FOURTH AMENDMENT
TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "FOURTH AMENDMENT") is
dated as of April 5, 2000 and entered into by and among PRIME HOSPITALITY CORP.,
a Delaware corporation ("COMPANY"), the financial institutions listed on the
signature pages hereof ("LENDERS"), SOCIETE GENERALE, SOUTHWEST AGENCY, as
Documentation Agent, CREDIT LYONNAIS NEW YORK BRANCH, as Syndication Agent and
BANKERS TRUST COMPANY, as agent for Lenders ("AGENT"), and, for purposes of
Section 4 hereof, the Credit Support Party named on the signature pages hereof,
and is made with reference to that certain Amended and Restated Senior Secured
Credit Agreement dated as of December 17, 1997, by and among Company, Lenders,
Documentation Agent, Syndication Agent and Agent, as amended or otherwise
modified by that certain First Amendment to Credit Agreement dated as of
February 23, 1998, that certain Limited Waiver to Credit Agreement dated as of
August 5, 1998, that certain Second Amendment to Credit Agreement dated as of
September 24, 1998 and that certain Third Amendment to Credit Agreement dated as
of October 27, 1999 (collectively, the "CREDIT AGREEMENT"). Capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement.
R E C I T A L S
WHEREAS, Company and Lenders desire to amend the Credit Agreement in
the manner set forth below,
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED TERMS
Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"INDEBTEDNESS PREPAYMENT" has the meaning assigned to that term in
subsection 6.5(vii).
"INDEBTEDNESS PREPAYMENT CERTIFICATE" means a Compliance Certificate or
such other evidence reasonably satisfactory to Agent showing that both
immediately prior to and immediately after any Indebtedness Prepayment to be
made on the date thereof (or, if no Indebtedness Prepayment is to be made on
such date, then showing that as of the date of such Indebtedness Prepayment
Certificate) the Company is in compliance with the Indebtedness Prepayment
Financial Covenants after taking into account any changes in the aggregate
Indebtedness of Company and its Subsidiaries that have been made in the time
period between
the last day of the most recently reported quarter and the date of such
Indebtedness Prepayment Certificate.
"INDEBTEDNESS PREPAYMENT DATE" has the meaning assigned to that term in
subsection 6.5(vii).
"INDEBTEDNESS PREPAYMENT FINANCIAL COVENANTS" means the financial
covenants contained in subsection 6.6F.
1.2 AMENDMENTS TO SECTION 6: COMPANY'S NEGATIVE COVENANTS
Subsection 6.5 of the Credit Agreement is hereby amended by adding the
following subparagraphs (vi) and (vii) to the end thereof:
"(vi) Company may pay, prepay, redeem, retire, purchase, buy-back,
defease or make similar payment in respect of the Mortgage Notes; and
(vii) Company may pay, prepay, redeem, retire, purchase, buy-back,
defease or make similar payment in respect of any Indebtedness permitted
under this Agreement (any such payment excluding payments made pursuant to
subsection 6.5(vi), an "INDEBTEDNESS PREPAYMENT"), PROVIDED that
(A) the aggregate amount of Indebtedness Prepayments shall not
exceed $80,000,000,
(B) if, on the date any Indebtedness Prepayment is scheduled to be
made (any such date, an "INDEBTEDNESS PREPAYMENT DATE"), the
aggregate amount of all Indebtedness Prepayments theretofore
made in accordance with this subsection 6.5(vii) plus such
scheduled Indebtedness Prepayment shall exceed $20,000,000,
Company shall deliver to Agent on the Indebtedness Prepayment
Date an Indebtedness Prepayment Certificate dated as of such
Indebtedness Prepayment Date, and
(C) if, on any Indebtedness Prepayment Date, the aggregate amount of
all Indebtedness Prepayments theretofore made in accordance with
this subsection 6.5(vii) plus the corresponding Indebtedness
Prepayment shall also exceed $40,000,000, from and after such
Indebtedness Prepayment Date, Company shall at all times comply
with the Indebtedness Prepayment Financial Covenants and shall
deliver to Agent within one (1) Business Day after request
therefor an Indebtedness Prepayment Certificate dated as of the
date of such request or any other date specified by Agent."
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Subsection 6.6 of the Credit Agreement is hereby amended by adding
thereto the following new subsection 6.6F:
6.6 FINANCIAL COVENANTS.
F. INDEBTEDNESS PREPAYMENT FINANCIAL COVENANTS.
(i) TIMING. Without limitation of any of the foregoing covenants in
this subsection 6.6, Company covenants and agrees that Company shall
perform and comply with all covenants in this subsection 6.6F at the
times and during the periods more specifically set forth in subsection
6.5(vii) above.
(ii) MINIMUM INTEREST COVERAGE RATIOS.
(A) As of the last day of the most recent quarter ending
during any of the periods set forth below, the Company shall not
permit the ratio of (1) Consolidated EBITDA to (2) the sum of (x)
Consolidated Interest Expense PLUS (y) all capitalized interest
expense to be less than the correlative ratio indicated (such
amounts to be determined with reference to the preceding 12-month
period ending on such last day):
================================================================================
PERIOD MINIMUM INTEREST
COVERAGE RATIO
================================================================================
from and including December 17, 1999
to but excluding December 17, 2000 2.625 to 1.00
--------------------------------------------------------------------------------
from and including December 17, 200
and thereafter 2.875 to 1.00
================================================================================
(B) As of the last day of the most recent quarter ending
during any of the periods set forth below, the Company shall not
permit the ratio of (1) Adjusted Consolidated EBITDA to (2) the sum
of (x) Consolidated Interest Expense PLUS (y) all capitalized
interest expense to be less than the correlative ratio indicated
(such amounts to be determined with reference to the preceding
12-month period ending on such last day):
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================================================================================
PERIOD MINIMUM INTEREST
COVERAGE RATIO
================================================================================
from and including December 17, 1999
to but excluding December 17, 2000 2.375 to 1.00
--------------------------------------------------------------------------------
from and including December 17, 2000
to but excluding December 17, 2001 2.625 to 1.00
--------------------------------------------------------------------------------
from and including December 17, 2001
and thereafter 2.875 to 1.00
================================================================================
(iii) MAXIMUM TOTAL DEBT LEVERAGE RATIO. As of the last day of the
most recent quarter ending during any of the periods set forth below,
the Company shall not permit the ratio of (A) Consolidated Total
Indebtedness reduced by the amount of (1) unrestricted cash on the
balance sheet and (2) the 7% Convertible Subordinated Notes due 2002
issued by the Company pursuant to the Convertible Note Indenture (the
"7% NOTES") (provided that the market price of the Common Stock exceeds
the conversion price of the 7% Notes) to (B) Adjusted Consolidated
EBITDA to exceed the correlative ratio indicated (the Consolidated
Total Indebtedness and unrestricted cash calculations to be determined
as of such last day and Adjusted Consolidated EBITDA to be determined
with reference to the preceding 12-month period ending on such day):
================================================================================
PERIOD MAXIMUM TOTAL
DEBT LEVERAGE RATIO
================================================================================
from and including January 1, 2000 - to 4.25 to 1.00
and including December 31, 2000
--------------------------------------------------------------------------------
from and including January 1, 2001 and 4.00 to 1.00
thereafter
================================================================================
(iv) MAXIMUM TOTAL DEBT/BOOK CAPITALIZATION. As of the last day of
the most recent quarter ending, the Company shall not permit the
quotient of (A) Consolidated Total Indebtedness of the Company and its
Subsidiaries DIVIDED by (B) the sum of (1) Consolidated Total
Indebtedness PLUS (2) Consolidated Net Worth to exceed fifty-two and
one-half percent (52.5%)."
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SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Fourth Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FOURTH
AMENDMENT EFFECTIVE DATE"):
A. On or before the Fourth Amendment Effective Date, Company
shall deliver to Agent executed copies of this Fourth Amendment (with sufficient
originally executed copies for each Lender and its counsel) dated the Fourth
Amendment Effective Date.
B. On or before the Fourth Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Fourth Amendment
and to amend the Credit Agreement in the manner provided herein, Company
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each of Company and the
Subsidiary Guarantor has all requisite corporate power and authority to enter
into this Fourth Amendment and to carry out the transactions contemplated by,
and perform its respective obligations under, the Credit Agreement as amended by
this Fourth Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Fourth Amendment and the performance of the Amended Agreement have been
duly authorized by all necessary corporate action on the part of Company and the
Subsidiary Guarantor, as the case may be.
C. NO CONFLICT. The execution and delivery by each of Company
and the Subsidiary Guarantor of this Fourth Amendment and the performance by
Company of the Amended Agreement do not, and will not, (i) violate any provision
of any law or any governmental rule or regulation applicable to Company or any
of its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of
Company or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on Company or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of Company or
any of its Subsidiaries, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of Company or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in favor
of Agent on behalf of Lenders), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of
Company or any
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of its Subsidiaries, except for such approvals or consents which have been
obtained on or before the Fourth Amendment Effective Date and disclosed in
writing to Agent and Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each
of Company and the Subsidiary Guarantor of this Fourth Amendment and any other
operative document delivered pursuant to this Fourth Amendment and the
performance by Company of the Amended Agreement do not, and will not, require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.
E. BINDING OBLIGATION. This Fourth Amendment and the Amended
Agreement have been duly executed and delivered by each of Company and the
Subsidiary Guarantor and will be legally valid and binding obligations of
Company and the Subsidiary Guarantor, enforceable against Company and the
Subsidiary Guarantor in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
F. GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES. Neither the
making of the Loans pursuant to the Amended Agreement nor the granting of a
Security Interest in any Collateral (as defined in the Security Agreement)
pursuant to the Security Documents violates Regulations T, U or X of the Board
of Governors of the Federal Reserve System. It is not necessary in connection
with the execution and delivery of this Fourth Amendment or the Amended
Agreement to register the Loans under the Securities Act or to qualify any
indenture under the Trust Indenture Act of 1939, as amended.
G. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fourth Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
H. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Fourth Amendment that would constitute an Event of Default or a Potential Event
of Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
The Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Fourth
Amendment and consents to the amendment of the Credit Agreement effected
pursuant to this Fourth Amendment. The Credit Support Party hereby confirms that
each Credit Support Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible the payment and performance of all
"Guarantied Obligations" and "Secured Obligations," as the case may be (in each
case as such terms are defined in the
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applicable Credit Support Document), including without limitation the payment
and performance of all such "Guarantied Obligations" or "Secured Obligations,"
as the case may be, in respect of the Obligations of Company now or hereafter
existing under or in respect of the Amended Agreement and the Notes defined
therein.
The Credit Support Party acknowledges and agrees that any of the Loan
Documents and the Credit Support Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations
thereunder (which obligations on the date hereof remain absolute and
unconditional and are not subject to any defenses, set-offs or counterclaims)
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Fourth Amendment. The Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Fourth Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
The Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Fourth
Amendment, the Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Fourth Amendment and (ii) nothing in the
Credit Agreement, this Fourth Amendment or any other Loan Document shall be
deemed to require the consent of the Credit Support Party to any future
amendments to the Credit Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Fourth Amendment Effective Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Fourth Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Fourth Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Agent or any Lender under, the Credit Agreement or any of the other
Loan Documents.
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B. FEES AND EXPENSES. Company acknowledges that all costs,
fees and expenses as described in subsection 8.2 of the Credit Agreement
incurred by Agent and its counsel with respect to this Fourth Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company. Without limiting the generality of the foregoing, and in addition to
any other costs, fees and expenses required to be paid by Company hereunder or
under the Credit Agreement or the other Loan Documents, Company agrees that upon
the written consent of Majority Lenders to the Fourth Amendment, Company shall
pay to each such consenting Lender an amount equal to the product of (i) four
hundredths of one percent (0.04%) and (ii) such Lender's Pro Rata Share of the
aggregate amount of the Commitments, which payments shall be made within three
(3) Business Days after the date on which Agent notifies Company that Agent has
received such written consent of Majority Lenders and the names of the
consenting Lenders.
C. HEADINGS. Section and subsection headings in this Fourth Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Fourth Amendment for any other purpose or be given any substantive
effect.
D. APPLICABLE LAW. THIS FOURTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Fourth Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Fourth Amendment shall become
effective upon the execution of a counterpart hereof by Company, Lenders and the
Credit Support Party and receipt by Company and Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PRIME HOSPITALITY CORP.
By: ______________________________
Name:
Title:
HOMEGATE HOSPITALITY, INC.,
(for purposes of Section 4 only) as the Credit
Support Party
By: ______________________________
Name:
Title:
S-1
BANKERS TRUST COMPANY,
as Agent and as a Lender
By:
------------------------------------
Name:
Title:
S-2
CREDIT LYONNAIS NEW YORK BRANCH,
as Syndication Agent and as a Lender
By:
------------------------------------
Name:
Title:
S-3
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Documentation Agent and as a Lender
By:
------------------------------------
Name:
Title:
S-4
BANK LEUMI USA,
as a Lender
By:
------------------------------------
Name:
Title:
S-5
BANKBOSTON, N.A.,
as a Lender
By:
------------------------------------
Name:
Title:
X-0
XXXX XXX, XXXXX NATIONAL ASSOCIATION,
as a Lender
By:
------------------------------------
Name:
Title:
S-7
CIBC, INC.,
as a Lender
By:
------------------------------------
Name:
Title:
S-8
IMPERIAL BANK,
as a Lender
By:
------------------------------------
Name:
Title:
X-0
XXXX XX XXXXXXX, X.X.,
X/X/X XXXXXXXXXXX, N.A.,
as a Lender
By:
------------------------------------
Name:
Title:
S-10
ORIX USA CORPORATION,
as a Lender
By:
------------------------------------
Name:
Title:
S-11
PNC BANK, N.A.,
as a Lender
By:
------------------------------------
Name:
Title:
S-12
SOUTHERN PACIFIC BANK,
as a Lender
By:
------------------------------------
Name:
Title:
S-13
