Parent
--------------------------------------------
shall not on any date on a Consolidated basis permit the Secured Recourse
Indebtedness (excluding the Obligations) of the Parent, to exceed 15% of the
Parent Aggregate Asset Value.
Section 7.07 Limitations on Secured Indebtedness. The Parent shall not at
-----------------------------------
any time on a Consolidated basis permit the sum of the Parent's Secured
Non-Recourse Indebtedness and Secured Recourse Indebtedness to exceed 35% of
the Parent Aggregate Asset Value.
-73-
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01 Events of Default. The occurrence of any of the following
-----------------
events shall constitute an "Event of Default" under any Credit Document:
(a) Principal or Letter of Credit Obligation Payment. The Borrower
------------------------------------------------
shall fail to pay any principal of any Note or any Letter of Credit Obligation
when the same becomes due and payable as set forth in this Agreement;
(b) Interest or Other Obligation Payment. The Borrower shall fail to
------------------------------------
pay any interest on any Note or any fee or other amount payable hereunder or
under any other Credit Document when the same becomes due and payable as set
forth in this Agreement, provided however that the Borrower will have a grace
period of five days after the payments covered by this Section 8.01(b) becomes
due and payable for the first two defaults under this Section 8.01(b) in every
calendar year;
(c) Representation and Warranties. Any representation or warranty
-----------------------------
made or deemed to be made (i) by the Borrower in this Agreement or in any
other Credit Document, (ii) by the Borrower (or any of its officers) in
connection with this Agreement or any other Credit Document, or (iii) by any
Subsidiary in any Credit Document shall prove to have been incorrect in any
material respect when made or deemed to be made;
(d) Covenant Breaches. (i) The Borrower shall fail to perform or
-----------------
observe any covenant contained in Sections 5.02(a)(i), (b)(i) or (f), Article
VI or Article VII of this Agreement or the Borrower shall fail to perform or
observe, or shall fail to cause any Guarantor to perform or observe any
covenant in any Credit Document beyond any notice and/or cure period for such
default expressly provided in such Credit Document or (ii) the Borrower or any
Guarantor shall fail to perform or observe any term or covenant set forth in
any Credit Document which is not covered by clause (i) above or any other
provision of this Section 8.01, in each case if such failure shall remain
unremedied for 30 days after the earlier of the date written notice of such
default shall have been given to the Borrower or such Guarantor by the
Administrative Agent or any Bank or the date a Responsible Officer of the
Borrower or any Guarantor has actual knowledge of such default, unless such
default in this clause (ii) cannot be cured in such 30 day period and the
Borrower is diligently proceeding to cure, or caused to be cured, such
default, in which event the cure period shall be extended to 90 days;
(e) Cross-Defaults.
--------------
(i) with respect to (A) any Secured Non-Recourse Indebtedness
which is outstanding in a principal amount of at least $10,000,000
individually or when aggregated with all such Secured Non-Recourse
Indebtedness of the Borrower, the Parent or any of their respective
Subsidiaries or (B) any other Indebtedness (but excluding
Indebtedness evidenced by the Notes) which is outstanding in a
-74-
principal amount of at least $5,000,000 individually or when
aggregated with all such Indebtedness of the Borrower, the Parent or
any of their respective Subsidiaries, any of the following:
A. any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the
stated maturity thereof,
B. the Borrower, the Parent or any of their respective
Subsidiaries shall fail to pay any principal of or premium
or interest of any of such Indebtedness (whether by
scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness,
or
C. any other event shall occur or condition shall exist
under any agreement or instrument relating to such
Indebtedness, and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
permit the holders of such Indebtedness to accelerate the
maturity of such Indebtedness;
(f) Insolvency. The Borrower, the Parent, any of their respective
----------
Subsidiaries, or the Approved Participating Lessee or Approved Manager for
Hotel Properties which comprise twenty-five percent (25%) or more of the
Borrowing Base Hotel Value shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower, the Parent, any
of their respective Subsidiaries, or the Approved Participating Lessee or
Approved Manager for Hotel Properties which comprise twenty-five percent (25%)
or more of the Borrowing Base Hotel Value seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against the
Borrower, the Parent, any of their respective Subsidiaries, or the Approved
Participating Lessee or Approved Manager for Hotel Properties which comprise
twenty-five percent (25%) or more of the Borrowing Base Hotel Value, either
such proceeding shall remain undismissed for a period of 60 days or any of the
actions sought in such proceeding shall occur; or the Borrower, the Parent,
any of their respective Subsidiaries, or the Approved Participating Lessee or
Approved Manager for Hotel Properties which comprise twenty-five percent (25%)
or more of the Borrowing Base Hotel Value shall take any corporate action to
authorize any of the actions set forth above in this paragraph (f);
-75-
(g) Judgments. Any judgment or order for the payment of money in
---------
excess of $10,000,000 (reduced for purposes of this paragraph for the amount
in respect of such judgment or order that a reputable insurer has acknowledged
being payable under any valid and enforceable insurance policy) shall be
rendered against the Borrower, the Parent or any of their respective
Subsidiaries which, within 60 days from the date such judgment is entered,
shall not have been discharged or execution thereof stayed pending appeal;
(h) ERISA. (i) Any Person shall engage in any "prohibited
-----
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is likely to result in
the termination of such Plan for purposes of Title IV of ERISA, unless such
Reportable Event, proceedings or appointment are being contested by the Parent
or the Borrower in good faith and by appropriate proceedings, (iv) any Plan
shall terminate for purposes of Title IV of ERISA, (v) the Parent, the
Borrower or any member of a Controlled Group shall incur any liability in
connection with a withdrawal from a Multiemployer Plan or the insolvency
(within the meaning of Section 4245 of ERISA) or reorganization (within the
meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless such
liability is being contested by the Parent or the Borrower in good faith and
by appropriate proceedings, or (vi) any other event or condition shall occur
or exist, with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower or any Guarantor to any tax,
penalty or other liabilities in the aggregate exceeding $10,000,000;
(i) Guaranty. Any Guaranty except a Supplemental Guaranty shall for
--------
any reason cease to be valid and binding on any Guarantor or any Guarantor
shall so state in writing;
(j) Environmental Indemnity. Any Environmental Indemnity shall for
-----------------------
any reason cease to be valid and binding on any Person party thereto or any
such Person shall so state in writing;
(k) Approved Participating Lessee. Either (i) a material default by
-----------------------------
the Approved Participating Lessee shall occur under any Approved Participating
Lease related to Hotel Properties which comprise twenty-five percent (25%) or
more of the Borrowing Base Hotel Value which shall remain uncured following
any notice and cure period under such document, or (ii) with respect to Hotel
Properties which comprise twenty-five percent (25%) or more of the Borrowing
Base Hotel Value, the Approved Participating Lease for any Hotel Property is
terminated;
(l) Intentionally Deleted.;
---------------------
(m) Default Under Qualified Ground Lease. Qualified Ground Leases
------------------------------------
for Hotel Properties which comprise twenty-five percent (25%) or more of the
Borrowing Base Hotel Value have in the aggregate either (i) been terminated
because of a default by the lessee under
-76-
such Qualified Ground Lease or (ii) are subject to a default by the lessee
under such Qualified Ground Lease which has not been cured or waived 10 days
prior to the date the ground lessors under such Qualified Ground Lease would
have the right to terminate such Qualified Ground Leases;
(n) Manager. The Approved Participating Lessees for Hotel Properties
-------
which comprise twenty-five percent (25%) or more of the Borrowing Base Hotel
Value shall not have replaced the Approved Manager for such Hotel Properties
with a reputable, nationally known, third party manager acceptable to the
Administrative Agent within 120 days of the terminations of the Approved
Management Agreements for such Hotel Properties except in connection with an
Asset Disposition;
(o) Parent's REIT Status. There shall be a determination from the
--------------------
applicable Governmental Authority from which no appeal can be taken that the
Parent's tax status as a REIT has been lost;
(p) Parent Common Stock The Parent at any time hereafter fails to
-------------------
cause the Parent Common Stock to be duly listed on the New York Stock
Exchange, Inc.; or
(q) Changes in Ownership and Control. Any of the following occur
--------------------------------
without the written consent of the Required Lenders : (a) the Parent (i)
amends the Borrower's partnership agreement in any material respect, (ii)
admits a new general partner to the Borrower, (iii) own less than 70% of the
partnership interests in and beneficial ownership of the Borrower, or (iv)
resigns as general partner of the Borrower; or (b) (i) the Parent or the
Borrower shall cease to employ Xxx X. Xxxxx or another person reasonably
acceptable to the Required Lenders as such Person's chairman of the board,
president or chief executive officer, and (ii) within 180 days following the
termination of such employment of Xx. Xxxxx or other such persons for any
reason, another person reasonably acceptable to the Required Lenders is not
employed as the applicable officer of the Parent or the Borrower.
Section 8.02 Optional Acceleration of Maturity. If any Event of Default
---------------------------------
(other than an Event of Default pursuant to paragraph (f) of Section 8.01 with
respect to the Borrower or the Parent) shall have occurred and be continuing,
then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Bank to make Advances and the obligation of each Issuing
Bank to issue, increase, or extend Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon, the Letter of Credit Obligations, and
all other amounts payable under this Agreement to be forthwith due and
payable, whereupon the Notes, all such interest, all such Letter of Credit
Obligations and all such amounts shall become and be forthwith due and payable
in full, without presentment, demand, protest or further notice of any kind
(including, without limitation, any notice of intent to accelerate or notice
of acceleration), all of which are hereby expressly waived by the Borrower,
-77-
(b) the Borrower shall, on demand of the Administrative Agent at the
request or with the consent of the Required Lenders, deposit into the Cash
Collateral Account an amount of cash equal to the Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations
are not otherwise paid at such time, and
(c) the Administrative Agent shall at the request of, or may with
the consent of, the Required Lenders proceed to enforce its rights and
remedies under the Credit Documents for the ratable benefit of the Banks by
appropriate proceedings.
Section 8.03 Automatic Acceleration of Maturity. If any Event of Default
----------------------------------
pursuant to paragraph (f) of Section 8.01 with respect to the Borrower or the
Parent shall occur,
(a) the obligation of each Bank to make Advances and the obligation
of each Issuing Bank to issue, increase, or extend Letters of Credit shall
immediately and automatically be terminated and the Notes, all interest on the
Notes, all Letter of Credit Obligations, and all other amounts payable under
this Agreement shall immediately and automatically become and be due and
payable in full, without presentment, demand, protest or any notice of any
kind (including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are hereby expressly waived by the
Borrower and
(b) to the extent permitted by law or court order, the Borrower
shall deposit into the Cash Collateral Account an amount of cash equal to the
outstanding Letter of Credit Exposure as security for the Obligations to the
extent the Letter of Credit Obligations are not otherwise paid at such time.
Section 8.04 Cash Collateral Account.
-----------------------
(a) Pledge. The Borrower hereby pledges, and grants to the
------
Administrative Agent for the benefit of the Banks, a security interest in all
funds held in the Cash Collateral Account maintained with Societe Generale,
New York Branch from time to time, but under the control of the Administrative
Agent, and all proceeds thereof, as security for the payment of the
Obligations, including without limitation all Letter of Credit Obligations
owing to any Issuing Bank or any other Bank due and to become due from the
Borrower to any Issuing Bank or any other Bank under this Agreement in
connection with the Letters of Credit and the Borrower agrees to execute all
cash management or cash collateral agreements and UCC-1 Financing Statements
requested by the Administrative Agent as needed or desirable for the
Administrative Agent to have a perfected first lien security interest in the
Cash Collateral Account.
(b) Application against Letter of Credit Obligations. The
------------------------------------------------
Administrative Agent may, at any time or from time to time apply funds then
held in the Cash Collateral Account to the payment of any Letter of Credit
Obligations owing to any Issuing Bank, in such order as the Administrative
Agent may elect, as shall have become or shall become due and payable by the
Borrower to any Issuing Bank under this Agreement in connection with the
Letters of Credit.
(c) Duty of Care. The Administrative Agent shall cause Societe
------------
Generale, New York Branch to exercise reasonable care in the custody and
preservation of any funds held in the
-78-
Cash Collateral Account and Societe Generale, New York Branch shall be deemed
to have exercised such care if such funds are accorded treatment substantially
equivalent to that which Societe Generale, New York Branch accords its own
property, it being understood that neither Societe Generale, New York Branch,
nor the Administrative Agent shall have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to any
such funds.
Section 8.05 Non-exclusivity of Remedies. No remedy conferred upon the
---------------------------
Administrative Agent or the Banks is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 8.06 Right of Set-off. Upon (a) the occurrence and during the
----------------
continuance of any Event of Default and (b) the granting of the consent, if
any, specified by Section 8.02 to authorize the Administrative Agent to
declare the Notes and any other amount payable hereunder due and payable
pursuant to the provisions of Section 8.02 or the automatic acceleration of
the Notes and all amounts payable under this Agreement pursuant to Section
8.03, each Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Bank to or for the credit or
the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Note held by such
Bank, and the other Credit Documents, irrespective of whether or not such Bank
shall have made any demand under this Agreement, such Note, or such other
Credit Documents, and although such obligations may be unmatured. Each Bank
agrees to promptly notify the Borrower after any such set-off and application
made by such Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Bank
under this Section are in addition to any other rights and remedies
(including, without limitation, other rights of set-off) which such Bank may
have.
ARTICLE IX
AGENCY AND ISSUING BANK PROVISIONS
Section 9.01 Authorization and Action. Each Bank hereby appoints and
------------------------
authorizes the Administrative Agent to take such action as the Administrative
Agent on its behalf and to exercise such powers under this Agreement and the
other Credit Documents as are delegated to the Administrative Agent by the
terms hereof and of the other Credit Documents, together with such powers as
are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement or any other Credit Document (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Banks and all holders
of Notes; provided, however, that the Administrative Agent shall not be
--------
required to take any action which exposes
-79-
the Administrative Agent to personal liability or which is contrary to this
Agreement, any other Credit Document, or applicable law. The functions of the
Administrative Agent are administerial in nature and in no event shall the
Administrative Agent have a fiduciary or trustee relation in respect of any
Bank by reason of this Agreement or any other Credit Document. Within 5
Business Days of the Administrative Agent or a Bank receiving actual notice
(without any duty to investigate) of a Default, the Administrative Agent or
such Bank, as applicable, will provide written notice of such Default to the
Banks.
Section 9.02 Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken (including such
Person's own negligence) by it or them under or in connection with this
Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as
the holder thereof until the Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form
satisfactory to the Administrative Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement or the other
Credit Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Credit Document on the part of the Parent, the
Borrower or their Subsidiaries or to inspect the property (including the books
and records) of the Borrower or its Subsidiaries; (e) shall not be responsible
to any Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Credit
Document; and (f) shall incur no liability under or in respect of this
Agreement or any other Credit Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
Section 9.03 Administrative Agent and Its Affiliates. With respect to its
---------------------------------------
Commitment, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
the Administrative Agent. The term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage
in any kind of business with, the Borrower or any of its Subsidiaries, and any
Person who may do business with or own securities of the Borrower or any such
Subsidiary, all as if the Administrative Agent were not the Administrative
Agent hereunder and without any duty to account therefor to the Banks.
Section 9.04 Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Administrative Agent or any other
Bank and based on the Parent's and the Borrower's financial statements and the
Parent's filings under the Exchange Act and such other documents and
information as it has deemed appropriate, made its own credit analysis and
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decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon the Administrative Agent 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 this Agreement.
Section 9.05 Indemnification. The Banks severally agree to indemnify the
---------------
Administrative Agent and each Issuing Bank (to the extent not reimbursed by
the Borrower), according to their respective Pro Rata Shares from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent or such Issuing Bank in any way relating to or arising
out of this Agreement or any action taken or omitted by the Administrative
Agent or such Issuing Bank under this Agreement or any other Credit Document
(including the Administrative Agent's or such Issuing Bank's own negligence),
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's or such
Issuing Bank's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank agrees to reimburse the Administrative Agent promptly
upon demand for its Pro Rata Share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Credit Document, to the extent that the
Administrative Agent is not reimbursed for such expenses by the Borrower.
Section 9.06 Successor Administrative Agent and Issuing Banks. The
------------------------------------------------
Administrative Agent or any Issuing Bank may resign at any time by giving
written notice thereof to the Banks and the Borrower and may be removed at any
time with cause by the Required Lenders upon receipt of written notice from
the Required Lenders to such effect. Upon receipt of notice of any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent or Issuing Bank acceptable to the Borrower. If
no successor Administrative Agent or Issuing Bank shall have been so
appointed, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's or Issuing Bank's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent or Issuing Bank, then the retiring Administrative Agent or Issuing Bank
may, on behalf of the Banks and the Borrower, appoint a successor
Administrative Agent or Issuing Bank acceptable to the Borrower, which shall
be a commercial bank meeting the financial requirements of an Eligible
Assignee and, in the case of an Issuing Bank, a Bank. Upon the acceptance of
any appointment as Administrative Agent or Issuing Bank by a successor
Administrative Agent or Issuing Bank, such successor Administrative Agent or
Issuing Bank shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent or Issuing
Bank, and the retiring Administrative Agent or Issuing Bank shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents, except that the retiring Issuing Bank shall remain an
Issuing Bank with respect to any Letters of Credit issued by such Issuing Bank
and outstanding on the effective date of its resignation or removal and the
provisions affecting such Issuing Bank with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Bank until the termination
of all
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such Letters of Credit. After any retiring Administrative Agent's or
Issuing Bank's resignation or removal hereunder as Administrative Agent or
Issuing Bank, the provisions of this Article IX shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was such
Administrative Agent or Issuing Bank under this Agreement and the other Credit
Documents.
Section 9.07 Joint Book Runners, Syndication Agent and Documentation
-------------------------------------------------------
Agent. Bank of Montreal, Chicago Branch shall be named Syndication Agent under
-----
the Credit Documents, but the Syndication Agent shall have no right or duty to
act as agent on behalf of the Banks in such capacity. Deutsche Banc Alex.
Xxxxx shall be named Joint Book Runner and Documentation Agent under the
Credit Documents, but such Joint Book Runner and the Documentation Agent shall
have no right or duty to act as agent on behalf of the Banks in such
capacities. Societe Generale, Southwest Agency shall be named Joint Book
Runner Agent under the Credit Documents, but such Joint Book Runner shall have
no right or duty to act as agent on behalf of the Banks in such capacity.
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, nor increase in the
aggregate Commitments of the Banks, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment shall
--------
increase the Commitment of any Bank without the written consent of such Bank,
and no amendment, waiver or consent shall, unless in writing and signed by all
the Banks, do any of the following: (a) increase the aggregate Commitments of
the Banks in excess of $300,000,000, (b) reduce the principal of, or interest
on, the Notes or any fees or other amounts payable hereunder or under any
other Credit Document or otherwise release the Borrower from any Obligations,
(c) postpone any date fixed for any scheduled payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (d)
change the percentage of the Commitments of the Banks which shall be required
for the Banks or any of them to take any action hereunder or under any other
Credit Document, (e) amend this Section 10.01, (f) amend the definition of
"Required Lenders", (g) amend the definition of "Borrowing Base", "Borrowing
Base Hotel Value" or "Hotel Value", but not the definitions that are used in
such definitions, or (h) release the Parent from its obligations under the
Guaranty; and provided, further, that no amendment, waiver or consent shall,
--------
unless in writing and signed by the Administrative Agent or any Issuing Bank
in addition to the Banks required above to take such action, affect the rights
or duties of the Administrative Agent or such Issuing Bank, as the case may
be, under this Agreement or any other Credit Document. In addition, none of
the following decisions shall be made without the written consent of the
Required Lenders:
(a) release any Guarantor except the Parent from its obligations
under any of the Guaranties, provided that the Administrative Agent can (i)
release any Supplemental Guarantor
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from its obligations under any of the Supplemental Guaranties and (ii) if no
Default then exists, release any Subsidiary of the Borrower which no longer is
a Property Owner of an Eligible Property;
(b) release any Person from its obligations under any of the
Environmental Indemnities;
(c) any determination to make a Borrowing after the occurrence and
during the continuance of an Event of Default;
(d) increases the maximum duration of Interest Periods permitted
under this Agreement;
(e) any waiver or any amendment to the financial covenants contained
in Article VII of this Agreement or any definitions used therein;
(f) any material waiver or modification of the covenants contained
in Article V or Article VI;
(g) amends any of the definitions that are used in the definition of
"Borrowing Base" or "Borrowing Base Hotel Value";
(h) any amendment, supplement or modification to, or waiver of, the
provisions of Section 8.01 of this Agreement;
(i) any determination to send notice to the Borrower of, or
otherwise declare, an Event of Default pursuant to Section 8.01 of this
Agreement;
(j) any determination to accelerate the Obligations pursuant to
Section 8.02 of this Agreement;
(k) any exercise remedies under any Credit Document;
(l) any material decision regarding the operation, maintenance, sale
or other disposition of any Property after the foreclosure upon such Property,
provided that Administrative Agent shall be able to take any action it
determines necessary to preserve or maintain any such Property and provided
further that if the Required Lenders cannot agree on the sale or disposition
of such Property, the Administrative Agent shall not sell or dispose of such
Property, but shall continue to hold such Property for the benefit of the
Banks;
(m) any waiver for more than 45 days of, or any material amendment
to, the reporting requirements set forth in clauses (a)-(d) of Section 5.05 of
this Agreement;
(n) any material waiver of the conditions to a Hotel Property
qualifying as either an Eligible Property or a Permitted Non-Eligible
Property; and
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(o) any other material waiver or modification of the Credit
Documents.
Any amendment to a covenant of the Parent or any of its Subsidiaries or
amendment to a definition shall require the Borrower's written consent.
Section 10.02 Notices, Etc. Except a specifically provided herein, all
------------
notices and other communications shall be in writing (including telecopy or
telex) and mailed, telecopied, telexed, hand delivered or delivered by a
nationally recognized overnight courier, (a) if to the Borrower, at its
address at 0000 Xxxxxxxxxx Xxxx, Xxxxx X00, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xx. Xxxx X. Xxxxx, with a copy to Xxxxxxx X. Xxxxxx at Sidley
Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000 (telephone: (000) 000-0000; telecopy (000) 000-0000) and a copy to
Xxxxxx X. Xxxxx at Xxxxx & Associates, Suite 4322, 000 Xxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 (telephone: (000) 000-0000; telecopy (000) 000-0000);
(b) if to any Bank at its Domestic Lending Office; (c) if to the
Administrative Agent or to Societe Generale, Southwest Agency in its capacity
as an Issuing Bank, at its address at 4900 Xxxxxxxx Xxxx Center, 0000 Xxxx
Xxxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Day, (telecopy: (214)
000-0000; telephone: (000) 000-0000); or, (d) as to each party, at such other
address or teletransmission number as shall be designated by such party in a
written notice to the other parties. All such notices and communications
shall, when mailed, telecopied, telexed or hand delivered or delivered by
overnight courier, be effective three days after deposited in the mails, when
telecopy transmission is completed, when confirmed by telex answer-back or
when delivered, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or Article IX shall not be
effective until received by the Administrative Agent.
Section 10.03 No Waiver; Remedies. No failure on the part of any Bank,
-------------------
the Administrative Agent, or any Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement and the other Credit Documents are
cumulative and not exclusive of any remedies provided by law.
Section 10.04 Costs and Expenses. The Borrower agrees to pay on demand
------------------
all out-of-pocket costs and expenses of the Administrative Agent in connection
with the preparation, execution, delivery, due diligence, administration,
modification and amendment of this Agreement, the Notes and the other Credit
Documents and syndication of the Obligations including, without limitation,
(a) the reasonable fees and out-of-pocket expenses of Xxxxxxxxx & Xxxxxxxxx,
L.L.P., counsel for the Administrative Agent and the Banks, and (b) to the
extent not included in the foregoing, the costs of any local counsel, travel
expenses of the Administrative Agent and its consultants and representatives,
Engineering Reports, Environmental Reports, mortgage and intangible taxes (if
any), and any title or Uniform Commercial Code search costs, any flood plain
search costs, insurance consultant costs and other costs usual and customary
in connection with a credit facility of this type. In addition, the Borrower
agrees to pay on demand all reasonable out-of-pocket costs and expenses, if
any, of the Administrative Agent, each Issuing Bank, and each Bank (including,
without limitation, reasonable counsel fees and expenses of the Administrative
Agent, such Issuing Bank, and each Bank) in connection with the
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enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other Credit Documents.
Section 10.05 Binding Effect. This Agreement shall become effective when
--------------
it shall have been executed by the Borrower and the Administrative Agent, and
when the Administrative Agent shall have, as to each Bank, either received a
counterpart hereof executed by such Bank or been notified by such Bank that
such Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, each Issuing Bank, and
each Bank and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or delegate its duties
under this Agreement or any interest in this Agreement without the prior
written consent of each Bank.
Section 10.06 Bank Assignments and Participations.
-----------------------------------
(a) Assignments. Any Bank may assign to one or more banks or other
-----------
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the
Advances owing to it, the Notes held by it, and the participation interest in
the Letter of Credit Obligations held by it); provided, however, that (i) each
-------- -------
such assignment shall be of a constant, and not a varying, percentage of all
of such Bank's rights and obligations under this Agreement and shall involve a
ratable assignment of such Bank's Commitment, such Bank's Advances and such
Bank's participation in Letter of Credit Exposure, (ii) the amount of the
resulting Commitment and Advances of the assigning Bank (unless it is
assigning all its Commitment) and the assignee Bank pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 and
shall be an integral multiple of $1,000,000, (iii) each such assignment shall
be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with the
Notes subject to such assignment, (v) the Administrative Agent shall consent
to such assignment, which consent shall not be unreasonably withheld or
delayed, and (vi) each Eligible Assignee (other than an Eligible Assignee
which is an Affiliate of the assigning Bank) shall pay to the Administrative
Agent a $3,500 administrative fee. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least three Business Days
after the execution thereof, (A) the assignee thereunder shall be a party
hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and (B) such Bank
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
such Bank's rights and obligations under this Agreement, such Bank shall cease
to be a party hereto). Notwithstanding anything herein to the contrary, any
Bank may assign, as collateral or otherwise, any of its rights under the
Credit Documents to any Federal Reserve Bank.
(b) Term of Assignments. By executing and delivering an Assignment
-------------------
and Acceptance, the Bank thereunder and the assignee thereunder confirm to and
agree with each
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other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such Bank makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency of value of this
Agreement or any other instrument or document furnished pursuant hereto; (ii)
such Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the Guarantors or
the performance or observance by the Borrower or the Guarantors of any of
their obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements and
filings under the Exchange Act referred to in Sections 4.06 and 5.05, if
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such Bank 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
this Agreement; (v) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) The Register. The Administrative Agent shall maintain at its
------------
address referred to in Section 10.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Banks and the Commitments of, and principal amount
of the Advances owing to, each Bank from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, the Issuing
Banks, and the Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance
----------
executed by a Bank and an Eligible Assignee, together with the Note subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of the attached
Exhibit B, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note, a new Note payable
to the order of such Eligible Assignee in amount equal to, respectively, the
Commitment and the outstanding Advances assumed by it pursuant to such
Assignment and Acceptance, and if the assigning Bank has retained any
Commitment hereunder, a new Note payable to the order of such Bank in an
amount equal to, respectively, the Commitment and the outstanding Advances
retained by it hereunder. Such new Note shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the
form of the attached Exhibit A.
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(e) Participations. Each Bank may sell participations to one or more
--------------
banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it, its participation
interest in the Letter of Credit Obligations, and the Notes held by it);
provided, however, that (i) such Bank's obligations under this Agreement
-------- -------
(including, without limitation, its Commitment to the Borrower hereunder)
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Bank
shall remain the holder of any such Note for all purposes of this Agreement,
(iv) the Borrower, the Administrative Agent, and the Issuing Banks and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement, and
(v) such Bank shall not require the participant's consent to any matter under
this Agreement, except for change in the principal amount of any Note in which
the participant has an interest, reductions in fees or interest, or extending
the Maturity Date except as permitted in this Agreement. The Borrower hereby
agrees that participants shall have the same rights under Sections 2.08, 2.09,
and 2.11(c) hereof as the Bank to the extent of their respective
participations, provided that no participant shall be able to collect in
--------
excess of amounts payable to the Bank selling to such participant under such
Sections in respect of the interest sold to such participant or to collect any
such amounts from the Borrower.
(f) Confidentiality. Each Bank may furnish any information
---------------
concerning the Borrower and its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including prospective
assignees and participants); provided that, prior to any such disclosure, the
--------
assignee or participant or proposed assignee or participant shall agree in
writing to preserve the confidentiality of any confidential information
relating to the Borrower and its Subsidiaries received by it from or on behalf
of such Bank in accordance with Section 10.20. Such Bank shall promptly
deliver a signed copy of any such confidentiality agreement to the
Administrative Agent.
Section 10.07 Indemnification. The Borrower shall indemnify the
---------------
Administrative Agent, the Banks (in any capacity or title and including any
lender which was a Bank hereunder prior to any full assignment of its
Commitment), the Issuing Banks, and each affiliate thereof and their
respective directors, officers, employees and agents from, and discharge,
release, 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 (i) any actual or proposed use by the Borrower or any Affiliate of the
Borrower of the proceeds of any Advance, (ii) any breach by the Borrower or
any Guarantor of any provision of this Agreement or any other Credit Document,
(iii) any investigation, litigation or other proceeding (including any
threatened investigation or proceeding) relating to the foregoing, or (iv) any
Environmental Claim or requirement of Environmental Laws concerning or
relating to the present or previously-owned or operated properties, or the
operations or business, of the Borrower or any of its Subsidiaries, and the
Borrower shall reimburse the Administrative Agent, each Issuing Bank, and each
Bank, and each affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any reasonable out-of-pocket expenses
(including legal fees) incurred in connection with any such investigation,
litigation or other proceeding; and expressly including any such losses,
liabilities, claims, damages, or expense incurred by reason of the Person
being indemnified's own negligence, but excluding any such
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losses, liabilities, claims, damages or expenses incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified.
Section 10.08 Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 10.09 Survival of Representations, Indemnifications, etc. All
--------------------------------------------------
representations, warranties contained in this Agreement or made in writing by
or on behalf of the Borrower in connection herewith shall survive the
execution and delivery of this Agreement and the Credit Documents, the making
of the Advances and any investigation made by or on behalf of the Banks, none
of which investigations shall diminish any Bank's right to rely on such
representations and warranties. All obligations of the Borrower provided for
in Sections 2.08, 2.09, 2.11(c), 9.05 and 10.07 shall survive any termination
of this Agreement and repayment in full of the Obligations.
Section 10.10 Severability. In case one or more provisions of this
------------
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein
shall not be affected or impaired thereby.
Section 10.11 Entire Agreement. This Agreement, the Notes and the other
----------------
Credit Documents constitute the entire understanding among the parties hereto
with respect to the subject matter hereof and supersede any prior agreements,
written or oral, with respect thereto.
Section 10.12 Usury Not Intended. It is the intent of the Borrower and
------------------
each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of New York and the United States
of America from time to time in effect. In furtherance thereof, the Banks and
the Borrower stipulate and agree that none of the terms and provisions
contained in this Agreement or the other Credit Documents shall ever be
construed to create a contract to pay, as consideration for the use,
forbearance or detention of money, interest at a rate in excess of the Maximum
Rate and that for purposes hereof "interest" shall include the aggregate of
all charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Advances, include amounts
which by applicable law are deemed interest which would exceed the Maximum
Rate, then such excess shall be deemed to be a mistake and each Bank receiving
same shall credit the same on the principal of its Notes (or if such Notes
shall have been paid in full, refund said excess to the Borrower). In the
event that the maturity of the Notes is accelerated by reason of any election
of the holder thereof resulting from any Event of Default under this Agreement
or otherwise, or in the event of any required or permitted prepayment, then
such consideration that constitutes interest may never include more than the
Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration
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or prepayment and, if theretofore paid, shall be credited on the applicable
Notes (or, if the applicable Notes shall have been paid in full, refunded to
the Borrower). In determining whether or not the interest paid or payable
under any specific contingencies exceeds the Maximum Rate, the Borrower and
the Banks shall to the maximum extent permitted under applicable law amortize,
prorate, allocate and spread in equal parts during the period of the full
stated term of the Notes all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations. The provisions of this Section shall control
over all other provisions of this Agreement or the other Credit Documents
which may be in apparent conflict herewith.
Section 10.13 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER, THE
-------------
ADMINISTRATIVE AGENT, THE ISSUING BANK, ANY BANK, OR ANY INDEMNITEE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
OTHER CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT
OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF
NEW YORK.
Section 10.14 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
-------------------------------------------------------
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
----------------------
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK,
BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE
PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A)
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE
-------------------
AGENT, ANY BANK OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
(1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER
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COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
--------------
(c) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
------------------
PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING
THEREOF BY THE ADMINISTRATIVE AGENT OR THE BANKS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWER ADDRESSED AS PROVIDED HEREIN. NOTHING
HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF THE ADMINISTRATIVE
AGENT OR THE BANKS TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
----- --- ----------
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
--------------------
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(e) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
--------------
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT.
-90-
(f) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
-----------------
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 10.14, WITH ITS COUNSEL.
-------------
Section 10.15 Knowledge of Borrower. For purposes of this
---------------------
Agreement, "knowledge of the Borrower" means the actual knowledge of any of
the executive officers and all other Responsible Officers of the Parent.
Section 10.16 Banks Not in Control. None of the covenants or other
--------------------
provisions contained in the Credit Documents shall or shall be deemed to, give
the Banks the rights or power to exercise control over the affairs and/or
management of the Borrower, any of its Subsidiaries or any Guarantor, the
power of the Banks being limited to the right to exercise the remedies
provided in the Credit Documents; provided, however, that if any Bank becomes
the owner of any stock, or other equity interest in, any Person whether
through foreclosure or otherwise, such Bank shall be entitled (subject to
requirements of law) to exercise such legal rights as it may have by being
owner of such stock, or other equity interest in, such Person.
Section 10.17 Headings Descriptive. The headings of the several Sections
--------------------
and paragraphs of the Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
Section 10.18 Time is of the Essence. Time is of the essence under the
----------------------
Credit Documents.
Section 10.19 SCOPE OF INDEMNITIES. THE BORROWER ACKNOWLEDGES AND AGREES
--------------------
THAT CERTAIN OF ITS OBLIGATIONS AND INDEMNITIES UNDER THIS AGREEMENT INCLUDE
ANY CLAIMS RESULTING FROM THE NEGLIGENCE OR ALLEGED NEGLIGENCE OF THE
ADMINISTRATIVE AGENT, THE BANKS, OR ANY OTHER PERSON BEING INDEMNIFIED.
Section 10.20 Confidentiality. The Administrative Agent, Issuing Bank and
---------------
each Bank severally agrees that it will use its best efforts not to disclose
without the prior written consent of the Parent or the Borrower (other than to
an Affiliate or such Person's or their Affiliate's directors, officers,
employees, auditors, regulators or counsel) any information with respect to
the Parent or the Borrower which is furnished pursuant to this Agreement
except that the Administrative Agent, Issuing Bank and each Bank may disclose
any such information (a) which is or becomes generally available to the public
other than by a breach of this Section 10.20, (b) which is known by or becomes
known by such Person from another Person, (c) as may be required or
appropriate in any report, statement or testimony submitted to any
Governmental Authority (whether in the United States or elsewhere), (d) as may
be required or appropriate in response to any summons or subpoena or any law,
order, regulation or ruling applicable to such Agent, Issuing Bank or Bank and
(e) to any prospective participant or assignee in connection with any
contemplated transfer pursuant to Section 10.06 in accordance with the
provisions of Section 10.06(f).
-91-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
EXECUTED as of the date first referenced above.
BORROWER:
--------
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
By: LaSalle Hotel Properties,
its general partner
By:________________________________
Name:______________________________
Title:_____________________________
-92-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Joint Book Runner and
Administrative Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
-93-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
BANK OF MONTREAL, CHICAGO BRANCH.,
individually and as Syndication Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
-94-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
BANKERS TRUST COMPANY, individually
and as Joint Book Runner and
Documentation Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
-95-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
CREDIT LYONNAIS NEW YORK BRANCH
By:______________________________________
Name:____________________________________
Title:___________________________________
-96-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
LASALLE BANK NATIONAL ASSOCIATION
By:______________________________________
Name:____________________________________
Title:___________________________________
-97-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
FLEET NATIONAL BANK
By:______________________________________
Name:____________________________________
Title:___________________________________
-98-
[SIGNATURE PAGE OF THIRD AMENDED
AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT]
FIRSTAR BANK, NATIONAL ASSOCIATION
By:______________________________________
Name:____________________________________
Title:___________________________________
-99-
