1
EXHIBIT 10.17
$25,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
SUBURBAN LODGES OF AMERICA, INC.,
and
THE GUARANTORS PARTY HERETO
and
THE BANKS PARTY HERETO
and
PNC BANK, KENTUCKY, INC., As Agent
Dated as of September 26, 1996
PREPARED BY XXXXXXXX XXXXXXXXX PROFESSIONAL CORPORATION
2
TABLE OF CONTENTS
Article Page
1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.1 Number; Inclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.2 Determination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.3 Agent's Discretion and Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.4 Documents Taken as a Whole. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.5 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.6 Implied References to this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2.7 Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.2.8 Modifications to Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.2.9 From, To and Through. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.2.10 Shall; Will. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.3 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2. REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1 Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans. . . . . . . . . . . . . . . . . . . . 19
2.3 Commitment Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.4 Delinquent Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5 Revolving Credit Loan Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.6 Making Revolving Credit Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7 Revolving Credit Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.8 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9 Letter of Credit Subfacility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9.1 Issuance of Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9.3 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9.4 Disbursements, Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9.5 Documentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9.6 Determinations to Honor Drawing Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9.7 Nature of Participation and Reimbursement Obligations. . . . . . . . . . . . . . . . . . . . . . 23
2.9.8 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.9.9 Liability for Acts and Omissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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2.10 Increase in Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.10.1 Existing Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.10.2 New Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.10.3 Limitations on Increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.11 Reduction of Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3. COLLATERAL POOL PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1 Acceptance of Collateral Pool Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.1 Acceptance Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1.2 Collateral Pool Addition Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2 Release of Collateral Pool Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3 Borrowing Base Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.3.1 Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.3.2 Borrowing Base Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.4 Covenants Relating to the Collateral Pool and the Collateral Pool
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.1 Minimum Collateral Pool Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.2 Pro Forma Debt Service Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.3 Extended Stay Lodging Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.4 Insurance, Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.5 Guest Leases; Tenant Leases; Major Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4.6 Non-Disturbance Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.4.7 Management Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.4.8 Major Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.4.9 Annual Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.4.10 Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4. INTEREST RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.1 Interest Rate Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.1.1 Revolving Credit Interest Rate Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.1.2 Rate Quotations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2.1 Ending Date and Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2.2 Amount of Borrowing Tranche. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2.3 Termination Before Expiration Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2.4 Renewals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2.5 Completion of Syndication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3 Interest After Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.1 Letter of Credit Fees, Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.2 Other Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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4.3.3 Acknowledgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4 Euro-Rate Unascertainable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4.1 Unascertainable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4.2 Illegality; Increased Costs; Deposits Not Available. . . . . . . . . . . . . . . . . . . . . . . 34
4.4.3 Agent's and Bank's Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5 Selection of Interest Rate Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5. PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.2 Pro Rata Treatment of Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.3 Interest Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.4 Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.4.1 Right to Prepay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.4.2 Replacement of a Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.5 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.5.1 Borrowing Base Exceeded. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.6 Additional Compensation in Certain Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . 38
5.6.2 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1 Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.1 Organization and Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.2 Capitalization and Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.4 Power and Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.1.5 Validity and Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.1.6 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.1.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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6.1.8 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.1.9 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.1.10 Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.1.11 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.1.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.1.13 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1.14 No Event of Default; Compliance with Instruments. . . . . . . . . . . . . . . . . . . . . . . . 44
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1.16 Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1.17 Mortgage Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.1.18 Status of the Pledged Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.1.19 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.1.20 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1.21 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1.22 Investment Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1.23 Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1.24 Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.1.25 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.1.26 Senior Debt Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.2 Updates to Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.1 First Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.1.1 Officer's Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.1.2 Secretary's Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.1.3 Delivery of Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.4 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.5 Legal Details. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.6 Payment of Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.1.7 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1.8 Officer's Certificate Regarding MACs and Minimum
Market Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1.9 No Violation of Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1.10 No Actions or Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1.11 Collateral Pool Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1.12 Quarterly Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.2 Each Additional Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.1 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.1.1 Preservation of Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.1.2 Payment of Liabilities, Including Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.1.3 Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.1.4 Maintenance of Properties and Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.1.5 Maintenance of Patents, Trademarks, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.1.6 Visitation Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1.7 Keeping of Records and Books of Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1.8 Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1.9 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1.10 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.1.11 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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8.1.12 Subordination of Intercompany Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.1.13 NASDAQ Listed Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.2 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.2.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.2.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2.3 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2.4 Loans and Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2.5 Dividends and Related Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. . . . . . . . . . . . . . . . . . . . . . . 58
8.2.7 Affiliate Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2.8 Subsidiaries, Partnerships and Joint Ventures. . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2.9 Continuation of or Change in Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.2.10 Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.2.11 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.12 Changes in Organizational Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.13 Minimum Debt Service Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.14 Maximum Consolidated Debt to Market Value Ratio. . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.15 Maximum Floating Rate Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.16 Minimum Tangible Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2.17 Geographical Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.2.18 Restrictions on Assets Under Development and Land. . . . . . . . . . . . . . . . . . . . . . . 61
8.3 Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.3.1 Quarterly Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.3.2 Annual Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.3.3 Certificate of the Borrower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.3.4 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.3.5 Notice of Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.3.6 Budgets, Forecasts, Other Reports and Information. . . . . . . . . . . . . . . . . . . . . . . . 63
8.3.7 Notices Regarding Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . 63
8.3.7.1 Certain Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.3.7.2 Notices of Involuntary Termination and Annual Reports. . . . . . . . . . . . . . . . . 64
8.3.7.3 Notice of Voluntary Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.1.1 Payments Under Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.1.2 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.1.3 Breach of Negative Covenants or Visitation Rights. . . . . . . . . . . . . . . . . . . . . . . . 65
9.1.4 Breach of Other Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1.5 Defaults in Other Agreements or Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1.6 Final Judgments or Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1.7 Loan Document Unenforceable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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9.1.8 Uninsured Losses; Proceedings Against Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1.9 Notice of Lien or Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.1.10 Insolvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.1.11 Events Relating to Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . 67
9.1.12 Cessation of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.1.13 Change of Ownership or Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.1.14 Involuntary Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.1.15 Voluntary Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.2 Consequences of Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings. . . . . . . . 69
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. . . . . . . . . . . . . . . . . . . . . . 69
9.2.3 Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.2.4 Suits, Actions, Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2.5 Application of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2.6 Other Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.3 Notice of Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.3 Nature of Duties; Independent Credit Investigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.4 Actions in Discretion of Agent; Instructions from the Banks. . . . . . . . . . . . . . . . . . . . . . . 72
10.5 Reimbursement and Indemnification of Agent by the Borrower. . . . . . . . . . . . . . . . . . . . . . . . 72
10.6 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.7 Reimbursement and Indemnification of Agent by Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.8 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.9 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.10 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.11 Banks in Their Individual Capacities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.12 Holders of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.13 Equalization of Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.14 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.15 Agent's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.16 Availability of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.17 Calculations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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10.18 Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.1 Modifications, Amendments or Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.1.1 Increase of Commitment; Extension or Expiration Date. . . . . . . . . . . . . . . . . . . . . . 77
11.1.2 Extension of Payment; Reduction of Principal Interest or
Fees; Modification of Terms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.1.3 Release of Collateral or Guarantor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.1.4 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.2 No Implied Waivers; Cumulative Remedies; Writing Required. . . . . . . . . . . . . . . . . . . . . . . . 78
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes. . . . . . . . . . . . . . . . . . . . 79
11.4 Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.5 Funding by Branch, Subsidiary or Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.5.1 Notional Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.5.2 Actual Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.9 Prior Understanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.10 Duration; Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.11 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.12 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.13 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.14 Agent's or Bank's Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.15 Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.17 Tax Withholding Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.18 Joinder of Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.19 LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS
SCHEDULE 1.1(C) - COLLATERAL POOL PROPERTIES
SCHEDULE 1.1(R)(1) - LIST OF REAL ESTATE COLLATERAL DOCUMENTS
SCHEDULE 3.4.4 - INSURANCE REQUIREMENTS FOR COLLATERAL POOL
PROPERTIES
SCHEDULE 3.4.7 - MANAGEMENT AGREEMENTS
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2 - MANAGEMENT SHAREHOLDERS; OPTIONS, WARRANTS
OR OTHER PURCHASE RIGHTS
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS,
LICENSES, ETC.
SCHEDULE 6.1.18 - PARTNERSHIP AGREEMENTS
SCHEDULE 6.1.19 - INSURANCE POLICIES
SCHEDULE 6.1.21 - MATERIAL CONTRACTS
SCHEDULE 6.1.23 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.1.25 - ENVIRONMENTAL DISCLOSURES
EXHIBITS
EXHIBIT 1.1(A) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G) - FORM OF GUARANTY AND SURETYSHIP AGREEMENT
EXHIBIT 1.1(I) - FORM OF INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(J) - FORM OF JOINDER
EXHIBIT 1.1(N) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(P) - FORM OF PLEDGE AGREEMENT
EXHIBIT 1.1(R) - FORM OF REAL ESTATE COLLATERAL DOCUMENTS
EXHIBIT 1.1(S) - FORM OF SECURITY AGREEMENT
EXHIBIT 2.5 - FORM OF LOAN REQUEST
EXHIBIT 7.1.4(i) - REQUIREMENTS OF OPINION OF COUNSEL
EXHIBIT 8.3.3 - FORM OF COMPLIANCE CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of September 26, 1996 and is
made by and among SUBURBAN LODGES OF AMERICA, INC., a Georgia corporation (the
"Borrower"), each of the GUARANTORS (as hereinafter defined), the BANKS (as
hereinafter defined), and PNC BANK, KENTUCKY, INC., in its capacity as agent
for the Banks under this Agreement (hereinafter referred to in such capacity as
the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide a
revolving credit facility to the Borrower in an aggregate principal amount not
to exceed $25,000,000; and
WHEREAS, the revolving credit facility shall be used for
general corporate purposes, including without limitation the acquisition,
construction and renovation of extended stay lodging facilities and related
equity investments; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
1.CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Affiliate as to any Person shall mean any other
Person (i) which directly or indirectly controls, is controlled by, or is under
common control with such Person, (ii) which beneficially owns or holds 5% or
more of any class of the voting or other equity interests of such Person, or
(iii) 5% or more of any class of voting interests or other equity interests of
which is beneficially owned or held, directly or indirectly, by such Person.
Control, as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
11
securities, by contract or otherwise, including the power to elect a majority
of the directors or trustees of a corporation or trust, as the case may be.
Agent shall mean PNC Bank, Kentucky, Inc., and its
successors and assigns.
Agent's Fee shall have the meaning assigned to that
term in Section 10.15.
Agreement shall mean this Credit Agreement, as the
same may be supplemented, amended, restated or otherwise modified from time to
time, including all schedules and exhibits.
Annual Statements shall have the meaning assigned to
that term in Section 6.1.9(i).
Appraisal shall mean an appraisal commissioned by and
acceptable to the Agent and in compliance with the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended and the regulations
promulgated thereunder, and with the Uniform Standards of Professional
Appraisal Practice.
As Is Value shall mean, other than as set forth
herein, the value set forth in the most recent Appraisal of a Collateral Pool
Property.
Assets Under Development shall mean all real estate
which any Loan Party, directly or indirectly, owns or leases on which the
construction of building improvements has been commenced but which is not yet
completed and generating income.
Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among a Purchasing Bank, the
Transferor Bank and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals,
designated by written notice to the Agent from the Borrower, authorized to
execute notices, reports and other documents on behalf of the Loan Parties
required hereunder. The Borrower may amend such list of individuals from time
to time by giving written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on
Schedule 1.1(B) and their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a Bank.
Base Net Worth shall mean the sum of $30,000,000 plus
80% of the proceeds received by the Borrower from any offering or placement of
any equity securities of the
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12
Borrower after the Closing Date, net of reasonable and customary expenses in
connection with such offering or placement.
Base Rate shall mean the greater of (i) the interest
rate per annum announced from time to time by the Agent at its Principal Office
as its then prime rate, which rate may not be the lowest rate then being
charged commercial borrowers by the Agent, or (ii) the Federal Funds Effective
Rate plus 1/2% per annum.
Base Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(i).
Benefit Arrangement shall mean at any time an
"employee benefit plan," within the meaning of Section 3(3) of ERISA, which is
neither a Plan nor a Multiemployer Plan and which is maintained, sponsored or
otherwise contributed to by any member of the ERISA Group.
Borrower shall mean Suburban Lodges of America, Inc.,
a corporation organized and existing under the laws of the State of Georgia.
Borrowing Base shall be determined based on the most
recent certificate of the Borrower delivered pursuant to Section 8.3.3 and
shall mean the lesser of (i) 45% of the aggregate of the As Is Value of each
Collateral Pool Property or (ii) such amount that will allow the Borrower to
comply with the Pro Forma Debt Service Coverage Ratio set forth in Section
3.4.2.
Borrowing Date shall mean, with respect to any Loan,
the date for the making thereof or the renewal or conversion thereof to the
same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of
Loans outstanding as follows: (i) any Loans to which a Euro-Rate Option applies
which become subject to the same Interest Rate Option under the Loan Request by
the Borrower and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday
or Sunday or a legal holiday on which commercial banks are authorized or
required to be closed for business in Louisville, Kentucky.
Closing Date shall mean September 26, 1996.
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13
Collateral shall mean the Pledged Collateral, the
Real Estate Collateral, the UCC Collateral and all other property of the
Borrower on which liens and security interests have been granted to the Agent
for the benefit of the Banks to secure the Loans.
Collateral Pool shall mean, at any time, the
Properties which the Borrower has proposed as the Collateral Pool Properties
and have been included pursuant to Section 3.1 and which have not been released
pursuant to Section 3.2. The Collateral Pool Properties shall be set forth on
Schedule 1.1(C), as amended, restated, modified or otherwise supplemented from
time to time in accordance herewith.
Collateral Pool Property shall mean an income
producing real estate property which is included in the Collateral Pool and
Collateral Pool Properties shall mean more than one Collateral Pool Property.
Collateral Pool Value shall mean the aggregate of the
As Is Value for each Collateral Pool Property. For purposes of determining
Collateral Pool Value, the Appraisal with respect to a Collateral Pool Property
may be the annual Appraisal, the Appraisal performed for the inclusion of the
Property in the Collateral Pool, or an Appraisal requested by the Borrower or
the Agent, whichever is most recent.
Commitment Fee shall have the meaning assigned to
that term in Section 2.3.
Consolidated Debt shall mean all Indebtedness of the
Borrower and its consolidated Subsidiaries.
Consolidated Debt Service shall mean for any period
of determination the sum of scheduled principal installments on Indebtedness
(as adjusted for prepayments), plus interest incurred (both capitalized and
expensed, but excluding capitalized interest financed by an interest reserve
funded by Indebtedness), in each case of the Borrower and its Subsidiaries for
such period determined and consolidated in accordance with GAAP, together with
100% of any interest incurred (both capitalized and expensed) with respect to
any obligation for which the Borrower is liable, in whole or in part, under a
Guaranty or similar obligation of an unconsolidated Affiliate.
Consolidated EBITDA for any period of determination
shall mean (i) the sum of net income, depreciation, amortization, other
non-cash charges to net income, interest expense and income tax expense minus
(ii) non-cash credits to net income and any gains (and plus any losses) from
extraordinary items and assets sales, in each case of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.
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Consolidated Tangible Net Worth shall mean as of any
date of determination total stockholders' equity less intangible assets of the
Borrower and its Subsidiaries as of such date determined and consolidated in
accordance with GAAP.
Construction Project shall have the meaning assigned
to that term in Section 3.4.8.
Debt Service Coverage Ratio shall mean the ratio of
Consolidated EBITDA to Consolidated Debt Service.
Delinquent Bank shall have the meaning assigned to
that term in Section 2.4.
Dollar, Dollars, U.S. Dollars and the symbol $ shall
mean lawful money of the United States of America.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal or property damage or
natural resource damage or equitable relief, order, notice of violation,
citation, request for information issued pursuant to any Environmental Laws by
an Official Body, subpoena or other written notice of any type relating to,
arising out of, or issued pursuant to any of the Environmental Laws or any
Environmental Conditions, as the case may be.
Environmental Conditions shall mean any conditions of
the environment, including the workplace, the ocean, natural resources
(including flora or fauna), soil, surface water, groundwater, any actual or
potential drinking water supply sources, substrata or the ambient air, relating
to or arising out of, or caused by the use, handling, storage, treatment,
recycling, generation, transportation, release, spilling, leaking, pumping,
emptying, discharging, injecting, escaping, leaching, disposal, dumping,
threatened release or other management or mismanagement of Regulated Substances
resulting from the use of, or operations on, the Property.
Environmental Laws shall mean all federal, state,
local and foreign Laws and regulations, including permits, licenses,
authorizations, bonds, orders, judgments, consent decrees issued, or entered
into, pursuant thereto, relating to pollution or protection of human health or
the environment or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended or supplemented from time to
time, and any successor statute of similar import, and the rules and
regulations thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under
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15
common control and all other entities which, together with the Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
Euro-Rate shall mean with respect to the Loans
comprising any Borrowing Tranche to which the Euro-Rate Option applies for any
Interest Period, the interest rate per annum determined by the Agent by
dividing (the resulting quotient rounded upward to the nearest 1/100 of 1% per
annum) (i) the rate of interest determined by the Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest
error) to be the "ask" eurodollar rate evidenced by Telerate page 314 as quoted
by Xxxxxx, Astley & Xxxxxx (or appropriate successor or, if Xxxxxx, Astley &
Xxxxxx or its successor ceases to provide such quotes, a comparable replacement
as determined by the Agent) two (2) Business Days prior to the first day of
such Interest Period for an amount comparable to such Borrowing Tranche and
having a borrowing date and a maturity comparable to such Interest Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The
Euro-Rate may also be expressed by the following formula:
Telerate page 314 Quoted by Xxxxxx,
Euro-Rate = Astley & Xxxxxx or appropriate successor
----------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option
outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Agent shall give prompt notice to the
Borrower of the Euro-Rate as determined or adjusted in accordance herewith,
which determination shall be conclusive absent manifest error.
Euro-Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(ii).
Euro-Rate Reserve Percentage shall mean the maximum
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%)
as determined by the Agent which is in effect during any relevant period, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities") of a member bank
in such System.
Event of Default shall mean any of the Events of Default described in Section
9.1.
Expiration Date shall mean, with respect to the
Revolving Credit Commitment, September 25, 1998.
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16
Federal Funds Effective Rate for any day shall mean
the rate per annum (based on a year of 360 days and actual days elapsed and
rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve
Bank of New York (or any successor) on such day as being the weighted average
of the rates on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by such Federal
Reserve Bank (or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted average it refers to
as the "Federal Funds Effective Rate" as of the date of this Agreement;
provided, if such Federal Reserve Bank (or its successor) does not announce
such rate on any day, the "Federal Funds Effective Rate" for such day shall be
the Federal Funds Effective Rate for the last day of which such rate was
announced.
Financial Projections shall have the meaning assigned
to that term in Section 6.1.9(ii).
Floating Rate Debt shall mean any outstanding
Consolidated Debt which bears interest at a rate which is subject to periodic
adjustment (either automatically or by reference to a fluctuating base or
market rate or at the option of the lender) at any time.
GAAP shall mean generally accepted accounting
principles as are in effect from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.
Governmental Acts shall have the meaning assigned to
that term in Section 2.9.8.
Guarantor shall mean each of the parties to this
Agreement which is designated as a "Guarantor" on the signature page hereof and
each other Person which joins this Agreement as a Guarantor after the date
hereof pursuant to Section 11.18.
Guaranty of any Person shall mean any obligation of
such Person guaranteeing or in effect guaranteeing any liability or obligation
of any other Person in any manner, whether directly or indirectly, including
any agreement to indemnify or hold harmless any other Person, any performance
bond or other suretyship arrangement and any other form of assurance against
loss, except endorsement of negotiable or other instruments for deposit or
collection in the ordinary course of business.
Guaranty Agreement shall mean the Guaranty and
Suretyship Agreement in substantially the form of Exhibit 1.1(G) executed and
delivered by each Guarantor to the Agent for the benefit of the Banks.
Guest Leases shall mean agreements entered into in
the ordinary course of business between a Loan Party and a third-party guest
for extended-stay lodging accommodations.
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Historical Statements shall have the meaning assigned
to that term in Section 6.1.9(i).
Indebtedness shall mean, as to any Person at any
time, any and all indebtedness, obligations or liabilities (whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several) of such Person for or in respect of: (i)
borrowed money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations under
any letter of credit, currency swap agreement, interest rate swap, cap, collar
or floor agreement or other interest rate management device, (iv) any other
transaction (including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of a borrowing
of money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or similar evidence of indebtedness), or (v) any Guaranty of Indebtedness for
borrowed money.
Intercompany Subordination Agreement shall mean a
Subordination Agreement among the Loan Parties in the form attached hereto as
Exhibit 1.1(I).
Interest Payment Date shall mean each date specified
for the payment of interest in Section 5.3.
Interest Period shall have the meaning assigned to
such term in Section 4.2.
Interest Rate Option shall mean any Euro-Rate Option
or Base Rate Option.
Interim Statements shall have the meaning assigned to
that term in Section 6.1.9(i).
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Joinder shall mean a joinder by a Person as a
Guarantor, a Company and a Grantor, as the case may be, under this Agreement,
the Guaranty Agreement, the Intercompany Subordination Agreement, the Security
Agreement and the other Loan Documents in the form of Exhibit 1.1(J).
Labor Contracts shall mean all employment agreements,
employment contracts, collective bargaining agreements and other agreements
among any Loan Party or Subsidiary of a Loan Party and its employees.
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Land shall mean all unimproved real estate which any
Loan Party, directly or indirectly, owns or leases.
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, opinion, release,
ruling, order, injunction, writ, decree or award of any Official Body.
Letter of Credit shall have the meaning assigned to
that term in Section 2.9.1.
Letter of Credit Fee shall have the meaning assigned
to that term in Section 2.9.3.
Letter of Credit Outstandings shall mean at any time
the sum of (i) the aggregate undrawn face amount of outstanding Letters of
Credit and (ii) the aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, whether voluntarily or involuntarily given, including
any conditional sale or title retention arrangement, and any assignment,
deposit arrangement or lease intended as, or having the effect of, security and
any filed financing statement or other notice of any of the foregoing (whether
or not a lien or other encumbrance is created or exists at the time of the
filing).
Loan Documents shall mean this Agreement, the
Revolving Credit Notes, the Real Estate Collateral Documents, the Guaranty
Agreement, the Intercompany Subordination Agreement, the Pledge Agreement and
any other instruments, certificates or documents delivered or contemplated to
be delivered hereunder or thereunder or in connection herewith or therewith, as
the same may be supplemented or amended from time to time in accordance
herewith or therewith, and Loan Document shall mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the
Guarantors.
Loan Request shall mean a request for Revolving
Credit Loans made in accordance with Section 2.5 or a request to select,
convert to or renew a Euro-Rate Option in accordance with Section 4.2.
Loans or Revolving Credit Loans shall mean
collectively and Loan or Revolving Credit Loan shall mean separately all
revolving credit loans or any revolving credit loan made by the Banks or one of
the Banks to the Borrower pursuant to Section 2.1 hereof.
Major Agreements shall mean, at any time, (a) each
Tenant Lease, (b) each cross-easement, restriction or similar agreement
encumbering or affecting a Collateral Pool
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19
Property and any adjoining property, (c) each management agreement with respect
to a Collateral Pool Property, (d) each ground lease affecting a Collateral
Pool Property, and (e) any other agreement, contract, indenture or other
document or instrument material to the operation, management and/or maintenance
of a Collateral Pool Property or to the security afforded thereby; provided
that any lease for laundry facilities that is terminable by the Loan Party
which is a party thereto upon no more than thirty (30) days' notice shall not
be included as a Major Agreement.
Market Capitalization shall mean, as of any date of
determination, the product of the number of issued and outstanding shares of
common stock of the Borrower and the market price per share.
Market Value shall mean Consolidated Debt plus Market
Capitalization.
Material Adverse Change shall mean any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
this Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Loan Parties
taken as a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Loan Parties taken as a whole to duly and
punctually pay or perform its Indebtedness, or (d) impairs materially or could
reasonably be expected to impair materially the ability of the Agent or any of
the Banks, to the extent permitted, to enforce their legal remedies pursuant to
this Agreement or any other Loan Document.
Modified Base Rate shall have the meaning assigned to
that term in Section 4.3.2.
Month, with respect to an Interest Period under the
Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period begins on a day of a calendar month
for which there is no numerically corresponding day in the month in which such
Interest Period is to end, the final month of such Interest Period shall be
deemed to end on the last Business Day of such final month.
Multiemployer Plan shall mean any employee benefit
plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3)
of ERISA and to which the Borrower or any member of the ERISA Group is then
making or accruing an obligation to make contributions or, within the preceding
five Plan years, has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has
two or more contributing sponsors (including the Borrower or any member of the
ERISA Group) at least two
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of whom are not under common control, as such a plan is described in Sections
4063 and 4064 of ERISA.
Net Operating Income shall mean, as of any date of
determination, the sum of the net operating income for each Collateral Pool
Property determined in accordance with GAAP for the fiscal quarter of the
Borrower then ending multiplied by four (4), minus a capital reserve
requirement in an amount equal to three percent (3%) of the foregoing sum.
Non-Disturbance Agreement shall have the meaning
assigned to that term in Section 3.4.6.
Notes or Revolving Credit Notes shall mean
collectively and Note or Revolving Credit Note shall mean separately all the
revolving credit notes of the Borrower in the form of Exhibit 1.1(N) evidencing
the Revolving Credit Loans together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.
Notices shall have the meaning assigned to that term
in Section 11.6.
Obligation shall mean any obligation or liability of
any of the Loan Parties to the Agent or any of the Banks, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, under or in connection with
this Agreement, the Revolving Credit Notes, the Letters of Credit or any other
Loan Document.
Official Body shall mean any national, federal,
state, local or other government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
Partnership Interests shall have the meaning given to
such term in Section 6.1.3.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA or any
successor.
Permitted Investments shall mean:
(i) direct obligations of the United
States of America or any agency or instrumentality thereof or obligations
backed by the full faith and credit of the United States of America maturing in
twelve (12) months or less from the date of acquisition;
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21
(ii) commercial paper maturing in 180
days or less rated not lower than A-1, by Standard & Poor's Corporation or P-1
by Xxxxx'x Investors Service, Inc. on the date of acquisition; and
(iii) demand deposits, time deposits or
certificates of deposit maturing within one year in commercial banks whose
obligations are rated A-1, A or the equivalent or better by Standard & Poor's
Corporation on the date of acquisition.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or
similar charges, incurred in the ordinary course of business and which are not
yet due and payable;
(ii) Pledges or deposits made in the
ordinary course of business to secure payment of workmen's compensation, or to
participate in any fund in connection with workmen's compensation, unemployment
insurance, old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen,
warehousemen, carriers, or other like Liens, securing obligations incurred in
the ordinary course of business that are not yet due and payable and Liens of
landlords securing obligations to pay lease payments that are not yet due and
payable or in default;
(iv) Good-faith pledges or deposits made
in the ordinary course of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases, not in
excess of the aggregate amount due thereunder, or to secure statutory
obligations, or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;
(v) Encumbrances consisting of zoning
restrictions, easements or other restrictions on the use of real property, none
of which materially impairs the use of such property or the value thereof, and
none of which is violated in any material respect by existing or proposed
structures or land use;
(vi) Liens, security interests and
mortgages in favor of the Agent for the benefit of the Banks;
(vii) Liens on property of any Loan Party
or Subsidiary of any Loan Party permitted in Section 8.2.1(ii) securing
Indebtedness permitted under such section;
(viii) The following, (A) if the validity
or amount thereof is being contested in good-faith by appropriate and lawful
proceedings diligently conducted so long as levy and execution thereon have
been stayed and continue to be stayed or (B) if a final judgment
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is entered and such judgment is discharged within thirty (30) days of entry,
and in either case they do not affect the Collateral or, in the aggregate,
materially impair the ability of any Loan Party to perform its Obligations
hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty,
provided that the Loan Party maintains such reserves or other
appropriate provisions as shall be required by GAAP and pays
all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property other than the
Collateral, including any attachment of personal or real
property or other legal process prior to adjudication of a
dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual
Liens.
Person shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
Plan shall mean at any time an employee pension
benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan)
which is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained by any member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the ERISA Group for
employees of any entity which was at such time a member of the ERISA Group.
Pledge Agreement shall mean the Pledge Agreement in
substantially the form of Exhibit 1.1(P) executed and delivered by the Borrower
to the Agent for the benefit of the Banks.
Pledged Collateral shall mean the property of the
Borrower in which security interests are to be granted under the Pledge
Agreement.
PNC shall mean PNC Bank, Kentucky, Inc., its
successors and assigns.
Potential Default shall mean any event or condition
which with notice, passage of time or a determination by the Agent or the
Required Banks, or any combination of the foregoing, would constitute an Event
of Default.
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Principal Office shall mean the main banking office
of the Agent in Louisville, Kentucky.
Prior Security Interest shall mean a valid and
enforceable perfected first-priority security interest under the Uniform
Commercial Code in the UCC Collateral and the Pledged Collateral which is
subject only to Liens for taxes not yet due and payable to the extent such
prospective tax payments are given priority by statute or Purchase Money
Security Interests as permitted hereunder.
Pro Forma Debt Service shall mean, as of any date of
determination, the annual amount, assuming equal monthly payments, required to
amortize fully over a 20-year period the then-outstanding principal of the
Loans at an assumed interest rate of 2.00% over the yield to maturity for U.S.
Treasury obligations with a maturity on the date closest to 10 years from such
date.
Pro Forma Debt Service Coverage Ratio shall mean the
ratio of Net Operating Income to Pro Forma Debt Service.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code or Section
406 of ERISA for which neither an individual nor a class exemption has been
issued by the United States Department of Labor.
Property shall mean all real property, both owned and
leased, of any the Borrower or Subsidiary of the Borrower.
Property Release shall have the meaning assigned to
that term in Section 3.2.
Purchase Money Security Interest shall mean Liens
upon tangible personal property securing loans to the Borrower or any
Subsidiary of the Borrower or deferred payments by the Borrower or any
Subsidiary of the Borrower for the purchase of such tangible personal property.
Purchasing Bank shall mean a Bank which becomes a
party to this Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's
Commitment bears to the Commitments of all of the Banks.
Real Estate Collateral shall mean one or more
Properties owned by a Loan Party which shall be encumbered by the Real Estate
Collateral Documents.
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Real Estate Collateral Documents shall mean mortgages
or deeds of trust and assignments of leases, rents, other income and contracts,
indemnity agreements and the other collateral documents listed on Schedule
1.1(R) hereto each in substantially the form set forth in Exhibit 1.1(R) hereto
and such other collateral documents as the Agent may request, all in form and
substance satisfactory in all respects to the Agent with respect to the Real
Estate Collateral, executed and delivered by a Loan Party to the Agent for the
benefit of the Banks.
Regulated Substances shall mean any substance,
including any solid, liquid, semisolid, gaseous, thermal, thoriated or
radioactive material, refuse, garbage, wastes, chemicals, petroleum products,
by-products, coproducts, impurities, dust, scrap, heavy metals, any substance
defined as a "hazardous substance," "pollutant," "pollution," "contaminant,"
"hazardous or toxic substance," "extremely hazardous substance," "toxic
chemical," "toxic waste," "hazardous waste," "industrial waste," "residual
waste," "solid waste," "municipal waste," "mixed waste," "infectious waste,"
"chemotherapeutic waste," "medical waste," "regulated substance" or any related
materials, substances or wastes as now or hereafter defined pursuant to any
Environmental Laws, ordinances, rules, regulations or other directives of any
Official Body, the generation, manufacture, extraction, processing,
distribution, treatment, storage, disposal, transport, recycling, reclamation,
use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying,
discharge, escape, release or other management or mismanagement of which is
regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve System, as amended
from time to time.
Reimbursement Obligation shall have the meaning
assigned to such term in Section 2.9.4(i).
Reportable Event means a reportable event described
in Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Requested Increase shall have the meaning assigned to
such term in Section 2.11(a).
Required Advance shall have the meaning assigned to
such term in Section 2.2.
Required Banks shall mean at any time when there are
less than three (3) Banks party to this Agreement, all of the Banks and, at any
time when there are three (3) or more Banks party to this Agreement (i) if
there are no Loans outstanding, Banks whose Commitments aggregate at least
66-2/3% of the Commitments of all of the Banks, or (ii) if there are Loans
outstanding, Banks whose Loans outstanding aggregate at least 66-2/3% of the
total principal amount of the Loans outstanding hereunder.
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Revolving Credit Commitment or Commitment shall mean,
as to any Bank at any time, the amount initially set forth opposite its name on
Schedule 1.1(B) in the column labeled "Amount of Commitment for Revolving
Credit Loans," and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, and Revolving Credit Commitments or Commitments shall
mean the aggregate Revolving Credit Commitments of all of the Banks.
Revolving Facility Usage shall mean at any time the
sum of the Revolving Credit Loans outstanding and the Letter of Credit
Outstandings.
Security Agreement shall mean the Security Agreement
in substantially the form of Exhibit 1.1(S) executed and delivered by each of
the Loan Parties to the Agent for the benefit of the Banks.
Shares shall have the meaning assigned to that term
in Section 6.1.2.
Subsidiary of any Person at any time shall mean (i)
any corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, or any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries, or (ii) any corporation, trust, partnership or other
entity which is controlled or capable of being controlled by such Person or one
or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to
that term in Section 6.1.3.
Tenant Lease shall mean any tenant lease of a
Collateral Pool Property other than any Guest Lease or any lease for laundry
facilities that is terminable by the Loan Party which is a party thereto upon
no more than thirty (30) days' notice.
Transferor Bank shall mean the selling Bank pursuant
to an Assignment and Assumption Agreement.
UCC Collateral shall mean the personal property of
the Loan Parties in which security interests are granted to the Banks under the
Security Agreement and the Real Estate Collateral Documents.
Uniform Commercial Code shall have the meaning
assigned to that term in Section 6.1.16.
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1.2 Construction.
Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other Loan Documents:
1.2.1 Number; Inclusion.
references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the phrase
"including without limitation";
1.2.2 Determination.
references to "determination" of or by the Agent or
the Banks shall be deemed to include good-faith estimates by the Agent or the
Banks (in the case of quantitative determinations) and good-faith beliefs by
the Agent or the Banks (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
whenever the Agent or the Banks are granted the right
herein to act in its or their sole discretion or to grant or withhold consent
such right shall be exercised in good-faith;
1.2.4 Documents Taken as a Whole.
the words "hereof," "herein," "hereunder," "hereto"
and similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any particular
provision of this Agreement or such other Loan Document;
1.2.5 Headings.
the section and other headings contained in this
Agreement or such other Loan Document and the Table of Contents (if any),
preceding this Agreement or such other Loan Document are for reference purposes
only and shall not control or affect the construction of this Agreement or such
other Loan Document or the interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Loan Document, as the case
may be, unless otherwise specified;
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1.2.7 Persons.
reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement or other Loan Document, as the case may be, and
reference to a Person in a particular capacity excludes such Person in any
other capacity;
1.2.8 Modifications to Documents.
reference to any agreement (including this Agreement
and any other Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or instrument
as amended, modified, replaced, substituted for, superseded or restated;
1.2.9 From, To and Through.
relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding," and "through"
means "through and including"; and
1.2.10 Shall; Will.
references to "shall" and "will" are intended to have
the same meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP.
2. REVOLVING CREDIT FACILITY
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Bank severally agrees
to make Revolving Credit Loans to the Borrower at any time or from time to time
on or after the date hereof to the Expiration Date provided, that, after giving
effect to such Revolving Credit Loans (i) the aggregate principal amount of
each Bank's Revolving Credit Loans outstanding hereunder shall not exceed at
any one time such Bank's Revolving Credit Commitment minus such Bank's Ratable
Share of the Letter of Credit Outstandings and (ii) the Revolving Facility
Usage hereunder shall not exceed
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the Borrowing Base. Within such limits of time and amount and subject to the
other provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.
2.2 Nature of Banks' Obligations with Respect to
Revolving Credit Loans.
Each Bank shall be obligated to participate in each request
for Revolving Credit Loans pursuant to Section 2.5 in accordance with its
Ratable Share (a "Required Advance"). The aggregate of each Bank's Revolving
Credit Loans outstanding hereunder to the Borrower at any time shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the Letter of
Credit Outstandings. The obligations of each Bank hereunder are several. The
failure of any Bank to perform its obligations hereunder shall not affect the
Obligations of the Borrower to any other party nor shall any other party be
liable for the failure of such Bank to perform its obligations hereunder. The
Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
2.3 Commitment Fees.
Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "Commitment Fee") equal to 1/8% per annum
from the Closing Date through December 31, 1996 and 1/4% per annum after
December 31, 1996 (in each case computed on the basis of a year of 360 days and
actual days elapsed) on the average daily difference between the amount of such
Bank's Revolving Credit Commitment as the same may be constituted from time to
time and the Revolving Facility Usage. All Commitment Fees shall be payable in
arrears on the first Business Day of each calendar quarter after the date
hereof and on the Expiration Date or upon acceleration of the Notes.
2.4 Delinquent Bank.
No Bank that has failed to make any Required Advance or other
payment due from such Bank to the Agent in accordance with the provisions of
this Agreement within three (3) Business Days after receiving notice that such
Required Advance or other payment is due (a "Delinquent Bank") shall be
entitled to (a) its Ratable Share of any payment received by the Agent until
all Obligations owed to the non-delinquent Banks have been satisfied in full;
(b) the proceeds of any Collateral until all Obligations owed to the
non-delinquent Banks have been satisfied in full; or (c) give or deny any
approval or consent to be given by the Banks hereunder, and such delinquent
Bank's Commitment shall be deducted from the aggregate amount of the Loan for
purposes of determining whether the Banks' or the Required Banks' approval or
consent has been obtained. Upon the cure by any Delinquent Bank of all defaults
which it may have committed under this Agreement, such Bank shall no longer be
deemed a Delinquent Bank, except that such Bank shall not be entitled, at any
time thereafter, to vote its Commitment with
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respect to any matter requiring the approval or consent of the Required Banks,
unless the Required Banks otherwise agree.
2.5 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request the Banks to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to
existing Revolving Credit Loans pursuant to Section 4.2, by delivering to the
Agent, not later than 10:00 a.m., Louisville time, (i) three (3) Business Days
prior to the proposed Borrowing Date with respect to the making of Revolving
Credit Loans to which the Euro-Rate Option applies or the conversion to or the
renewal of the Euro-Rate Option for any Revolving Credit Loans; and (ii) one
(1) Business Day prior to either the proposed Borrowing Date with respect to
the making of a Revolving Credit Loan to which the Base Rate Option applies or
the last day of the preceding Interest Period with respect to the conversion to
the Base Rate Option for any Revolving Credit Loan, of a duly completed request
therefor substantially in the form of Exhibit 2.5 or a request by telephone
immediately confirmed in writing by letter, facsimile or telex in such form
(each, a "Loan Request"), it being understood that the Agent may rely on the
authority of any individual making such a telephonic request without the
necessity of receipt of such written confirmation. Each Revolving Credit Loan
Request shall be irrevocable and shall specify (i) the proposed Borrowing Date;
(ii) the aggregate amount of the proposed Revolving Credit Loans comprising
each Borrowing Tranche, which shall be in integral multiples of $100,000 and
not less than $1,000,000 for each Borrowing Tranche to which the Euro-Rate
Option applies and not less than the lesser of $100,000 or the maximum amount
available for Borrowing Tranches to which the Base Rate Option applies; (iii)
whether the Euro-Rate Option or Base Rate Option shall apply to the proposed
Revolving Credit Loans comprising the Borrowing Tranche; and (iv) in the case
of a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the proposed Revolving Credit Loans comprising such
Borrowing Tranche.
2.6 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan
Request pursuant to Section 2.5, notify the Banks of its receipt of such Loan
Request specifying: (i) the proposed Borrowing Date and the time and method of
disbursement of such Revolving Credit Loans; (ii) the amount and type of each
such Revolving Credit Loan and the applicable Interest Period (if any); and
(iii) the apportionment among the Banks of the Revolving Credit Loans as
determined by the Agent in accordance with Section 2.2. Each Bank shall remit
the principal amount of each Revolving Credit Loan to the Agent such that the
Agent is able to, and the Agent shall, to the extent the Banks have made funds
available to it for such purpose, fund such Revolving Credit Loans to the
Borrower in U.S. Dollars and immediately available funds at the Principal
Office prior to 2:00 p.m., Louisville time, on the Borrowing Date, provided
that if any Bank fails to remit such funds to the Agent in a timely manner, the
Agent may elect in its sole
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discretion to fund with its own funds the Revolving Credit Loans of such Bank
on the Borrowing Date, and such Bank shall be subject to the repayment
obligation in Section 10.16.
2.7 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank,
together with interest thereon, shall be evidenced by a Revolving Credit Note
dated the Closing Date payable to the order of such Bank in a face amount equal
to the Revolving Credit Commitment of such Bank.
2.8 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used for
general corporate purposes, including without limitation the acquisition,
construction and renovation of extended stay lodging facilities and related
equity investments.
2.9 Letter of Credit Subfacility.
2.9.1 Issuance of Letters of Credit.
Borrower may request the issuance of a letter of
credit (each a "Letter of Credit") on behalf of itself or another Loan Party by
delivering to the Agent a completed application and agreement for letters of
credit in such form as the Agent may specify from time to time by no later than
10:00 a.m., Louisville time, at least five (5) Business Days, or such shorter
period as may be agreed to by the Agent, in advance of the proposed date of
issuance. Subject to the terms and conditions hereof and in reliance on the
agreements of the other Banks set forth in this Section 2.9, the Agent will
issue a Letter of Credit provided that each Letter of Credit shall (A) have a
maximum maturity of twelve (12) months from the date of issuance, (B) in no
event expire later than one Business Day prior to the Expiration Date and
provided that in no event shall (i) the Letter of Credit Outstandings exceed,
at any one time, $5,000,000 or (ii) the Revolving Facility Usage exceed, at any
one time, the lesser of (a) the Revolving Credit Commitments or (b) the
Borrowing Base.
2.9.2 Participations.
Immediately upon issuance of each Letter of Credit,
and without further action, each Bank shall be deemed to, and hereby agrees
that it shall, have irrevocably purchased for such Bank's own account and risk
from the Agent an individual participation interest in such Letter of Credit
and drawings thereunder in an amount equal to such Bank's Ratable Share of the
maximum amount which is or at any time may become available to be drawn
thereunder, and each such Bank shall be responsible to reimburse the Agent
immediately for its Ratable Share of any disbursement under any Letter of
Credit which has not been reimbursed by Borrower in accordance with Section
2.9.4.
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2.9.3 Letter of Credit Fees.
The Borrower shall pay (i) to the Agent for the
ratable account of the Banks a fee (the "Letter of Credit Fee") equal to 23%
per annum, and (ii) to the Agent for its own account a fronting fee equal to c%
per annum, which fees shall be computed on the daily average Letter of Credit
Outstanding and shall be payable quarterly in arrears commencing with the first
Business Day of each calendar quarter following issuance of each Letter of
Credit and on the Expiration Date. The Borrower shall also pay to the Agent for
the Agent's sole account the Agent's then in effect customary fees and
administrative expense payable with respect to the Letters of Credit as the
Agent may generally charge or incur from time to time in connection with the
issuance, maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit.
2.9.4 Disbursements, Reimbursement.
(i) Borrower shall be obligated immediately
to reimburse Agent for all amounts which Agent is required to advance pursuant
to the Letters of Credit. Such amounts advanced shall become, at the time the
amounts are advanced, Revolving Credit Loans from the Banks. Such Revolving
Credit Loans shall bear interest at the rate applicable under the Base Rate
Option unless the Borrower elects to have a different Interest Rate Option
apply to such Revolving Credit Loans pursuant to and in accordance with the
provisions contained in Section 4.1.
(ii) The Agent will notify the (A) Borrower
of each demand or presentment for payment or other drawing under each Letter of
Credit, and (B) Banks of the amount required to be advanced pursuant to the
Letters of Credit. Before 10:00 a.m., Louisville time, on the date of any
advance the Agent is required to make pursuant to the Letters of Credit, each
Bank shall make available such Bank's Ratable Share of such advance in
immediately available funds to the Agent.
2.9.5 Documentation.
Each Loan Party agrees to be bound by the terms of
the Agent's application and agreement for Letters of Credit and the Agent's
written regulations and customary practices relating to Letters of Credit,
though such interpretation may be different from the such Loan Party's own. In
the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that,
except in the case of gross negligence or willful misconduct, the Agent shall
not be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following any Loan Party's instructions or those contained in
the Letters of Credit or any modifications, amendments or supplements thereto.
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2.9.6 Determinations to Honor Drawing Requests.
In determining whether to honor any request for
drawing under any Letter of Credit by the beneficiary thereof, the Agent shall
be responsible only to determine that the documents and certificates required
to be delivered under such Letter of Credit have been delivered and that they
comply on their face with the requirements of such Letter of Credit.
2.9.7 Nature of Participation and Reimbursement
Obligations.
The obligation of the Banks to participate in Letters
of Credit pursuant to Section 2.9.2 and the obligation of the Banks pursuant to
Section 2.9.4 to fund Revolving Credit Loans upon a draw under a Letter of
Credit and the Obligations of the Borrower to reimburse the Agent upon a draw
under Letter of Credit pursuant to Section 2.9 shall be absolute unconditional
and irrevocable, and shall be performed strictly in accordance with the terms
of such sections under all circumstances, including the following
circumstances:
(i) the failure of any Loan Party or any
other Person to comply with the conditions set forth in Sections 2.1, 2.5, 2.6
or 7.2 or as otherwise set forth in this Agreement for the making of a Revolving
Credit Loan, it being acknowledged that such conditions are not required for the
making of a Revolving Credit Loan under Section 2.9.4;
(ii) any lack of validity or
enforceability of any Letter of Credit;
(iii) the existence of any claim, set-off,
defense or other right which any Loan Party or any Bank may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the Agent or other Bank or any
other Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Loan Party or Subsidiaries of a Loan Party and the
beneficiary for which any Letter of Credit was procured);
(iv) any draft, demand, certificate or
other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(v) payment by the Agent under any
Letter of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit;
(vi) any adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of any Loan Party or Subsidiaries of a Loan Party;
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(vii) any breach of this Agreement or
any other Loan Document by any party thereto;
(viii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;
(ix) the fact that an Event of Default
or a Potential Default shall have occurred and be continuing; or
(x) the Expiration Date shall have
passed or this Agreement or the Commitments hereunder shall have been
terminated.
2.9.8 Indemnity.
In addition to amounts payable as provided in Section
10.5, the Borrower hereby agrees to protect, indemnify, pay and save harmless
the Agent from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which the
Agent may incur or be subject to as a consequence, direct or indirect, of (i)
the issuance of any Letter of Credit, other than as a result of (A) the gross
negligence or willful misconduct of the Agent as determined by a final judgment
of a court of competent jurisdiction or (B) subject to the following clause
(ii), the wrongful dishonor by the Agent of a proper demand for payment made
under any Letter of Credit or (ii) the failure of the Agent to honor a drawing
under any such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government
or governmental authority (all such acts or omissions herein called
"Governmental Acts").
2.9.9 Liability for Acts and Omissions.
As between any Loan Party and the Agent, such Loan
Party assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii)
failure of the beneficiary of any such Letter of Credit to comply fully with
any conditions required in order to draw upon such Letter of Credit; (iv)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any
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document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the control of
the Agent, including any Governmental Acts, and none of the above shall affect
or impair, or prevent the vesting of, any of the Agent's rights or powers
hereunder.
In furtherance and extension and not in limitation of
the specific provisions set forth above, any action taken or omitted by the
Agent under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in
good-faith, shall not put the Agent under any resulting liability to the
Borrower.
The Banks and any Loan Party may not commence a
proceeding against the Agent for wrongful disbursement under a Letter of Credit
as a result of acts or omissions constituting gross negligence or willful
misconduct of the Agent, until the Banks have made and the Borrower has repaid
the Revolving Credit Loans described in Section 2.9.4.
2.10 Increase in Commitments.
2.10.1 Existing Banks.
Subject to the limitations contained in Section
2.10.3, the Borrower, after the Closing Date, may make one (1) request for an
increase in the Revolving Credit Commitments of the Banks by sending a notice
thereof to all of the Banks and the Agent. Such notice shall specify the total
amount of increase requested by the Borrower (the "Requested Increase") which
amount shall be at least $10,000,000 and shall not exceed the amount permitted
in Section 2.10.3 below.
2.10.2 New Banks.
Subject to the limitations contained in Section
2.10.3, the Agent upon receipt of a Requested Increase may request that a new
bank or banks join this Agreement and provide a Commitment hereunder. Unless
the Borrower objects within ten (10) Business Days of notice from the Agent of
a proposed new bank or banks, such bank or banks selected by the Agent shall
join this Agreement pursuant to the procedures contained in Section 11.11.
2.10.3 Limitations on Increases.
Borrower may not request an increase in the Revolving
Credit Commitments and the Revolving Credit Commitments shall not be increased
pursuant to Section 2.10.1 or 2.10.2 if (i) there exists an Event of Default or
Potential Default on the date of such request or on the effective date of such
increase; or (ii) after giving effect to the proposed increase in Revolving
Credit Commitments, the Revolving Credit Commitments shall exceed $50,000,000.
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2.11 Reduction of Commitments.
The Borrower shall have the right, upon not less than
five (5) Business Days' prior written notice to the Agent, to permanently
reduce, at any one time, in a principal amount of not less than $10,000,000 (so
long as after giving effect to such reduction, the Revolving Credit Commitments
are not less than $25,000,000 in the aggregate), or at any time, terminate the
Revolving Credit Commitments without penalty or premium, except as hereinafter
set forth, provided that any such reduction or termination shall be accompanied
by (a) the payment in full of any Commitment Fee then accrued on the amount of
such reduction or termination and (b) prepayment of the Revolving Credit Notes,
together with the full amount of interest accrued on the principal sum to be
prepaid (and all amounts referred to in Section 5.6 hereof), to the extent that
the aggregate amount thereof then outstanding exceeds the Revolving Credit
Commitments as so reduced or terminated. From the effective date of any such
reduction or termination the obligations of Borrower to pay the Commitment Fee
pursuant to Section 2.3 shall correspondingly be reduced or cease.
3. COLLATERAL POOL PROPERTIES
3.1 Acceptance of Collateral Pool Properties.
3.1.1 Acceptance Generally.
Subject to compliance with the terms and conditions
of Section 7.1, the Banks have accepted the properties listed on Schedule
1.1(C) as of the Closing Date as Collateral Pool Properties. If the Borrower
desires that the Banks accept an additional property as a Collateral Property,
the Borrower shall so notify the Agent and the Agent shall promptly notify each
other Bank. No such additional property will be evaluated by the Banks as a
potential Collateral Pool Property unless the Borrower delivers to the Agent in
form and substance acceptable to the Agent the items set forth on Schedule
1.1(R). If, after receipt and review of the items set forth on Schedule 1.1(R),
the Agent is prepared to proceed with acceptance of such property as a
Collateral Pool Property, the Agent will so notify the Borrower, and the Agent
will obtain an Appraisal of such property in order to determine the As Is Value
thereof. After approving such As Is Value , the Agent will submit the foregoing
documents and information and the As Is Value to the Banks, for their
consideration in deciding whether to accept or reject the property as a
Collateral Pool Property; such decision will be made by all of the Banks. The
Banks agree to make a decision with respect to such property within fifteen
(15) Business Days after the receipt of such documents and information and the
As Is Value, provided that the failure of any Bank to respond within such time
period shall be deemed to constitute such Bank's acceptance of such property as
a Collateral Pool Property. If the Banks agree to accept such property as a
Collateral Pool Property, upon execution and delivery of documents and
completion of all other closing requirements imposed by the Agent (including
without limitation provision of the documents or supplements thereto described
on Schedule 1.1(R), and such other
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items or documents as may be appropriate under the circumstances, including
updates and modifications of any documents previously delivered), such property
shall become a Collateral Pool Property.
3.1.2 Collateral Pool Addition Fee.
If more than eight (8) properties are added to the
Collateral Pool in any calendar year during the term hereof, the Borrower shall
pay to each Bank a fee in the amount of $500.00 for each property in excess in
eight (8); provided that the aggregate amount of such fees paid to the Banks
for each such property shall not exceed $2,500.
3.2 Release of Collateral Pool Properties.
In connection with the sale to or refinancing by a third party
of a Collateral Pool Property, from time to time the Borrower may request, upon
not less than thirty (30) days' prior written notice to the Agent (and the
Agent shall promptly send a copy thereof to each other Bank), that a Collateral
Pool Property be released from the Liens created by the Real Estate Collateral
Documents applicable thereto, which release ("Property Release") shall be
delivered by the Agent if all of the following conditions are satisfied as of
the date of such Property Release:
(a) no Event of Default or Potential Default has
occurred and is then continuing or will occur after giving effect to such
Property Release and the reduction in the Collateral Pool Value by reason of
the release of such Collateral Pool Property;
(b) the Borrower shall have delivered to the
Agent a Borrowing Base Certificate reflecting the Borrowing Base after giving
effect to such Property Release;
(c) the Agent shall have determined that the
outstanding principal balance of the Loans will not exceed the Borrowing Base
after giving effect to such Property Release and any prepayment to be made
and/or the acceptance of any property as additional or replacement Collateral
Pool Property to be given concurrently with such Property Release; and
(d) the title insurance policy or policies issued
in favor of the Agent shall, at the request of the Agent, be endorsed to
reflect such release of Collateral, and the Borrower shall pay all costs and
expenses reasonably incurred by or for the account of the Agent in connection
with such Property Release.
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3.3 Borrowing Base Determinations
3.3.1 Appraisals.
The As Is Value of a Collateral Pool Property or
Properties shall be determined or redetermined, as applicable, under each of
the following circumstances:
(i) upon initial acceptance of a property
as a Collateral Pool Property, the Agent will determine the As Is Value thereof;
(ii) the As Is Value of all Collateral Pool
Properties (based upon preparation of current Appraisals) will be redetermined
annually, as provided in Section 3.4.9.
(iii) from time to time a Collateral Pool
Property may be re-appraised, at the Borrower's request, upon notice by the
Borrower to Agent to re-appraise a Collateral Pool Property, in which event
Agent shall cause an Appraisal thereof to be made; and
(iv) at any time and from time to time upon
five (5) Business Days' prior written notice to the Borrower, the Agent may
(and shall at the direction of the Required Banks) redetermine the As Is Value
of a Collateral Pool Property or Properties in any of the following
circumstances:
(A) if a material adverse
change occurs with respect to a Collateral Pool
Property, including, without limitation, a material
deterioration in the Net Operating Income of a
Collateral Pool Property, or a major casualty or
condemnation or a material change in the market
conditions affecting such Collateral Pool Property;
or
(B) if necessary in order to
comply with any Law applicable to any Bank.
Any As Is Value so determined or redetermined shall be submitted by the Agent
to the Borrower and to the Lenders.
3.3.2 Borrowing Base Value.
In the event the As Is Value of any Collateral Pool
Property is increased, such increase shall not become effective until the
Borrower delivers to the Agent an endorsement, if necessary, to the Agent's
title insurance policy increasing the amount thereof as related to such
Collateral Pool Property by the adjustment to the Collateral Pool Value.
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3.4 Covenants Relating to the Collateral Pool and the
Collateral Pool Properties.
The Borrower covenants and agrees that until payment in full
of the Loans and interest thereon, satisfaction of all of the Borrower's other
Obligations under the Loan Documents, expiration or termination of all Letters
of Credit and termination of the Revolving Credit Commitments, the Borrower
shall comply with the following covenants:
3.4.1 Minimum Collateral Pool Properties.
The Collateral Pool shall consist of at least three
(3) Collateral Pool Properties.
3.4.2 Pro Forma Debt Service Coverage Ratio.
The Pro Forma Debt Service Coverage Ratio as of the
end of each fiscal quarter of the Borrower for the fiscal quarter then ending
shall not be less than 2:25 to 1:00.
3.4.3 Extended-Stay Lodging Facilities.
Each Collateral Pool Property shall be an
extended-stay lodging facility (as determined by the Agent) owned or controlled
by the Borrower and, without the prior written approval of the Required Banks,
shall not contain more than 175 rooms.
3.4.4 Insurance, Casualty.
The Borrower shall maintain or cause to be maintained
insurance covering the Collateral Pool Properties in such amounts and covering
such risks as is set forth in Schedule 3.4.4 or otherwise required from time to
time pursuant to the Real Estate Collateral Documents.
3.4.5 Guest Leases; Tenant Leases; Major
Agreements.
All Guest Leases with respect to the Collateral Pool
Properties shall be on market terms and in substantial conformity with the
Borrower's standard form of Guest Lease, which form (including revisions
thereto) shall be submitted by the Borrower to the Agent for approval in
writing, which approval shall not be unreasonably withheld. Unless otherwise
consented to by the Agent in writing, all Tenant Leases with respect to the
Collateral Pool Properties shall (i) be to third parties under market terms,
(ii) provide for uses of such Collateral Pool Property that are consistent with
first-class management thereof, and (iii) contain provisions regarding
insurance, waiver of claims, damage and destruction, condemnation, notice to
mortgagee and subordination and attornment and other material matters in
substantial conformity with the standard form(s) of space lease utilized by the
Borrower for each Collateral Pool
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Property, all of which standard forms (including revisions thereto) shall be
submitted by the Borrower to the Agent for approval in writing, which approval
shall not be unreasonably withheld. Upon request by the Agent, the Borrower
shall provide to the Agent a copy of each Tenant Lease, including all
amendments, estoppel certificates and related documentation. In addition,
promptly following the execution of any Major Agreement (or the termination or
material modification thereof), Borrower shall provide a copy thereof to the
Agent, and the Agent shall promptly provide a copy thereof to each other Bank.
Upon the execution of any Major Agreement (or the termination or material
modification thereof) not approved in writing by the Agent prior to such
execution, the Agent may (and shall at the direction of Required Banks)
redetermine the As Is Value for the subject Collateral Pool Property; such
reappraisal right shall be in addition to the rights to re-appraise set forth
in Section 3.3.1(iv).
3.4.6 Non-Disturbance Agreements.
Borrower will obtain or cause to be obtained, prior
to the Closing Date, from all tenants under current Tenant Leases an estoppel,
subordination, non-disturbance and/or attornment agreement in a form approved
by the Agent (each a "Non-Disturbance Agreement"). If any Non-Disturbance
Agreement asserts a material claim or set-off right by the tenant, which is
materially inconsistent with the rent roll for such Collateral Pool Property,
or is delivered in a form materially different from the Non-Disturbance
Agreement, then, in any such circumstance, the Agent shall have the right to
establish an appropriate reserve until the Agent determines that the
circumstance leading to such reserve as aforesaid has been favorably resolved.
The Borrower shall obtain, or cause to be obtained, from each tenant under a
Tenant Lease entered into after the Closing Date, a Non-Disturbance Agreement
in a form approved by the Agent as a part of the approval of such Tenant Lease.
3.4.7 Management Agreements.
The Borrower or an Affiliate of the Borrower have
entered into the management agreements identified on Schedule 3.4.7 with
respect to the Collateral Pool Properties. The Borrower shall not enter into
any other management agreement, or hereafter amend in any material manner or
terminate, a management agreement with respect to any Collateral Pool Property,
except upon thirty (30) days' prior written notice to and approval by the
Agent, which approval shall not be unreasonably withheld. The Borrower shall
timely provide to the Agent a copy of any proposed management agreement, and
the Agent shall promptly provide a copy thereof to each other Bank. Without
limiting in any way the Agent's approval rights with respect thereto, each
proposed management agreement shall include an absolute right of Borrower or
its Affiliate to terminate such agreement upon thirty (30) days' notice to the
property manager and shall provide for management fees, reimbursements or other
payments to the property manager at levels not in excess of applicable market
levels.
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3.4.8 Major Construction.
If the Borrower or any of its Affiliates intends to
engage in any construction, remodeling or demolition project or series of
related projects with respect to a Collateral Pool Property (each, a
"Construction Project"), the aggregate cost of which will exceed Ten Percent
(10%) of the As Is Value of such property, Borrower shall first notify the
Agent, and such Construction Project shall be subject to the Required Banks'
approval, which approval shall not be unreasonably withheld.
3.4.9 Annual Appraisals.
Each of the Loan Parties shall cooperate with
appraisers engaged by the Agent and provide such information in its possession
as such appraisers reasonably require to complete annually for each Collateral
Pool Property by no later than one (1) year after the date of the most recent
appraisal for such Collateral Pool Property. The Borrower shall pay for the
cost of such annual appraisals.
3.4.10 Borrowing Base.
The Borrower shall not at any time permit the
Revolving Credit Usage to exceed the Borrowing Base.
4. INTEREST RATES
4.1.1 Interest Rate Options.
The Borrower shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate
Option, Euro-Rate Option set forth below applicable to the Loans, it being
understood that, subject to the provisions of this Agreement, the Borrower may
select different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche, provided that there
shall not be at any one time outstanding more than four (4) Borrowing Tranches
in the aggregate among all the Loans accruing interest at a Euro-Rate Option.
If at any time the designated rate applicable to any Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on such Bank's
Loan shall be limited to such Bank's highest lawful rate.
4.1.1 Revolving Credit Interest Rate Options.
The Borrower shall have the right to select from the
following Interest Rate Options applicable to the Revolving Credit Loans:
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(i) Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 360 days and actual days
elapsed) equal to the Base Rate plus .75%, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate; or
(ii) Euro-Rate Option: A rate per
annum (computed on the basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus 2.25%.
4.1.2 Rate Quotations.
The Borrower may call the Agent on or before the date
on which a Loan Request is to be delivered to receive an indication of the
rates then in effect, but it is acknowledged that such projection shall not be
binding on the Agent or the Banks nor affect the rate of interest which
thereafter is actually in effect when the election is made.
4.2 Interest Periods.
At any time when the Borrower shall select, convert to or
renew a Euro-Rate Option, the Borrower shall notify the Agent thereof at least
three (3) Business Days prior to the effective date of such Euro-Rate Option by
delivering a Loan Request. The notice shall specify an interest period (the
"Interest Period") during which such Interest Rate Option shall apply, such
Interest Period to be one (1), two (2), three (3), six (6) or, if available to
all the Banks, twelve (12) Months in the event of a Euro-Rate Option, provided,
that:
4.2.1 Ending Date and Business Day.
any Interest Period which would otherwise end on a
date which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day;
4.2.2 Amount of Borrowing Tranche.
each Borrowing Tranche to which a Euro-Rate applies
shall be in integral multiples of $100,000 and not less than $1,000,000.
4.2.3 Termination Before Expiration Date.
the Borrower shall not select, convert to or renew an
Interest Period that would end after the Expiration Date;
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4.2.4 Renewals.
in the case of the renewal of a Euro-Rate Option at
the end of an Interest Period, the first day of the new Interest Period shall
be the last day of the preceding Interest Period, without duplication in
payment of interest for such day; and
4.2.5 Completion of Syndication.
Until the earlier to occur of (i) the date on which
the Commitment of PNC is reduced below $15,000,000 or (ii) December 26, 1996,
the only Interest Period available for a Euro-Rate Option shall be a single one
(1) month Interest Period.
4.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an
Event of Default and until such time such Event of Default shall have been
cured or waived:
4.3.1 Letter of Credit Fees, Interest Rate.
the Letter of Credit Fees and the rate of interest
for each Loan otherwise applicable pursuant to Section 2.9 or Section 4.1,
respectively, shall be increased by 2.0% per annum; and
4.3.2 Other Obligations.
each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of
interest applicable under the Revolving Credit Base Rate Option plus an
additional 2% per annum (the "Modified Base Rate") from the time such
Obligation becomes due and payable and until it is paid in full.
4.3.3 Acknowledgment.
The Borrower acknowledges that such increased rates
reflect, among other things, the fact that such Loans or other amounts have
become a substantially greater risk given their default status and that the
Banks are entitled to additional compensation for such risk; and, all such
interest shall be payable by Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable.
4.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise
be determined, the Agent shall have determined that:
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(i) adequate and reasonable means
do not exist for ascertaining such Euro-Rate, or
(ii) a contingency has occurred which
materially and adversely affects the secondary market for negotiable
certificates of deposit maintained by dealers of recognized standing relating
to the London interbank eurodollar market relating to the Euro-Rate, the Agent
shall have the rights specified in Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits Not
Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or
funding of any Loan to which a Euro-Rate Option applies has been made
impracticable or unlawful by compliance by such Bank in good-faith with any Law
or any interpretation or application thereof by any Official Body or with any
request or directive of any such Official Body (whether or not having the force
of Law), or
(ii) such Euro-Rate Option will not
adequately and fairly reflect the cost to such Bank of the establishment or
maintenance of any such Loan, or
(iii) after making all reasonable
efforts, deposits of the relevant amount in Dollars for the relevant Interest
Period for a Loan to which a Euro-Rate Option applies are not available to such
Bank in the London interbank market,
then the Agent shall have the rights specified in Section 4.4.3.
4.4.3 Agent's and Bank's Rights.
In the case of any event specified in subsection
4.4.1 above, the Agent shall promptly so notify the Banks and the Borrower
thereof, and in the case of an event specified in subsection 4.4.2 above, such
Bank shall promptly so notify the Agent and endorse a certificate to such
noticce as to the specific circumstances of such notice, and the Agent shall
promptly send copies of such notice and certificate to the other Banks and the
Borrower. Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given) the obligation of (A) the Banks,
in the case of such notice given by the Agent, or (B) such Bank, in the case of
such notice given by such Bank, to allow the Borrower to select, convert to or
renew a Euro-Rate Option shall be suspended until the Agent shall have later
notified the Borrower, or such Bank shall have later notified the Agent, of the
Agent's or such Bank's, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist. If at
any time the Agent makes a determination under subsection 4.4.1 of this Section
4.4 and the Borrower has previously notified the Agent of its selection of,
conversion to or renewal of a Euro-Rate Option and such Interest Rate Option
has
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not yet gone into effect, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to such Loans. If any Bank notifies the Agent of a
determination under subsection 4.4.2 of this Section 4.4, the Borrower shall,
subject to the Borrower's indemnification Obligations under Section 5.6.2, as
to any Loan of the Bank to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option
otherwise available with respect to such Loan or prepay such Loan in accordance
with Section 5.4. Absent due notice from the Borrower of conversion or
prepayment, such Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Loan upon such specified date.
4.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply
to any Borrowing Tranche of Euro-Rate Loans at the expiration of an existing
Interest Period applicable to such Borrowing Tranche in accordance with the
provisions of Section 4.2, the Borrower shall be deemed to have converted such
Borrowing Tranche to the Base Rate Option commencing upon the last day of the
existing Interest Period, provided that the Agent shall use reasonable efforts
to notify the Borrower if the Borrower fails to select such a new Interest
Period prior to the expiration of an existing one, but the Agent's failure to
provide such notice shall not result in any liability to the Agent or prevent
the conversion to the Base Rate Option if the Borrower fails to select such a
new Interest Period in accordance with the foregoing sentence.
5. PAYMENTS
5.1 Payments.
All payments and prepayments to be made in respect of
principal, interest, Commitment Fees, Letter of Credit Fees, Agent's Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Louisville time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the Banks with
respect to the Loans in U.S. Dollars and in immediately available funds, and
the Agent shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by 11:00
a.m., Louisville time, by the Agent with respect to the Loans and such payments
are not distributed to the Banks on the same day received by the Agent, the
Agent shall pay the Banks the Federal Funds Effective Rate with respect to the
amount of such payments for each day held by the Agent and not distributed to
the Banks. The Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement and shall be deemed an "account stated."
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5.2 Pro Rata Treatment of Banks.
Each borrowing shall be allocated to each Bank according to
its Ratable Share, and each selection of, conversion to or renewal of any
Interest Rate Option and each payment or prepayment by the Borrower with
respect to principal, interest, Commitment Fees, Letter of Credit Fees, or
other fees (except for the Agent's Fee) or amounts due from the Borrower
hereunder to the Banks with respect to the Loans, shall (except as provided in
Section 4.4.2 [Euro- Rate Unascertainable], 5.4.2 [Voluntary Prepayments] or
5.6.1 [Additional Compensation in Certain Circumstances]) be made in proportion
to the applicable Loans outstanding from each Bank and, if no such Loans are
then outstanding, in proportion to the Ratable Share of each Bank.
5.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall
be due and payable in arrears on the first Business Day of each month after the
date hereof and on the Expiration Date or upon acceleration of the Notes.
Interest on Loans to which the Euro-Rate Option applies shall be due and
payable on the last day of each Interest Period for those Loans and, if any
such Interest Period is longer than one (1) month, also on the last day of
every month during such period. Interest on mandatory prepayments of principal
under Section 5.5 shall be due on the date such mandatory prepayment is due.
Interest on the principal amount of each Loan or other monetary Obligation
shall be due and payable on demand after such principal amount or other
monetary Obligation becomes due and payable (whether on the stated maturity
date, upon acceleration or otherwise).
5.4 Voluntary Prepayments.
5.41 Right to Prepay.
The Borrower shall have the right at its option from
time to time to prepay the Loans in whole or part without premium or penalty
(except as provided in subsection 5.4.2 below or in Section 5.6):
(i) at any time with respect to
any Loan to which the Base Rate Option applies,
(ii) on the last day of the
applicable Interest Period with respect to Loans to which a Euro-Rate Option
applies,
(iii) on the date specified in a
notice by any Bank pursuant to Section 4.4.2 [Euro-Rate Unascertainable] with
respect to any Loan to which a Euro-Rate Option applies.
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Whenever the Borrower desires to prepay any part of
the Loans, it shall provide a prepayment notice to the Agent at least one (1)
Business Day prior to the date of prepayment of Loans setting forth the
following information:
(y) the date, which shall be a Business Day, on
which the proposed prepayment is to be made;
(z) the total principal amount of such
prepayment, which shall not be less than $100,000.
All prepayment notices shall be irrevocable. The
principal amount of the Loans for which a prepayment notice is given, together
with interest on such principal amount except with respect to Loans to which
the Base Rate Option applies, shall be due and payable on the date specified in
such prepayment notice as the date on which the proposed prepayment is to be
made. If the Borrower prepays a Loan but fails to specify the applicable
Borrowing Tranche which the Borrower is prepaying, the prepayment shall be
applied first to Loans to which the Base Rate Option applies, and then to Loans
to which the Euro-Rate Option applies. Any prepayment hereunder shall be
subject to the Borrower's Obligation to indemnify the Banks under Section
5.6.2.
5.4.2 Replacement of a Bank.
In the event any Bank (i) gives notice under Section
4.4.2 or Section 5.6.1, (ii) does not fund Revolving Credit Loans because the
making of such Loans would contravene any Law applicable to such Bank, (iii)
does not approve any action as to which consent of the Required Banks is
requested by the Borrower and obtained hereunder, or (iv) becomes subject to
the control of an Official Body (other than normal and customary supervision),
then the Borrower shall have the right at its option, with the consent of the
Agent, which shall not be unreasonably withheld, to prepay the Loans of such
Bank in whole, together with all interest accrued thereon, and terminate such
Bank's Commitment within ninety (90) days after (w) receipt of such Bank's
notice under Section 4.4.2 or 5.6.1, (x) the date such Bank has failed to fund
Revolving Credit Loans because the making of such Loans would contravene Law
applicable to such Bank, (y) the date of obtaining the consent which such Bank
has not approved, or (z) the date such Bank became subject to the control of an
Official Body, as applicable; provided that the Borrower shall also pay to such
Bank at the time of such prepayment any amounts required under Section 5.6 and
any accrued interest due on such amount and any related fees; provided,
however, that the Commitment of such Bank shall be provided by one or more of
the remaining Banks or a replacement bank acceptable to the Agent; provided,
further, the remaining Banks shall have no obligation hereunder to increase
their Commitments. Notwithstanding the foregoing, the Agent may only be
replaced subject to the requirements of Section 10.14 and provided that all
Letters of Credit have expired or been terminated or replaced.
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5.5 Mandatory Prepayments.
5.5.1 Borrowing Base Exceeded.
Whenever the Revolving Facility Usage exceeds the
Borrowing Base, the Borrower shall make, within ten (10) Business Days after
the Borrower learns of such excess and whether or not the Agent has given
notice to such effect, a mandatory prepayment of principal equal to the excess
of the Revolving Facility Usage over the Borrowing Base, together with accrued
interest on such principal amount at the default rate set forth in Section 4.3.
5.6 Additional Compensation in Certain Circumstances.
5.6.1 Increased Costs or Reduced Return
Resulting From Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change
in any Law, guideline or interpretation or application thereof by any Official
Body charged with the interpretation or administration thereof or compliance
with any request or directive (whether or not having the force of Law) of any
central bank or other Official Body:
(i) subjects any Bank to any tax
or changes the basis of taxation with respect to this Agreement, the Notes, the
Loans or payments by the Borrower of principal, interest, Commitment Fees, or
other amounts due from the Borrower hereunder or under the Notes (except for
taxes on the overall net income of such Bank),
(ii) imposes, modifies or deems
applicable any reserve, special deposit or similar requirement against credits
or commitments to extend credit extended by, or assets (funded or contingent)
of, deposits with or for the account of, or other acquisitions of funds by, any
Bank, or
(iii) imposes, modifies or deems
applicable any capital adequacy or similar requirement (A) against assets
(funded or contingent) of, or letters of credit, other credits or commitments
to extend credit extended by, any Bank, or (B) otherwise applicable to the
obligations of any Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole
discretion deems to be material, such Bank shall from time to time notify the
Borrower and the Agent of the amount determined in good-faith (using any
averaging and attribution methods employed in good-faith) by such Bank to be
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necessary to compensate such Bank for such increase in cost, reduction of
income or additional expense, provided that a Bank shall not give the Borrower
notice hereunder unless the Bank is generally imposing such increased costs on
its similarly situated customers. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable
by the Borrower to such Bank ten (10) Business Days after such notice is given.
5.6.2 Indemnity.
In addition to the compensation required by
subsection 5.6.1 of this Section 5.6, the Borrower shall indemnify each Bank
against all liabilities, losses or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third parties and
any loss or expense incurred in connection with funds acquired by a Bank to
fund or maintain Loans subject to the Euro-Rate Option) which such Bank
sustains or incurs as a consequence of any
(i) payment, prepayment, conversion
or renewal of any Loan to which the Euro-Rate Option applies on a day other
than the last day of the corresponding Interest Period (whether or not such
payment or prepayment is mandatory, voluntary or automatic and whether or not
such payment or prepayment is then due),
(ii) attempt by the Borrower to
revoke (expressly, by later inconsistent notices or otherwise) in whole or part
any notice relating to Loan Requests under Section 2.5 or Section 4.2 or
prepayments under Section 5.4, or
(iii) default by the Borrower in the
performance or observance of any covenant or condition contained in this
Agreement or any other Loan Document, including any failure of the Borrower to
pay when due (by acceleration or otherwise) any principal, interest, Commitment
Fee or any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it
shall from time to time notify the Borrower of the amount determined in
good-faith by such Bank (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as such
Bank shall deem reasonable) to be necessary to indemnify such Bank for such
loss or expense. Such notice shall set forth in reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrower to
such Bank ten (10) Business Days after such notice is given.
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6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
The Loan Parties, jointly and severally, represent and warrant
to the Agent and each of the Banks as follows:
6.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan
Party is a corporation or partnership, duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization. Each Loan
Party and each Subsidiary of each Loan Party has the lawful power to own or
lease its properties and to engage in the business it presently conducts or
proposes to conduct. On the Closing Date, each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it
or both makes such licensing or qualification necessary.
6.2.2 Capitalization and Ownership.
The authorized capital stock of the Borrower consists
of 100,000,000 shares of common stock, par value $0.01 per share, of which, as
of June 30, 1996, 8,052,956 shares (referred to herein as the "Shares") were
issued and outstanding, and 5,000,000 shares of preferred stock, par value
$1.00 per share, of which no shares are issued and outstanding. All of the
Shares have been validly issued and are fully paid and nonassessable. There are
no options, warrants or other rights outstanding to purchase any such shares
except as indicated on Schedule 6.1.2. A list of executive officers and
directors of the Borrower who own Shares and their respective Share ownership
is also set forth on Schedule 6.1.2.
6.3 Subsidiaries.
Schedule 6.1.3 states the name of each of the
Borrower's Subsidiaries, its jurisdiction of incorporation, its authorized
capital stock, the issued and outstanding shares (referred to herein as the
"Subsidiary Shares") and the owners thereof if it is a corporation and its
outstanding partnership interests (the "Partnership Interest") if it is a
partnership. The Borrower and each Subsidiary of the Borrower has good and
marketable title to all of the Subsidiary Shares and Partnership Interests it
purports to own, free and clear in each case of any Lien. All Subsidiary Shares
and Partnership Interests have been validly issued, and all Subsidiary Shares
are fully paid and nonassessable. All capital contributions and other
consideration required to be made or paid in connection with the issuance of
the Partnership Interests have been made or paid, as the case may be. There are
no options, warrants or other rights outstanding to purchase any such
Subsidiary Shares or Partnership Interests except as indicated on Schedule
6.1.3.
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6.1.4 Power and Authority.
Each Loan Party has full power to enter into,
execute, deliver and carry out this Agreement and the other Loan Documents to
which it is a party, to incur the Indebtedness contemplated by the Loan
Documents and to perform its Obligations under the Loan Documents to which it
is a party, and all such actions have been duly authorized by all necessary
proceedings on its part.
6.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
6.1.6 No Conflict.
Neither the execution and delivery of this Agreement
or the other Loan Documents by any Loan Party nor the consummation of the
transactions herein or therein contemplated or compliance with the terms and
provisions hereof or thereof by them will conflict with, constitute a default
under or result in any breach of (i) the terms and conditions of the
certificate of incorporation, bylaws or other organizational documents of any
Loan Party or (ii) any Law or of any material agreement or instrument or order,
writ, judgment, injunction or decree to which any Loan Party is a party or by
which it is bound or to which it is subject, or result in the creation or
enforcement of any Lien, charge or encumbrance whatsoever upon any property
(now or hereafter acquired) of any Loan Party (other than Liens granted under
the Loan Documents).
6.1.7 Litigation.
There are no actions, suits, proceedings or
investigations pending or, to the knowledge of any Loan Party, threatened
against such Loan Party or any Subsidiary of such Loan Party at law or equity
before any Official Body which individually or in the aggregate may result in
any Material Adverse Change. None of the Loan Parties or any Subsidiaries of
any Loan Party is in violation of any order, writ, injunction or any decree of
any Official Body which may result in any Material Adverse Change.
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6.1.8 Title to Properties.
The real property owned or leased by each Loan Party
and each Subsidiary of each Loan Party is described on Schedule 6.1.8. Each
Loan Party and each Subsidiary of each Loan Party has good and marketable title
to or valid leasehold interest in all properties, assets and other rights which
it purports to own or lease or which are reflected as owned or leased on its
books and records, free and clear of all Liens and encumbrances except
Permitted Liens, and subject to the terms and conditions of the applicable
leases. All leases of property are in full force and effect without the
necessity for any consent which has not previously been obtained upon
consummation of the transactions contemplated hereby.
6.1.9 Financial Statements.
(i) Historical Statements. The
Borrower has delivered to the Agent copies of its audited consolidated year-end
financial statements on a pro forma basis for the fiscal year ended December
31, 1995 (the "Annual Statements"). In addition, the Borrower has delivered to
the Agent copies of its unaudited consolidated interim financial statements for
the fiscal year to date and as of the end of the fiscal quarter ended June 30,
1996 (the "Interim Statements") (the Annual and Interim Statements being
collectively referred to as the "Historical Statements"). The Historical
Statements were compiled from the books and records maintained by the
Borrower's management, are correct and complete and fairly represent the
consolidated financial condition of the Borrower and its Subsidiaries as of
their dates and the results of operations for the fiscal periods then ended and
have been prepared in accordance with GAAP consistently applied, subject (in
the case of the Interim Statements) to normal year-end audit adjustments.
(ii) Financial Projections. The
Borrower has delivered to the Agent financial projections of the Borrower and
its Subsidiaries for the period 1996-1998 derived from various assumptions of
the Borrower's management (the "Financial Projections"). The Financial
Projections represent a reasonable range of possible results in light of the
history of the business, present and foreseeable conditions and the intentions
of the Borrower's management. The Financial Projections accurately reflect the
liabilities of the Borrower and its Subsidiaries upon consummation of the
transactions contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial
Statements. Neither the Borrower nor any Subsidiary of the Borrower has any
liabilities, contingent or otherwise, or forward or long-term commitments that
are not disclosed in the Historical Statements or in the notes thereto, and
except as disclosed therein there are no unrealized or anticipated losses from
any commitments of the Borrower or any Subsidiary of the Borrower which may
cause a Material Adverse Change. Since December 31, 1995, no Material Adverse
Change has occurred.
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6.1.10 Margin Stock.
None of the Loan Parties or any Subsidiaries of any
Loan Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Loan has been or will
be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or to refund Indebtedness originally incurred for
such purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of Governors
of the Federal Reserve System. None of the Loan Parties or any Subsidiary of
any Loan Party holds or intends to hold margin stock in such amounts that more
than 25% of the reasonable value of the assets of any Loan Party or Subsidiary
of any Loan Party are or will be represented by margin stock.
6.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document,
nor any certificate, statement, agreement or other documents furnished to the
Agent or any Bank in connection herewith or therewith, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. There is no fact
known to any Loan Party which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of
any Loan Party or Subsidiary of any Loan Party which has not been set forth in
this Agreement or in the certificates, statements, agreements or other
documents furnished in writing to the Agent and the Banks prior to or at the
date hereof in connection with the transactions contemplated hereby.
6.1.12 Taxes.
All federal, state, local and other tax returns
required to have been filed with respect to each Loan Party and each Subsidiary
of each Loan Party have been filed, and payment or adequate provision has been
made for the payment of all taxes, fees, assessments and other governmental
charges which have or may become due pursuant to said returns or to assessments
received, except to the extent that such taxes, fees, assessments and other
charges are being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made. There are no agreements or
waivers extending the statutory period of limitations applicable to any federal
income tax return of any Loan Party or Subsidiary of any Loan Party for any
period.
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6.1.13 Consents and Approvals.
Except for the filing of financing statements and the
applicable Real Estate Collateral Documents in the state and county filing
offices, no consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Loan Party,
except as listed on Schedule 6.1.13, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on Schedule
6.1.13.
6.1.14 No Event of Default; Compliance with
Instruments.
No event has occurred and is continuing and no
condition exists or will exist after giving effect to the borrowings to be made
on the Closing Date under the Loan Documents which constitutes an Event of
Default or Potential Default. None of the Loan Parties or any Subsidiaries of
any Loan Party is in violation of (i) any term of its certificate of
incorporation, bylaws, or other organizational documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would constitute a
Material Adverse Change.
6.1.15 Patents, Trademarks, Copyrights,
Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan
Party owns or possesses all the material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises, permits and
rights necessary to own and operate its properties and to carry on its business
as presently conducted and planned to be conducted by such Loan Party or
Subsidiary, without known conflict with the rights of others. All material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party and each Subsidiary of
each Loan Party are listed and described on Schedule 6.1.15.
6.1.16 Security Interests.
The Liens and security interests granted to the Agent
for the benefit of the Banks pursuant to the Pledge Agreement, the Real Estate
Collateral Documents and the Security Agreement in the Collateral (other than
the Collateral Pool Properties) constitute and will continue to constitute
Prior Security Interests under the Uniform Commercial Code as in effect in each
applicable jurisdiction (the "Uniform Commercial Code") or other applicable Law
entitled to all the rights, benefits and priorities provided by the Uniform
Commercial Code or such Law. Upon the filing of financing statements relating
to said security interests in each office and in each jurisdiction where
required in order to perfect the security interests described above, taking
possession of any stock certificates or other certificates evidencing the
Pledged Collateral, and recordation of the Security Agreement in the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, all such action as is necessary or advisable to
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establish such rights of the Agent will have been taken, and there will be upon
execution and delivery of the Pledge Agreement and the Real Estate Collateral
Documents, such filings and such taking of possession, no necessity for any
further action in order to preserve, protect and continue such rights, except
the filing of continuation statements with respect to such financing statements
within six months prior to each five-year anniversary of the filing of such
financing statements. All filing fees and other expenses in connection with
each such action have been or will be paid by the Borrower.
16.1.7 Mortgage Liens.
The Liens granted to the Agent for the benefit of the
Banks pursuant to the Real Estate Collateral Documents constitute a valid first
priority Lien under applicable law. All such action as will be necessary or
advisable to establish such Lien of the Agent and its priority as described in
the preceding sentence will be taken at or prior to the time required for such
purpose, and there will be as of the date of execution and delivery of the Real
Estate Collateral Documents no necessity for any further action in order to
protect, preserve and continue such Lien and such priority.
6.1.18 Status of the Pledged Collateral.
All the shares of capital stock or Partnership
Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreement are or will be upon issuance validly issued and nonassessable
and owned beneficially and of record by the pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge
Agreement and except as the right of the Banks to dispose of the Shares or
Partnership Interests may be limited by the Securities Act of 1933, as amended,
and the regulations promulgated by the Securities and Exchange Commission
thereunder and by applicable state securities laws. There are no shareholder,
partnership or other agreements or understandings with respect to the Shares of
capital stock or Partnership Interests included in the Pledged Collateral
except for the partnership agreements described on Schedule 6.1.18. The Loan
Parties have delivered true and correct copies of such partnership agreements
to the Agent.
6.1.19 Insurance.
Schedule 6.1.19 lists all insurance policies and
other bonds to which any Loan Party or Subsidiary of any Loan Party is a party
on the Closing Date, all of which are valid and in full force and effect. No
notice has been given or claim made and no grounds exist to cancel or avoid any
of such policies or bonds or to reduce the coverage provided thereby. Such
policies and bonds provide adequate coverage from reputable and financially
sound insurers in amounts sufficient to insure the assets and risks of each
Loan Party and each Subsidiary of each Loan Party in accordance with prudent
business practice in the industry of the Loan Parties and their Subsidiaries.
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6.1.20 Compliance with Laws.
The Loan Parties and their Subsidiaries are in
compliance in all material respects with all applicable Laws (in other than
Environmental Laws which are specifically addressed in subsection 6.1.25) in
all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
6.1.21 Material Contracts.
As of the Closing Date, Schedule 6.1.21 lists all
material contracts relating to the business operations of each Loan Party and
each Subsidiary of any Loan Party, including all employee benefit plans and
Labor Contracts. All such material contracts are valid, binding and enforceable
upon such Loan Party or Subsidiary and each of the other parties thereto in
accordance with their respective terms, and there is no default thereunder, to
the Loan Parties' knowledge, with respect to parties other than such Loan Party
or Subsidiary.
6.1.22 Investment Companies.
None of the Loan Parties or any Subsidiaries of any
Loan Party is an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940 and shall not become such an "investment company" or under such "control."
6.1.23 Plans and Benefit Arrangements.
Except as set forth on Schedule 6.1.23:
(i) The Borrower and each member
of the ERISA Group are in compliance in all material respects with any
applicable provisions of ERISA with respect to all Benefit Arrangements, Plans
and Multiemployer Plans. There has been no Prohibited Transaction with respect
to any Benefit Arrangement or any Plan or, to the best knowledge of the
Borrower, with respect to any Multiemployer Plan or Multiple Employer Plan,
which could result in any material liability of the Borrower or any other
member of the ERISA Group. The Borrower and all members of the ERISA Group have
made when due any and all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or any Law
pertaining thereto. With respect to each Plan and Multiemployer Plan, the
Borrower and each member of the ERISA Group (i) have fulfilled in all material
respects their obligations under the minimum funding standards of ERISA, (ii)
have not incurred any liability to the PBGC, and (iii) have not had asserted
against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.
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(ii) To the best of the Borrower's
knowledge, each Multiemployer Plan and Multiple Employer Plan is able to pay
benefits thereunder when due.
(iii) Neither the Borrower nor any
other member of the ERISA Group has instituted or intends to institute
proceedings to terminate any Plan.
(iv) No event requiring notice to
the PBGC under Section 302(f)(4)(A) of ERISA has occurred or is reasonably
expected to occur with respect to any Plan, and no amendment with respect to
which security is required under Section 307 of ERISA has been made or is
reasonably expected to be made to any Plan.
(v) The aggregate actuarial
present value of all benefit liabilities (whether or not vested) under each
Plan, determined on a plan termination basis, as disclosed in, and as of the
date of, the most recent actuarial report for such Plan, does not exceed the
aggregate fair market value of the assets of such Plan.
(vi) Neither the Borrower nor any
other member of the ERISA Group has incurred or reasonably expects to incur any
material withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any other member of the ERISA Group has
been notified by any Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been terminated within the
meaning of Title IV of ERISA and, to the best knowledge of the Borrower, no
Multiemployer Plan or Multiple Employer Plan is reasonably expected to be
reorganized or terminated, within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit
Arrangement is insured, the Borrower and all members of the ERISA Group have
paid when due all premiums required to be paid for all periods through the
Closing Date. To the extent that any Benefit Arrangement is funded other than
with insurance, the Borrower and all members of the ERISA Group have made when
due all contributions required to be paid for all periods through the Closing
Date.
(viii) All Plans, Benefit Arrangements
and Multiemployer Plans have been administered in accordance with their terms
and applicable Law.
6.1.24 Employment Matters.
Each of the Loan Parties is in compliance with the
Labor Contracts and all applicable federal, state and local labor and
employment Laws including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the
failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing,
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handbilling or other work stoppages or slowdowns at facilities of any of the
Loan Parties which in any case would constitute a Material Adverse Change. The
Borrower has delivered to the Agent true and correct copies of each of the
Labor Contracts.
6.1.25 Environmental Matters.
Except as disclosed on Schedule 6.1.25:
(i) None of the Loan Parties or any
Subsidiaries of any Loan Party has received any Environmental Complaint from
any Official Body or private Person alleging that such Loan Party or Subsidiary
or any prior or subsequent owner of the Property is a potentially responsible
party under the Comprehensive Environmental Response, Cleanup and Liability
Act, 42 U.S.C. Section 9601, et seq., and none of the Loan Parties has any
reason to believe that such an Environmental Complaint might be received. There
are no pending or, to any Loan Party's knowledge, threatened Environmental
Complaints relating to any Loan Party or Subsidiary of any Loan Party or, to
any Loan Party's knowledge, any prior or subsequent owner of the Property
pertaining to, or arising out of, any Environmental Conditions.
(ii) Except for conditions,
violations or failures which individually and in the aggregate are not
reasonably likely to result in a Material Adverse Change, there are no
circumstances at, on or under the Property that constitute a breach of or
non-compliance with any of the Environmental Laws, and there are no present or,
to any Loan Party's knowledge, past Environmental Conditions at, on or under
the Property or, to any Loan Party's knowledge, at, on or under adjacent
property, that prevent compliance with the Environmental Laws at the Property.
(iii) Neither the Property nor any
structures, improvements, equipment, fixtures, activities or facilities thereon
or thereunder contain or use Regulated Substances except in material compliance
with Environmental Laws. There are no processes, facilities, operations,
equipment or any other activities at, on or under the Property, or, to any Loan
Party's knowledge, at, on or under adjacent property, that currently result in
the release or threatened release of Regulated Substances onto the Property,
except to the extent that such releases or threatened releases are not a
material breach of or otherwise not a material violation of the Environmental
Laws or are not likely to result in a Material Adverse Change.
(iv) There are no aboveground
storage tanks, underground storage tanks or underground piping associated with
such tanks, used for the management of Regulated Substances at, on or under the
Property that (a) do not have, to the extent required by Environmental Laws, a
full operational secondary containment system in place, and (b) are not
otherwise in material compliance with all Environmental Laws. There are no
abandoned underground storage tanks or underground piping associated with such
tanks, previously used for the management of Regulated Substances at, on or
under the Property that have not either been closed in place in accordance with
Environmental Laws or removed in material compliance with
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all applicable Environmental Laws and no contamination associated with the use
of such tanks exists on the Property that is not in material compliance with
Environmental Laws.
(v) Each Loan Party and each
Subsidiary of any Loan Party has all material permits, licenses,
authorizations, plans and approvals necessary under the Environmental Laws for
the conduct of the business of such Loan Party and Subsidiary as presently
conducted. Each Loan Party and each Subsidiary of any Loan Party has submitted
all material notices, reports and other filings required by the Environmental
Laws to be submitted to an Official Body which pertain to past and current
operations on the Property.
(vi) Except for violations which
individually and in the aggregate are not likely to result in a Material
Adverse Change, all past and present on-site generation, storage, processing,
treatment, recycling, reclamation, disposal or other use or management of
Regulated Substances at, on, or under the Property and all off-site
transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances has been done in
accordance with the Environmental Laws.
6.1.26 Senior Debt Status.
The Obligations of each Loan Party under this
Agreement, the Notes, the Guaranty Agreement and each of the other Loan
Documents to which it is a party do rank and will rank at least pari passu in
priority of payment with all other Indebtedness of such Loan Party except
Indebtedness of such Loan Party to the extent secured by Permitted Liens. There
is no Lien upon or with respect to any of the properties or income of any Loan
Party or Subsidiary of any Loan Party which secures indebtedness or other
obligations of any Person except for Permitted Liens.
6.2 Updates to Schedules.
Should any of the information or disclosures provided
on any of the Schedules attached hereto become outdated or incorrect in any
material respect, the Loan Party shall promptly provide the Agent in writing
with such revisions or updates to such Schedule as may be necessary or
appropriate to update or correct same; provided, however, that the Borrower
shall not be required to update any Schedule that specifically relates to the
Closing Date and no Schedule shall be deemed to have been amended, modified or
superseded by any such correction or update, nor shall any breach of warranty
or representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Banks, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule.
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7. CONDITIONS OF LENDING
The obligation of each Bank to make Loans and of the
Agent to issue Letters of Credit hereunder is subject to the performance by
each of the Loan Parties of its Obligations to be performed hereunder at or
prior to the making of any such Loans or issuance of such Letters of Credit and
to the satisfaction of the following further conditions:
7.1 First Loans.
On the Closing Date:
7.1.1 Officer's Certificate.
The representations and warranties of each of the
Loan Parties contained in Article 6 shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein), and each of the Loan Parties shall have performed and
complied with all covenants and conditions hereof, no Event of Default or
Potential Default under this Agreement shall have occurred and be continuing or
shall exist; and there shall be delivered to the Agent for the benefit of each
Bank a certificate of each of the Loan Parties, dated the Closing Date and
signed by the Chief Executive Officer, President or Chief Financial Officer of
each of the Loan Parties, to each such effect.
7.1.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit
of each Bank a certificate dated the Closing Date and signed by the Secretary
or an Assistant Secretary of each of the Loan Parties, certifying as
appropriate as to:
(i) all action taken by each Loan
Party in connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or
officers authorized to sign this Agreement and the other Loan Documents and the
true signatures of such officer or officers and specifying the Authorized
Officers permitted to act on behalf of each Loan Party for purposes of this
Agreement and the true signatures of such officers, on which the Agent and each
Bank may conclusively rely; and
(iii) copies of its organizational
documents, including its certificate of incorporation and bylaws as in effect
on the Closing Date certified by the appropriate state official where such
documents are filed in a state office together with
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certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business.
7.1.3 Delivery of Loan Documents.
The Guaranty Agreement, Real Estate Collateral
Documents for all completed and open extended stay lodging facilities owned by
any Loan Party, Pledge Agreement, Intercompany Subordination Agreement and
Security Agreement shall have been duly executed and delivered to the Agent for
the benefit of the Banks, together with all appropriate financing statements
and appropriate stock powers and certificates evidencing the Shares and the
Partnership Interests (if any).
7.1.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit
of each Bank:
(i) a written opinion of Xxxxxx,
Xxxxxxx & Xxxxxx, counsel for the Loan Parties, dated the Closing Date and in
form and substance satisfactory to the Agent and its counsel as to the matters
set forth in Exhibit 7.1.4(i) and as to such other matters incident to the
transactions contemplated herein as the Agent may reasonably request.
(ii) a written opinion of local
counsel for the Borrower in form and substance satisfactory to the Agent and
its counsel as to such maters relating to the Collateral Pool Properties to be
included in the Collateral Pool on the Closing Date as the Agent may reasonably
request.
7.1.5 Legal Details.
All legal details and proceedings in connection with
the transactions contemplated by the Agreement and the other Loan Documents
shall be in form and substance satisfactory to the Agent and counsel for the
Agent, and the Agent shall have received all such other counterpart originals
or certified or other copies of such documents and proceedings in connection
with such transactions, in form and substance satisfactory to the Agent and
said counsel, as the Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
The Borrower shall pay or cause to be paid to the
Agent for itself and for the account of the Banks to the extent not previously
paid all commitment and other fees accrued through the Closing Date and the
costs and expenses for which the Agent and the Banks are entitled to be
reimbursed.
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7.1.7 Consents.
All material consents required to effectuate the
transactions contemplated hereby as set forth on Schedule 6.1.13 shall have
been obtained.
7.1.8 Officer's Certificate Regarding MACs
and Minimum Market Capitalization.
Since December 31, 1995, no Material Adverse Change
in any Loan Party or Subsidiary of any Loan Party shall have occurred; prior to
the Closing Date, there shall be no material change in the management of any
Loan Party or Subsidiary of any Loan Party; the Borrower shall have completed
an initial public offering establishing that the Market Capitalization shall
not be less than $50,000,000 and there shall be delivered to the Agent for the
benefit of each Bank a certificate dated the Closing Date and signed by the
Chief Executive Officer, President or Chief Financial Officer of each Loan
Party to each such effect.
7.1.9 No Violation of Laws.
The making of the Loans shall not contravene any Law
applicable to any Loan Party or any of the Banks.
7.1.10 No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
court, governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain damages in respect of this Agreement or the consummation of the
transactions contemplated hereby or which, in the Agent's sole discretion,
would make it inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents.
7.1.11 Collateral Pool Properties.
With respect to the Collateral Pool Properties which
are part of the Collateral Pool on the Closing Date, the Borrower shall have
delivered all documents and information required hereunder for inclusion of
such Collateral Pool Property into the Collateral Pool and the Banks shall have
approved the inclusion therein.
7.1.12 Quarterly Compliance Certificate.
The Borrower shall have delivered to the Agent for
the benefit of the Banks a duly completed certificate described in Section
8.3.3, dated the Closing Date, certified by the Chief Executive Officer,
President or Chief Financial Officer.
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7.2 Each Additional Loan.
At the time of making any Loans or issuing any Letters of
Credit other than Loans made or Letters of Credit issued on the Closing Date
hereunder and after giving effect to the proposed borrowings: the
representations and warranties of the Loan Parties contained in Article 6 shall
be true on and as of the date of such additional Loan or Letter of Credit with
the same effect as though such representations and warranties had been made on
and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein) and the Loan Parties shall have performed and complied with all
covenants and conditions hereof; no Event of Default or Potential Default shall
have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to
any Loan Party or Subsidiary of any Loan Party or any of the Banks; and the
Borrower shall have delivered to the Agent a duly executed and completed Loan
Request or application for a Letter of Credit as the case may be.
8. COVENANTS
8.1 Affirmative Covenants.
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations under the Loan Documents and termination of the Revolving
Credit Commitments, the Borrower shall comply at all times with the following
affirmative covenants:
8.1.1 Preservation of Existence, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its corporate existence and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary.
8.1.2 Payment of Liabilities, Including
Taxes, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become
due and payable, including all taxes, assessments and governmental charges upon
it or any of its properties, assets, income or profits, prior to the date on
which penalties attach thereto, except to the extent that such liabilities,
including taxes, assessments or charges, are being contested in good-faith and
by appropriate and lawful proceedings diligently conducted and for which such
reserve or other appropriate provisions, if any, as shall be required
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by GAAP shall have been made, but only to the extent that failure to discharge
any such liabilities would not result in any additional liability which would
adversely affect to a material extent the financial condition of any Loan Party
or Subsidiary of any Loan Party which would affect the Collateral, provided
that the Loan Parties and their Subsidiaries will pay all such liabilities
forthwith upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor.
8.1.3 Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, workers' compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers,
including self-insurance to the extent customary, all as reasonably acceptable
to the Agent and, with respect to the Collateral Pool Properties, the
requirements of Schedule 3.4.4 and the Real Estate Collateral Documents. At the
request of the Agent, the Loan Parties shall deliver (x) on the Closing Date
and annually thereafter an original certificate of insurance signed by the Loan
Parties' independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Loan Documents, together with a copy of the endorsement
described in the next sentence and as required by Schedule 3.4.4 and the Real
Estate Collateral Documents attached to such certificate and (y) from time to
time a summary schedule indicating all insurance then in force with respect to
each of the Loan Parties. Such policies of insurance shall contain special
endorsements, in form and substance reasonably acceptable to the Agent, which
shall specify the Agent as an additional insured, mortgagee and lender loss
payee as its interests may appear.
8.1.4 Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful or
necessary to its business, and from time to time, such Loan Party will make or
cause to be made all appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
trade names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
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8.1.6 Visitation Rights.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect any of
its properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times and as often as any of the Banks may reasonably
request, provided that each Bank shall provide the Borrower and the Agent with
reasonable notice prior to any visit or inspection. In the event any Bank
desires to conduct an audit of any Loan Party, such Bank shall make a
reasonable effort to conduct such audit contemporaneously with any audit to be
performed by the Agent.
8.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary
of the Borrower to, maintain and keep proper books of record and account which
enable the Borrower and its Subsidiaries to issue financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made in all
material respects of all its dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each member of
the ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding
requirements of ERISA and shall make, and cause each member of the ERISA Group
to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
8.1.9 Compliance with Laws.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation
of this Section 8.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
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8.1.10 Use of Proceeds.
The Borrower will use the proceeds of the Loans only
for lawful purposes in accordance with Sections 2.8 and such uses shall not
contravene any applicable Law or any other provision hereof.
8.1.11 Further Assurances.
Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Agent's Lien on and Prior Security
Interest in the Collateral as a continuing first priority perfected Lien,
subject only to Permitted Liens, and shall do such other acts and things as the
Agent in its sole discretion may deem necessary or advisable from time to time
in order to preserve, perfect and protect the Liens granted under the Loan
Documents and to exercise and enforce its rights and remedies thereunder with
respect to the Collateral.
8.1.12 Subordination of Intercompany Loans.
Each Loan Party shall cause any intercompany
Indebtedness, loans or advances owed by any Loan Party to any other Loan Party
to be subordinated pursuant to the terms of the Intercompany Subordination
Agreement.
8.1.13 NASDAQ Listed Company.
The common stock of the Borrower shall at all times
be listed for trading and be traded on The Nasdaq Stock Market.
8.1.14
8.2 Negative Covenants.
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and termination of the Revolving Credit
Commitments, the Loan Parties shall comply with the following negative
covenants:
8.2.1 Indebtedness.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Indebtedness, except:
(i) Indebtedness under the Loan
Documents;
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(ii) Indebtedness of a Loan Party
which is secured by assets not included in the Collateral Pool and for which
the holder of such Indebtedness has no recourse against any assets of a Loan
Party other than the specific asset being purchased or financed, provided that
the sum of the Revolving Credit Commitments and any Indebtedness outstanding
under this clause (ii) shall not exceed at any time $50,000,000 in the
aggregate; and
(iii) Indebtedness which is
subordinated in accordance with the provisions of Section 8.1.12.
8.2.2 Liens.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
8.2.3 Guaranties.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time, directly or indirectly, become
or be liable in respect of any Guaranty, or assume, guarantee, become surety
for, endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any other Person,
except for Guaranties of Indebtedness of the Loan Parties permitted hereunder.
8.2.4 Loans and Investments.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any
of the foregoing, except:
(i) trade credit extended on usual
and customary terms in the ordinary course of business;
(ii) advances to employees to meet
expenses incurred by such employees in the ordinary course of business;
(iii) Permitted Investments; and
(iv) loans, advances and investments
in other Loan Parties.
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8.2.5 Dividends and Related Distributions.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, make or pay, or agree to become or remain
liable to make or pay, any dividend or other distribution of any nature
(whether in cash, property, securities or otherwise) on account of or in
respect of its shares of capital stock or partnership interests on account of
the purchase, redemption, retirement or acquisition of its shares of capital
stock (or warrants, options or rights therefor) or partnership interests,
except dividends or other distributions payable to another Loan Party.
8.2.6 Liquidations, Mergers, Consolidations,
Acquisitions.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs,
or become a party to any merger or consolidation, or acquire by purchase, lease
or otherwise all or substantially all of the assets or capital stock of any
other Person, provided that any Loan Party other than the Borrower may
consolidate or merge into another Loan Party.
8.2.7 Affiliate Transactions.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property or services
to any Affiliate of any Loan Party or other Person) unless such transaction is
not otherwise prohibited by this Agreement, is entered into in the ordinary
course of business upon fair and reasonable arm's-length terms and conditions
which are fully disclosed to the Agent and is in accordance with all applicable
Law.
8.2.8 Subsidiaries, Partnerships and Joint
Ventures.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, own or create directly or indirectly any
Subsidiaries other than (i) any Subsidiary which has joined this Agreement as
Guarantor on the Closing Date; and (ii) any Subsidiary formed after the Closing
Date which joins this Agreement as a Guarantor pursuant to Section 11.18,
provided that the Required Banks shall have consented to such formation and
joinder (such consent not to be unreasonably withheld) and that such Subsidiary
and the Loan Parties, as applicable, shall grant and cause to be perfected
first priority Liens to the Agent in the stock of or other ownership interests
in such Subsidiary. Each of the Loan Parties shall not become or agree to
become a general or limited partner in any general or limited partnership or a
joint venturer in any joint venture, except that the Loan Parties may be
general or limited partners in other Loan Parties.
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8.2.9 Continuation of or Change in Business.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than their
respective businesses, substantially as conducted and operated by such Loan
Party or Subsidiary during the present fiscal year, or reasonable extensions
thereof including the furnishing of development and management services to
third parties, and such Loan Party or Subsidiary shall not permit any material
change in such business.
8.2.10 Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to:
(i) fail to satisfy the minimum
funding requirements of ERISA and the Internal Revenue Code with respect to any
Plan;
(ii) request a minimum funding
waiver from the Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited
Transaction with any Plan, Benefit Arrangement or Multiemployer Plan which,
alone or in conjunction with any other circumstances or set of circumstances
resulting in liability under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial
present value of all benefit liabilities (whether or not vested) under each
Plan, determined on a plan termination basis, as disclosed in the most recent
actuarial report completed with respect to such Plan, to exceed, as of any
actuarial valuation date, the fair market value of the assets of such Plan;
(v) fail to make when due any
contribution to any Multiemployer Plan that the Borrower or any member of the
ERISA Group may be required to make under any agreement relating to such
Multiemployer Plan, or any Law pertaining thereto;
(vi) withdraw (completely or
partially) from any Multiemployer Plan or withdraw (or be deemed under Section
4062(e) of ERISA to withdraw) from any Multiple Employer Plan, where any such
withdrawal is likely to result in a material liability of the Borrower or any
member of the ERISA Group;
(vii) terminate, or institute
proceedings to terminate, any Plan, where such termination is likely to result
in a material liability to the Borrower or any member of the ERISA Group;
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(viii) make any amendment to any Plan
with respect to which security is required under Section 307 of ERISA; or
(ix) fail to give any and all
notices and make all disclosures and governmental filings required under ERISA
or the Internal Revenue Code, where such failure is likely to result in a
Material Adverse Change.
8.2.11 Fiscal Year.
The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its fiscal year from the twelve-month
period beginning January 1 and ending December 31.
8.2.12 Changes in Organizational Documents.
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock), by- laws or other organizational documents without providing at least
thirty (30) calendar days' prior written notice to the Agent and the Banks and,
in the event such change would be adverse to the Banks as determined by the
Agent in its reasonable discretion, obtaining the prior written consent of the
Required Banks.
8.2.13 Minimum Debt Service Coverage Ratio.
The Loan Parties shall not permit the Debt Service
Coverage Ratio, calculated as of the end of each fiscal quarter for the fiscal
quarter then ended, to be less than 2.5 to 1.0.
8.2.14 Maximum Consolidated Debt to Market
Value Ratio.
The Loan Parties shall not at any time permit the
ratio of Consolidated Debt to Market Value to exceed 45%.
8.2.15 Maximum Floating Rate Debt.
The Loan Parties shall not at any time permit
Floating Rate Debt (excluding Indebtedness under this Agreement and
Indebtedness which is subject to an interest rate protection agreement
acceptable to the Agent) to exceed 20% of Consolidated Debt.
8.2.16 Minimum Tangible Net Worth.
The Loan Parties shall not at any time permit Consolidated Tangible Net
Worth to be less than the Base Net Worth.
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8.2.17 Geographical Restrictions.
The Loan Parties shall not permit (i) without the
prior written consent of the Banks, more than ten (10) extended stay lodging
facilities owned by the Loan Parties in the aggregate to be located in the
Atlanta, Georgia Standard Metropolitan Statistical Area or more than four (4)
such facilities to be located in the Charlotte, North Carolina Standard
Metropolitan Statistical Area and (ii) except as set forth in the preceding
clause, more than fifteen (15%) of such facilities to be located in any single
Standard Metropolitan Statistical Area.
8.2.18 Restrictions on Assets Under
Development and Land.
The Loan Parties shall not at any time permit the
aggregate book value, determined in accordance with GAAP, of (i) Assets under
Development and (ii) Land to exceed 35% of Market Value.
8.3 Reporting Requirements.
The Loan Parties, jointly and severally, covenant and
agree that until payment in full of the Loans and interest thereon, expiration
or termination of all Letters of Credit, satisfaction of all of the Loan
Parties' other Obligations hereunder and under the other Loan Documents and
termination of the Revolving Credit Commitments, the Loan Parties will furnish
or cause to be furnished to the Agent and each of the Banks:
8.3.1 Quarterly Financial Statements.
As soon as available and in any event within
forty-five (45) calendar days after the end of each of the first three fiscal
quarters in each fiscal year, financial statements of the Borrower, consisting
of a balance sheet as of the end of such fiscal quarter and related statements
of income, stockholders' equity and cash flows for the fiscal quarter then
ended and the fiscal year through that date, together with an operating
statement and an occupancy report for each Collateral Pool Property, all in
reasonable detail and certified (subject to normal year-end audit adjustments)
by the Chief Executive Officer, President or Chief Financial Officer of the
Borrower as having been prepared in accordance with GAAP, consistently applied,
and setting forth in comparative form the respective financial statements for
the corresponding date and period in the previous fiscal year.
8.3.2 Annual Financial Statements.
As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower, financial
statements of the Borrower consisting of a balance sheet as of the end of such
fiscal year, and related statements of income, stockholders' equity and cash
flows for the fiscal year then ended, all in reasonable detail and setting
forth in comparative form the financial statements as of the end of and for the
preceding fiscal year, and certified by
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independent certified public accountants of nationally recognized standing
reasonably satisfactory to the Agent. The certificate or report of accountants
shall be free of qualifications (other than any consistency qualification that
may result from a change in the method used to prepare the financial statements
as to which such accountants concur) and shall not indicate the occurrence or
existence of any event, condition or contingency which would materially impair
the prospect of payment or performance of any covenant, agreement or duty of
the Borrower under any of the Loan Documents, together with a letter of such
accountants substantially to the effect that, based upon their ordinary and
customary examination of the affairs of the Borrower, performed in connection
with the preparation of such consolidated financial statements, and in
accordance with generally accepted auditing standards, they are not aware of
the existence of any condition or event which constitutes an Event of Default
or Potential Default or, if they are aware of such condition or event, stating
the nature thereof and confirming the Borrower's calculations with respect to
the certificate to be delivered pursuant to Section 8.3.3 with respect to such
financial statements.
8.3.3 Certificate of the Borrower.
Concurrently with the financial statements of the
Borrower furnished to the Agent and to the Banks pursuant to Sections 8.3.1 and
8.3.2, a certificate of the Borrower signed by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower, in the form of Exhibit
8.3.3, to the effect that, except as described pursuant to Section 8.3.4, (i)
the representations and warranties of the Loan Parties contained in Article 6
are true on and as of the date of such certificate with the same effect as
though such representations and warranties had been made on and as of such date
(except representations and warranties which expressly relate solely to an
earlier date or time) and the Borrower has performed and complied with all
covenants and conditions hereof, (ii) no Event of Default or Potential Default
exists and is continuing on the date of such certificate, and (iii) containing
calculations in sufficient detail to demonstrate compliance as of the date of
the financial statements with all financial covenants contained in Section 8.2
and the covenant with respect to the Borrowing Base contained in Section
3.4.10, together with any supporting information which the Agent may from time
to time request.
8.3.4 Notice of Default.
Promptly after any officer of any Loan Party has
learned of the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of such Loan Party setting forth the details of such Event of Default
or Potential Default and the action which the such Loan Party proposes to take
with respect thereto.
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8.3.5 Notice of Litigation.
Promptly after the commencement thereof, notice of
all actions, suits, proceedings or investigations before or by any Official
Body or any other Person against any Loan Party or Subsidiary of any Loan Party
which relate to the Collateral, involve a claim or series of claims in excess
of $100,000 or which if adversely determined would constitute a Material
Adverse Change with respect to any Loan Party or Subsidiary of any Loan Party.
8.3.6 Budgets, Forecasts, Other Reports and
Information.
Promptly upon their becoming available to the
Borrower:
(i) the annual budget and any
forecasts or projections of the Borrower, to be supplied not later than thirty
(30) days prior to commencement of the fiscal year to which any of the
foregoing may be applicable,
(ii)a any reports including
management letters submitted to the Borrower by independent accountants in
connection with any annual, interim or special audit,
(iii) any reports, notices or proxy
statements generally distributed by the Borrower to its stockholders on a date
no later than the date supplied to the stockholders,
(iv) regular or periodic reports,
including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses,
filed by the Borrower with the Securities and Exchange Commission,
(v) a copy of any order in any
proceeding to which the Borrower or any of its Subsidiaries is a party issued
by any Official Body, and
(vi) such other reports and
information as the Agent or the Banks may from time to time reasonably request,
including without limitation information and reports to enable the Agent and
the Banks to evaluate the financial condition and cash flow of each of the Loan
Parties. The Borrower shall also notify the Banks promptly of the enactment or
adoption of any Law which may result in a Material Adverse Change with respect
to the Borrower.
8.3.7 Notices Regarding Plans and Benefit
Arrangements.
8.3.7.1 Certain Events.
Promptly upon becoming aware of the
occurrence thereof, notice (including the nature of the event and, when known,
any action taken or threatened by the Internal Revenue Service or the PBGC with
respect thereto) of:
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(i) any Reportable Event
with respect to the Borrower or any member of the ERISA Group (regardless of
whether the obligation to report said Reportable Event to the PBGC has been
waived),
(ii) any Prohibited Transaction
which could subject the Borrower or any member of the ERISA Group to a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code in connection with any Plan, Benefit
Arrangement or any trust created thereunder,
(iii) any assertion of material
withdrawal liability with respect to any Multiemployer Plan,
(iv) any partial or complete
withdrawal from a Multiemployer Plan by the Borrower or any member of the ERISA
Group under Title IV of ERISA (or assertion thereof), where such withdrawal is
likely to result in material withdrawal liability,
(v) any cessation of operations
(by the Borrower or any member of the ERISA Group) at a facility in the
circumstances described in Section 4063(e) of ERISA,
(vi) withdrawal by the Borrower or
any member of the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or
any member of the ERISA Group to make a payment to a Plan required to avoid
imposition of a lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to
a Plan requiring the provision of security to such Plan pursuant to Section 307
of ERISA, or
(ix) any change in the actuarial
assumptions or funding methods used for any Plan, where the effect of such
change is to materially increase or materially reduce the unfunded benefit
liability or obligation to make periodic contributions.
8.3.7.2 Notices of Involuntary
Termination and Annual Reports.
Promptly after receipt thereof, copies of (a)
all notices received by the Borrower or any member of the ERISA Group of the
PBGC's intent to terminate any Plan administered or maintained by the Borrower
or any member of the ERISA Group, or to have a trustee appointed to administer
any such Plan; and (b) at the request of the Agent or any Bank each annual
report (IRS Form 5500 series) and all accompanying schedules, the most recent
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actuarial reports, the most recent financial information concerning the
financial status of each Plan administered or maintained by the Borrower or any
member of the ERISA Group, and schedules showing the amounts contributed to
each such Plan by or on behalf of the Borrower or any member of the ERISA Group
in which any of their personnel participate or from which such personnel may
derive a benefit, and each Schedule B (Actuarial Information) to the annual
report filed by the Borrower or any member of the ERISA Group with the Internal
Revenue Service with respect to each such Plan.
8.3.7.3 Notice of Voluntary
Termination.
Promptly upon the filing thereof, copies of
any Form 5310, or any successor or equivalent form to Form 5310, filed with the
PBGC in connection with the termination of any Plan.
9. DEFAULT
9.1 Events of Default.
An Event of Default shall mean the occurrence or existence of
any one or more of the following events or conditions (whatever the reason
therefor and whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay any principal of any
Loan (including scheduled installments, mandatory prepayments or the payment
due at maturity) or shall fail to pay any interest on any Loan or any other
amount owing hereunder or under the other Loan Documents after such principal,
interest or other amount becomes due in accordance with the terms hereof or
thereof;
9.1.2 Breach of Warranty.
Any representation or warranty made at any time by
any of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;
9.1.3 Breach of Negative Covenants or
Visitation Rights.
Any of the Loan Parties shall default in the
observance or performance of any covenant contained in Section 8.1.6 or Section
8.2;
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9.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall continue unremedied for a
period of ten (10) Business Days after any officer of any Loan Party becomes
aware of the occurrence thereof (such grace period to be applicable only in the
event such default can be remedied by corrective action of the Loan Parties as
determined by the Agent in its sole discretion);
9.1.5 Defaults in Other Agreements or
Indebtedness.
A default or event of default shall occur at any time
under the terms of any other agreement involving borrowed money or the
extension of credit or any other Indebtedness under which any Loan Party or
Subsidiary of any Loan Party may be obligated as a borrower or guarantor in
excess of $250,000 in the aggregate, and such breach, default or event of
default consists of the failure to pay (beyond any period of grace permitted
with respect thereto, whether waived or not) any indebtedness when due (whether
at stated maturity, by acceleration or otherwise) or if such breach or default
permits or causes the acceleration of any indebtedness (whether or not such
right shall have been waived) or the termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of
money in excess of $250,000 in the aggregate shall be entered against any Loan
Party by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry;
9.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal,
valid and binding agreements enforceable against the party executing the same
or such party's successors and assigns (as permitted under the Loan Documents)
in accordance with the respective terms thereof or shall in any way be
terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby;
9.1.8 Uninsured Losses; Proceedings Against
Assets.
There shall occur any material uninsured damage to or
loss, theft or destruction of any of the Collateral in excess of $250,000 or
the Collateral or any other of the Loan Parties' assets with a value in excess
of $250,000 in the aggregate are attached, seized, levied upon or subjected to
a writ or distress warrant; or such come within the possession of any
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receiver, trustee, custodian or assignee for the benefit of creditors and the
same is not cured within thirty (30) days thereafter;
9.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $250,000
which is not a Permitted Lien is filed of record with respect to all or any
part of any of the Loan Parties' assets by the United States, or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the Pension Benefit Guaranty
Corporation, or if any taxes or debts owing at any time or times hereafter to
any one of these becomes payable and the same is not paid within thirty (30)
days after the same becomes payable;
9.1.10 Insolvency.
Any Loan Party ceases to be solvent or admits in
writing its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit
Arrangements.
Any of the following occurs: (i) any Reportable
Event, which the Agent determines in good-faith constitutes grounds for the
termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan;
(iii) a trustee shall be appointed to administer or liquidate any Plan; (iv)
the PBGC shall give notice of its intent to institute proceedings to terminate
any Plan or Plans or to appoint a trustee to administer or liquidate any Plan;
and, in the case of the occurrence of (i), (ii), (iii) or (iv) above, the Agent
determines in good-faith that the amount of the Borrower's liability is likely
to exceed 10% of its Consolidated Tangible Net Worth; (v) the Borrower or any
member of the ERISA Group shall fail to make any contributions when due to a
Plan or a Multiemployer Plan; (vi) the Borrower or any member of the ERISA
Group shall make any amendment to a Plan with respect to which security is
required under Section 307 of ERISA; (vii) the Borrower or any member of the
ERISA Group shall withdraw completely or partially from a Multiemployer Plan;
(viii) the Borrower or any member of the ERISA Group shall withdraw (or shall
be deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer
Plan; or (ix) any applicable Law is adopted, changed or interpreted by any
Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), the Agent determines in
good-faith that any such occurrence would be reasonably likely to materially
and adversely affect the total enterprise represented by the Borrower and the
other members of the ERISA Group;
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9.1.12 Cessation of Business.
Any Loan Party ceases to conduct its business as
contemplated or such Loan Party is enjoined, restrained or in any way prevented
by court order from conducting all or any material part of its business and
such injunction, restraint or other preventive order is not dismissed within
thirty (30) days after the entry thereof;
9.1.13 Change of Ownership or Control.
(i) Within a period of twelve (12) consecutive
calendar months, individuals who were directors of the Borrower on the first
day of such period shall cease to constitute a majority of the board of
directors of the Borrower; or (ii) the management shareholders, as identified
on Schedule 6.1.2, in the aggregate, shall own less than 2/3s of the Shares (as
adjusted from time to time to reflect any stock splits, stock dividends,
reorganizations or similar events) owned by such management shareholders in the
aggregate on the Closing Date;
9.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of any Loan Party in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of any Loan Party for
any substantial part of its property, or for the winding-up or liquidation of
its affairs, and such proceeding shall remain undismissed or unstayed and in
effect for a period of sixty (60) consecutive days or such court shall enter a
decree or order granting any of the relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
Any Loan Party shall commence a voluntary case under
any applicable bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.
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9.2 Consequences of Event of Default.
9.2.1 Events of Default Other Than
Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under subsections
9.1.1 through 9.1.13 of Section 9.1 shall occur and be continuing, the Banks
and the Agent shall be under no further obligation to make Loans or issue
Letters of Credit, as the case may be, and the Agent may, and upon the request
of the Required Banks, shall (i) by written notice to the Borrower, declare the
unpaid principal amount of the Notes then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the
Banks hereunder and thereunder to be forthwith due and payable, and the same
shall thereupon become and be immediately due and payable to the Agent for the
benefit of each Bank without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived, and (ii) require the
Borrower to, and the Borrower shall thereupon, deposit in a non-interest
bearing account with the Agent, as cash collateral for its Obligations under
the Loan Documents, an amount equal to the maximum amount currently or at any
time thereafter available to be drawn on all outstanding Letters of Credit, and
the Borrower hereby pledges to the Agent and the Banks, and grants to the Agent
and the Banks a security interest in, all such cash as security for such
Obligations. Upon the curing of all existing Events of Default to the
satisfaction of the Required Banks, the Agent shall return such cash collateral
to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings.
If an Event of Default specified under subsections
9.1.14 or 9.1.15 of Section 9.1 shall occur, the Banks shall be under no
further obligations to make Loans hereunder and the unpaid principal amount of
the Notes then outstanding and all interest accrued thereon, any unpaid fees
and all other Indebtedness of the Borrower to the Banks hereunder and
thereunder shall be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived; and
9.2.3 Set-off.
If an Event of Default shall occur and be continuing,
any Bank to whom any Obligation is owed by any Loan Party hereunder or under
any other Loan Document or any participant of such Bank which has agreed in
writing to be bound by the provisions of Section 10.13 and any branch,
Subsidiary or Affiliate of such Bank or participant anywhere in the world shall
have the right, in addition to all other rights and remedies available to it,
without notice to such Loan Party, to set-off against and apply to the then
unpaid balance of all the Loans and all other Obligations of the Borrower and
the other Loan Parties hereunder or under any other Loan Document any debt
owing to, and any other funds held in any manner for the account of, the
Borrower or such other Loan Party by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand,
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general or special, provisionally credited or finally credited, or otherwise)
now or hereafter maintained by the Borrower or such other Loan Party for its
own account (but not including funds held in custodian or trust accounts) with
such Bank or participant or such branch, Subsidiary or Affiliate. Such right
shall exist whether or not any Bank or the Agent shall have made any demand
under this Agreement or any other Loan Document, whether or not such debt owing
to or funds held for the account of the Borrower or such other Loan Party is or
are matured or unmatured and regardless of the existence or adequacy of any
Collateral, Guaranty or any other security, right or remedy available to any
Bank or the Agent; and
9.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing,
and whether or not the Agent shall have accelerated the maturity of Loans to
the Borrower pursuant to any of the foregoing provisions of this Section 9.2,
the Agent or any Bank, if owed any amount with respect to the Notes, may
proceed to protect and enforce its rights by suit in equity, action at law
and/or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or the Notes, including
as permitted by applicable Law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Agent or such Bank; and
9.2.5 Application of Proceeds.
From and after the date on which the Agent has taken
any action pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent
and the Banks for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, actually
incurred by the Agent or the Banks in connection with realizing on the
Collateral or collection of any Obligations of any of the Loan Parties under
any of the Loan Documents, including advances made by the Banks or any one of
them or the Agent for the reasonable maintenance, preservation, protection or
enforcement of, or realization upon, the Collateral, including advances for
taxes, insurance, repairs and the like and reasonable expenses incurred to sell
or otherwise realize on, or prepare for sale or other realization on, any of
the Collateral;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Loan Parties to the Banks incurred
under this Agreement or any of the Loan Documents, whether of principal,
interest, fees, expenses or otherwise, in such manner as the Agent may
determine in its discretion; and
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(iii) the balance, if any, as
required by Law; and
9.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies
contained in this Agreement or in any of the other Loan Documents (including
the Mortgage), the Agent shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code or other applicable Law, all of which
rights and remedies shall be cumulative and non- exclusive, to the extent
permitted by Law. The Agent may, and upon the request of the Required Banks
shall, exercise all post-default rights granted to the Agent and the Banks
under the Loan Documents or applicable Law.
9.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease,
or other disposition of the Collateral or any other intended action by the
Agent, if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrower.
10. THE AGENT
10.1 Appointment.
Each Bank hereby irrevocably designates, appoints and
authorizes PNC to act as Agent for such Bank under this Agreement to execute
and deliver or accept on behalf of each of the Banks the other Loan Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. PNC Bank agrees
to act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
10.2 Delegation of Duties.
The Agent may perform any of its duties hereunder by or
through agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 10.5 and 10.6,
shall be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters pertaining to
its duties hereunder and to rely upon any advice so obtained.
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10.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or otherwise exist. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary or trust relationship in respect of any Bank; and
nothing in this Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement except as expressly set forth herein. Each Bank expressly
acknowledges (i) that the Agent has not made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of any of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank; (ii) that it has made and
will continue to make, without reliance upon the Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Loans hereunder; and (iii)
except as expressly provided herein, that the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto, whether coming into
its possession before the making of any Loan or at any time or times
thereafter.
10.4 Actions in Discretion of Agent; Instructions from the
Banks.
The Agent agrees, upon the written request of the Required
Banks, to take or refrain from taking any action of the type specified as being
within the Agent's rights, powers or discretion herein, provided that the Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or any other Loan Document or
applicable Law. In the absence of a request by the Required Banks, the Agent
shall have authority, in its sole discretion, to take or not to take any such
action, unless this Agreement specifically requires the consent of the Required
Banks or all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6. Subject to the provisions of Section 10.6, no Bank shall have any right
of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
10.5 Reimbursement and Indemnification of Agent by the
Borrower.
The Borrower unconditionally agrees to pay or reimburse the
Agent and save the Agent harmless against (a) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements, including fees and
expenses of counsel, appraisers and environmental consultants, actually
incurred by the Agent (i) in connection with the development, negotiation,
preparation, printing, execution, administration, syndication,
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interpretation and performance of this Agreement and the other Loan Documents,
(ii) relating to any requested amendments, waivers or consents pursuant to the
provisions hereof, (iii) in connection with the enforcement of this Agreement
or any other Loan Document or collection of amounts due hereunder or thereunder
or the proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (iv) in any workout, restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, and (b) 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 Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same results from the Agent's gross negligence
or willful misconduct, or if the Borrower was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that the Borrower shall remain liable to the extent such failure to
give notice does not result in a loss to the Borrower), or if the same results
from a compromise or settlement agreement entered into without the consent of
the Borrower, which shall not be unreasonably withheld. In addition, the
Borrower agrees to reimburse and pay all reasonable out-of-pocket expenses of
the Agent's regular employees and agents engaged periodically to perform audits
of the Loan Parties' books, records and business properties.
10.6 Exculpatory Provisions.
Neither the Agent nor any of its directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible in
any manner to any of the Banks for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with
this Agreement or any other Loan Documents, or (c) be under any obligation to
any of the Banks to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions hereof or thereof on the part of
the Loan Parties, or the financial condition of the Loan Parties, or the
existence or possible existence of any Event of Default or Potential Default.
Neither the Agent nor any Bank nor any of their respective directors, officers,
employees, agents, attorneys or Affiliates shall be liable to any of the Loan
Parties for consequential damages resulting from any breach of contract, tort
or other wrong in connection with the negotiation, documentation,
administration or collection of the Loans or any of the Loan Documents.
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10.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the
extent not reimbursed by the Borrower and without limiting the Obligation of
the Borrower to do so) in proportion to its Ratable Share from and against 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 Agent, in its capacity
as such, in any way relating to or arising out of this Agreement or any other
Loan Documents or any action taken or omitted by the Agent hereunder or
thereunder, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (a) if the same results from the
Agent's gross negligence or willful misconduct, or (b) if such Bank was not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that such Bank shall remain liable to
the extent such failure to give notice does not result in a loss to the Bank),
or (c) if the same results from a compromise and settlement agreement entered
into without the consent of such Bank, which shall not be unreasonably
withheld. In addition, each Bank agrees promptly upon demand to reimburse the
Agent (to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share for all
amounts due and payable by the Borrower to the Agent in connection with the
Agent's periodic audit of the Loan Parties' books, records and business
properties.
10.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent, certificate,
letter, cablegram, statement, order or other document or conversation by
telephone or otherwise believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon the advice
and opinions of counsel and other professional advisers selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
hereunder unless it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
10.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Potential Default or Event of Default unless the Agent
has received written notice from a Bank or the Borrower referring to this
Agreement, describing such Potential Default or Event of Default and stating
that such notice is a "notice of default."
10.10 Notices.
The Agent shall promptly send to each Bank a copy of all
notices received from the Borrower pursuant to the provisions of this Agreement
or the other Loan Documents
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promptly upon receipt thereof. The Agent shall promptly notify the Borrower and
the other Banks of each change in the Base Rate and the effective date thereof.
10.11 Banks in Their Individual Capacities.
With respect to its Revolving Credit Commitments and the
Revolving Credit Loans made by it, the Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not the Agent, and the term "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. PNC Bank and its
Affiliates and each of the Banks and their respective Affiliates may, without
liability to account, except as prohibited herein, make Loans to, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking or trust business with, the Loan
Parties and their Affiliates, in the case of the Agent, as though it were not
acting as Agent hereunder and in the case of each Bank, as though such Bank
were not a Bank hereunder.
10.12 Holders of Notes.
The Agent may deem and treat any payee of any Note as the
owner thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes
agree among themselves that, with respect to all amounts received by any Bank
or any such holder for application on any Obligation hereunder or under any
Note or under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Sections 4.4.2, 5.4.2 or 5.6.1. The Banks or any such
holder receiving any such amount shall purchase for cash from each of the other
Banks an interest in such Bank's Loans in such amount as shall result in a
ratable participation by the Banks and each such holder in the aggregate unpaid
amount under the Notes, provided that if all or any portion of such excess
amount is thereafter recovered from the Bank or the holder making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by law (including court order) to be paid by the Bank or the holder
making such purchase.
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10.14 Successor Agent.
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is required by Section 5.4.2, in either case of (i) or (ii) by
giving not less than thirty (30) days' prior written notice to the Borrower. If
the Agent shall resign under this Agreement, then either (a) the Required Banks
shall appoint from among the Banks a successor agent for the Banks, subject to
the consent of the Borrower, such consent not to be unreasonably withheld, or
(b) if a successor agent shall not be so appointed and approved within the
thirty (30) day period following the Agent's notice to the Banks of its
resignation, then the Agent shall appoint, with the consent of the Borrower,
such consent not to be unreasonably withheld, a successor agent who shall serve
as Agent until such time as the Required Banks appoint and the Borrower
consents to the appointment of a successor agent. Upon its appointment pursuant
to either clause (a) or (b) above, such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent, effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated without any other or further act
or deed on the part of such former Agent or any of the parties to this
Agreement. After the resignation of any Agent hereunder, the provisions of this
Article 10 shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
10.15 Agent's Fee.
The Borrower shall pay to the Agent a nonrefundable fee per
annum (the "Agent's Fee") as set forth in that certain letter dated March 21,
1996 between the Borrower and PNC Securities, payable in equal quarterly
installments in arrears on the first Business Day of each calendar quarter
after the date hereof and on the date on which all Loans shall be paid in full,
all Letters of Credit shall have expired or have been terminated, the
Commitments shall have been terminated, and the Borrower shall have paid all of
its other monetary Obligations hereunder. The Agent's Fee shall continue to
accrue through such date.
10.16 Availability of Funds.
Unless the Agent shall have been notified by a Bank prior to
the date upon which a Loan is to be made that such Bank does not intend to make
available to the Agent such Bank's portion of such Loan, the Agent may assume
that such Bank has made or will make such proceeds available to the Agent on
such date and the Agent may, in reliance upon such assumption (but shall not be
required to), make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Bank,
the Agent shall be entitled to recover such amount on demand from such Bank
(or, if such Bank fails to pay such amount forthwith upon such demand from the
Borrower) together with interest thereon, in respect of each day during the
period commencing on the date such amount was made
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available to the Borrower and ending on the date the Agent recovers such
amount, at a rate per annum equal to the applicable interest rate in respect of
the Loan.
10.17 Calculations.
In the absence of gross negligence or willful misconduct, the
Agent shall not be liable for any error in computing the amount payable to any
Bank whether in respect of the Loans, fees or any other amounts due to the
Banks under this Agreement. In the event an error in computing any amount
payable to any Bank is made, the Agent, the Borrower and each affected Bank
shall, forthwith upon discovery of such error, make such adjustments as shall
be required to correct such error, and any compensation therefor will be
calculated at the Federal Funds Effective Rate.
10.18 Beneficiaries.
Except as expressly provided herein, the provisions of this
Article 10 are solely for the benefit of the Agent and the Banks, and the Loan
Parties shall not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any of the Loan Parties.
11. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent,
acting on behalf of all the Banks, and the Borrower, on behalf of the Loan
Parties, may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or the
rights of the Banks or the Loan Parties hereunder or thereunder, or may grant
written waivers or consents to a departure from the due performance of the
Obligations of the Loan Parties hereunder or thereunder. Any such agreement,
waiver or consent made with such written consent shall be effective to bind all
the Banks and the Loan Parties; provided, that, without the written consent of
all the Banks, no such agreement, waiver or consent may be made which will:
11.1.1 Increase of Commitment; Extension or Expiration
Date.
Increase the amount of the Revolving Credit Commitment
of any Bank hereunder or extend the Expiration Date;
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11.1.2 Extension of Payment; Reduction of
Principal Interest or Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, extend the
time for payment of principal or interest of any Loan, the Commitment Fee or
any other fee payable to any Bank, or reduce the principal amount of or the
rate of interest borne by any Loan or reduce the Commitment Fee or any other
fee payable to any Bank, or otherwise affect the terms of payment of the
principal of or interest of any Loan, the Commitment Fee or any other fee
payable to any Bank;
11.1.3 Release of Collateral or Guarantor.
Except as permitted by Section 3.2, release any
Collateral, any Guarantor from its Obligations under the Guaranty Agreement or
any other security for any of the Loan Parties' Obligations; or
11.1.4 Miscellaneous
Amend Sections 5.2 [Pro Rata Treatment of Banks],
10.6 [Exculpatory Provisions] or 10.13 [Equalization of Banks] or this Section
11.1, alter any provision regarding the pro rata treatment of the Banks, change
the definition of Required Banks, or change any requirement providing for the
Banks or the Required Banks to authorize the taking of any action hereunder.
No agreement, waiver or consent which would modify
the interests, rights or obligations of the Agent in its capacity as Agent or
as the issuer of Letters of Credit shall be effective without the written
consent of the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing
Required.
No course of dealing and no delay or failure of the Agent or
any Bank in exercising any right, power, remedy or privilege under this
Agreement or any other Loan Document shall affect any other or future exercise
thereof or operate as a waiver thereof, nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such
a right, power, remedy or privilege preclude any further exercise thereof or of
any other right, power, remedy or privilege. The rights and remedies of the
Agent and the Banks under this Agreement and any other Loan Documents are
cumulative and not exclusive of any rights or remedies which they would
otherwise have. Any waiver, permit, consent or approval of any kind or
character on the part of any Bank of any breach or default under this Agreement
or any such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
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11.3 Reimbursement and Indemnification of Banks by the
Borrower; Taxes.
The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrower's
Obligations are set forth in Section 10.5) and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements (including fees and expenses of counsel for each
Bank except with respect to (a) and (b) below), incurred by such Bank (a) in
connection with the administration and interpretation of this Agreement, and
other instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan Document,
or collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and
(d) in any workout, restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings, or (ii) 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 such Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by such Bank hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrower was not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or (C) if
the same results from a compromise or settlement agreement entered into without
the consent of the Borrower, which shall not be unreasonably withheld. The
Banks will attempt to minimize the fees and expenses of legal counsel for the
Banks which are subject to reimbursement by the Borrower hereunder by
considering the usage of one law firm to represent the Banks and the Agent if
appropriate under the circumstances. The Borrower agrees unconditionally to pay
all stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Agent or any Bank to be payable
in connection with this Agreement or any other Loan Document, and the Borrower
agrees unconditionally to save the Agent and the Banks harmless from and
against any and all present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in paying any such
taxes, fees or impositions.
11.4 Holidays.
Whenever any payment or action to be made or taken hereunder
shall be stated to be due on a day which is not a Business Day, such payment or
action shall be made or taken on the next following Business Day (except as
provided in Section 4.2.1 with respect to Interest
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Periods under the Euro-Rate Option), and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
11.5 Funding by Branch, Subsidiary or Affiliate.
11.5.1 Notional Funding.
Each Bank shall have the right from time to time,
without notice to the Borrower, to deem any branch, Subsidiary or Affiliate
(which for the purposes of this Section 11.5 shall mean any corporation or
association which is directly or indirectly controlled by or is under direct or
indirect common control with any corporation or association which directly or
indirectly controls such Bank) of such Bank to have made, maintained or funded
any Loan to which the Euro-Rate Option applies at any time, provided that
immediately following (on the assumption that a payment were then due from the
Borrower to such other office), and as a result of such change, the Borrower
would not be under any greater financial obligation pursuant to Section 5.6
than it would have been in the absence of such change. Notional funding offices
may be selected by each Bank without regard to the Bank's actual methods of
making, maintaining or funding the Loans or any sources of funding actually
used by or available to such Bank.
11.5.2 Actual Funding.
Each Bank shall have the right from time to time to
make or maintain any Loan by arranging for a branch, Subsidiary or Affiliate of
such Bank to make or maintain such Loan subject to the last sentence of this
Section 11.5.2. If any Bank causes a branch, Subsidiary or Affiliate to make or
maintain any part of the Loans hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Loans to the same extent as if such Loans were
made or maintained by such Bank, but in no event shall any Bank's use of such a
branch, Subsidiary or Affiliate to make or maintain any part of the Loans
hereunder cause such Bank or such branch, Subsidiary or Affiliate to incur any
cost or expenses payable by the Borrower hereunder or require the Borrower to
pay any other compensation to any Bank (including any expenses incurred or
payable pursuant to Section 5.6) which would otherwise not be incurred.
11. 6 Notices.
All notices, requests, demands, directions and other
communications (as used in this Section 11.6, collectively referred to as
"notices") given to or made upon any party hereto under the provisions of this
Agreement shall be by telephone or in writing (including telex or facsimile
communication) unless otherwise expressly permitted hereunder and shall be
delivered or sent by telex or facsimile to the respective parties at the
addresses and numbers set forth under their respective names on the signature
pages hereof or in accordance with any subsequent unrevoked written direction
from any party to the others. All notices shall, except as otherwise
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expressly herein provided, be effective (a) in the case of telex or facsimile,
when received, (b) in the case of hand- delivered notice, when hand-delivered,
(c) in the case of telephone, when telephoned, provided, however, that in order
to be effective, telephonic notices must be confirmed in writing no later than
the next day by letter, facsimile or telex, (d) if given by mail, four (4) days
after such communication is deposited in the mail with first-class postage
prepaid, return receipt requested, and (e) if given by any other means
(including by air courier), when delivered; provided, that notices to the Agent
shall not be effective until received. Any Bank giving any notice to any Loan
Party shall simultaneously send a copy thereof to the Agent, and the Agent
shall promptly notify the other Banks of the receipt by it of any such notice.
11.7 Severability.
The provisions of this Agreement are intended to be severable.
If any provision of this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
11.8 Governing Law.
Each Letter of Credit and Section 2.9 shall be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, as the same may be
revised or amended from time to time, and to the extent not inconsistent
therewith, the internal laws of the Commonwealth of Kentucky without regard to
its conflict of laws principles and the balance of this Agreement shall be
deemed to be a contract under the Laws of the Commonwealth of Kentucky and for
all purposes shall be governed by and construed and enforced in accordance with
the internal laws of the Commonwealth of Kentucky without regard to its
conflict of laws principles.
11.9 Prior Understanding.
This Agreement supersedes all prior understandings and
agreements, whether written or oral, between the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements and commitments.
11.10 Duration; Survival.
All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the making of
Loans and issuance of Letters of Credit and shall not be waived by the
execution and delivery of this Agreement, any investigation by the Agent or the
Banks, the making of Loans, issuance of Letters of Credit, or payment in full
of the Loans. All covenants and agreements of the Loan Parties contained in
Sections 8.1, 8.2 and 8.3 herein shall continue in full force and effect from
and after the date hereof so long as the
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Borrower may borrow or request Letters of Credit hereunder and until
termination of the Revolving Credit Commitments and payment in full of the
Loans and expiration or termination of all Letters of Credit. All covenants and
agreements of the Borrower contained herein relating to the payment of
principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Notes, Article 5 and Sections
10.5, 10.7 and 11.3, shall survive payment in full of the Loans, expiration or
termination of the Letters of Credit and termination of the Revolving Credit
Commitments.
11.11 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign or
transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Revolving Credit Commitment and the Loans made by it to
one or more banks or other entities, subject to the consent of the Borrower and
the Agent with respect to any assignee, such consent not to be unreasonably
withheld, and provided that assignments may not be made in amounts less than
$5,000,000 and provided, further, that, notwithstanding the foregoing, the
consent of the Borrower shall not be required at any time after the occurrence
of an Event of Default or Potential Default. In the case of an assignment, upon
receipt by the Agent of the Assignment and Assumption Agreement, the assignee
shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it had
been a signatory Bank hereunder, the Commitments in Section 2.1 shall be
adjusted accordingly, and upon surrender of any Note subject to such
assignment, the Borrower shall execute and deliver a new Note to the assignee
in an amount equal to the amount of the Revolving Credit Commitment assumed by
it and a new Revolving Credit Note to the assigning Bank in an amount equal to
the Revolving Credit Commitment retained by it hereunder. The assigning Bank
shall pay to the Agent a service fee in the amount of $3,500 for each
assignment. In the case of a participation, the participant shall only have the
rights specified in Section 9.2.3 (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto and not to
include any voting rights except with respect to changes of the type referenced
in clauses 11.1.1, 11.1.2, or 11.1.3 under Section 11.1), all of such Bank's
obligations under this Agreement or any other Loan Document shall remain
unchanged, and all amounts payable by any Loan Party hereunder or thereunder
shall be determined as if such Bank had not sold such participation. Any
assignee or participant which is not incorporated under the Laws of the United
States of America or a state thereof shall deliver to the Borrower and the
Agent the form of certificate described in Section 11.17 relating to federal
income tax withholding. Each Bank may furnish any publicly available
information concerning any Loan Party or its Subsidiaries and any other
information concerning any Loan Party or its Subsidiaries in the possession of
such Bank from time to time to assignees and participants (including
prospective assignees or participants),
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provided that such assignees and participants agree to be bound by the
provisions of Section 11.12.
11.12 Confidentiality.
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information the
Borrower specifically designates as confidential), except as provided below,
and to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and
the Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the
confidentiality, (ii) to assignees and participants as contemplated by Section
11.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available from a source not subject to confidentiality
restrictions, or (v) if the Borrower shall have consented to such disclosure.
11.13 Counterparts.
This Agreement may be executed by different parties hereto on
any number of separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
11.14 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
11.15 Exceptions.
The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exceptions be deemed to permit any action or
omission that would be in contravention of applicable Law.
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11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF THE CIRCUIT COURT OF JEFFERSON COUNTY AND THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH
LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST
IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
11.17 Tax Withholding Clause.
Each Bank or assignee or participant of a bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such
tax at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of the Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate
pursuant to the preceding sentence shall deliver such form or certificate as
follows: (A) each Bank which is a party hereto on the Closing Date shall
deliver such form or certificate at least five (5) Business Days prior to the
first date on which any interest or fees are payable by the Borrower hereunder
for the account of each Bank; (B) each assignee or participant shall deliver
such form or certificate at least five (5) Business Days before the effective
date of such assignment or participation (unless the Agent in its sole
discretion shall permit such assignee or participant to deliver such form or
certificate less than five (5) Business Days before such date in which case it
shall be due on the date specified by the Agent). Each Bank, assignee or
participant which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes
to deliver to each of the Borrower and the Agent two (2) additional copies of
such form (or a successor form) on or before the date that such form expires or
becomes obsolete or
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after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, either certifying
that such Bank, assignee or participant is entitled to receive payments under
this Agreement and the other Loan Documents without deduction or withholding of
any United States federal income taxes or is subject to such tax at a reduced
rate under an applicable tax treaty or stating that no such exemption or
reduced rate is allowable. The Agent shall be entitled to withhold United
States federal income taxes at the full withholding rate unless the Bank,
assignee or participant establishes an exemption or that it is subject to a
reduced rate as established pursuant to the above provisions.
11.18 Joinder of Guarantors.
Any Subsidiary of the Borrower which is required to join this
Agreement as a Guarantor pursuant to Section 8.2.8 shall execute and deliver to
the Agent (i) a Joinder in substantially the form attached hereto as Exhibit
1.1(G)(1) pursuant to which it shall join as a Guarantor each of the documents
to which the Guarantors are parties, (ii) documents in the forms described in
Section 7.1 [First Loans] modified as appropriate to relate to such Subsidiary;
and (iii) documents necessary to grant and perfect Prior Security Interests to
the Agent for the benefit of the Banks in all Collateral held by such
Subsidiary. The Loan Parties shall deliver such Joinder and related documents
to the Agent within five (5) Business Days after the date of the filing of such
Subsidiary's articles of incorporation if the Subsidiary is a corporation, the
date of the filing of its certificate of limited partnership if it is a limited
partnership or the date of its organization if it is an entity other than a
limited partnership or corporation.
11.19 LIMITATION OF LIABILITY.
TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE
BY THE BORROWER OR ANY OTHER LOAN PARTY OR ANY OTHER PERSON AGAINST THE AGENT
AND THE BANKS, OR ANY OF THEM, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE,
ATTORNEY OR AGENT OF THE AGENT OR THE BANKS FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF
CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH
(WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND
EACH OF THE BORROWER AND THE OTHER LOAN PARTIES HEREBY WAIVE, RELEASE AND AGREE
NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE 1 OF 3 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
ATTEST: SUBURBAN LODGES OF AMERICA,
INC.
By:
-------------------------------- --------------------------------
Title:
-----------------------------
[Seal]
GUARANTORS:
ATTEST: SUBURBAN HOLDINGS, L.P.
By: Suburban Lodges of America, Inc.,
its sole general partner
By:
-------------------------------- --------------------------------
Title:
-----------------------------
[Seal]
ATTEST: SLA DEVELOPMENT, INC.
By:
-------------------------------- --------------------------------
Title:
-----------------------------
[Seal]
ATTEST: SUBURBAN MANAGEMENT, INC.
By:
-------------------------------- --------------------------------
Title:
-----------------------------
[Seal]
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[SIGNATURE PAGE 2 OF 3 TO CREDIT AGREEMENT]
ATTEST: SUBURBAN FRANCHISE SYSTEMS,
INC.
By:
-------------------------------- --------------------------------
Title:
-----------------------------
[Seal]
Address for Notices to Borrower and Each
Guarantor until October , 1996:
000 Xxxxxxxxxx Xxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Telephone No. (000) 000-0000
Address for Notices to Borrower and Each
Guarantor on and after October , 1996:
Telecopier No.
-----------------------
Attention: Xxxxx X. Xxxxxxxx
Telephone No.
-----------------------
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[SIGNATURE PAGE 3 OF 3 TO CREDIT AGREEMENT]
PNC BANK, KENTUCKY, INC.,
individually and as Agent
By:
-------------------------------
Title:
----------------------------
Address for Notices:
000 Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Commercial Real Estate Lending
Telephone No. (000) 000-0000
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