EXHIBIT (10)(ii)
----------------
SECOND AMENDED AND RESTATED
SENIOR UNSECURED CREDIT AGREEMENT
Dated as of November 13, 2000
Among
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AS THE BORROWER,
SOCIETE GENERALE, SOUTHWEST AGENCY
AS JOINT BOOK RUNNER AND ADMINISTRATIVE AGENT,
BANK OF MONTREAL, CHICAGO BRANCH
AS SYNDICATION AGENT,
DEUTSCHE BANC ALEX. ▇▇▇▇▇
AS JOINT BOOK RUNNER AND DOCUMENTATION AGENT
and
THE BANKS NAMED HEREIN
AS THE BANKS
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . 1
Section 1.01 Certain Defined Terms . . . . . . . . . . . . . . . 24
Section 1.02 Computation of Time Periods . . . . . . . . . . . . 24
Section 1.03 Accounting Terms; Changes in GAAP . . . . . . . . . 25
Section 1.04 Types of Advances . . . . . . . . . . . . . . . . . 25
Section 1.05 Miscellaneous . . . . . . . . . . . . . . . . . . . 25
Section 1.06 Amendment and Restatement; Commitment
Increases . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT . . . . . . . . . . 26
Section 2.01 The Advances. . . . . . . . . . . . . . . . . . . . 26
Section 2.02 Method of Borrowing . . . . . . . . . . . . . . . . 29
Section 2.03 Fees. . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.04 Reduction of the Commitments. . . . . . . . . . . . 29
Section 2.05 Repayment of Advances . . . . . . . . . . . . . . . 29
Section 2.06 Interest, Late Payment Fee. . . . . . . . . . . . . 29
Section 2.07 Prepayments . . . . . . . . . . . . . . . . . . . . 31
Section 2.08 Breakage Costs. . . . . . . . . . . . . . . . . . . 31
Section 2.09 Increased Costs . . . . . . . . . . . . . . . . . . 32
Section 2.10 Payments and Computations . . . . . . . . . . . . . 33
Section 2.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.12 Illegality. . . . . . . . . . . . . . . . . . . . . 36
Section 2.13 Letters of Credit . . . . . . . . . . . . . . . . . 37
Section 2.14 Determination of Borrowing Base . . . . . . . . . . 39
Section 2.15 Bank Replacement. . . . . . . . . . . . . . . . . . 40
Section 2.16 Sharing of Payments, Etc. . . . . . . . . . . . . . 40
ARTICLE III
CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . 41
Section 3.01 Conditions Precedent to initial Advance . . . . . . 41
Section 3.02 Conditions Precedent for each Borrowing or
Letter of Credit. . . . . . . . . . . . . . . . . . 42
Section 3.03 Conditions Precedent to a Hotel Property
Qualifying as an Eligible Property. . . . . . . . . 43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 46
Section 4.01 Existence; Qualification; Partners;
Subsidiaries. . . . . . . . . . . . . . . . . . . . 46
Section 4.02 Partnership and Corporate Power . . . . . . . . . . 46
Section 4.03 Authorization and Approvals . . . . . . . . . . . . 47
Section 4.04 Enforceable Obligations . . . . . . . . . . . . . . 47
Section 4.05 Parent Common Stock . . . . . . . . . . . . . . . . 47
Section 4.06 Financial Statements. . . . . . . . . . . . . . . . 47
Section 4.07 True and Complete Disclosure. . . . . . . . . . . . 47
Section 4.08 Litigation. . . . . . . . . . . . . . . . . . . . . 48
Section 4.09 Use of Proceeds . . . . . . . . . . . . . . . . . . 48
Section 4.10 Investment Company Act. . . . . . . . . . . . . . . 48
Section 4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.12 Pension Plans . . . . . . . . . . . . . . . . . . . 49
Section 4.13 Condition of Hotel Property; Casualties;
Condemnation. . . . . . . . . . . . . . . . . . . . 49
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Section 4.14 Insurance . . . . . . . . . . . . . . . . . . . . . 49
Section 4.15 No Burdensome Restrictions; No Defaults . . . . . . 50
Section 4.16 Environmental Condition . . . . . . . . . . . . . . 50
Section 4.17 Legal Requirements, Zoning, Utilities,
Access. . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.18 Existing Indebtedness . . . . . . . . . . . . . . . 51
Section 4.19 Title; Encumbrances . . . . . . . . . . . . . . . . 51
Section 4.20 Leasing Arrangements. . . . . . . . . . . . . . . . 51
Section 4.21 Approved Management Agreements. . . . . . . . . . . 52
ARTICLE V
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 52
Section 5.01 Compliance with Laws, Etc.. . . . . . . . . . . . . 52
Section 5.02 Preservation of Existence, Separateness,
Etc.. . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.03 Payment of Taxes, Etc.. . . . . . . . . . . . . . . 54
Section 5.04 Visitation Rights; Bank Meeting . . . . . . . . . . 54
Section 5.05 Reporting Requirements. . . . . . . . . . . . . . . 57
Section 5.06 Maintenance of Property and Required Work . . . . . 58
Section 5.07 Insurance . . . . . . . . . . . . . . . . . . . . . 58
Section 5.08 Borrowing Base Requirements . . . . . . . . . . . . 58
Section 5.09 Supplemental Guaranties . . . . . . . . . . . . . . 58
Section 5.10 LaSalle Leasing . . . . . . . . . . . . . . . . . . 58
Section 5.11 Use of Proceeds . . . . . . . . . . . . . . . . . . 58
Section 5.12 New Guarantors. . . . . . . . . . . . . . . . . . . 58
ARTICLE VI
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 59
Section 6.01 Liens, Etc. . . . . . . . . . . . . . . . . . . . . 59
Section 6.02 Indebtedness. . . . . . . . . . . . . . . . . . . . 59
Section 6.03 Agreements Restricting Distributions
From Subsidiaries . . . . . . . . . . . . . . . . . 60
Section 6.04 Restricted Payments . . . . . . . . . . . . . . . . 60
Section 6.05 Fundamental Changes; Asset Dispositions . . . . . . 61
Section 6.06 Approved Participating Lessee Ownership . . . . . . 61
Section 6.07 Investments, Loans, Future Properties . . . . . . . 61
Section 6.08 Affiliate Transactions. . . . . . . . . . . . . . . 62
Section 6.09 Sale and Leaseback. . . . . . . . . . . . . . . . . 63
Section 6.10 Sale or Discount of Receivables . . . . . . . . . . 63
Section 6.11 No Further Negative Pledges . . . . . . . . . . . . 63
Section 6.12 Intentionally Deleted . . . . . . . . . . . . . . . 63
Section 6.13 Material Documents. . . . . . . . . . . . . . . . . 63
Section 6.14 Limitations on Development, Construction,
Renovation and Purchase of Hotel Properties . . . . 63
ARTICLE VII
FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . 64
Section 7.01 Parent's Fixed Charge Coverage Ratio. . . . . . . . 64
Section 7.02 Parent's Interest Coverage Ratio. . . . . . . . . . 64
Section 7.03 Unsecured Interest Coverage Ratio . . . . . . . . . 64
Section 7.04 Maintenance of Net Worth. . . . . . . . . . . . . . 64
Section 7.05 Limitations on Total Liabilities. . . . . . . . . . 64
Section 7.06 Limitations on Secured Recourse Indebtedness. . . . 64
Section 7.07 Limitations on Secured Indebtedness . . . . . . . . 64
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ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES. . . . . . . . . . . . . . . . 65
Section 8.01 Events of Default . . . . . . . . . . . . . . . . . 65
Section 8.02 Optional Acceleration of Maturity . . . . . . . . . 67
Section 8.03 Automatic Acceleration of Maturity. . . . . . . . . 68
Section 8.04 Cash Collateral Account . . . . . . . . . . . . . . 68
Section 8.05 Non-exclusivity of Remedies . . . . . . . . . . . . 69
Section 8.06 Right of Set-off. . . . . . . . . . . . . . . . . . 69
ARTICLE IX
AGENCY AND ISSUING BANK PROVISIONS . . . . . . . . . . . . 70
Section 9.01 Authorization and Action. . . . . . . . . . . . . . 70
Section 9.02 Administrative Agent' Reliance, Etc.. . . . . . . . 70
Section 9.03 Each Administrative Agent and Its Affiliates. . . . 71
Section 9.04 Bank Credit Decision. . . . . . . . . . . . . . . . 71
Section 9.05 Indemnification . . . . . . . . . . . . . . . . . . 71
Section 9.06 Successor Administrative Agent and
Issuing Banks . . . . . . . . . . . . . . . . . . . 71
Section 9.07 Joint Book Runners, Syndication Agent
and Documentation Agent . . . . . . . . . . . . . . 72
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 72
Section 10.01 Amendments, Etc.. . . . . . . . . . . . . . . . . . 72
Section 10.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . 74
Section 10.03 No Waiver; Remedies . . . . . . . . . . . . . . . . 74
Section 10.04 Costs and Expenses. . . . . . . . . . . . . . . . . 74
Section 10.05 Binding Effect. . . . . . . . . . . . . . . . . . . 74
Section 10.06 Bank Assignments and Participations . . . . . . . . 75
Section 10.07 Indemnification . . . . . . . . . . . . . . . . . . 77
Section 10.08 Execution in Counterparts . . . . . . . . . . . . . 77
Section 10.09 Survival of Representations, Indemnifications,
etc.. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 10.10 Severability. . . . . . . . . . . . . . . . . . . . 77
Section 10.11 Entire Agreement. . . . . . . . . . . . . . . . . . 77
Section 10.12 Usury Not Intended. . . . . . . . . . . . . . . . . 78
Section 10.13 Governing Law . . . . . . . . . . . . . . . . . . . 78
Section 10.14 Consent to Jurisdiction; Service of Process;
Jury Trial. . . . . . . . . . . . . . . . . . . . . 78
Section 10.15 Knowledge of Borrower . . . . . . . . . . . . . . . 79
Section 10.16 Banks Not in Control. . . . . . . . . . . . . . . . 79
Section 10.17 Headings Descriptive. . . . . . . . . . . . . . . . 80
Section 10.18 Time is of the Essence. . . . . . . . . . . . . . . 80
Section 10.19 Scope of Indemnities. . . . . . . . . . . . . . . . 80
Section 10.20 Confidentiality . . . . . . . . . . . . . . . . . . 80
Section 10.21 Hyatt Boston. . . . . . . . . . . . . . . . . . . . 80
EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Environmental Indemnity
Exhibit F - Form of Guaranty
Exhibit G - Form of Notice of Borrowing
Exhibit H - Form of Notice of Conversion or Continuation
Exhibit I - Form of Property Adjustment Report
SCHEDULES:
Schedule 1.01(a) - Commitments
Schedule 1.01(b) - Initial Properties, Initial Investment Amount
and Initial Hotel Value
Schedule 1.01(c) - Approved Managers
Schedule 1.01(d) - Approved Participating Leases
Schedule 1.01(e) - Engineer Report Scope of Services
Schedule 1.01(f) - Approved Engineers
Schedule 1.01(g) - Environmental Report Scope of Services
Schedule 1.01(h) - Approved Environmental Consultants
Schedule 1.01(i) - Guarantors
Schedule 1.01(j) - Qualified Ground Leases
Schedule 1.01(k) - Approved Participating Lessees
Schedule 1.01(l) - Existing Letters of Credit
Schedule 4.01 - Subsidiaries
Schedule 4.08 - Litigation
Schedule 4.17 - Legal Requirements; Zoning; Utilities; Access
Schedule 4.18 - Existing Indebtedness
Schedule 4.21 - Approved Management Agreements
Schedule 5.07 - Insurance
SECOND AMENDED AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED SENIOR UNSECURED CREDIT AGREEMENT, dated
as of November 13, 2000, is among LASALLE HOTEL OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership, as the Borrower, SOCIETE GENERALE,
SOUTHWEST AGENCY, as Joint Book Runner and Administrative Agent, BANK OF
MONTREAL, CHICAGO BRANCH, as Syndication Agent, DEUTSCHE BANC ALEX. ▇▇▇▇▇,
as Joint Book Runner and Documentation Agent, and the Banks.
PRELIMINARY STATEMENTS:
WHEREAS, many of the parties hereto previously entered into an
Amended and Restated Senior Unsecured Credit Agreement, dated as of
October 10, 1998, by and between LaSalle Hotel Operating Partnership, L.P.,
a Delaware limited partnership, as the Borrower, Societe Generale,
Southwest Agency, as Co-Arranger, Administrative Agent, and Documentation
Agent, Bank of Montreal, Chicago Branch, as Co-Arranger and Syndication
Agent, and the banks and other lenders a party thereto; as amended by First
Amendment to Amended and Restated Senior Unsecured Credit Agreement dated
as of November 5, 1998; as amended by Second Amendment to Amended and
Restated Senior Unsecured Credit Agreement dated as of April 15, 1999; and
as amended by Consent dated as of August 10, 2000, all executed by and
among such parties (as so amended, the "Existing Credit Agreement")
pursuant to which the banks and other lenders party to the Existing Credit
Agreement (the "Existing Lenders") have made Advances (as defined in the
Existing Credit Agreement) to the Borrower, and have issued or participated
in Letters of Credit (as defined in the Existing Credit Agreement) for the
account of the Borrower, in each case on the terms and conditions set forth
therein;
WHEREAS, the Borrower has requested that the Existing Lenders amend
the Existing Credit Agreement and the other Credit Documents (as defined in
the Existing Credit Agreement, and as used herein, the "Existing Credit
Documents") in order to decrease the Commitments under this Agreement and
revise certain terms thereof and the Existing Lenders have agreed to do so
on the terms and conditions set forth herein; and
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Credit Agreement in its entirety for clarity only, and amend the
other Existing Credit Documents, in order to memorialize such amendments;
WHEREAS, this Second Amended and Restated Credit Agreement
constitutes for all purposes an amendment to the Existing Credit Agreement
and not a new or substitute agreement and each reference to an "Advance"
and "Letter of Credit" herein shall mean such Advance made and each Letter
of Credit issued heretofore under the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions contained in this Agreement, the parties hereto do hereby agree
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (unless otherwise
indicated, such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Accession Agreement" means an Accession Agreement in the form
attached respectively to the Guaranty and Environmental Indemnity as
Annex 1 thereto, which agreement causes the Person executing and delivering
the same to the Administrative Agent to become a party to the Guaranty and
Environmental Indemnity.
"Acquisition Agreements" means for any Hotel Property the agreements
entered into in connection with the acquisition of such Hotel Property.
"Adjusted Base Rate" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Rate in effect on such day plus 2%.
"Adjusted Net Worth" means, for the Parent as of any date, the sum of
(a) the Parent's Net Worth on such date PLUS (b) the minority interest
reflected in the Parent's balance sheet on such date determined in
accordance with GAAP.
"Adjusted NOI" means, for any Hotel Property for any period, the
EBITDA of such Hotel Property for such period LESS the aggregate FF&E
Reserves for such period for such Hotel Property.
"Adjustment Event" has the meaning set forth in Section 2.14(b).
"Administrative Agent" means Societe Generale, Southwest Agency, in
its capacity as Administrative Agent for the Banks pursuant to Article IX
and any successor Administrative Agent appointed pursuant to Section 9.06.
"Advisor" means LaSalle Hotel Advisors, Inc..
"Advisory Agreement" means collectively that certain Amended and
Restated Advisory Agreement and the certain Employee Lease Agreement, both
dated January 1, 2000, and both between the Parent and the Advisor, as such
agreements may be amended in accordance with the terms of this Agreement.
"Advisory Fee Letter" has the meaning set forth in Section 2.03(d).
"Advance" means an Advance by a Bank to the Borrower, any such
Advance being either a Base Rate Advance or a LIBOR Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such Person or any Subsidiary of such
Person. The term "control" (including the terms "controlled by" or "under
common control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of a Control Percentage, by contract or
otherwise.
"Agreement" has the meaning given such term in the initial paragraph
of this agreement.
"Allocation Percentage" means, for any Person, with respect to a
Person's Joint Venture Subsidiary, the percentage ownership interest of
such Person in such Joint Venture Subsidiary.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Base Rate Advance and such
Bank's LIBOR Lending Office in the case of a LIBOR Advance.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
"Applicable Margin" means, (a) with respect to each Type of Advance
at any date, the applicable percentage per annum set forth below based upon
the Status then in effect under the column for such Type of Advance, (b)
with respect to the letter of credit fee payable under Section 2.03(b) at
any date, the applicable percentage per annum set forth below under the
column "Letters of Credit & LIBOR Advances," based upon the Status then in
effect, and (c) with respect to the commitment fee payable under
Section 2.03(a) at any date, the applicable percentage per annum set forth
below under the column "Unused Commitment Fee," based upon the Status then
in effect.
Letters of Unused
Base Rate Credit & Commitment
Advances LIBOR Advances Fee
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Level I
Status .250% 1.750% .20%
Level II
Status .375% 1.875% .25%
Level III
Status .500% 2.000% .25%
Level IV
Status .625% 2.125% .25%
Notwithstanding the foregoing, the following provisions shall apply:
(a) if the Leverage Ratio does not exceed 50% on any day from the
Closing Date to December 31, 2000, then until December 31, 2000 the
Applicable Margin for (i) Letters of Credit and LIBOR Advances shall be
1.750%, (ii) Base Rate Advances shall be .250%, and (iii) the Unused
Commitment Fee shall be .250%; PROVIDED that if the Leverage Ratio ever
does exceed 50% prior to January 1, 2001, then from and after the date the
Leverage Ratio exceeds 50% (and regardless of whether the Leverage Ratio
subsequently returns to a level equal to or below 50%) the modification to
the Applicable Margins set forth in this paragraph (a) shall no longer
apply.
(b) On January 1, 2001, all Applicable Margins shall be reset based
upon the Status as calculated on or about November 15, 2000. Thereafter,
all such Applicable Margins shall be reset as contemplated by the
definition of Status.
"Approved Management Agreements" means those certain management
agreements listed on Schedule 4.22 attached hereto and any future
management agreement for an Eligible Property in substantially the same
form or as otherwise approved by the Administrative Agent in writing which
approval shall not be unreasonably withheld or delayed.
"Approved Manager" means those certain managers listed as "Approved
Managers" on Schedule 1.01(c) attached hereto, or any other reputable,
nationally known, third party manager of a Hotel Property approved by the
Administrative Agent in writing which approval shall not be unreasonably
withheld or delayed.
"Approved Other Country" means each of the following countries:
Canada, Mexico, United Kingdom, France, Germany, Spain, Belgium, The
Netherlands, Luxembourg, Italy, Portugal, Austria, Switzerland, Norway,
Sweden, Denmark, U. S. Virgin Islands, Bahamas, and Puerto Rico.
"Approved Participating Leases" means those certain Approved
Participating Leases listed on Schedule 1.01(d) attached hereto and any
future participating lease for an Eligible Property approved by the
Administrative Agent in writing (which approval shall not be unreasonably
withheld if such participating lease permits the lessor under such
participating lease to terminate such lease upon the lessee's failure to
achieve reasonable revenue targets for the applicable Hotel Property).
"Approved Participating Lessee" means LaSalle Leasing, each of the
other Persons listed on Schedule 1.01(k) attached hereto, and any future
participating lessee for a Hotel Property (a) which is approved by the
Administrative Agent in writing and (b) does not jeopardize the Parent's
REIT status; provided, however, that any lessee (y) in which the Advisor
has a Control Percentage in ownership interest or (z) that is an Approved
Manager or its Affiliate shall automatically be deemed an Approved
Participating Lessee.
"Approved Substitute Advisor" means any Person experienced in the
hospitality industry which is reasonably acceptable to the Administrative
Agent.
"Approved Substitute Advisory Agreement" means any agreement with an
Approved Substitute Advisor pertaining to the providing of advisory
services to the Parent and the Parent's Subsidiaries which is reasonably
acceptable to the Administrative Agent.
"Asset Disposition" means any sale, lease of substantially all of a
Hotel Property (in which the Borrower or a Guarantor is lessor but
exclusive of the Approved Participating Leases), conveyance, exchange,
transfer, or assignment of any Property by the Borrower or a Guarantor to a
Person other than the Borrower or a Guarantor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of the attached Exhibit B.
"Banks" means the lenders listed on the signature pages of this
Agreement and each Eligible Assignee that shall become a party to this
Agreement pursuant to Section 10.06.
"Base Rate Advance" means an Advance which bears interest as provided
in Section 2.06(a).
"Borrower" means LaSalle Hotel Operating Partnership, L.P., a
Delaware limited partnership.
"Borrowing" means a borrowing consisting of simultaneous Advances of
the same Type made by each Bank pursuant to Section 2.01 or Converted by
each Bank to Advances of a different Type pursuant to Section 2.02(b).
"Borrowing Base" means, at any date of its determination, an amount
equal to (a) 50% of the Borrowing Base Hotel Value on such date MINUS (b)
the Unsecured Indebtedness (except for the Obligations) of the Parent and
its Subsidiaries outstanding on such date.
"Borrowing Base Hotel Value" means, at any date of its determination,
an amount equal to the sum of the Hotel Values for all Eligible Properties
on such date.
"Borrowing Base Certificate" means a certificate of the Borrower in
substantially the form of the attached Exhibit C, certified by a
Responsible Officer of Borrower to be true, correct and accurate in all
material respects.
"Borrowing Base Determination Date" means any date the Borrowing Base
is determined in accordance with Section 2.14.
"Borrowing Base Requirements" means collectively that (a) no more
than 15% of the Borrowing Base Hotel Value may be comprised of Eligible
Properties which are located outside the United States and shall only be in
an Approved Other Country; (b) no more than 10% of the Borrowing Base Hotel
Value may be comprised of Eligible Properties which are limited service
hotels; (c) no more than 20% of the Borrowing Base Hotel Value may be
comprised of Renovating Properties; (d) no more than one (1) Renovating
Property shall be in the Borrowing Base at any time; (e) no more than 20%
of the Borrowing Base Hotel Value may be comprised of Hotel Properties
owned or leased by Joint Venture Subsidiaries; (f) no more than 30% of the
Borrowing Base Hotel Value may be comprised of any one Eligible Property
(except for the San Diego Paradise Point which shall not comprise more than
40% of the Borrowing Base Hotel Value); (g) the Borrowing Base shall be
comprised of at least four (4) Eligible Properties; and (h) no Hotel
Property or other Property shall cause the Parent to forfeit the Parent's
tax status as a REIT.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or Dallas, Texas and, if
the applicable Business Day relates to any LIBOR Advances, any day other
than a Saturday or Sunday or a day on which banking institutions are
generally authorized or obligated by law or executive order to close in the
City of London, England.
"Calculated Value" means for any Hotel Property the product of (a)
the lesser of (i) the Adjusted NOI for such Hotel Property for the
preceding Rolling Period or (ii) the actual rental payments received by the
Parent or its Subsidiary under the participating lease for such Hotel
Property during such Rolling Period TIMES (b) ten (10).
"Capital Expenditure" means any payment made directly or indirectly
for the purpose of acquiring or constructing fixed assets, Real Property or
equipment which in accordance with GAAP would be capitalized in the fixed
asset accounts of such Person making such expenditure, including, without
limitation, amounts paid or payable for such purpose under any conditional
sale or other title retention agreement or under any Capital Lease, but
excluding repairs of Property in the normal and ordinary course of
business.
"Capitalization Event" means any sale or issuance by the Parent or
any of its Subsidiaries of equity securities except for the issuance of the
Borrower's operating partnership units in exchange for a direct or indirect
ownership interest in a Person that owns a Hotel Property.
"Capital Lease" means, for any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its
Subsidiaries under Capitalized Leases, as determined on a consolidated
basis in conformity with GAAP.
"Cash Collateral Account" means a special cash collateral account
containing cash deposited pursuant to the terms of this Agreement to be
maintained at Societe Generale, New York Branch's office in accordance with
Section 8.04.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, state and local
analogs, and all rules and regulations and requirements thereunder in each
case as now or hereafter in effect.
"Closing Date" means November 13, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Commitment" means, with respect to any Bank, the amount set opposite
such Bank's name on Schedule 1.01(a) as its Commitment, or if such Bank has
entered into any Assignment and Acceptance, the amount set forth for such
Bank as its Commitment in the Register maintained by the Administrative
Agent pursuant to Section 10.06(c), as such amount may be reduced pursuant
to Section 2.04.
"Compliance Certificate" means a certificate of the Borrower in
substantially the form of the attached Exhibit D.
"Conditions to Asset Disposition" shall for any Asset Disposition
include all of the following requirements: (a) no Default has occurred and
is continuing or would occur upon the consummation of such Asset
Disposition, as certified by the Borrower; (b) the Borrower shall have
delivered to the Administrative Agent a Property Adjustment Report in
connection with such Asset Disposition; and (c) if required pursuant to the
provisions of Section 2.07(c)(i), the Borrower makes a prepayment of the
Advances in an amount of not less than the amount of Advances that would
need to be repaid, if any, to cure a Borrowing Base deficiency under
Section 2.07(c)(i).
"Consolidated" refers to the consolidation of the accounts of the
Borrower with the Borrower's Subsidiaries and the Parent with the Parent's
Subsidiaries, as applicable, in accordance with GAAP.
"Control Percentage" means, with respect to any Person, the
percentage of the outstanding capital stock of such Person having ordinary
voting power which gives the direct or indirect holder of such stock the
power to elect a majority of the Board of Directors of such Person.
"Controlled Group" means all members of a controlled group of
corporations and all trades (whether or not incorporated) under common
control which, together with the Parent and the Borrower, are treated as a
single employer under Section 414 of the Code.
"Convert", "Conversion", and "Converted" each refers to a conversion
of Advances of one Type into Advances of another Type pursuant to
Section 2.02(b).
"Credit Documents" means this Agreement, the Notes, the Guaranties,
the Environmental Indemnities, the Fee Letter, the Advisory Fee Letter, and
each other agreement, instrument or document executed by the Borrower or
any of its Subsidiaries at any time in connection with this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Development Property" means either (a) a new Hotel Property under
construction including the conversion of a non-Hotel Property into a Hotel
Property or (b) an existing Hotel Property which is undergoing an expansion
pursuant to which the total guest rooms for such Hotel Property will be
increased by 50% or more.
"Dollar Equivalent" means the equivalent in another currency of an
amount in U.S. Dollars to be determined by reference to the rate of
exchange quoted by the Administrative Agent, at 12:00 Noon (Dallas, Texas
time) on the date of determination, for the spot purchase in the foreign
exchange market of such amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Operations Contact" in the questionnaire
such Bank provided to the Administrative Agent, or such other office of
such Bank as such Bank may from time to time specify to the Borrower and
the Administrative Agent.
"EBITDA" means for any Person or Hotel Property, as applicable, for
any period for which such amount is being determined, an amount equal to
(a) the Net Income for such Person or Hotel Property, as applicable, for
such period PLUS (b) to the extent deducted in determining Net Income,
Interest Expense, income taxes, depreciation, amortization, and other non-
cash items for such period, as determined in accordance with GAAP PLUS (c)
for the Hyatt Boston and Hyatt Boston Lessee, as applicable, the Hyatt
Boston Deemed Interest.
"Effective Date" means the date all of the conditions precedent set
forth in Section 3.01 have been satisfied.
"Eligible Assignee" means (a) a commercial bank (or other financial
institution acceptable to the Administrative Agent and the Borrower)
organized under the laws of the United States, or any State thereof, and
having primary capital of not less than $250,000,000 and approved by the
Administrative Agent and the Issuing Bank, which approvals will not be
unreasonably withheld, (b) a commercial bank (or other financial
institution acceptable to the Administrative Agent and the Borrower)
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development and having primary
capital (or its equivalent) of not less than $250,000,000 (or its Dollar
Equivalent) and approved by the Administrative Agent and the Issuing Bank,
which approvals will not be unreasonably withheld, (c) a Bank, and (d) an
Affiliate of the respective assigning Bank, without approval of any Person
but otherwise meeting the eligibility requirements of (a) or (b) above.
"Eligible Property" means, as of any Borrowing Base Determination
Date, any Hotel Property which is owned or leased by the Borrower or any
Guarantor on such date and was so owned or leased on the date of the most
recent Borrowing Base Certificate delivered to the Banks, and which
satisfies the conditions to qualifying as an Eligible Property set forth in
Section 3.03 on such Borrowing Base Determination Date.
"Engineering Report" means with respect to any Hotel Property, an
engineering report in accordance with the scope of services attached hereto
as Schedule 1.01(e) reasonably satisfactory to the Administrative Agent
prepared for the Banks by a Person set forth on Schedule 1.01(f) or
otherwise satisfactory to the Administrative Agent covering the physical
condition of the Hotel Property, including without limitation the
structural, electrical, plumbing, mechanical and other essential components
of the Hotel Property.
"Environment" or "Environmental" shall have the meanings set forth in
42 U.S.C. Section 9601(8), as amended.
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action
or proceeding, order, decree, consent agreement or notice of potential or
actual responsibility or violation (including claims or proceedings under
the Occupational Safety and Health Acts or similar laws or requirements
relating to health or safety of employees) which seeks to impose liability
under any Environmental Law.
"Environmental Indemnity" means one or more environmental indemnity
agreements dated of even date herewith in substantially the form of the
attached Exhibit E executed or to be executed by the Borrower, the Parent
and all Subsidiaries of the Borrower (excluding the Permitted Other
Subsidiaries), and any future environmental indemnities executed in
connection with any Hotel Property, as any of such environmental
indemnities may be amended hereafter in accordance with the terms of such
agreements.
"Environmental Law" means all Legal Requirements arising from,
relating to, or in connection with the Environment, health, or safety,
including without limitation CERCLA, relating to (a) pollution,
contamination, injury, destruction, loss, protection, cleanup, reclamation
or restoration of the air, surface water, groundwater, land surface or
subsurface strata, or other natural resources; (b) solid, gaseous or liquid
waste generation, treatment, processing, recycling, reclamation, cleanup,
storage, disposal or transportation; (c) exposure to pollutants,
contaminants, hazardous, medical, infectious, or toxic substances,
materials or wastes; (d) the safety or health of employees; or (e) the
manufacture, processing, handling, transportation, distribution in
commerce, use, storage or disposal of hazardous, medical, infectious, or
toxic substances, materials or wastes.
"Environmental Permit" means any permit, license, order, approval or
other authorization under Environmental Law.
"Environmental Report" means with respect to any Hotel Property, an
environmental report in accordance with the scope of services attached
hereto as Schedule 1.01(g) reasonably satisfactory to the Administrative
Agent prepared for the Banks by a Person set forth on Schedule 1.01(h) or
otherwise satisfactory to the Administrative Agent certifying to the
Administrative Agent and the Banks that the Hotel Property and the soil and
the groundwater thereunder do not contain Hazardous Substances except for
Permitted Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect
from time to time.
"Exchange Act" has the meaning set forth in Section 2.04.
"Existing Credit Agreement" has the meaning set forth in the
preliminary statements to this Agreement.
"Existing Credit Documents" has the meaning set forth in the
preliminary statements to this Agreement.
"Existing Lenders" has the meaning set forth in the preliminary
statements to this Agreement.
"Existing Letters of Credit" means the letters of credit outstanding
on the date of this Agreement issued for the account of the Borrower or its
Subsidiaries which are described in the attached Schedule 1.01(l), as the
same may be amended, supplemented, and otherwise modified from time to
time.
"Existing Notes" means the promissory notes payable under the
Existing Credit Agreement.
"Event of Default" has the meaning set forth in Section 8.01.
"Expiration Date" means, with respect to any Letter of Credit, the
date on which such Letter of Credit will expire or terminate in accordance
with its terms.
"Facilitators" means Societe Generale, Southwest Agency, Bank of
Montreal, Chicago Branch, and Bankers Trust Company.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for any such day on such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Fee Letter" means the letter agreement dated as of September 18,
2000 among the Borrower, the Parent, and the Facilitators.
"FF&E" means furniture, fixtures and equipment.
"FF&E Reserve" means, for any Person or any Hotel Property for any
period, a reserve equal to four percent (4%) of gross revenues from any
Hotel Property owned by such Person or from such Hotel Property, as
applicable, for such period.
"Fiscal Quarter" means each of the three-month periods ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve-month period ending on December 31.
"Free Cash Flow" means, for any Person for any period, the Funds From
Operations for such period PLUS amortization not included in the
calculation of Funds From Operations LESS (a) the aggregate FF&E Reserves
for such Person and its Subsidiaries for such period, and (b) the aggregate
amount of scheduled principal payments on the Total Liabilities of such
Person (excluding optional prepayments and scheduled principal payments in
respect of any such Indebtedness which is payable in a single installment
at final maturity) required to be made during such period.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. Section 9631 (1988)
and the Post-closure Liability Trust Fund, established pursuant to 42
U.S.C. Section 9641 (1988), which statutory provisions have been amended or
repealed by the Superfund Amendments and Reauthorization Act of 1986, and
the "Fund," "Trust Fund," or "Superfund" that are now maintained pursuant
to 42 U.S.C.Section 9507.
"Funding Deadline" means November 30, 2000
"Funds From Operations" means, for any Person for any period for
which such amount is being determined, an amount equal to such Person's Net
Income for such period excluding gains (losses) from debt restructuring and
sales of property (including furniture and equipment), plus depreciation
and amortization of Real Property and after adjustments for unconsolidated
partnerships and joint ventures, and excluding any payments made in
connection with one-time charges referenced in the definition of Parent's
Adjusted EBITDA.
"Future Property" means any Hotel Property except for the Initial
Properties which the Borrower or any Subsidiary of the Borrower acquires.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time, applied on a basis consistent with the
requirements of Section 1.03.
"Governmental Authority" means any foreign governmental authority,
the United States of America, any state of the United States of America and
any subdivision of any of the foregoing, and any agency, department,
commission, board, authority or instrumentality, bureau or court having
jurisdiction over any Bank, the Parent, the Borrower, any Subsidiaries of
the Borrower or the Parent, any participating lessee, a manager or any of
their respective Properties.
"Governmental Proceedings" means any action or proceedings by or
before any Governmental Authority, including, without limitation, the
promulgation, enactment or entry of any Legal Requirement.
"Guarantor" means (a) the Parent, (b) each Subsidiary which owns an
Eligible Property, (c) each other direct or indirect Wholly-Owned
Subsidiary of the Borrower (except for any direct or indirect Wholly-Owned
Subsidiary which is contractually prohibited from acting as a Guarantor by
the terms of any document evidencing or securing Indebtedness of the
Borrower or its Subsidiaries permitted by the terms of this Agreement), and
(d) each other direct or indirect Joint Venture Subsidiary or
Unconsolidated Entity of the Borrower designated by the Administrative
Agent (except for any such Person which is contractually prohibited from
acting as a Guarantor by the terms of (i) any document evidencing or
securing Indebtedness of the Borrower or its Subsidiaries permitted by the
terms of this Agreement or (ii) the organizational documents of such
Person). The Guarantors on the Effective Date are identified on
Schedule 1.01(i).
"Guaranty" means one or more Guaranty and Contribution Agreements in
substantially the form of the attached Exhibit F executed by the Parent,
the Borrower and all of the Subsidiaries of the Borrower (excluding the
Permitted Other Subsidiaries), evidencing the joint and several guaranty by
the signatories thereto of the obligations of Borrower in respect of the
Credit Documents, and any future guaranty and contribution agreement
executed to secure Advances except for Supplemental Guaranties, as any of
such agreements may be amended hereafter in accordance with the terms of
such agreements.
"Hazardous Substance" means the substances identified as such
pursuant to CERCLA and those regulated under any other Environmental Law,
including without limitation pollutants, contaminants, petroleum, petroleum
products, radio nuclides, radioactive materials, and medical and infectious
waste.
"Hazardous Waste" means the substances regulated as such pursuant to
any Environmental Law.
"Hotel Property" for any hotel means the Real Property and the
Personal Property for such hotel, and the property referred to in
Section 10.13.
"Hotel Value" means, with respect to any Hotel Property, at any date,
the value thereof to be calculated as follows:
(a) For a Seasoned Property, the Calculated Value for such
Seasoned Property; and
(b) For a New Property, the Investment Amount in such New
Property; PROVIDED that if the Borrower can provide the Administrative
Agent financial reports for such New Property for the period prior to the
acquisition of such New Property which have been reviewed by KPMG Peat
Marwick L.L.P. or other independent certified public accountants of
nationally recognized standing reasonably acceptable to the Administrative
Agent, then at the Borrower's election the Hotel Value for such New
Property will be the lesser of (i) the Calculated Value for such New
Property or (ii) 120% of the Investment Amount in such New Property.
However, the Hotel Value of a Hotel Property owned or leased by a Joint
Venture Subsidiary shall be deemed to be the Allocation Percentage of the
value calculated above for such Hotel Property. The initial Hotel Value for
the Initial Properties is set forth on Schedule 1.01(b) attached hereto.
"Hyatt Boston" means the Hotel Property called the Hyatt Harborside
Hotel, located in Boston, Massachusetts.
"Hyatt Boston Bond Overlap Period" has the meaning set forth in
Section 10.21.
"Hyatt Boston Deemed Interest" means approximately $200,000 per year
of payments made or to be made by the Hyatt Boston Lessee under the Hyatt
Boston Lease which terminate upon the redemption of the Hyatt Boston
Replacement Bonds.
"Hyatt Boston Existing Bonds" means Massachusetts Port Authority
Special Project Revenue Bonds, Series 1990 issued by the Hyatt Boston
Issuer.
"Hyatt Boston Existing Bonds Credit Enhancement" means any letter of
credit, guaranty or other form of credit enhancement which supports the
Hyatt Boston Existing Bonds.
"Hyatt Boston Issuer" means the Massachusetts Port Authority.
"Hyatt Boston Lease" means that certain Amended and Restated Ground
Lease, by and between the Hyatt Boston Issuer and the Hyatt Boston Lessee,
as amended.
"Hyatt Boston Lessee" means LHO Harborside Hotel, LLC.
"Hyatt Boston Replacement Bonds" means bonds issued by the Hyatt
Boston Issuer in an amount approximately equal to the amount needed to
redeem the Hyatt Boston Existing Bonds, including interest on such bonds
and the costs and expenses of redeeming such bonds and issuing the Hyatt
Boston Replacement Bonds.
"Hyatt Boston Replacement Bonds Proceeds" means the aggregate cash
proceeds received from the issuance of the Hyatt Boston Replacement Bonds
MINUS the expenses incurred in connection with such issuance.
"Hyatt Boston Replacement Bonds Credit Enhancement" means any letter
of credit, guaranty or other form of credit enhancement which supports the
Hyatt Boston Replacement Bonds.
"Improvements" for any hotel means all buildings, structures,
fixtures, tenant improvements and other improvements of every kind and
description now or hereafter located in or on or attached to the Land for
such hotel; and all additions and betterments thereto and all renewals,
substitutions and replacements thereof.
"Indebtedness" means (without duplication), at any time and with
respect to any Person, (a) indebtedness of such Person for borrowed money
(whether by loan or the issuance and sale of debt securities) or for the
deferred purchase price of property or services purchased (other than
amounts constituting trade payables, accruals or bank drafts arising in the
ordinary course of business); (b) indebtedness of others in the amount
which such Person has directly or indirectly assumed or guaranteed or
otherwise provided credit support therefor or for which such Person is
liable as a partner of such Person; (c) indebtedness of others in the
amount secured by a Lien on assets of such Person, whether or not such
Person shall have assumed such indebtedness; (d) obligations of such Person
in respect of letters of credit, acceptance facilities, or drafts or
similar instruments issued or accepted by banks and other financial
institutions for the account of such Person (other than trade payables or
bank drafts arising in the ordinary course); (e) obligations of such Person
under Capital Leases; and (f) obligations under interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements
or other similar agreements or arrangements designed to protect against
fluctuations in interest rates.
"Initial Properties" means collectively the Hotel Properties listed
on Schedule 1.01(b), and "Initial Property" means any of such Hotel
Properties.
"Interest Expense" means, for any Person for any period for which
such amount is being determined, the total interest expense (including that
properly attributable to Capital Leases in accordance with GAAP) and all
charges incurred with respect to letters of credit determined on a
consolidated basis in conformity with GAAP, PLUS capitalized interest of
such Person and its Subsidiaries PLUS for the Hyatt Boston Lessee, the
Hyatt Boston Deemed Interest.
"Interest Period" means, for each LIBOR Advance comprising part of
the same Borrowing, the period commencing on the date of such Advance or
the date of the Conversion of any Base Rate Advance into such an Advance
and ending on the last day of the period selected by the Borrower pursuant
to the provisions below and Section 2.02 and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and Section 2.02. The duration of each
such Interest Period shall be one, two, three, six, nine or twelve months,
in each case as the Borrower may select, upon notice received by the
Administrative Agent not later than 12:00 Noon (Dallas, Texas time) on the
third Business Day prior to the first day of such Interest Period,
PROVIDED, HOWEVER, that:
(a) Interest Periods for Advances of the same Borrowing shall be of
the same duration;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
PROVIDED that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month in which it would have ended if
there were a numerically corresponding day in such calendar month; and
(d) each successive Interest Period shall commence on the day on
which the next preceding Interest Period expires; and
(e) no Interest Period with respect to any portion of any Advance
shall extend beyond the Maturity Date.
"Interest Rate Agreements" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrower, the
Parent or any of their respective Subsidiaries against fluctuations in
interest rates.
"Investment" means, with respect to any Person, (a) any loan or
advance to any other Person, (b) the ownership, purchase or other
acquisition of, any Stock, Stock Equivalents, other equity interest,
obligations or other securities of, (i) any other Person, or (ii) all or
substantially all of the assets of any other Person, or (iii) all or
substantially all of the assets constituting the business of a division,
branch or other unit operation of any other Person, or (c) any joint
venture or partnership with, or any capital contribution to, or other
investment in, any other Person or any real property.
"Investment Amount" means (a) for any Hotel Property the sum of (i)
for any Initial Property, the amount set forth for such Initial Property on
Schedule 1.01(b) attached hereto, and for any other Hotel Property, the
aggregate purchase price paid by the Borrower or its Subsidiary for such
other Hotel Property (giving effect to any securities used to purchase a
Hotel Property at the fair market value of the securities at the time of
purchase based upon the price at which such securities could be exchanged
into the Parent's common stock assuming such exchange occurred on the date
of acquiring the Hotel Property), and (ii) 95% of (A) the actual cost of
any Capital Expenditures or FF&E expenditures for such Hotel Property made
by the Borrower or its Subsidiaries during any period minus (B) the FF&E
Reserve for such Hotel Property for such period, and (b) for any other
Investment the aggregate purchase price paid by the Borrower or its
Subsidiary for such other Investment (giving effect to any securities used
to purchase such Investment at the fair market value of the securities at
the time of purchase based upon the price at which such securities could be
exchanged into the Parent's common stock assuming such exchange occurred on
the date of acquiring such Investment).
"Issuing Bank" means Societe Generale, Southwest Agency; any Bank
approved by the Administrative Agent and the Borrower as an "Issuing Bank";
or any Bank acting as a successor issuing bank pursuant to Section 9.06,
and "Issuing Banks" means, collectively, all of such Banks.
"Joint Venture Subsidiary" of a Person means any Subsidiary of such
Person which is controlled and managed by such Person, except for a Wholly-
Owned Subsidiary.
"Land" for any hotel means the real property upon which the hotel is
located, together with all rights, title and interests appurtenant to such
real property, including without limitation all rights, title and interests
to (a) all strips and gores within or adjoining such property, (b) the
streets, roads, sidewalks, alleys, and ways adjacent thereto, (c) all of
the tenements, hereditaments, easements, reciprocal easement agreements,
rights-of-way and other rights, privileges and appurtenances thereunto
belonging or in any way pertaining thereto, (d) all reversions and
remainders, (e) all air space rights, and all water, sewer and wastewater
rights, (e) all mineral, oil, gas, hydrocarbon substances and other rights
to produce or share in the production of anything related to such property,
and (f) all other appurtenances appurtenant to such property, including
without limitation, any now or hereafter belonging or in anywise
appertaining thereto.
"LaSalle Leasing" means LaSalle Hotel Lessee, Inc.
"Legal Requirement" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation
of any of the foregoing) of, and the terms of any license or permit issued
by, any Governmental Authority.
"Letter of Credit" means, individually, any letter of credit issued
by the Issuing Bank in accordance with the provisions of Section 2.13 of
this Agreement including any Existing Letter of Credit, and "Letters of
Credit" means all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of
Credit, such Letter of Credit and any reimbursement or other agreements,
documents, and instruments entered into in connection with or relating to
such Letter of Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit and (b) the
aggregate unpaid amount of all Letter of Credit Obligations at such time.
"Letter of Credit Obligations" means all obligations of the Borrower
arising in respect of the Letter of Credit Documents, including without
limitation the aggregate drawn amounts of Letters of Credit which have not
been reimbursed by the Borrower or converted into an Adjusted Base Rate
Advance pursuant to the provisions of Section 2.13(c).
"Leverage Ratio" means the percentage obtained by dividing (a) the
Parent's Total Liabilities by (b) the Parent Aggregate Asset Value.
"LIBOR" means, for the Interest Period for each LIBOR Advance
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest whole multiple of 1/16 of 1% per annum) equal to (A)
the rate per annum at which deposits in Dollars are offered by the
Administrative Agent to leading banks and accepted by leading banks in the
London interbank eurodollar market at approximately 12:00 Noon (London
time) two (2) Business Days before the first day of such Interest Period,
in an amount substantially equal to the Administrative Agent's LIBOR
Advance comprising part of such Borrowing and for a period equal to such
Interest Period divided by (B) one minus the LIBOR Reserve Requirement. It
is agreed that for purposes of this definition, LIBOR Advances made
hereunder shall be deemed to constitute Eurocurrency Liabilities as defined
in Regulation D and to be subject to the reserve requirements of
Regulation D.
"LIBOR Advance" means any Advance which bears interest as provided in
Section 2.06(b).
"LIBOR Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Operations Contact" in the questionnaire such
Bank provided to the Administrative Agent, or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the
Administrative Agent.
"LIBOR Reserve Requirement" shall mean, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such date, as
provided by the Federal Reserve System for determining the maximum reserve
requirements generally applicable to financial institutions regulated by
the Federal Reserve Board comparable in size and type to the Administrative
Agent (including, without limitation, basic, supplemental, marginal and
emergency reserves) under Regulation D with respect to "Eurocurrency
liabilities" as currently defined as Regulation D, or under any similar or
successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding (or other category of liabilities which includes
deposits by reference to which the interest rate on a LIBOR Advance is
determined or any category or extensions of credit which includes loans by
a non-United States office of the Administrative Agent to United States
residents). Each determination by the Administrative Agent of the LIBOR
Reserve Requirement, shall, in the absence of manifest error, be conclusive
and binding upon the Borrower.
"Lien" means any mortgage, lien, pledge, charge, deed of trust,
security interest, encumbrance or other type of preferential arrangement to
secure or provide for the payment of any obligation of any Person, whether
arising by contract, operation of law or otherwise (including, without
limitation, the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement).
"Liquid Investments" means cash and the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days
from the date of acquisition thereof ("bank debt securities"), issued by
(A) any Bank or (B) any other bank or trust company which has a combined
capital surplus and undivided profit of not less than $250,000,000 or the
Dollar Equivalent thereof, if at the time of deposit or purchase, such bank
debt securities are rated not less than "A" (or the then equivalent) by the
rating service of S&P or of Moody's, and (ii) commercial paper issued by
(A) any Bank or (B) any other Person if at the time of purchase such
commercial paper is rated not less than "A-2" (or the then equivalent) by
the rating service of S&P or not less than "P-2" (or the then equivalent)
by the rating service of Moody's, or upon the discontinuance of both of
such services, such other nationally recognized rating service or services,
as the case may be, as shall be selected by the Borrower with the consent
of the Administrative Agent;
(c) repurchase agreements relating to investments described in
clauses (a) and (b) above with a market value at least equal to the
consideration paid in connection therewith, with any Person who regularly
engages in the business of entering into repurchase agreements and has a
combined capital surplus and undivided profit of not less than $250,000,000
or the Dollar Equivalent thereof, if at the time of entering into such
agreement the debt securities of such Person are rated not less than "A"
(or the then equivalent) by the rating service of S&P or of Moody's; and
(d) such other instruments (within the meaning of New York's
Uniform Commercial Code) as the Borrower may request and the Administrative
Agent may approve in writing, which approval will not be unreasonably
withheld.
"Material Adverse Change" shall mean a material adverse change in the
business, financial condition, or results of operations of the Borrower,
the Parent or any Guarantor, in each case since the date of the most recent
financial statements of the Borrower or the Parent delivered to the Banks.
"Maturity Date" means December 31, 2003.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law.
"Minimum Tangible Net Worth" means, with respect to the Parent, at
any time, the sum of (a) $230,000,000 PLUS (b) 75% of the aggregate net
proceeds received by the Parent or any of its Subsidiaries after the
Closing Date in connection with any offering of Stock or Stock Equivalents
of the Parent or its Subsidiaries, PLUS (c) 75% of the value of any
partnership interests in Borrower issued after the Closing Date for the
acquisition of a Hotel Property or any interest in a Hotel Property
permitted hereunder.
"Moody's" means ▇▇▇▇▇'▇ Investor Service Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Parent, the Borrower or any member
of a Controlled Group is making or accruing an obligation to make
contributions.
"Net Cash Proceeds" means (a) the aggregate cash proceeds (including,
without limitation, insurance proceeds) received by the Parent, the
Borrower or any of their respective Subsidiaries (as applicable) in
connection with any Asset Disposition or Capitalization Event, MINUS (b)
the reasonable expenses of such Person in connection with such Asset
Disposition or such Capitalization Event.
"Net Income" means, for any Person or Hotel Property for any period
for which such amount is being determined, the net income of such Person
(on a consolidated basis) or Hotel Property, as applicable, after taxes, as
determined in accordance with GAAP, excluding, however, extraordinary
items, including but not limited to (i) any net gain or loss during such
period arising from the sale, exchange, or other disposition of capital
assets (such term to include all fixed assets and all securities) other
than in the ordinary course of business and (ii) any write-up or write-down
of assets; PROVIDED that to the extent that the Net Income for any Hotel
Property does not include a reasonable allocation of administrative,
accounting or other overhead of the Person or Persons who directly or
indirectly own or lease such Hotel Property which directly pertains to the
operation of Hotel Properties, then such allocation amount shall be deemed
subtracted from such Net Income for purposes of the financial tests and
other definitions contained in this Agreement which utilize Hotel Property
Net Income.
"Net Worth" means, for any Person, stockholders equity of such Person
determined in accordance with GAAP.
"New Property" means, as at any date, any Hotel Property (including a
Renovating Property) that is not a Seasoned Property.
"Note" means a promissory note of the Borrower payable to the order
of any Bank, in substantially the form of the attached Exhibit A,
evidencing indebtedness of the Borrower to such Bank resulting from
Advances owing to such Bank, and "Notes" means all of such promissory
notes.
"Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit G signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion
or continuation in the form of the attached Exhibit H signed by a
Responsible Officer of the Borrower.
"Obligations" means all Advances, Letter of Credit Obligations, and
other amounts payable by the Borrower to the Administrative Agent or the
Banks under the Credit Documents.
"Parent" means LaSalle Hotel Properties, a Maryland trust.
"Parent Aggregate Asset Value" means the sum of (a) the aggregate
Hotel Value of the Parent Hotel Properties which meet the Parent Hotel
Property Requirements, (b) the Parent's and the Parent's Subsidiaries'
Liquid Investments, (c) for Investments in Unconsolidated Entities which
are in the form of loans to such Unconsolidated Entities, the Investment
Amount of all such Investments and (d) for Investments in Unconsolidated
Entities which are not in the form of loans to such Unconsolidated
Entities, the aggregate sum of the products obtained by multiplying the
Hotel Value for each Hotel Property owned or leased by an Unconsolidated
Entity by the Parent's Unconsolidated Entity Percentage for such
Unconsolidated Entity.
"Parent Common Stock" means the common shares of beneficial interest
of Parent, par value $.01 per share.
"Parent Hotel Properties" means all Hotel Properties owned or leased
by the Parent or one of the Parent's Subsidiaries, including without
limitation Eligible Properties.
"Parent Hotel Property Requirements" means (a) that all Parent Hotel
Properties are (i) in either the United States of America or an Approved
Other Country and (ii) either (A) full service hotels primarily located in
a resort, convention or urban market or (B) limited service hotels
primarily located in an urban market, (b) that all Parent Hotel Properties
would not, if all were deemed Eligible Properties, cause a material
variation to the Borrowing Base Requirements, (c) no Parent Hotel Property
has a Hotel Value which exceeds 25% of the difference of (i) the Parent
Aggregate Asset Value MINUS (ii) to the extent added in determining the
Parent Aggregate Asset Value, the amount of Liquid Investments, (d) no
Parent Hotel Property is subject to a ground lease which fails in a
material way to qualify as a Qualified Ground Lease, and (e) no Parent
Hotel Property (i) fails to comply in any material respect with all
applicable Environmental Laws, and (ii) is subject to any material
Environmental Claim, all as evidenced by an Environmental Report for such
Parent Hotel Property delivered by the Parent to the Administrative Agent.
"Parent's Adjusted EBITDA" means, for the Parent and the Parent's
Subsidiaries on a Consolidated basis for any period, (a) the EBITDA for
such period PLUS (b) to the extent deducted in determining EBITDA, any one-
time charges on of before December 31, 2001 which in the aggregate do not
exceed $1,800,000 and which are (i) taken within a Rolling Period of the
consummation of the Permitted Proposed Transaction in connection with the
Permitted Proposed Transaction or a write-off of intangible assets
pertaining to LaSalle Leasing or (ii) otherwise approved by the
Administrative Agent LESS (c) the sum of (i) the aggregate base management
fees and employee lease fees paid during such period under the Advisory
Agreement or any Approved Substitute Advisory Agreement and (ii) the
aggregate FF&E Reserves for such period in respect of each Hotel Property
owned by the Parent or its Subsidiaries (whether located on land owned by
or land leased to such owner of the Hotel Property).
"Parent's Fixed Charge Coverage Ratio" means, as of the end of any
Rolling Period, a ratio of (a) the Parent's Adjusted EBITDA for such
Rolling Period to (b) the Parent's Fixed Charges for such Rolling Period.
"Parent's Fixed Charges" means, for the period for which such amount
is being determined, the sum of the following amounts for the Parent and
the Parent's Subsidiaries on a Consolidated basis: (a) the amount (without
duplication) of all mandatory principal payments scheduled to be made
(excluding optional prepayments and scheduled principal payments in respect
of any such Indebtedness which is payable in a single installment at final
maturity), (b) Parent's Interest Expense, (c) all payments scheduled to be
made in respect of Capital Leases, and (d) all preferred stock dividends.
"Parent's Interest Coverage Ratio" means, as of the end of any
Rolling Period, a ratio of (a) Parent's Adjusted EBITDA for such Rolling
Period to (b) the Parent's Interest Expense for such Rolling Period.
"Parent's Interest Expense" means, for the period for which such
amount is being determined, the Interest Expense for the Parent and the
Parent's Subsidiaries on a Consolidated basis.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means the Liens permitted to exist pursuant
to Section 6.01.
"Permitted Hazardous Substances" means (a) Hazardous Substances,
petroleum and petroleum products which are (i) used in the ordinary course
of business and in typical quantities for a hotel and (ii) generated, used
and disposed of in accordance with all Legal Requirements and good hotel
industry practice and (b) non-friable asbestos to the extent (i) that no
applicable Legal Requirements require removal of such asbestos from the
Hotel Property and (ii) such asbestos is encapsulated in accordance with
all applicable Legal Requirements and such reasonable operations and
maintenance program as may be required by the Administrative Agent.
"Permitted Hotel Sale" means the Asset Disposition of all, but not a
portion, of (a) a Hotel Property or (b) the ownership interest in a
Subsidiary of the Borrower which owns a Hotel Property, in either case for
which the Conditions to Asset Disposition are satisfied or will be
satisfied within the time periods required under this Agreement.
"Permitted Non-Eligible Property" means any Hotel Property (a) which
either (i) does NOT satisfy the conditions to qualifying as an Eligible
Property set forth in Section 3.03, (ii) has not been submitted to the
Banks as a potential Eligible Property or (iii) has been removed as an
Eligible Property by the Borrower; (b) which is owned by a Permitted Other
Subsidiary; (c) which neither is subject to any Environmental Claim, nor
contains any Hazardous Substance which could reasonably be expected to
cause a Material Adverse Change as evidenced by an Environmental Report
delivered to the Administrative Agent at least 10 days prior to the
acquisition of such Hotel Property by Borrower or one of Borrower's
Subsidiaries; and (d) which, with all other Parent Hotel Properties, will
not cause a violation of the Parent Hotel Property Requirements.
"Permitted Other Subsidiaries" means a Wholly-Owned Subsidiary or a
Joint Venture Subsidiary of the Borrower which (a) does not own any
Eligible Property, and (b) is a bankruptcy remote, single purpose Person.
"Permitted Proposed Transaction" means the purchase by Borrower or a
Subsidiary of Borrower of all of the issued and outstanding shares of the
capital stock of LaSalle Leasing for cash consideration which does not
exceed $1,200,000; PROVIDED that (a) while the Borrower can enter into an
agreement pertaining to such purchase at any time, the Borrower shall not
consummate such purchase until on or after January 1, 2001; (b) the
Borrower shall consummate such purchase pursuant to documentation
reasonably acceptable to the Administrative Agent; (c) the Borrower shall
provide to the Administrative Agent evidence reasonably satisfactory to the
Administrative Agent that the consummation of such purchase shall not cause
a potential Event of Default under Section 8.01(o) of this Agreement
pertaining to the Parent's REIT status.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
limited liability company, joint venture or other entity, or a government
or any political subdivision or agency thereof or any trustee, receiver,
custodian or similar official.
"Personal Property" for any Hotel Property means all FF&E, inventory
and other personal property of every kind, whether now existing or
hereafter acquired, tangible and intangible, now or hereafter located on or
about the Land, and used or to be used in the future in connection with the
operation of such Hotel Property.
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Parent, the Borrower or any member of
a Controlled Group and covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code.
"Preliminary Property Plan" means for any Hotel Property, the
preliminary financial projections of the Capital Expenditures and the
expenditures for FF&E for such Hotel Property in connection with a
renovation or expansion (but not maintenance) of such Hotel Property, as
such projections may be amended by the Borrower from time to time.
"Prime Rate" means a fluctuating interest rate per annum as shall be
in effect from time to time equal to the rate of interest publicly
announced by the Administrative Agent as its prime commercial lending rate
(which may not be the lowest rate offered to its customers), whether or not
the Borrower has notice thereof.
"Property" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"Property Adjustment Report" means a certificate of the Borrower in
substantially the form of the attached Exhibit I.
"Property Information" for any Hotel Property means the information
and documentation for such Hotel Property listed in Sections 3.03(f),
3.03(g), 3.03(j)(i)-(iii) and (v) and a commitment for a title policy for
such Hotel Property, together with a legible copy of all documents referred
to in such commitment.
"Property Owner" for any Initial Property or Future Property, means
the Person who owns fee or leasehold title interest (as applicable) in, and
to such Property.
"Pro Rata Share" means, at any time with respect to any Bank, either
(a) the ratio (expressed as a percentage) of such Bank's Commitment at such
time to the aggregate Commitments at such time or (b) if the Commitments
have been terminated, the ratio (expressed as a percentage) of such Bank's
aggregate outstanding Advances and participation interest in the Letter of
Credit Exposure at such time to the aggregate outstanding Advances and
Letter of Credit Exposure of all the Banks at such time.
"Prescribed Forms" means such duly executed form(s) or statement(s),
and in such number of copies, which may, from time to time, be prescribed
by law and which, pursuant to applicable provisions of (a) an income tax
treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable
rule or regulation under the Code, permit the Borrower to make payments
hereunder for the account of such Bank free of deduction or withholding of
income or similar taxes (except for any deduction or withholding of income
or similar taxes as a result of any change in or in the interpretation of
any such treaty, the Code or any such rule or regulation).
"Public Offering" means the initial public offering of approximately
14,200,000 shares of Parent Common Stock.
"Qualified Ground Lease" means each of the ground leases or subground
leases set forth on Schedule 1.01(j) hereto and for a Future Property means
any ground lease (a) which is a direct ground lease granted by the fee
owner of real property, (b) which may be transferred and/or assigned
without the consent of the lessor (or as to which the lease expressly
provides that (i) such lease may be transferred and/or assigned with the
consent of the lessor and (ii) such consent shall not be unreasonably
withheld or delayed) or subject to certain reasonable pre-defined
requirements, (c) which has a remaining term (including any renewal terms
exercisable at the sole option of the lessee) of at least twenty (20)
years, (d) under which no material default has occurred and is continuing,
(e) with respect to which a Lien may be granted without the consent of the
lessor, (f) which contains lender protection provisions acceptable to the
Administrative Agent, including, without limitation, provisions to the
effect that (i) the lessor shall notify any holder of a Lien in such lease
of the occurrence of any default by the lessee under such lease and shall
afford such holder the option to cure such default, and (ii) in the event
that such lease is terminated, such holder shall have the option to enter
into a new lease having terms substantially identical to those contained in
the terminated lease and (g) which is otherwise acceptable in form and
substance to the Administrative Agent.
"Real Property" for any hotel means the Land and the Improvements for
such hotel, including without limitation, parking and other ancillary
functions necessary for the operation of such hotel.
"Register" has the meaning set forth in paragraph (c) of
Section 10.06.
"REIT" means a real estate investment trust under Sections 856-860 of
the Code.
"Release" shall have the meaning set forth in CERCLA or under any
other Environmental Law.
"Renovating Property" means a Hotel Property (a) that has been
designated as such in writing by the Borrower to the Administrative Agent,
and (b) with respect to which a renovation (i) was commenced consisting of
alterations, remodeling and other similar work having an aggregate cost
exceeding ten percent (10%) of the Investment Amount in such Hotel Property
and (ii) was completed, or is reasonably expected to be completed, within
twenty-four (24) months of the commencement of such renovation; PROVIDED
that the Borrower shall only be able to designate (y) one (1) Hotel
Property as a Renovating Property at any one time and (z) a Hotel Property
as a Renovating Property only during the Fiscal Quarters for which the
renovation is occurring (not exceeding eight (8) Fiscal Quarters) and the
Rolling Period following such period.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA.
"Required Lenders" means, at any time, Banks holding at least 51% of
the then aggregate unpaid principal amount of the Notes and the Letter of
Credit Exposure of the Banks at such time, or, if no such principal amount
of the Notes and Letter of Credit Exposure is then outstanding, Banks
having at least 51% of the aggregate amount of the Commitments at such
time.
"Required Work" means, for any Future Property which the Borrower
requests be an Eligible Property, the work agreed upon by the Borrower and
the Administrative Agent, if any, as the Required Work for such Future
Property.
"Response" shall have the meaning set forth in CERCLA or under any
other Environmental Law.
"Responsible Officer" means the Chief Executive Officer, President,
Executive Vice President, Chief Operating Officer, Chief Financial Officer,
or Treasurer of any Person.
"Restricted Payment" means (a) any direct or indirect payment,
prepayment, redemption, purchase, or deposit of funds or Property for the
payment (including any sinking fund or defeasance), prepayment, redemption
or purchase of Indebtedness not permitted by this Agreement, and (b) the
making by any Person of any dividends or other distributions (in cash,
property, or otherwise) on, or payment for the purchase, redemption or
other acquisition of, any shares of any capital stock, any limited
liability company interests or any partnership interests of such Person,
other than dividends or distributions payable in such Person's stock,
limited liability company interests or any partnership interests.
"Rolling Period" means, as of any date, the four Fiscal Quarters
ending immediately preceding such date.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-
▇▇▇▇, Inc., or any successor thereof.
"Seasoned Property" means, as at any date, a Hotel Property
(excluding any Renovating Property) that has been owned for four (4) or
more Fiscal Quarters, by the Parent or by a Person that has been a
Subsidiary of the Parent during such entire period.
"Secured Non-Recourse Indebtedness" of any Person means all
Indebtedness of such Person with respect to which recourse for payment is
limited to specific assets encumbered by a Lien securing such Indebtedness;
PROVIDED, HOWEVER, that personal recourse of a holder of Indebtedness
against any obligor with respect thereto for fraud, misrepresentation,
misapplication of cash, non-payment of real estate taxes or ground lease
rent, waste and other circumstances customarily excluded from non-recourse
provisions in non-recourse financing of real estate shall not, by itself,
prevent any Indebtedness from being characterized as Secured Non-Recourse
Indebtedness, PROVIDED FURTHER THAT if a personal recourse claim is made in
connection therewith, such claim shall not constitute Secured Non-Recourse
Indebtedness for the purposes of this Agreement.
"Secured Recourse Indebtedness" of any Person means any Total
Liabilities (excluding any Secured Non-Resource Indebtedness) of such
Person for which the obligations thereunder are secured by a Lien on any
assets of such Person or its Subsidiaries.
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"Status" means the existence of Level I Status, Level II Status,
Level III Status, or Level IV Status, as the case may be. As used in this
definition:
"Level I Status" exists at any date if, at such date, the
Leverage Ratio is less than or equal to 35%;
"Level II Status" exists at any date if, at such date, the
Leverage Ratio is greater than 35% but less than or equal to 40%;
"Level III Status" exists at any date if, at such date, the
Leverage Ratio is greater than 40% but less than or equal to 45%; and
"Level IV Status" exists at any date if, at such date, the
Leverage Ratio is greater than 45%.
Status shall be determined and changed as of the 45th day following any
Fiscal Quarter. The Leverage Ratio shall be based upon the components of
the calculation of the Leverage Ratio for the Rolling Period just ended or
as of the end of such Rolling Period, as applicable.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how
designated) of or in a corporation or equivalent entity, whether voting or
non-voting, and includes, without limitation, common stock and preferred
stock.
"Stock Equivalents" means all securities (other than Stock)
convertible into or exchangeable for Stock and all warrants, options or
other rights to purchase or subscribe for any stock, whether or not
presently convertible, exchangeable or exercisable.
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which more than 50% of the
outstanding shares of capital stock (or other equivalent interests) having
by the terms thereof ordinary voting power under ordinary circumstances to
elect a majority of the board of directors or Persons performing similar
functions (or, if there are no such directors or Persons, having general
voting power) of such entity (irrespective of whether at the time capital
stock (or other equivalent interests) of any other class or classes of such
entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more Subsidiaries of such Person or
by one or more Subsidiaries of such Person.
"Supplemental Guarantor" means any partner of the Borrower except for
the Parent or the Guarantors that executes a Supplemental Guaranty.
"Supplemental Guaranty" means any future assumption of liability in a
form reasonably acceptable to the Administrative Agent executed by a
Supplemental Guarantor to secure Advances, as such future supplemental
guaranties may be amended hereafter in accordance with their terms.
"Termination Event" means (a) the occurrence of a Reportable Event
with respect to a Plan, as described in Section 4043 of ERISA and the
regulations issued thereunder (other than a Reportable Event not subject to
the provision for 30-day notice to the PBGC under such regulations),
(b) the withdrawal of the Parent, the Borrower or any of a Controlled Group
from a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (c) the giving of a notice of
intent to terminate a Plan under Section 4041(c) of ERISA, (d) the
institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Total Commitments" means the aggregate amount of the Banks'
Commitments which shall initially be Two Hundred Million Dollars
($200,000,000); as such amount may be increased pursuant to the provisions
of Section 1.06 or decreased pursuant to the provisions of Section 2.04 or
other applicable provisions of this Agreement.
"Total Liabilities" of any Person means the sum of the following
(without duplication): (a) all Indebtedness of such Person and its
Subsidiaries determined on a Consolidated basis in conformity with GAAP,
PLUS (b) such Person's Unconsolidated Entity Percentage of Indebtedness
(including Secured Non-Recourse Indebtedness) of such Person's
Unconsolidated Entities, PLUS (c) to the extent not already included in the
calculation of either of the preceding clauses (a) or (b), the aggregate
amount of letters of credit for which such Person or any of its
Subsidiaries would have a direct or contingent obligation to reimburse the
issuers of such letters of credit upon a drawing under such letters of
credit MINUS (d) to the extent included in the calculation of any of the
preceding clauses (a), (b) or (c), (i) trade payables and accruals incurred
in the ordinary course of business, (ii) the amount of any minority
interests and (iii) Capital Lease Obligations for a ground lease for any
Hotel Property for which the annual rental payments for such ground lease
do not exceed 30% of the Adjusted NOI for such Hotel Property.
"Type" has the meaning set forth in Section 1.04.
"Unconsolidated Entity" means, with respect to any Person, at any
date, any other Person in whom such Person holds an Investment, which
Investment is accounted for in the financial statements of such Person on
an equity basis of accounting or as a loan or advance to the other Person,
and whose financial results would not be consolidated under GAAP with the
financial results of such Person on the consolidated financial statements
of such Person, if such statements were prepared as of such date.
"Unconsolidated Entity Percentage" means, for any Person, with
respect to a Person's Unconsolidated Entity, the percentage ownership
interest of such Person in such Unconsolidated Entity; PROVIDED that, in
the event that such Person is the general partner of such Unconsolidated
Entity, such Person's Unconsolidated Entity Percentage with respect to such
Unconsolidated Entity shall be 100% with respect to any Indebtedness for
which recourse may be made against any general partner of such
Unconsolidated Entity (provided that such Indebtedness shall not be deemed
to be recourse to such general partner solely because of certain customary
carveouts to non-recourse Indebtedness); PROVIDED FURTHER that when the
Investment in an Unconsolidated Entity is in the form of preferred stock or
a loan or advance, the Unconsolidated Entity Percentage shall be a
percentage equal to (a) the amount of such Investment DIVIDED by (b) the
aggregate amount of the Investments by all Persons in the Unconsolidated
Entity.
"Unencumbered" means, with respect to any Hotel Property, at any date
of determination, the circumstance that such Hotel Property on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability) of any kind (including any such Lien or
restriction imposed by (i) any agreement governing Indebtedness, and (ii)
the organizational documents of the Borrower or any of its Subsidiaries,
but excluding Permitted Encumbrances and, in the case of any Qualified
Ground Lease (to the extent permitted by the definition thereof),
restrictions on transferability or assignability in respect of such
Qualified Ground Lease);
(b) is not subject to any agreement (including (i) any
agreement governing Indebtedness, and (ii) if applicable, the
organizational documents of the Borrower or any of its Subsidiaries) which
prohibits or limits the ability of the Borrower or any of its Subsidiaries
to create, incur, assume or suffer to exist any Lien upon such Hotel
Property, other than Permitted Encumbrances (excluding any agreement or
organizational document which limits generally the amount of Indebtedness
which may be incurred by the Borrower or its Subsidiaries); and
(c) is not subject to any agreement (including any agreement
governing Indebtedness) which entitles any Person to the benefit of any
Lien (other than Permitted Encumbrances) on such Hotel Property, or would
entitle any Person to the benefit of any such Lien upon the occurrence of
any contingency (including, without limitation, pursuant to an "equal and
ratable" clause).
For the purposes of this Agreement, any Hotel Property owned by a
Subsidiary of the Borrower shall not be deemed to be Unencumbered unless
both (i) such Hotel Property and (ii) all Stock owned directly or
indirectly by Borrower in such Subsidiary is Unencumbered.
"Unsecured Indebtedness" of any Person means the Total Liabilities of
such Person MINUS the sum of the Secured Recourse Indebtedness and Secured
Non-Recourse Indebtedness of such Person.
"Unsecured Interest Coverage Ratio" means, as of the end of any
Rolling Period, a ratio of (a) the amount of (i) the aggregate Adjusted NOI
for all Eligible Properties for such Rolling Period MINUS (ii) for any
Eligible Property the Adjusted NOI attributable to the period of time prior
to a Hotel Property qualifying as an Eligible Property PLUS (iii) for any
previous Eligible Property that no longer qualifies as an Eligible Property
during such Rolling Period the Adjusted NOI for such Hotel Property for the
portion of such Rolling Period that such Hotel Property qualified as an
Eligible Property to (b) the portion of Parent's Interest Expense
attributable to Unsecured Indebtedness for such Rolling Period.
"Wholly-Owned Subsidiary" of a Person means any Subsidiary for which
such Person's ownership interest is 99% or more.
SECTION 1.02 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding".
SECTION 1.03 ACCOUNTING TERMS; CHANGES IN GAAP.
(a) All accounting terms not specifically defined in this
Agreement shall be construed in accordance with GAAP applied on a
consistent basis.
(b) Unless otherwise indicated, all financial statements of
the Borrower and the Parent, all calculations for compliance with covenants
in this Agreement, and all calculations of any amounts to be calculated
under the definitions in Section 1.01 shall be based upon the Consolidated
accounts of the Borrower, the Parent and their respective Subsidiaries (as
applicable) in accordance with GAAP.
(c) If any changes in accounting principles after
September 30, 2000 required by GAAP or the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or similar
agencies results in a change in the method of calculation of, or affects
the results of such calculation of, any of the financial covenants,
standards or terms found in this Agreement, then the parties shall enter
into and diligently pursue negotiations in order to amend such financial
covenants, standards or terms so as to equitably reflect such change, with
the desired result that the criteria for evaluating the financial condition
of Borrower and its Subsidiaries (determined on a Consolidated basis) shall
be the same after such change as if such change had not been made.
SECTION 1.04 TYPES OF ADVANCES. Advances are distinguished by
"Type". The "Type" of an Advance refers to the determination whether such
Advance is a LIBOR Advance or Base Rate Advance, each of which constitutes
a Type.
SECTION 1.05 MISCELLANEOUS. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to
this Agreement, unless otherwise specified.
SECTION 1.06 AMENDMENT AND RESTATEMENT; COMMITMENT INCREASES. The
parties hereto agree to use reasonable efforts to accomplish the matters
set forth in the preliminary statements of this Agreement and, without
limitation, agree to the following:
(a) For each Bank which does not have an Existing Note, the
Borrower will execute a Note payable to such Bank in the amount of such
Bank's Commitment which Note will constitute the Note the Borrower is
obligated to deliver to such Bank as provided in Section 3.01.
(b) For each Bank which has an Existing Note, the Borrower
will execute a Note payable to such Bank in the amount of such Bank's
Commitment which Note (i) will replace in its entirety such Bank's Existing
Note and either increase or decrease, as applicable, the Indebtedness
evidenced by the Existing Note and (ii) constitute the Note the Borrower is
obligated to deliver to such Bank as provided in Section 3.01.
(c) The Borrower shall be entitled to request that the Total
Commitments be increased to an amount not exceeding Three Hundred Million
Dollars ($300,000,000); PROVIDED that (i) no Default then exists, (ii) the
Borrower gives the Banks thirty (30) days prior written notice of such
election, (iii) no Bank shall be obligated to increase such Bank's
Commitment without such Bank's written consent which may be withheld in
such Bank's sole discretion, (iv) the Borrower, not the Banks or the
Administrative Agent, is responsible for arranging for Persons to provide
the additional Commitment amounts; and (v) any Person providing any
additional Commitment amount must qualify as an Eligible Assignee and be
reasonably acceptable to the Administrative Agent if such Person is not
already a Bank. In connection with any such increase in the Total
Commitments the parties shall execute any documents reasonably requested in
connection with or to evidence such increase, including without limitation
an amendment to this Agreement.
(d) On the date ("Funding Date") the conditions precedent set
forth in Section 3.01 are satisfied, or, in connection with any future
increase in the Total Commitments permitted by this Agreement, the date
designated by the Administrative Agent, the Banks whose Commitments have
increased in connection with this Agreement or such future increase in the
Total Commitments, as applicable, shall fund to the Administrative Agent
such amounts as may be required to cause each of them to hold its Pro Rata
Share of Advances based upon the Commitments as of such Funding Date, and
the Administrative Agent shall distribute the funds so received to the
other Banks in such amounts as may be required to cause each of them to
hold its Pro Rata Share of Advances as of such Funding Date. The Banks and
the Existing Lenders, as applicable, receiving such amounts to be applied
to LIBOR Advances may demand payment of the breakage costs under
Section 2.08 as though Borrower had elected to prepay such LIBOR Advances
on such date and the Borrower shall pay the amount so demanded as provided
in Section 2.08. The first payment of interest and letter of credit fees
received by the Administrative Agent after such Funding Date shall be paid
to the Banks in amounts adjusted to reflect the adjustments of their
respective Pro Rata Shares of the Advances as of the Funding Date. On the
Funding Date each Bank shall be deemed to have either sold or purchased, as
applicable, participations in the Letter of Credit Exposure sold to the
Banks pursuant to Section 2.13(b) of the Original Credit Agreement so that
upon consummation of all such sales and purchases each Bank holds
participations in the Letter of Credit Exposure equal to such Bank's Pro
Rata Share of the total Letter of Credit Exposure as of such Funding Date.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01 THE ADVANCES. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Advances to the
Borrower from time to time on any Business Day up to 30 days prior to the
Maturity Date in an aggregate amount not to exceed at any time outstanding
an amount equal to such Bank's Commitment LESS such Bank's Pro Rata Share
of the Letter of Credit Exposure at such time. The aggregate amount of all
outstanding Advances and Letter of Credit Exposure at any time may not
exceed either the lesser of (i) the Total Commitments at such time or (ii)
the Borrowing Base at such time. Within the limits of each Bank's
Commitment and the Borrowing Base limitation set forth above, the Borrower
may from time to time prepay pursuant to Section 2.07 and reborrow under
this Section 2.01. Notwithstanding any notice requirement in this Agreement
to the contrary, for the initial Advance only the Banks and the Borrower
agree that if the conditions precedent for the initial Advance set forth in
Section 3.01 are satisfied on or prior to November 14, 2000, the initial
Advance shall be on November 14, 2000 and shall be a LIBOR Advance if
requested by the Borrower.
SECTION 2.02 METHOD OF BORROWING.
(A) NOTICE. Each Borrowing shall be made by telephone
(promptly confirmed in writing on the same day) pursuant to a Notice of
Borrowing, given not later than 12:00 Noon (Dallas, Texas time) (i) on the
third Business Day before the date of the proposed Borrowing, in the case
of a Borrowing consisting of LIBOR Advances, or (ii) on the Business Day
before the date of the proposed Borrowing, in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative
Agent, which shall give each Bank prompt notice on the day of receipt of
such timely telephone call or Notice of Borrowing of such proposed
Borrowing by telecopier. Each Notice of Borrowing shall be in writing or
by telecopier specifying the requested (i) date of such Borrowing, (ii)
Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing, and (iv) if such Borrowing is to be comprised of LIBOR Advances,
the Interest Period for each such Advance. In the case of a proposed
Borrowing comprised of LIBOR Advances, the Administrative Agent shall
promptly notify each Bank of the applicable interest rate under Section
2.06(b). Each Bank shall, before 12:00 Noon (Dallas, Texas time) on the
date of such Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address referred to in
Section 10.02, or such other location as the Administrative Agent may
specify by notice to the Banks, in same day funds, such Bank's Pro Rata
Share of such Borrowing. Upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds
available to the Borrower at its account with the Administrative Agent or
to such other account as the Borrower shall specify to the Administrative
Agent in writing.
(b) CONVERSIONS AND CONTINUATIONS. In order to elect to
Convert or continue Advances comprising part of the same Borrowing under
this Section, the Borrower shall deliver an irrevocable Notice of
Conversion or Continuation to the Administrative Agent at the
Administrative Agent's office no later than 12:00 Noon (Dallas, Texas time)
(i) on the date which is at least three Business Days in advance of the
proposed Conversion or continuation date in the case of a Conversion to or
a continuation of a Borrowing comprised of LIBOR Advances and (ii) on the
Business Day prior to the proposed conversion date in the case of a
Conversion to a Borrowing comprised of Base Rate Advances. Each such
Notice of Conversion or Continuation shall be in writing or by telecopier,
specifying (i) the requested Conversion or continuation date (which shall
be a Business Day), (ii) the Borrowing amount and Type of the Advances to
be Converted or continued, (iii) whether a Conversion or continuation is
requested, and if a Conversion, into what Type of Advances, and (iv) in the
case of a Conversion to, or a continuation of, LIBOR Advances, the
requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Administrative Agent
shall provide each Bank with a copy thereof and, in the case of a
Conversion to or a continuation of LIBOR Advances, notify each Bank of the
applicable interest rate under Section 2.06(b). For purposes other than
the conditions set forth in Section 3.02, the portion of Advances
comprising part of the same Borrowing that are Converted to Advances of
another Type shall constitute a new Borrowing. If the Borrower shall fail
to specify an Interest Period for a LIBOR Advance including the
continuation of a LIBOR Advance, the Borrower shall be deemed to have
selected a Base Rate Advance.
(c) CERTAIN LIMITATIONS. Notwithstanding anything in
paragraphs (a) and (b) above:
(i) in the case of LIBOR Advances each Borrowing shall be in
an aggregate amount of not less than $1,000,000 or greater multiples of
$100,000;
(ii) except for Borrowings for the acquisition by the Borrower
or its Subsidiary of Investments permitted under Sections 6.07 (c) and (d),
the Borrower may not request Borrowings on more than three days in any
calendar month.
(iii) at no time shall there be more than eight (8) Interest
Periods applicable to outstanding LIBOR Advances;
(iv) the Borrower may not select LIBOR Advances for any
Borrowing to be made, Converted or continued if a Default has occurred and
is continuing;
(v) if any Bank shall, at any time prior to the making of any
requested Borrowing comprised of LIBOR Advances, notify the Administrative
Agent that the introduction of or any change in or in the interpretation of
any law or regulation after the date hereof makes it unlawful, or that any
central bank or other governmental authority asserts that it is unlawful,
for such Bank or its LIBOR Lending Office to perform its obligations under
this Agreement to make LIBOR Advances or to fund or maintain LIBOR
Advances, then such Bank's Pro Rata Share of such Borrowing shall be made
as a Base Rate Advance, provided that such Base Rate Advance shall be
considered part of the same Borrowing and interest on such Base Rate
Advance shall be due and payable at the same time that interest on the
LIBOR Advances comprising the remainder of such Borrowing shall be due and
payable; and such Bank agrees to use commercially reasonable efforts
(consistent with its internal policies and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the
making of such designation would avoid the effect of this paragraph and
would not, in the reasonable judgment of such Bank, be otherwise materially
disadvantageous to such Bank;
(vi) if the Administrative Agent is unable to determine the
LIBOR for LIBOR Advances comprising any requested Borrowing, the right of
the Borrower to select LIBOR Advances for such Borrowing or for any
subsequent Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing
shall be a Base Rate Advance;
(vii) if the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative Agent
that the LIBOR for LIBOR Advances comprising such Borrowing will not
adequately reflect the cost to such Banks of making or funding their
respective LIBOR Advances, as the case may be, for such Borrowing, the
right of the Borrower to select LIBOR Advances for such Borrowing or for
any subsequent Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing
shall be a Base Rate Advance; and
(viii) if the Borrower shall fail to select the duration or
continuation of any Interest Period for any LIBOR Advances in accordance
with the provisions contained in the definition of "Interest Period" in
Section 1.01 and paragraph (a) or (b) above, the Administrative Agent will
forthwith so notify the Borrower and the Banks and such Advances will be
made available to the Borrower on the date of such Borrowing as Base Rate
Advances or, if an existing Advance, Converted into Base Rate Advances.
(d) NOTICES IRREVOCABLE. Each Notice of Borrowing and Notice
of Conversion or Continuation shall be irrevocable and binding on the
Borrower. In the case of any Borrowing which the related Notice of
Borrowing specifies is to be comprised of LIBOR Advances, the Borrower
shall indemnify each Bank against any loss, out-of-pocket cost or expense
incurred by such Bank as a result of any condition precedent for Borrowing
set forth in Article III not being satisfied for any reason, including,
without limitation, any loss, cost or expense actually incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by
such Bank to fund the Advance to be made by such Bank as part of such
Borrowing when such Advance, as a result of such failure, is not made on
such date.
(e) ADMINISTRATIVE AGENT RELIANCE. Unless the Administrative
Agent shall have received notice from a Bank before the date of any
Borrowing that such Bank will not make available to the Administrative
Agent such Bank's Pro Rata Share of the Borrowing, the Administrative Agent
may assume that such Bank has made its Pro Rata Share of such Borrowing
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (a) of this Section 2.02 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Bank
shall not have so made its Pro Rata Share of such Borrowing available to
the Administrative Agent, such Bank and the Borrower severally agree to
immediately repay to the Administrative Agent on demand such corresponding
amount, together with interest on such amount, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable on each such day to Advances comprising such
Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for
each such day. If such Bank shall repay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding
amount so repaid shall constitute such Bank's Advance as part of such
Borrowing for purposes of this Agreement even though not made on the same
day as the other Advances comprising such Borrowing.
(f) BANK OBLIGATIONS SEVERAL. The failure of any Bank to
make the Advance to be made by it as part of any Borrowing shall not
relieve any other Bank of its obligation, if any, to make its Advance on
the date of such Borrowing. No Bank shall be responsible for the failure
of any other Bank to make the Advance to be made by such other Bank on the
date of any Borrowing.
(g) NOTES. The indebtedness of the Borrower to each Bank
resulting from Advances owing to such Bank shall be evidenced by the Note
of the Borrower payable to the order of such Bank in substantially the form
of Exhibit A.
SECTION 2.03 FEES.
(a) COMMITMENT FEES. For the period from the Effective Date
to but excluding the Maturity Date the Borrower agrees to pay to the
Administrative Agent for the account of each Bank a commitment fee on the
average daily amount by which such Bank's Commitment exceeds the sum of
such Bank's outstanding Advances and Pro Rata Share of the Letter of Credit
Exposure at a rate per annum equal to the Applicable Margin based upon a
360-day year. Such fees shall be due and payable quarterly in arrears (i)
on the date which is 30 days following the last Business Day of each March,
June, September and December and (ii) on the Maturity Date.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Banks, fees in respect of all
Letters of Credit outstanding at a rate per annum equal to the Applicable
Margin calculated based upon a 360-day year and in respect of the maximum
amount available from time to time to be drawn under such outstanding
Letters of Credit, payable quarterly in arrears (i) on the date which is 30
days following the last Business Day of each March, June, September and
December and (ii) on the Maturity Date. In addition, the Borrower agrees
to pay to the Issuing Bank for its own account a fee on the average daily
amount of the aggregate undrawn maximum face amount of each Letter of
Credit issued by such Issuing Bank at a rate per annum equal to .125%, such
fees due and payable quarterly in arrears (i) on the date which is 30 days
following the last Business Day of each March, June, September and December
and (ii) on the Maturity Date.
(c) FACILITATORS' FEES. The Borrower agrees to pay to the
Facilitators for their benefit the fees set forth in the Fee Letter as and
when the same are due and payable pursuant to the terms of the Fee Letter.
(d) ▇▇ ▇▇▇▇▇'▇ FEES. The Borrower agrees to pay to ▇▇ ▇▇▇▇▇
for ▇▇ ▇▇▇▇▇'▇ account the fees set forth in the Advisory Fee Letter (the
"Advisory Fee Letter") dated September 18, 2000, by and between such
parties, as and when the same are due and payable pursuant to the terms of
such Advisory Fee Letter.
SECTION 2.04 REDUCTION OF THE COMMITMENTS. The Borrower may, upon
at least three Business Days' prior notice to the Administrative Agent,
permanently terminate in whole or permanently reduce ratably in part the
Commitments of the Banks; PROVIDED, HOWEVER, that (i) each partial
reduction shall be in the aggregate amount of not less than $5,000,000 or
an integral multiple of $1,000,000 in excess thereof, (ii) no such
reduction shall result in a Borrowing Base deficiency as provided in
Section 2.07(c)(i), and (iii) no such reduction shall result in the Total
Commitments of the Banks being less than $100,000,000.
SECTION 2.05 REPAYMENT OF ADVANCES. The Borrower shall repay the
outstanding principal amount of each Advance on the Maturity Date.
SECTION 2.06 INTEREST, LATE PAYMENT FEE. The Borrower shall pay
interest on the unpaid principal amount of each Advance made by each Bank
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) BASE RATE ADVANCES. If such Advance is a Base Rate
Advance, a rate per annum (computed on the actual number of days elapsed,
including the first day and excluding the last, based on a 365 day year)
equal at all times to the lesser of (i) the Adjusted Base Rate in effect
from time to time plus the Applicable Margin and (ii) the Maximum Rate,
payable in arrears on the first day of each calendar month, provided that
during the continuance of an Event of Default, Base Rate Advances shall
bear interest at a rate per annum equal at all times to the lesser of
(i) the rate required to be paid on such Advance immediately prior to the
date on which such Event of Default commenced plus two percent (2%) and
(ii) the Maximum Rate.
(b) LIBOR ADVANCES. If such Advance is a LIBOR Advance, a
rate per annum (computed on the actual number of days elapsed, including
the first day and excluding the last, based on a 360 day year) equal at all
times during the Interest Period for such Advance to the lesser of (i) the
LIBOR for such Interest Period plus the Applicable Margin and (ii) the
Maximum Rate, payable in arrears on the last day of such Interest Period,
and on the date such LIBOR Advance shall be paid in full, and, with respect
to LIBOR Advances having an Interest Period in excess of one month, the
first day of each calendar month during such Interest Period; provided that
during the continuance of an Event of Default, LIBOR Advances shall bear
interest at a rate per annum equal at all times to the lesser of (i) the
rate required to be paid on such Advance immediately prior to the date on
which such Event of Default commenced plus two percent (2%) and (ii) the
Maximum Rate.
(c) USURY RECAPTURE. In the event the rate of interest
chargeable under this Agreement or the Notes at any time is greater than
the Maximum Rate, the unpaid principal amount of the Notes shall bear
interest at the Maximum Rate until the total amount of interest paid or
accrued on the Notes equals the amount of interest which would have been
paid or accrued on the Notes if the stated rates of interest set forth in
this Agreement had at all times been in effect. In the event, upon payment
in full of the Notes, the total amount of interest paid or accrued under
the terms of this Agreement and the Notes is less than the total amount of
interest which would have been paid or accrued if the rates of interest set
forth in this Agreement had, at all times, been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the
Administrative Agent for the account of the Banks an amount equal to the
difference between (i) the lesser of (A) the amount of interest which would
have been charged on the Notes if the Maximum Rate had, at all times, been
in effect and (B) the amount of interest which would have accrued on the
Notes if the rates of interest set forth in this Agreement had at all times
been in effect and (ii) the amount of interest actually paid or accrued
under this Agreement on the Notes. In the event the Banks ever receive,
collect or apply as interest any sum in excess of the Maximum Rate, such
excess amount shall, to the extent permitted by law, be applied to the
reduction of the principal balance of the Notes, and if no such principal
is then outstanding, such excess or part thereof remaining shall be paid to
the Borrower.
(d) OTHER AMOUNTS OVERDUE. If any amount payable under this
Agreement other than the Advances is not paid when due and payable,
including without limitation, accrued interest and fees, then such overdue
amount shall accrue interest hereon due and payable on demand at a rate per
annum equal to the Adjusted Base Rate plus two percent (2%), from the date
such amount became due until the date such amount is paid in full.
SECTION 2.07 PREPAYMENTS.
(a) RIGHT TO PREPAY. The Borrower shall have no right to
prepay any principal amount of any Advance except as provided in this
Section 2.07.
(b) OPTIONAL PREPAYMENTS. The Borrower may elect to prepay
any of the Advances, after giving by 12:00 Noon (Dallas, Texas time) (i) in
the case of LIBOR Advances, at least three Business Days' prior written
notice or (ii) in case of Base Rate Advances, at least one Business Day's
prior written notice to the Administrative Agent stating the proposed date
and aggregate principal amount of such prepayment, and if applicable, the
relevant Interest Period for the Advances to be prepaid. If any such
notice is given, the Borrower shall prepay Advances comprising part of the
same Borrowing in whole or ratably in part in an aggregate principal amount
equal to the amount specified in such notice, and with respect to LIBOR
Advances shall also pay accrued interest to the date of such prepayment on
the principal amount prepaid and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on such
date; PROVIDED, HOWEVER, that each partial prepayment shall be in an
aggregate principal amount not less than $1,000,000 and in integral
multiples of $100,000.
(c) MANDATORY PREPAYMENTS.
(i) BORROWING BASE DEFICIENCY. On or prior to the fifth
(5th) Business Day following a Borrowing Base Determination Date occurring
under the provisions of Section 2.14, the Borrower shall be required to
prepay Advances in an aggregate amount equal to the excess of (A) the
aggregate amount of outstanding Advances and Letter of Credit Exposure on
such date over (B) the lesser of (1) the Borrowing Base, as determined on
such Borrowing Base Determination Date or (2) the Total Commitments at such
time (or, upon payment in full of all outstanding Advances, to deposit into
the Cash Collateral Account an amount equal to the amount of the Letter of
Credit Exposure which exceeds the Borrowing Base).
(ii) ACCRUED INTEREST. Each prepayment pursuant to this
Section 2.07(c) of a LIBOR Advance shall be accompanied by accrued interest
on the amount prepaid to the date of such prepayment and amounts, if any,
required to be paid pursuant to Section 2.08 as a result of such prepayment
being made on such date.
(d) RATABLE PAYMENTS. Each payment of any Advance pursuant
to this Section 2.07 or any other provision of this Agreement shall be made
in a manner such that all Advances comprising part of the same Borrowing
are paid in whole or ratably in part.
(e) EFFECT OF NOTICE. All notices given pursuant to this
Section 2.07 shall be irrevocable and binding upon the Borrower.
SECTION 2.08 BREAKAGE COSTS. If (a) any payment of principal of any
LIBOR Advance is made other than on the last day of the Interest Period for
such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VIII or
otherwise; (b) any Conversion of a LIBOR Advance is made other than on the
last day of the Interest Period for such Advance pursuant to Section 2.12
or otherwise; or (c) the Borrower fails to make a principal or interest
payment with respect to any LIBOR Advance on the date such payment is due
and payable, the Borrower shall, within 10 days of any written demand sent
by any Bank to the Borrower through the Administrative Agent, pay to the
Administrative Agent for the account of such Bank any amounts (without
duplication of any other amounts payable in respect of breakage costs)
required to compensate such Bank for any losses (other than lost profit),
out-of-pocket costs or expenses which it may reasonably incur as a result
of such payment or nonpayment, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Bank to fund or maintain such
Advance.
SECTION 2.09 INCREASED COSTS.
(a) LIBOR ADVANCES. If, due to either (i) the introduction
of or any change (other than any change by way of imposition or increase of
reserve requirements included in the calculation of the LIBOR) in or in the
interpretation of any law or regulation enacted, issued or promulgated
after the date of this Agreement or (ii) the compliance with any guideline
or request from any central bank or other Governmental Authority (whether
or not having the force of law) enacted, issued or promulgated after the
date of this Agreement, there shall be any increase in the cost to any Bank
of agreeing to make or making, funding or maintaining LIBOR Advances, then
the Borrower shall from time to time, within 10 days of written demand by
such Bank (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Bank additional amounts
(without duplication of any other amounts payable in respect of increased
costs) sufficient to compensate such Bank for such increased cost;
PROVIDED, HOWEVER, that, before making any such demand, each Bank agrees to
use commercially reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need
for, or reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate as to the amount of such increased cost and detailing
the calculation of such cost submitted to the Borrower and the
Administrative Agent by such Bank at the time such Bank demands payment
under this Section shall be conclusive and binding for all purposes, absent
manifest error.
(b) CAPITAL ADEQUACY. If any Bank or the Issuing Bank
determines in good faith that compliance with any law or regulation or any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law) enacted, issued or promulgated
after the date of this Agreement affects or would affect the amount of
capital required or expected to be maintained by such Bank or the Issuing
Bank and that the amount of such capital is increased by or based upon the
existence of such Bank's commitment to lend or the Issuing Bank's
commitment to issue Letters of Credit or any Bank's commitment to risk
participate in Letters of Credit and other commitments of this type, then,
upon 30 days prior written notice by such Bank or the Issuing Bank (with a
copy of any such demand to the Administrative Agent), the Borrower shall
immediately pay to the Administrative Agent for the account of such Bank or
to the Issuing Bank, as the case may be, from time to time as specified by
such Bank or the Issuing Bank, additional amounts (without duplication of
any other amounts payable in respect of increased costs) sufficient to
compensate such Bank or the Issuing Bank, in light of such circumstances,
(i) with respect to such Bank, to the extent that such Bank reasonably
determines such increase in capital to be allocable to the existence of
such Bank's commitment to lend under this Agreement or its commitment to
risk participate in Letters of Credit and (ii) with respect to the Issuing
Bank, to the extent that such Issuing Bank reasonably determines such
increase in capital to be allocable to the issuance or maintenance of the
Letters of Credit. A certificate as to such amounts and detailing the
calculation of such amounts submitted to the Borrower and the
Administrative Agent by such Bank or the Issuing Bank shall be conclusive
and binding for all purposes, absent manifest error.
(c) LETTERS OF CREDIT. If any change in any law or
regulation or in the interpretation thereof by any court or administrative
or Governmental Authority charged with the administration thereof enacted,
issued or promulgated after the date of this Agreement shall either
(i) impose, modify, or deem applicable any reserve, special deposit, or
similar requirement against letters of credit issued by, or assets held by,
or deposits in or for the account of, Issuing Bank or any Bank or
(ii) impose on Issuing Bank or any Bank any other condition regarding the
provisions of this Agreement relating to the Letters of Credit or any
Letter of Credit Obligations, and the result of any event referred to in
the preceding clause (i) or (ii) shall be to increase the cost to Issuing
Bank of issuing or maintaining any Letter of Credit, or increase the cost
to such Bank of its risk participation in any Letter of Credit (which
increase in cost shall be determined by Issuing Bank's or such Bank's
reasonable allocation of the aggregate of such cost increases resulting
from such event), then, within 10 days of written demand by Issuing Bank or
such Bank (with a copy sent to the Administrative Agent), as the case may
be, the Borrower shall pay to the Administrative Agent for the account of
Issuing Bank or Bank, as the case may be, from time to time as specified by
Issuing Bank or such Bank, additional amounts which shall be sufficient to
compensate such Issuing Bank or such Bank for such increased cost. Issuing
Bank and each Bank agrees to use commercially reasonable efforts
(consistent with internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office for the booking of its
Letters of Credit or risk participations if the making of such designation
would avoid the effect of this paragraph and would not, in the reasonable
judgment of Issuing Bank or such Bank, be otherwise disadvantageous to
Issuing Bank or such Bank, as the case may be. A certificate as to such
increased cost incurred by Issuing Bank or such Bank, as the case may be,
as a result of any event mentioned in clause (i) or (ii) above, and
detailing the calculation of such increased costs submitted by Issuing Bank
or such Bank to the Borrower and the Administrative Agent, shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.10 PAYMENTS AND COMPUTATIONS.
(a) Payment Procedures. Except if otherwise set forth
herein, the Borrower shall make each payment under this Agreement and under
the Notes not later than 12:00 Noon (Dallas, Texas time) on the day when
due in Dollars to the Administrative Agent without setoff, deduction or
counterclaim at the location referred to in the Notes (or such other
location as the Administrative Agent shall designate in writing to the
Borrower) in same day funds. The Administrative Agent will on the same day
such payment is deemed received from the Borrower cause to be distributed
like funds relating to the payment of principal, interest or fees ratably
(other than amounts payable solely to the Administrative Agent, the Issuing
Banks, or a specific Bank pursuant to Section 2.03(b), 2.03(c), 2.06(c),
2.08, 2.09, 2.11, 2.12, or 2.13(c) but after taking into account payments
effected pursuant to Section 10.04) to the Banks in accordance with each
Bank's Pro Rata Share for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Bank or Issuing Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of
this Agreement. If and to the extent that the Administrative Agent shall
not have so made payment to a Bank on the day required under this
Agreement, the Administrative Agent agrees to immediately pay such Bank
such payment, together with interest on such amount, for each day from the
date such amount was deemed received by the Administrative Agent until the
date such amount is paid to such Bank at the Federal Funds Rate for each
such day.
(b) COMPUTATIONS. All computations of interest based on the
Adjusted Base Rate shall be made by the Administrative Agent on the basis
of a year of 365 days and all computations of fees and interest based on
the LIBOR and the Federal Funds Rate shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate shall be
conclusive and binding for all purposes, absent manifest error.
(c) NON-BUSINESS DAY PAYMENTS. Whenever any payment shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or fees,
as the case may be; PROVIDED, however, that if such extension would cause
payment of interest on or principal of LIBOR Advances to be made in the
next following calendar month, such payment shall be made on the next
preceding Business Day.
(d) ADMINISTRATIVE AGENT RELIANCE. Unless the Administrative
Agent shall have received written notice from the Borrower prior to the
date on which any payment is due to the Banks that the Borrower will not
make such payment in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Bank on such date an amount equal to the
amount then due such Bank. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent, each Bank
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank, together with interest, for each day from the
date such amount is distributed to such Bank until the date such Bank
repays such amount to the Administrative Agent, at the Federal Funds Rate
for each such day.
(e) APPLICATION OF PAYMENTS. Unless otherwise specified in
Section 2.07 hereof, whenever any payment received by the Administrative
Agent under this Agreement is insufficient to pay in full all amounts then
due and payable under this Agreement and the Notes, such payment shall be
distributed and applied by the Administrative Agent and the Banks in the
following order: FIRST, to the payment of fees and expenses due and
payable to the Administrative Agent under and in connection with this
Agreement or any other Credit Document; SECOND, to the payment of all
expenses due and payable under Section 2.11(c), ratably among the Banks in
accordance with the aggregate amount of such payments owed to each such
Bank; THIRD, to the payment of fees due and payable to the Issuing Bank
pursuant to Section 2.03(b); FOURTH, to the payment of all other fees due
and payable under Section 2.03; and FIFTH, to the payment of the interest
accrued on and the principal amount of all of the Notes and the interest
accrued on and all Letter of Credit Obligations, regardless of whether any
such amount is then due and payable, ratably among the Banks in accordance
with the respective Pro Rata Share.
(f) REGISTER. The Administrative Agent shall record in the
Register the Commitment and the Advances from time to time of each Bank and
each repayment or prepayment in respect to the principal amount of such
Advances of each Bank. Any such recordation shall be conclusive and
binding on the Borrower and each Bank, absent manifest error; PROVIDED
HOWEVER, that failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations hereunder in
respect of such Advances.
SECTION 2.11 TAXES.
(a) NO DEDUCTION FOR CERTAIN TAXES. Any and all payments by
the Borrower shall be made, in accordance with Section 2.10, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank, Issuing Bank, and the
Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Bank,
Issuing Bank, or the Administrative Agent (as the case may be) is organized
or any political subdivision of such jurisdiction or by the jurisdiction of
such Bank's Applicable Lending Office or any political subdivision of such
jurisdiction (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable to any Bank, Issuing Bank, or the
Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.11),
such Bank, Issuing Bank, or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made; PROVIDED, however, that if the Borrower's obligation
to deduct or withhold Taxes is caused solely by such Bank's, Issuing
Bank's, or the Administrative Agent's failure to provide the forms
described in paragraph (e) of this Section 2.11 and such Bank, Issuing
Bank, or the Administrative Agent could have provided such forms, no such
increase shall be required; (ii) the Borrower shall make such deductions;
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Legal
Requirements.
(b) OTHER TAXES. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement, the Notes, or the other Credit Documents
(hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. Subject to the proviso of Section
2.11(a), the Borrower indemnifies each Bank, Issuing Bank, and the
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
Governmental Authority on amounts payable under this Section 2.11) paid by
such Bank, Issuing Bank, or the Administrative Agent (as the case may be)
and any liability (including interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Each payment required to be made by the
Borrower in respect of this indemnification shall be made to the
Administrative Agent for the benefit of any party claiming such
indemnification within 30 days from the date the Borrower receives written
demand detailing the calculation of such amounts therefor from the
Administrative Agent on behalf of itself as Administrative Agent, Issuing
Bank, or any such Bank. If any Bank, the Administrative Agent, or Issuing
Bank receives a refund in respect of any Taxes or Other Taxes paid by the
Borrower under this paragraph (c), such Bank, the Administrative Agent, or
Issuing Bank, as the case may be, shall promptly pay to the Borrower the
Borrower's share of such refund.
(d) EVIDENCE OF TAX PAYMENTS. The Borrower will pay prior to
delinquency all Taxes and Other Taxes payable in respect of any payment.
Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Administrative Agent, at its address referred to in
Section 10.02, the original or a certified copy of a receipt evidencing
payment of such Taxes or Other Taxes.
(e) FOREIGN BANK WITHHOLDING EXEMPTION. Each Bank and each
Issuing Bank that is not incorporated under the laws of the United States
of America or a state thereof agrees that it will deliver to the Borrower
and the Administrative Agent on the date of this Agreement or upon the
effectiveness of any Assignment and Acceptance two duly completed copies of
the Prescribed Forms, certifying in each case that such Bank is entitled to
receive payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes. Each
Bank which delivers to the Borrower and the Administrative Agent a
Prescribed Form further undertakes to deliver to the Borrower and the
Administrative Agent two further copies of a replacement Prescribed Form,
on or before the date that any such Prescribed Form expires or becomes
obsolete or after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrower and the
Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower and the Administrative Agent
certifying that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes. If an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any
delivery required by the preceding sentence would otherwise be required
which renders all such forms inapplicable or which would prevent any Bank
from duly completing and delivering any such Prescribed Form with respect
to it and such Bank advises the Borrower and the Administrative Agent that
it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, such Bank shall not be
required to deliver such forms. The Borrower shall withhold tax at the
rate and in the manner required by the laws of the United States with
respect to payments made to a Bank failing to timely provide the requisite
Prescribed Forms.
SECTION 2.12 ILLEGALITY. If any Bank shall notify the
Administrative Agent and the Borrower that the introduction of or any
change in or in the interpretation of any Legal Requirement makes it
unlawful, or that any central bank or other Governmental Authority asserts
that it is unlawful for such Bank or its LIBOR Lending Office to perform
its obligations under this Agreement to maintain any LIBOR Advances of such
Bank then outstanding hereunder, then, notwithstanding anything herein to
the contrary, the Borrower shall, if demanded by such Bank by notice to the
Borrower and the Administrative Agent no later than 12:00 Noon (Dallas,
Texas time), (a) if not prohibited by Legal Requirement to maintain such
LIBOR Advances for the duration of the Interest Period, on the last day of
the Interest Period for each outstanding LIBOR Advance of such Bank or
(b) if prohibited by Legal Requirement to maintain such LIBOR Advances for
the duration of the Interest Period, on the second Business Day following
its receipt of such notice from such Bank, Convert all LIBOR Advances of
such Bank then outstanding to Base Rate Advances, and pay accrued interest
on the principal amount Converted to the date of such Conversion and
amounts, if any, required to be paid pursuant to Section 2.08 as a result
of such Conversion being made on such date. Each Bank agrees to use
commercially reasonable efforts (consistent with its internal policies and
legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such designation would avoid the effect of
this paragraph and would not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank.
SECTION 2.13 LETTERS OF CREDIT.
(a) ISSUANCE. From time to time from the date of this
Agreement until three months before the Maturity Date, at the request of
the Borrower, the Issuing Bank shall, on any Business Day and on the terms
and conditions hereinafter set forth, issue, increase, decrease, amend, or
extend the expiration date of Letters of Credit for the account of the
Borrower (for its own benefit or for the benefit of any of its
Subsidiaries). Upon the Effective Date, but subject to the limitations
contained in the following sentence, each Existing Letter of Credit shall
be automatically converted to a Letter of Credit. No Letter of Credit will
be issued, increased, or extended and no Existing Letter of Credit will be
converted to a Letter of Credit (i) if such issuance, increase, or
extension would cause the Letter of Credit Exposure to exceed the lesser of
(x) $25,000,000 or (y) an amount equal to (A) the lesser of the Borrowing
Base or the Total Commitments LESS (B) the aggregate outstanding Advances
and Letter of Credit Exposure at such time; (ii) unless such Letter of
Credit has an Expiration Date not later than the earlier of (A) one year
after the date of issuance thereof and (B) one day prior to the Maturity
Date; (iii) unless such Letter of Credit is in form and substance
acceptable to the respective Issuing Bank; (iv) unless such Letter of
Credit is a standby letter of credit not supporting the repayment of
indebtedness for borrowed money of any Person; (v) unless the Borrower has
delivered to the respective Issuing Bank the completed and executed Letter
of Credit Documents (other than the Letter of Credit) on such Issuing
Bank's standard form, which shall contain terms no more restrictive than
the terms of this Agreement; (vi) unless such Letter of Credit is governed
by the International Standby Practices (1998) ("ISP") or any successor to
the ISP; and (vii) unless no Default has occurred and is continuing or
would result from the issuance of such Letter of Credit. If the terms of
any of the Letter of Credit Documents referred to in the foregoing
clause (v) conflicts with the terms of this Agreement, the terms of this
Agreement shall control.
(b) PARTICIPATIONS. On the date of the issuance or increase
of any Letter of Credit on or after the Effective Date or the conversion of
any Existing Letter of Credit to a Letter of Credit in accordance with
provisions of the preceding Section 2.13(a), each Issuing Bank shall be
deemed to have sold to each other Bank and each other Bank shall have been
deemed to have purchased from such Issuing Bank a participation in the
Letter of Credit Exposure related to the Letters of Credit issued by such
Issuing Bank equal to such Bank's Pro Rata Share at such date and such sale
and purchase shall otherwise be in accordance with the terms of this
Agreement. Each Issuing Bank shall promptly notify each such participant
Bank by telex, telephone, or telecopy of each Letter of Credit of such
Issuing Bank issued, increased or decreased, and the actual dollar amount
of such Bank's participation in such Letter of Credit. Each Bank's
obligation to purchase participating interests pursuant to this Section and
to reimburse the respective Issuing Bank for such Bank's Pro Rata Share of
any payment under a Letter of Credit by such Issuing Bank not reimbursed in
full by the Borrower shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any of the
circumstances described in paragraph (d) below, (ii) the occurrence and
continuance of a Default, (iii) an adverse change in the financial
condition of the Borrower or any Guarantor, or (iv) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing, except for any such circumstance, happening or event
constituting or arising from gross negligence or willful misconduct on the
part of such Issuing Bank.
(c) REIMBURSEMENT. The Borrower shall pay promptly on demand
to each Issuing Bank in respect of each Letter of Credit issued by such
Issuing Bank an amount equal to any amount paid by such Issuing Bank under
or in respect of such Letter of Credit. In the event any Issuing Bank
makes a payment pursuant to a request for draw presented under a Letter of
Credit and such payment is not promptly reimbursed by the Borrower upon
demand, such Issuing Bank shall give notice of such payment to the
Administrative Agent and the Banks, and each Bank shall promptly reimburse
such Issuing Bank for such Bank's Pro Rata Share of such payment, and such
reimbursement shall be deemed for all purposes of this Agreement to
constitute a Base Rate Advance to the Borrower from such Bank. If such
reimbursement is not made by any Bank to any Issuing Bank on the same day
on which such Issuing Bank shall have made payment on any such draw, such
Bank shall pay interest thereon to such Issuing Bank for each such day from
the date such payment should have been made until the date repaid at a rate
per annum equal to the Federal Funds Rate for each such day. The Borrower
hereby unconditionally and irrevocably authorizes, empowers, and directs
the Administrative Agent and the Banks to record and otherwise treat each
payment under a Letter of Credit not immediately reimbursed by the Borrower
as a Borrowing comprised of Base Rate Advances to the Borrower.
(d) OBLIGATIONS UNCONDITIONAL. Except to the extent provided
in Section 2.13(e), the obligations of the Borrower under this Agreement in
respect of each Letter of Credit shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
under all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit Documents;
(ii) any amendment or waiver of or any consent to departure
from any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower or any Bank or any other Person may have at any
time against any beneficiary or transferee of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the respective Issuing Bank or any other Person or entity, whether
in connection with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated
transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect to the extent the respective Issuing Bank would not be liable
therefor pursuant to the following paragraph (e);
(v) payment by the respective Issuing Bank under such Letter
of Credit against presentation of a draft or certificate which does not
comply with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
(e) LIABILITY OF ISSUING BANKS. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. No
Issuing Bank, nor any other Bank, nor any of their respective officers or
directors shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or
of any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by such Issuing Bank against presentation of
documents which do not comply with the terms of a Letter of Credit,
including failure of any documents to bear any reference or adequate
reference to the relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit (including such Issuing Bank's
own negligence);
EXCEPT that the Borrower shall have a claim against such Issuing Bank, and
such Issuing Bank shall be liable to, and shall promptly pay to, the
Borrower, to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower which the Borrower proves were caused by (A) such
Issuing Bank's willful misconduct or gross negligence in determining
whether documents presented under a Letter of Credit comply with the terms
of such Letter of Credit or (B) such Issuing Bank's gross negligence in
failing to make lawful payment under any Letter of Credit after the
presentation to it of a draft and certificate strictly complying with the
terms and conditions of such Letter of Credit. In furtherance and not in
limitation of the foregoing, any Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation.
SECTION 2.14 DETERMINATION OF BORROWING BASE. The Borrowing Base
shall be determined by the Administrative Agent, as follows:
(a) QUARTERLY. On the 45th day following each calendar
quarter the Administrative Agent shall determine the Borrowing Base upon
receipt of a Borrowing Base Certificate setting forth the components of the
Borrowing Base dated as of the last day of the immediately preceding
calendar quarter.
(b) PROPERTY ADJUSTMENTS. Following each addition or
deletion of a Hotel Property as an Eligible Property (an "Adjustment
Event"), and the Administrative Agent's receipt of a Property Adjustment
Report with respect thereto, the Administrative Agent shall adjust the
Borrowing Base accordingly.
(c) REDUCTION OF COMMITMENTS. Following each reduction of
the Commitments pursuant to the provisions of Section 2.04.
(d) NOTICE OF BORROWING BASE CHANGE. Promptly following any
date the Borrowing Base is re-determined in accordance with the preceding
paragraphs, the Administrative Agent shall give notice to the Banks and the
Borrower of the new Borrowing Base.
SECTION 2.15 BANK REPLACEMENT.
(a) RIGHT TO REPLACE. The Borrower shall have the right to
replace each Bank affected by a condition under Section 2.02(c)(v), 2.09,
2.11, or 2.12 for more than 90 days (each such affected Bank, an "Affected
Bank") in accordance with the procedures in this Section 2.15 and provided
that no reduction of the total Commitments occurs as a result thereof.
(b) FIRST RIGHT OF REFUSAL; REPLACEMENT.
(i) Upon the occurrence of any condition permitting the
replacement of a Bank, the Administrative Agent in its sole discretion
shall have the right to reallocate the amount of the Commitments of the
Affected Banks, including without limitation to Persons which are not
already party to this Agreement but which qualify as Eligible Assignees,
which election shall be made by written notice within 30 days after the
date such condition occurs.
(ii) If the aggregate amount of the reallocated Commitments is
less than the Commitments of the Affected Banks, (A) the respective
Commitments of the Banks which have received such reallocated Commitments
shall be increased by the respective amounts of their proposed
reallocations, and (B) the Borrower shall have the right to add additional
Banks which are Eligible Assignees to this Agreement to replace such
Affected Banks, which additional Banks would have aggregate Commitments no
greater than those of the Affected Banks MINUS the amounts of the
Commitments already reallocated.
(c) PROCEDURE. Any assumptions of Commitments pursuant to
this Section 2.15 shall be (i) made by the purchasing Bank or Eligible
Assignee and the selling Bank entering into an Assignment and Assumption
and by following the procedures in Section 10.06 for adding a Bank. In
connection with the reallocation of the Commitments of any Bank pursuant to
the foregoing paragraph (b), each Bank with a reallocated Commitment shall
purchase from the Affected Banks at par such Bank's ratable share of the
outstanding Advances of the Affected Banks and assume such Bank's ratable
share of the Affected Banks' Letter of Credit Exposure.
SECTION 2.16 SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) on account of its Advances or its share of Letter
of Credit Obligations in excess of its Pro Rata Share of payments on
account of the Advances or Letter of Credit Obligations obtained by all the
Banks, such Bank shall notify the Administrative Agent and forthwith
purchase from the other Banks such participations in the Advances made by
them or Letter of Credit Obligations held by them as shall be necessary to
cause such purchasing Bank to share the excess payment ratably in
accordance with the requirements of this Agreement with each of them;
PROVIDED, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each
Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to
the proportion of (a) the amount of the participation sold by such Bank to
the purchasing Bank as a result of such excess payment to (b) the total
amount of such excess payment) of such recovery, together with an amount
equal to such Bank's ratable share (according to the proportion of (a) the
amount of such Bank's required repayment to the purchasing Bank to (b) the
total amount of all such required repayments to the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect
of the total amount so recovered. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.16
may, to the fullest extent permitted by Legal Requirement, unless and until
rescinded as provided above, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if
such Bank were the direct creditor of the Borrower in the amount of such
participation.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The
obligation of each Bank to make its initial Advance as part of the initial
Borrowing and of the Issuing Bank to issue the initial Letter of Credit are
subject to the following conditions precedent being satisfied on or prior
to the Funding Deadline:
(a) DOCUMENTATION. The Administrative Agent shall have
received counterparts of this Agreement executed by the Borrower and the
Banks, and the following duly executed by all the parties thereto, in form
and substance satisfactory to the Administrative Agent, and, with respect
to this Agreement, all Guaranties and the Environmental Indemnity, in
sufficient copies for each Bank:
(i) the Notes, all Guaranties, and the Environmental
Indemnity;
(ii) a certificate from the Chief Executive Officer, President
or Chief Financial Officer of the Parent on behalf of the Borrower dated as
of the Effective Date stating that as of the Effective Date (A) all
representations and warranties of the Borrower set forth in this Agreement
and the Credit Documents are true and correct in all material respects;
(B) no Default has occurred and is continuing; (C) the conditions in this
Section 3.01 have been met or waived in writing; and (D) to the best of the
Borrower's knowledge there are no claims, defenses, counterclaims or
offsets by the Borrower against the Banks under the Credit Documents;
(iii) a certificate of the Secretary or an Assistant Secretary
of the Parent on behalf of the Borrower and each Guarantor dated as of the
date of this Agreement certifying as of the date of this Agreement (A) the
names and true signatures of officers or authorized representatives of the
general partner of the Borrower and such Guarantor authorized to sign the
Credit Documents to which such Person is a party as general partner of such
Person, (B) resolutions of the Board of Directors or the members of the
general partner of such Person with respect to the transactions herein
contemplated, (C) either (x) the copies of the organizational documents of
the general partner of such Person delivered to the Banks are still true
and correct and have not been amended or modified since such date or (y)
copies of any modification or amendment to the organizational documents of
the general partner of such Person made since such date, (D) a true and
correct copy of the partnership agreement for such Person, and (E) a true
and correct copy of all partnership authorizations necessary or desirable
in connection with the transactions herein contemplated;
(iv) a certificate of the Secretary or an Assistant Secretary
of the Parent dated as of the date of this Agreement certifying as of the
date of this Agreement (A) resolutions of the Board of Directors of such
Person with respect to the transactions herein contemplated, (B) the copies
of the charter and bylaws of the Parent and any modification or amendment
to the articles or certificate of incorporation or bylaws of the Parent
made since such date, and (C) that the Parent owns 100% of the general
partner interests and at least 70% of the limited partnership interests in
the Borrower;
(v) (A) one or more favorable written opinions of ▇▇▇▇▇ &
▇▇▇▇ L.L.P., special counsel for the Borrower, the Parent, and their
Subsidiaries, in a form reasonably acceptable to the Administrative Agent,
in each case dated as of the Closing Date and with such changes as the
Administrative Agent may approve, and (B) such other legal opinions as the
Administrative Agent shall reasonably request, in each case dated as of the
Closing Date and with such changes as the Administrative Agent may approve;
(vi) a Borrowing Base Certificate dated as of the Closing
Date, duly completed and executed by the Chief Financial Officer or
Treasurer of the Parent on behalf of the Borrower; and
(vii) such other documents, governmental certificates,
agreements, and lien searches as the Administrative Agent may reasonably
request.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Article IV hereof, the Guaranties, and the
Environmental Indemnity shall be true and correct in all material respects.
(c) CERTAIN PAYMENTS. The Borrower shall have paid the fees
required to be paid as of the execution of this Credit Agreement pursuant
to the Fee Letter.
(d) REQUIREMENTS. The Borrowing Base Requirements and the
Parent Hotel Property Requirements are met.
(e) OTHER. The Administrative Agent shall have received such
other approvals, opinions or documents deemed necessary or desirable by any
Bank or the Administrative Agent as such party may reasonably request.
If the conditions set forth in this Section 3.01 are not satisfied on or
prior to the Funding Deadline, the obligation of each Bank to make Advances
and the obligation of each Issuing Bank to issue, increase, or extend
Letters of Credit shall immediately and automatically be terminated and the
Notes, all interest on the Notes, all Letter of Credit Obligations, and all
other amounts payable under this Agreement shall immediately and
automatically become and be due and payable in full, without presentment,
demand, protest or any notice of any kind (including, without limitation,
any notice of intent to accelerate or notice of acceleration), all of which
are hereby expressly waived by the Borrower. However, Borrower shall pay
to the Facilitators all fees and expenses as set forth in the Fee Letter.
SECTION 3.02 CONDITIONS PRECEDENT FOR EACH BORROWING OR LETTER OF
CREDIT. The obligation of each Bank to fund an Advance on the occasion of
each Borrowing (other than the Conversion or continuation of any existing
Borrowing) and of any Issuing Bank to issue or increase or extend any
Letter of Credit shall be subject to the further conditions precedent that
on the date of such Borrowing or the issuance or increase or extension of
such Letter of Credit:
(a) the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing or the issuance or increase or
extension of such Letter of Credit shall constitute a representation and
warranty by the Borrower that on the date of such Borrowing or the issuance
or increase or extension of such Letter of Credit such statements are
true):
(i) the representations and warranties contained in
Article IV hereof, the Guaranties, and the Environmental Indemnity are
correct in all material respects on and as of the date of such Borrowing or
the issuance or increase or extension of such Letter of Credit, before and
after giving effect to such Borrowing or to the issuance or increase or
extension of such Letter of Credit and to the application of the proceeds
from such Borrowing, as though made on and as of such date; and
(ii) no Default has occurred and is continuing or would result
from such Borrowing or from the application of the proceeds therefrom;
(b) the Borrower shall have executed and delivered to the
Administrative Agent a Borrowing Base Certificate dated not earlier than
the date 10 days prior to the anticipated date of such Borrowing and a
Notice of Borrowing delivered in accordance with Section 2.02; and
(c) the Administrative Agent shall have received such other
approvals, opinions or documents deemed necessary or desirable by any Bank
or the Administrative Agent as such party may reasonably request.
SECTION 3.03 CONDITIONS PRECEDENT TO A HOTEL PROPERTY QUALIFYING AS
AN ELIGIBLE PROPERTY. In order for an Initial Property or a Future
Property to qualify initially and thereafter to continue to qualify as an
Eligible Property, the following conditions precedent must be satisfied and
remain satisfied for that Property:
(a) TITLE. Such Hotel Property (i) is Unencumbered, (ii)
free of all material title defects, and (iii) either (A) owned (together
with the land on which it is located) in fee simple by the Borrower or its
direct or indirect Wholly-Owned Subsidiary or Joint Venture Subsidiary or
(B) owned by the Borrower or its direct or indirect Wholly-Owned Subsidiary
or Joint Venture Subsidiary and located on land leased to the Borrower or
such Subsidiary pursuant to a Qualified Ground Lease, all as evidenced by a
copy of the most recent ALTA Owner's Policy of Title Insurance (or
commitment to issue such a policy to the Borrower or its Subsidiary owning
or to own such Hotel Property) relating to such Hotel Property showing the
identity of the fee titleholder thereto and all matters of record as of its
date.
(b) GUARANTOR. In addition, if the Property Owner for such
Hotel Property is not the Borrower, the following:
(i) The Property Owner shall be either a Wholly-Owned
Subsidiary or a Joint Venture Subsidiary of the Borrower whose sole assets
are Eligible Properties, who is not liable for any Indebtedness other than
the Obligations, who complies in all material respects with all of the
covenants and requirements of Guarantors under the Credit Documents and who
has delivered to the Administrative Agent either (A) an original Guaranty
and Environmental Indemnity executed by such Subsidiary or (B) an Accession
Agreement executed by such Subsidiary; and
(ii) a written opinion of the Borrower's counsel or counsels
covering such matters relating to the Property Owner as the Administrative
Agent reasonably requires.
(c) APPROVED PARTICIPATING LEASE. (i) Such Hotel Property is
leased to an Approved Participating Lessee pursuant to an Approved
Participating Lease, (ii) no material default by the Approved Participating
Lessee or the Property Owner under the Approved Participating Lease exists
beyond any applicable cured period (provided that for purposes of this
subsection (c) such cure period will be deemed to commence running when the
Borrower, the Parent or a Guarantor has knowledge of such default), (iii)
the Approved Participating Lease remains in full force and effect, and (iv)
no failure to achieve specified financial results under such Approved
Participating Lease has occurred which would allow the Property Owner for
such Hotel Property to terminate such Approved Participating Lease.
(d) APPROVED MANAGEMENT AGREEMENT. Except for those Hotel
Properties managed pursuant to an Approved Participating Lease for such
Hotel Property, (i) such Hotel Property is managed by an Approved Manager
pursuant to an Approved Management Agreement, (ii) no material default by
the owner under the Approved Management Agreement exists, and (iii) the
Approved Management Agreement remains in full force and effect;
(e) QUALIFIED GROUND LEASES. In addition, if the Hotel
Property is subject to a Qualified Ground Lease, no default by the lessee
under the Qualified Ground Lease exists and the Qualified Ground Lease
remains in full force and effect.
(f) PROPERTY CONDITION. Such Hotel Property is free of all
material structural defects, as evidenced by an Engineering Report.
(g) ENVIRONMENTAL CONDITION. Such Hotel Property is (1) in
compliance, in all material respects, with all applicable Environmental
Laws, and (2) not subject to any material Environmental Claim, all as
evidenced by an Environmental Report.
(h) ADVERSE PROPERTY SITUATION. Neither all nor any material
portion of the Hotel Property shall be the subject of any proceeding by a
governmental authority for the condemnation, seizure or appropriation
thereof, nor the subject of any negotiations for sale in lieu of
condemnation, seizure or appropriation.
(i) TYPE AND LOCATION. Such Hotel Property is (i) located in
either the United States of America or in an Approved Other Country and
(ii) either (A) a full service hotel located in a resort, convention or
urban market or (B) a limited service hotel located in an urban market.
(j) DOCUMENTS AND INFORMATION. The Administrative Agent
shall have received each of the following executed by the Borrower, the
Property Owner or other appropriate person, in form and substance
reasonably satisfactory to the Administrative Agent:
(i) a copy of each of the following for such Hotel Property
certified as true and correct by the Borrower:
A. if the Hotel Property is subject to an Approved Management
Agreement, the Approved Management Agreement for the Hotel Property;
B. the Approved Participating Lease;
C. if the Hotel Property is subject to a Qualified Ground Lease,
the Qualified Ground Lease; and
D. if the Property Owner is not the Borrower, the Property Owner's
articles of incorporation, by-laws, partnership agreements, as applicable,
and certificates of existence, good standing and authority to do business
from each appropriate state authority, and partnership or corporate, as
applicable, authorizations authorizing the execution, delivery and
performance of the Accession Agreement all certified to be true and
complete by a duly authorized officer of such Property Owner;
(ii) if the Borrower has received a survey of the Real
Property, a copy of such survey;
(iii) (A) a description of such Hotel Property, such
description to include the age, location and number of rooms or suites of
such Hotel Property, and (B) to the extent available, statistics with
respect to the occupancy of the Hotel Property, operating statements, and
an analysis of the revenue per available room, in each case for the three
(3) prior Fiscal Years and the completed Fiscal Quarters of the current
Fiscal Year;
(iv) certificates and, to the extent within the Borrower's
control, policies of insurance evidencing that the Hotel Property is
covered by the insurance required pursuant to Section 5.07 hereof; and
(v) all other documents reasonably required by the
Administrative Agent.
(k) OTHER REQUIREMENTS. In addition, the following:
(i) As certified in writing by the Borrower to the
Administrative Agent and the Banks at least 10 Business Days prior to the
date the Borrower proposes such Hotel Property qualify as an Eligible
Property, the Hotel Property individually qualifies as an Eligible Property
and the addition of the Hotel Property as an Eligible Property shall not
(A) cause the Eligible Properties in the aggregate to violate the Borrowing
Base Requirements, (B) cause a Default, or (C) cause or result in the
Borrower or the Parent failing to comply with any of the financial
covenants contained herein; and
(ii) The Borrower shall have delivered to the Administrative
Agent the Property Information for such Hotel Property 10 Business Days
prior to the date the Borrower proposes such Hotel Property qualify as an
Eligible Property.
(l) OTHER ACTIONS. Borrower shall have executed and
acknowledged (or caused to be executed and acknowledged) and delivered to
the Administrative Agent, on behalf of the Banks, all documents, and taken
all actions reasonably required by the Administrative Agent from time to
time to confirm the rights created or now or hereafter intended to be
created under the Credit Documents, or otherwise to carry out the purposes
of the Credit Documents, and the transactions contemplated thereunder. The
Administrative Agent shall have received all other evidence and information
that they may reasonably require.
As of the date of this Agreement, (a) the Borrower represents to the Banks
and the Administrative Agent that to the best of the Borrower's knowledge
the Initial Properties qualify as Eligible Properties, and (b) the Banks
and the Administrative Agent agree with the Borrower that to their actual
knowledge, without investigation, the Initial Properties qualify as
Eligible Properties.
Upon 10 Business Days prior written notice from the Borrower to the
Administrative Agent, the Borrower can designate that a Hotel Property be
added (subject to the other requirements for a Hotel Property qualifying as
an Eligible Property) or deleted as an Eligible Property. Such notice
shall be accompanied by a Property Adjustment Report with respect to such
addition or deletion and (a) with respect to an addition, the certificate
required under Section 3.03(k)(i) and (b) with respect to a deletion,
Borrower's certification in such detail as reasonably required by the
Administrative Agent that such deletion shall not (A) cause the Eligible
Properties in the aggregate to violate the Borrowing Base Requirements, (B)
cause a Default, or (C) cause or result in the Borrower or the Parent
failing to comply with any of the financial covenants contained herein.
Notwithstanding anything contained in this Agreement to the contrary, the
Required Lenders in their reasonable discretion may upon 30 days prior
written notice to the Borrower designate that a Hotel Property is no longer
an Eligible Property upon their determination that such Hotel Property does
not satisfy the requirements for qualifying as an Eligible Property;
PROVIDED that if during such 30 day period the Borrower can satisfy those
requirements deemed unsatisfied by the Required Lenders, such Hotel
Property shall remain an Eligible Property.
If no Default exists at such time, then in connection with any deletion of
a Hotel Property from qualifying as an Eligible Property, any Borrower's
Subsidiary which owned or leased such Hotel Property, but not any other
Eligible Property, shall be released from such Subsidiaries obligations
under the Guaranty.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
SECTION 4.01 EXISTENCE; QUALIFICATION; PARTNERS; SUBSIDIARIES.
(a) The Borrower is a limited partnership duly organized,
validly existing, and in good standing under the laws of Delaware and in
good standing and qualified to do business in each jurisdiction where its
ownership or lease of property or conduct of its business requires such
qualification, except where the failure to so qualify would not cause a
Material Adverse Change.
(b) The Parent is a real estate investment trust duly
organized, validly existing, and in good standing under the laws of
Maryland and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the Parent. The Parent
has no first tier Subsidiaries except for the Borrower or members of
Permitted Other Subsidiaries.
(c) The Parent is the Borrower's sole general partner with
full power and authority to bind the Borrower to the Credit Documents.
(d) The Parent owns a 1.1% general partner interest in and an
approximately 89.7% limited partnership interest in the Borrower.
(e) Each Subsidiary of the Borrower is a limited partnership,
general partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
formation and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on such Subsidiary. The
Borrower has no Subsidiaries on the date of this Agreement other than the
Subsidiaries listed on the attached Schedule 4.01, and Schedule 4.01 lists
the jurisdiction of formation and the address of the principal office of
each such Subsidiary existing on the date of this Agreement. As of the
date of this Agreement, the Borrower and/or the Parent owns, directly or
indirectly, at least 99% of the interests in each such Subsidiary.
(f) As of the date of this Agreement, neither the Borrower,
nor the Parent, nor any of the Subsidiaries own directly or indirectly (i)
such a percentage of the beneficial ownership interest in any Approved
Participating Lessee or (ii) such an Investment in the Personal Property
for any Hotel Property as would cause a potential Event of Default under
Section 8.01(o).
SECTION 4.02 PARTNERSHIP AND CORPORATE POWER. The execution,
delivery, and performance by the Borrower, the Parent, and each Guarantor
of the Credit Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby (a) are within such Persons'
trust, partnership, limited liability company and corporate powers, as
applicable, (b) have been duly authorized by all necessary trust,
corporate, limited liability company and partnership action, as applicable,
(c) do not contravene (i) such Person's declaration of trust, certificate
or articles, as the case may be, of incorporation or by-laws, operating
agreement or partnership agreement, as applicable, or (ii) any law or any
contractual restriction binding on or affecting any such Person, the
contravention of which could reasonably be expected to cause a Material
Adverse Change, and (d) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement. At the time of each
Borrowing, such Borrowing and the use of the proceeds of such Borrowing
will be within the Borrower's partnership ▇▇▇▇▇▇, ▇▇▇▇ have been duly
authorized by all necessary partnership action, (a) will not contravene
(i) the Borrower's partnership agreement or (ii) any law or any contractual
restriction binding on or affecting the Borrower, the contravention of
which could reasonably be expected to cause a Material Adverse Change, and
(b) will not result in or require the creation or imposition of any Lien
prohibited by this Agreement.
SECTION 4.03 AUTHORIZATION AND APPROVALS. No authorization or
approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by the Borrower, the Parent, or any Guarantor of the Credit
Documents to which it is a party or the consummation of the transactions
contemplated thereby. At the time of each Borrowing, no authorization or
approval or other action by, and no notice to or filing with, any
Governmental Authority will be required for such Borrowing or the use of
the proceeds of such Borrowing the absence of which could reasonably be
expected to cause a Material Adverse Change.
SECTION 4.04 ENFORCEABLE OBLIGATIONS. This Agreement, the Notes,
and the other Credit Documents to which the Borrower is a party have been
duly executed and delivered by the Borrower; each Guaranty and the other
Credit Documents to which each Guarantor and the Parent is a party have
been duly executed and delivered by such Guarantor and the Environmental
Indemnity has been duly executed and delivered by the parties thereto.
Each Credit Document is the legal, valid, and binding obligation of the
Borrower, the Parent, and each Guarantor which is a party to it enforceable
against the Borrower, the Parent, and each such Guarantor in accordance
with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar
law affecting creditors' rights generally and by general principles of
equity (whether considered in proceeding at law or in equity).
SECTION 4.05 PARENT COMMON STOCK. The entire authorized capital
stock of the Parent consists of 100,000,000 shares of Parent Common Stock
of which 16,982,416 shares of Parent Common Stock are duly and validly
issued and outstanding, fully paid and nonassessable as of the Effective
Date. The issuance and sale of such Parent Common Stock either (i) has
been registered under applicable federal and state securities laws or (ii)
was issued pursuant to an exemption therefrom. The Parent meets the
requirements for taxation as a REIT under the Code.
SECTION 4.06 FINANCIAL STATEMENTS. The Consolidated balance sheet
of the Parent and its Subsidiaries, and the related Consolidated statements
of operations, shareholders' equity and cash flows, of the Parent and its
Subsidiaries contained in the most recent financial statements delivered to
the Banks, fairly present the financial condition in all material respects
and reflects the Indebtedness of the Parent and its Subsidiaries as of the
respective dates of such statements and the results of the operations of
the Initial Properties for the periods indicated, and such balance sheet
and statements were prepared in accordance with GAAP, subject to year-end
adjustments. Since the date of the statements for the Fiscal Quarter
ending September 30, 2000, neither a Material Adverse Change, nor any
material adverse change to the prospects or the Property of the Parent or
the Borrower has occurred.
SECTION 4.07 TRUE AND COMPLETE DISCLOSURE. No representation,
warranty, or other statement made by the Borrower (or on behalf of the
Borrower) in this Agreement or any other Credit Document contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements contained therein not misleading in light
of the circumstances in which they were made as of the date of this
Agreement. There is no fact known to the Borrower or the Parent on the
date of this Agreement that has not been disclosed to the Administrative
Agent which could reasonably be expected to cause a Material Adverse
Change. All projections, estimates, and pro forma financial information
furnished by the Borrower and the Parent or on behalf of the Borrower or
the Parent were prepared on the basis of assumptions, data, information,
tests, or conditions believed to be reasonable at the time such
projections, estimates, and pro forma financial information were furnished.
No representation, warranty or other statement made in any filing required
by the Exchange Act contains any untrue statement of material fact or omits
to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which they were
made as of the date same were made. Borrower and/or Parent have made all
filings required by the Exchange Act.
SECTION 4.08 LITIGATION. Except as set forth in the attached
Schedule 4.08, as of the date of this Agreement there is no pending or, to
the best knowledge of the Borrower, threatened action or proceeding
affecting the Borrower, the Parent, any Approved Participating Lessee or
any of their respective Subsidiaries before any court, Governmental
Authority or arbitrator.
SECTION 4.09 USE OF PROCEEDS.
(a) ADVANCES. The proceeds of the Advances have been, and will be
used by the Borrower (i) to refinance existing Indebtedness, (ii) to make
investments permitted pursuant to the provisions of Section 6.07, (iii) to
finance the renovation, repair, restoration and expansion of Hotel
Properties, Capital Expenditures and expenditures for FF&E for any Hotel
Properties in accordance with the provisions of Section 5.06 and as
permitted pursuant to the provisions of Sections 6.07 and 6.14, (iv) for
general corporate purposes of the Borrower and its Subsidiaries, (v) to
repurchase Parent Common Stock as permitted pursuant to the provisions of
Section 6.04(f), and (vi) for costs incurred in connection with any
Capitalization Event done in compliance with this Agreement.
(b) REGULATIONS. No proceeds of Advances will be used to purchase
or carry any margin stock in violation of Regulations T, U or X of the
Federal Reserve Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof. The Borrower
is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of
the Federal Reserve Board).
SECTION 4.10 INVESTMENT COMPANY ACT. Neither the Borrower, the
Parent nor any of their respective Subsidiaries is an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.11 TAXES. All federal, state, local and foreign tax
returns, reports and statements required to be filed (after giving effect
to any extension granted in the time for filing) by the Parent, the
Borrower, their respective Subsidiaries, or any member of a Controlled
Group have been filed with the appropriate governmental agencies in all
jurisdictions in which such returns, reports and statements are required to
be filed, and where the failure to file could reasonably be expected to
cause a Material Adverse Change, except where contested in good faith and
by appropriate proceedings; and all taxes and other impositions due and
payable (which are material in amount) have been timely paid prior to the
date on which any fine, penalty, interest, late charge or loss (which are
material in amount) may be added thereto for non-payment thereof except
where contested in good faith and by appropriate proceedings. As of the
date of this Agreement, neither the Parent, the Borrower nor any member of
a Controlled Group has given, or been requested to give, a waiver of the
statute of limitations relating to the payment of any federal, state, local
or foreign taxes or other impositions. None of the Property owned by the
Parent, the Borrower or any other member of a Controlled Group is Property
which the Parent, the Borrower or any member of a Controlled Group is
required to be treated as being owned by any other Person pursuant to the
provisions of Section 168(f)(8) of the Code. Proper and accurate amounts
have been withheld by the Borrower and all members of each Controlled Group
from their employees for all periods to comply in all material respects
with the tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law. Timely payment of all
material sales and use taxes required by applicable law have been made by
the Parent, the Borrower and all other members of each Controlled Group,
the failure to timely pay of which could reasonably be expected to cause a
Material Adverse Change. The amounts shown on all tax returns to be due
and payable have been paid in full or adequate provision therefor is
included on the books of the appropriate member of the applicable
Controlled Group.
SECTION 4.12 PENSION PLANS. All Plans are in compliance in all
material respects with all applicable provisions of ERISA. No Termination
Event has occurred with respect to any Plan, and each Plan has complied
with and been administered in all material respects in accordance with
applicable provisions of ERISA and the Code. No "accumulated funding
deficiency" (as defined in Section 302 of ERISA) has occurred and there has
been no excise tax imposed under Section 4971 of the Code. No Reportable
Event has occurred with respect to any Multiemployer Plan, and each
Multiemployer Plan has complied with and been administered in all material
respects with applicable provisions of ERISA and the Code. Neither the
Parent, the Borrower, nor any member of a Controlled Group has had a
complete or partial withdrawal from any Multiemployer Plan for which there
is any material withdrawal liability. As of the most recent valuation date
applicable thereto, neither the Parent, the Borrower nor any member of a
Controlled Group has received notice that any Multiemployer Plan is
insolvent or in reorganization.
SECTION 4.13 CONDITION OF HOTEL PROPERTY; CASUALTIES; CONDEMNATION.
Except as disclosed in an Engineering Report, each Initial Property and any
Future Property (a) is and will continue to be in good repair, working
order and condition, normal wear and tear excepted, (b) is free of
structural defects, (c) is not subject to material deferred maintenance and
(d) has and will have all building systems contained therein and all other
FF&E in good repair, working order and condition, normal wear and tear
excepted. The FF&E Reserve for each Hotel Property provides or will
provide adequate financial reserves for the payment of the maintenance of
the Hotel Properties, including replacement of FF&E, in accordance with
Section 5.06. None of the Properties of the Borrower or of any of its
Subsidiaries has been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by a Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy. No condemnation or other like proceedings that has had, or could
reasonably be expected to result in, a Material Adverse Change, are pending
and served nor, to the knowledge of the Borrower, threatened against any
Property in any manner whatsoever. No casualty has occurred to any
Property that could reasonably be expected to have a Material Adverse
Change.
SECTION 4.14 INSURANCE. The Borrower and each of its Subsidiaries
carry, or are the beneficiaries under, the insurance required pursuant to
the provisions of Section 5.07.
SECTION 4.15 NO BURDENSOME RESTRICTIONS; NO DEFAULTS.
(a) Except in connection with Indebtedness which is (i)
either permitted pursuant to the provisions of Section 6.02, or (ii) being
repaid with the proceeds of the initial Borrowing, neither the Parent, the
Borrower nor any of their respective Subsidiaries is a party to any
indenture, loan or credit agreement. Neither the Borrower, the Parent nor
any of their respective Subsidiaries is a party to any agreement or
instrument or subject to any charter or corporate restriction or provision
of applicable law or governmental regulation which could reasonably be
expected to cause a Material Adverse Change. Neither the Borrower, the
Parent nor any of their Subsidiaries is in default under or with respect to
(i) any contract, agreement, lease or other instrument which could
reasonably be expected to cause a Material Adverse Change or (ii) any
Qualified Ground Lease, Approved Participating Lease, franchise agreement
or Approved Management Agreement. Neither the Borrower, the Parent nor any
of their Subsidiaries has received any notice of default under any material
contract, agreement, lease or other instrument which is continuing and
which, if not cured, could reasonably be expected to cause a Material
Adverse Change.
(b) No Default has occurred and is continuing.
SECTION 4.16 ENVIRONMENTAL CONDITION.
(a) Except as disclosed in the Environmental Reports, to the
knowledge of the Borrower, the Borrower and its Subsidiaries (i) have
obtained all Environmental Permits material for the ownership and operation
of their respective Properties and the conduct of their respective
businesses; (ii) have been and are in material compliance with all terms
and conditions of such Environmental Permits and with all other
requirements of applicable Environmental Laws; (iii) have not received
notice of any violation or alleged violation of any Environmental Law or
Environmental Permit; and (iv) are not subject to any actual or contingent
Environmental Claim.
(b) Except as set forth in the Environmental Reports, to the
knowledge of Borrower, none of the present or previously owned or operated
Property of the Borrower or of any of its present or former Subsidiaries,
wherever located, (i) has been placed on or proposed to be placed on the
National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local
analogs, or have been otherwise investigated, designated, listed, or
identified as a potential site for removal, remediation, cleanup, closure,
restoration, reclamation, or other response activity under any
Environmental Laws which could reasonably be expected to cause a Material
Adverse Change; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any
Property owned or operated by the Borrower or any of its Subsidiaries,
wherever located; (iii) has been the site of any Release, use or storage of
Hazardous Substances or Hazardous Wastes from present or past operations
except for Permitted Hazardous Substances, which Permitted Hazardous
Substances have not caused at the site or at any third-party site any
condition that has resulted in or could reasonably be expected to result in
the need for Response or (iv) none of the Improvements are constructed on
land designated by any Governmental Authority having land use jurisdiction
as wetlands.
SECTION 4.17 LEGAL REQUIREMENTS, ZONING, UTILITIES, ACCESS. Except
as set forth on Schedule 4.17 attached hereto, the use and operation of
each Hotel Property as a commercial hotel with related uses constitutes a
legal use under applicable zoning regulations (as the same may be modified
by special use permits or the granting of variances) and complies in all
material respects with all Legal Requirements, and does not violate in any
material respect any material approvals, material restrictions of record or
any material agreement affecting any Hotel Property (or any portion
thereof). The Borrower and its Subsidiaries possess all certificates of
public convenience, authorizations, permits, licenses, patents, patent
rights or licenses, trademarks, trademark rights, trade names rights and
copyrights (collectively "Permits") required by Governmental Authority to
own and operate the Hotel Properties, except for those Permits if not
obtained would not cause a Material Adverse Change. The Borrower and its
Subsidiaries own and operate their business in material compliance with all
applicable Legal Requirements. To the extent necessary for the full
utilization of each Hotel Property in accordance with its current use,
telephone services, gas, steam, electric power, storm sewers, sanitary
sewers and water facilities and all other utility services are available to
each Hotel Property, are adequate to serve each such Hotel Property, exist
at the boundaries of the Land and are not subject to any conditions, other
than normal charges to the utility supplier, which would limit the use of
such utilities. All streets and easements necessary for the occupancy and
operation of each Hotel Property are available to the boundaries of the
Land.
SECTION 4.18 EXISTING INDEBTEDNESS. Except for the Obligations, the
only Indebtedness of the Borrower, the Parent or any of their respective
Subsidiaries existing as of the Effective Date is the Secured Non-Recourse
Indebtedness, Secured Recourse Indebtedness and other Indebtedness set
forth on Schedule 4.18 attached hereto and certain other Indebtedness
incurred in the ordinary course of business not to exceed $50,000. No
"default" or "event of default", however defined, has occurred and is
continuing under any such Indebtedness (or with respect to the giving of
this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given).
SECTION 4.19 TITLE; ENCUMBRANCES. With respect to the Initial
Properties, the Borrower or any Guarantor, as the case may be, has (i) good
and marketable fee simple title to the Real Property (other than for Real
Property subject to a ground lease, as to which it has a valid leasehold
interest) and (ii) good and marketable title to the Personal Property
(other than Personal Property for any Hotel Property for which the Property
Owner has a valid leasehold interest) free and clear of all Liens, and
there exists no Liens or other charges against such Property or leasehold
interest or any of the real or personal, tangible or intangible, Property
of the Borrower or any Guarantor (including without limitation statutory
and other Liens of mechanics, workers, contractors, subcontractors,
suppliers, taxing authorities and others; provided that certain Capital
Expenditures have been made to the Hotel Properties prior to the Effective
Date for which the payment is not past due), except (A) Permitted
Encumbrances and (B) the Personal Property (plus any replacements thereof)
owned by an Approved Participating Lessee.
SECTION 4.20 LEASING ARRANGEMENTS. The only material leases of
Eligible Properties for which either the Borrower or a Guarantor is a
lessee are the Qualified Ground Leases. The Property Owner for a Real
Property subject to a Qualified Ground Lease is the lessee under such
Qualified Ground Lease and no consent is necessary to such Person being the
lessee under such Qualified Ground Lease which has not already been
obtained. The Qualified Ground Leases are in full force and effect and no
defaults exist thereunder. The only material leases burdening the Hotel
Properties for which the lessee is entitled to participate in the increased
revenues of the Hotel Properties are the Approved Participating Leases.
The Approved Participating Leases are in full force and effect and no
defaults by the Borrower or any Subsidiary exist thereunder.
SECTION 4.21 APPROVED MANAGEMENT AGREEMENTS. The only management
agreements burdening the Initial Properties (excluding the Permitted Non-
Eligible Properties) are the Approved Management Agreements set forth on
Schedule 4.21 attached hereto. To the knowledge of the Borrower, the
Approved Participating Lessee for a Hotel Property subject to a Approved
Management Agreement is a party to such Approved Management Agreement and
no consent is necessary to such Person being the owner under such Approved
Management Agreement which has not already been obtained. To the knowledge
of the Borrower, the Approved Management Agreements are in full force and
effect and no material defaults by the Approved Participating Lessee exist
thereunder.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Bank
shall have any Commitment hereunder, unless the Administrative Agent shall
otherwise consent in writing (subject to the provisions of Section 10.01),
the Borrower agrees to comply with the following covenants.
SECTION 5.01 COMPLIANCE WITH LAWS, ETC. The Borrower will comply,
and cause each of its Subsidiaries to comply, in all material respects with
all Legal Requirements.
SECTION 5.02 PRESERVATION OF EXISTENCE, SEPARATENESS, ETC.
(a) The Borrower will (i) preserve and maintain, and cause
each of its Subsidiaries and the Parent to preserve and maintain, its
partnership, limited liability company, corporate or trust (as applicable)
existence, rights, franchises and privileges in the jurisdiction of its
formation, and (ii) qualify and remain qualified, and cause each such
Subsidiary and the Parent to qualify and remain qualified, as a foreign
partnership, limited liability company, corporation or trust, as
applicable, in each jurisdiction in which qualification is necessary or
desirable in view of its business and operations or the ownership of its
properties, and, in each case, where failure to qualify or preserve and
maintain its rights and franchises could reasonably be expected to cause a
Material Adverse Change.
(b) (i) The Parent Common Stock shall at all times be duly
listed on the New York Stock Exchange, Inc. and (ii) the Parent shall
timely file all reports required to be filed by it with the New York Stock
Exchange, Inc. and the Securities and Exchange Commission.
(c) The Borrower shall cause the Permitted Other Subsidiaries
which have Indebtedness and own a Hotel Property to, (i) maintain financial
statements, payroll records, accounting records and other corporate records
and other documents separate from each other and any other Person, (ii)
maintain its own bank accounts in its own name, separate from each other
and any other Person, (iii) pay its own expenses and other liabilities from
its own assets and incur (or endeavor to incur) obligations to other
Persons based solely upon its own assets and creditworthiness and not upon
the creditworthiness of each other or any other Person, and (iv) file its
own tax returns or, if part of a consolidated group, join in the
consolidated tax return of such group as a separate member thereof. The
Borrower shall use reasonable efforts to correct any known misunderstanding
or misrepresentation regarding the independence of the Permitted Other
Subsidiaries from the Borrower and the Borrower's other Subsidiaries.
(d) The Borrower shall, and shall cause the Permitted Other
Subsidiaries which have Indebtedness and own a Hotel Property to, take all
actions necessary to keep such Permitted Other Subsidiaries separate from
the Borrower and the Borrower's other Subsidiaries, including, without
limitation, (i) the taking of action under the direction of the Board of
Directors, members or partners, as applicable, of such Permitted Other
Subsidiaries and, if so required by the Certificate of Incorporation or the
bylaws, operating agreement or partnership agreement, as applicable, of
such Permitted Other Subsidiaries or by any Legal Requirement, the approval
or consent of the stockholders, members or partners, as applicable, of such
Permitted Other Subsidiaries, (ii) the preparation of corporate,
partnership or limited liability company minutes for or other appropriate
evidence of each significant transaction engaged in by such Permitted Other
Subsidiaries, (iii) the observance of separate approval procedures for the
adoption of resolutions by the Board of Directors or consents by the
partners, as applicable, of such Permitted Other Subsidiaries, on the one
hand, and of the Borrower and the Borrower's other Subsidiaries, on the
other hand, (iv) the holding of the annual stockholders meeting, if
applicable, of such Permitted Other Subsidiaries, which are corporations on
a date other than the date of the annual stockholders' meeting of the
Parent, and (v) preventing the cash, cash equivalents, credit card receipts
or other revenues of the Hotel Properties owned by such Permitted Other
Subsidiaries or any other assets of such Permitted Other Subsidiaries from
being commingled with the cash, cash equivalents, credit card receipts or
other revenues collected by the Borrower or the Borrower's other
Subsidiaries.
(e) The Borrower shall, and shall cause the Permitted Other
Subsidiaries to, manage the business of and conduct the administrative
activities of the Permitted Other Subsidiaries independently from the
business of the Borrower, any of the Borrower's other Subsidiaries and any
other Person. Any moneys earned by the Permitted Other Subsidiaries on
their assets or proceeds of the sale of any of their assets shall be
deposited in bank accounts separate from any of the assets of the Borrower,
any of the Borrower's other Subsidiaries and any other Person, and no
assets of the Permitted Other Subsidiaries shall become commingled with
assets of such Persons.
(f) The Borrower shall hold itself out, and shall continue to
hold itself out, to the public and to its creditors as a legal entity,
separate and distinct from all other entities, and shall continue to take
all steps reasonably necessary to avoid (i) misleading any other Person as
to the identity of the entity with which such Person is transacting
business or (ii) implying that the Borrower is, directly or indirectly,
absolutely or contingently, responsible for the Indebtedness or other
obligations of the Permitted Other Subsidiaries or any other Person.
SECTION 5.03 PAYMENT OF TAXES, ETC. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before
the same shall become delinquent (a) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or
profits or Property that are material in amount, prior to the date on which
penalties attach thereto and (b) all lawful claims that are material in
amount which, if unpaid, might by Legal Requirement become a Lien upon its
Property; PROVIDED, HOWEVER, that neither the Borrower nor any such
Subsidiary shall be required to pay or discharge any such tax, assessment,
charge, levy, or claim (a) which is being contested in good faith and by
appropriate proceedings, (b) with respect to which reserves in conformity
with GAAP have been provided, (c) such charge or claim does not constitute
and is not secured by any ▇▇▇▇▇▇ ▇▇▇▇ on any portion of any Hotel Property
and no portion of any Hotel Property is in jeopardy of being sold,
forfeited or lost during or as a result of such contest, (d) neither the
Administrative Agent nor any Bank could become subject to any civil fine or
penalty or criminal fine or penalty, in each case as a result of non-
payment of such charge or claim and (e) such contest does not, and could
not reasonably be expected to, result in a Material Adverse Change.
SECTION 5.04 VISITATION RIGHTS; BANK MEETING. At any reasonable
time and from time to time and so long as any visit or inspection will not
unreasonably interfere with the Borrower's or any of its Subsidiaries'
operations, upon reasonable notice and during normal business hours, the
Borrower will, and will cause its Subsidiaries and the Approved
Participating Lessees to, permit the Administrative Agent or any of its
agents or representatives thereof (at Borrower's expense) and any Bank or
any of its agents or representatives thereof (at such Bank's expense), to
examine and make copies of and abstracts from the records and books of
account of, and visit and inspect at its reasonable discretion the
properties of, the Borrower and any such Subsidiary, to discuss the
affairs, finances and accounts of the Borrower and any such Subsidiary with
any of their respective officers or directors. Without in any way limiting
the foregoing, the Borrower will, upon the request of the Administrative
Agent, participate in a meeting with the Administrative Agent and the Banks
once during each calendar year to be held at a location as may be agreed to
by the Borrower and the Administrative Agent at such time as may be agreed
to by the Borrower and the Administrative Agent; provided that the Borrower
shall not be obligated to reimburse the Banks for such Persons' travel
expenses in connection with such meeting.
SECTION 5.05 REPORTING REQUIREMENTS. The Borrower will furnish to
the Administrative Agent and, with respect to those items set forth in
clauses (a)-(f) and (k), furnish copies to each Bank:
(a) QUARTERLY FINANCIALS. As soon as available and in any event not
later than 45 days after the end of each Fiscal Quarter of the Parent, the
unaudited Consolidated balance sheets of the Parent and its Subsidiaries as
of the end of such quarter and the related unaudited statements of income,
shareholders' equity and cash flows of the Parent and its Subsidiaries for
such Fiscal Quarter and the period commencing at the end of the previous
year and ending with the end of such Fiscal Quarter, and the corresponding
figures as at the end of, and for, the corresponding periods in the
preceding Fiscal Year, all duly certified with respect to such statements
(subject to year-end audit adjustments) by a Responsible Officer of the
Parent as having been prepared in accordance with GAAP, together with (i) a
Compliance Certificate duly executed by a Responsible Officer of the
Parent, (ii) a completed Borrowing Base Certificate duly executed by a
Responsible Officer of the Parent setting forth the components of the
Borrowing Base as of the last day of the immediately preceding Fiscal
Quarter, and (iii) a certificate in form similar to the Borrowing Base
Certificate duly executed by a Responsible Officer of the Parent setting
forth for those Hotel Properties owned or leased by the Parent or any of
its Subsidiaries except for the Eligible Properties the Adjusted NOI for
the Rolling Period just ended and Investment Amount, separately totaled for
those Hotel Properties which are unencumbered, those Hotel Properties which
secure Secured Recourse Indebtedness and those Hotel Properties which
secure Secured Non-Recourse Indebtedness. As soon as available and in any
event not later than 60 days after the end of each Fiscal Quarter of the
Parent, (i) written notice of any anticipated material variation to an
operating budget prepared pursuant to Section 5.05(e) and (ii) a report
certified by a Responsible Officer of the Parent setting forth for each of
the Hotel Properties owned or leased by the Parent or any of its
Subsidiaries for the Fiscal Quarter just ended the average daily rate, the
average occupancy, the RevPAR, the total gross revenues, the total
expenses, the Adjusted NOI and the payments made under the participating
leases for such Hotel Properties.
(b) ANNUAL FINANCIALS. As soon as available and in any event not
later than 90 days after the end of each Fiscal Year of the Parent, a copy
of the Consolidated balance sheets of the Parent and its Subsidiaries as of
the end of such Fiscal Year and the related Consolidated statements of
income, shareholders' equity and cash flows of the Parent and its
Subsidiaries for such Fiscal Year, and the corresponding figures as at the
end of, and for, the preceding Fiscal Year, and certified by KPMG Peat
Marwick L.L.P. or other independent certified public accountants of
nationally recognized standing reasonably acceptable to the Administrative
Agent in an opinion, without qualification as to the scope, and including,
if requested by the Administrative Agent, any management letters delivered
by such accountants to the Parent in connection with such audit, together
with (i) a Compliance Certificate duly executed by a Responsible Officer of
the Parent, (ii) a completed Borrowing Base Certificate duly executed by a
Responsible Officer of the Parent setting forth the components of the
Borrowing Base as of the day of such financial statements and (iii) the
document required in clauses (iii) of the first sentence of the preceding
Section 5.05(a). As soon as available and in any event not later than 105
days after the end of each Fiscal Year of the Parent, the documents
required in the second sentence of the preceding Section 5.05(a).
(c) LASALLE LEASING FINANCIALS. As soon as available and in any
event not later than 60 days after the end of each Fiscal Quarter of
LaSalle Leasing, the unaudited Consolidated balance sheets of LaSalle
Leasing and its Subsidiaries as of the end of such quarter and the related
unaudited statements of income, shareholders' equity and cash flows of
LaSalle Leasing and its Subsidiaries for the period commencing at the end
of the previous year and ending with the end of such Fiscal Quarter, and
the corresponding figures as at the end of, and for, the corresponding
period in the preceding Fiscal Year, all duly certified with respect to
such statements (subject to year-end audit adjustments) by a Responsible
Officer of LaSalle Leasing as having been prepared in accordance with GAAP.
As soon as available and in any event not later than 120 days after the end
of each Fiscal Year of LaSalle Leasing, as applicable, (i) a copy of the
annual audit report for such year for LaSalle Leasing and its Subsidiaries,
if any, including therein audited Consolidated balance sheets of LaSalle
Leasing and its Consolidated Subsidiaries as of the end of such fiscal year
and the related Consolidated statements of income, shareholders' equity and
cash flows of LaSalle Leasing and its Subsidiaries for such fiscal year,
and the corresponding figures as at the end of, and for, the preceding
fiscal year, in each case certified by an independent certified public
accountant reasonably acceptable to the Administrative Agent and including,
if requested by the Administrative Agent, any management letters delivered
by such accountants to LaSalle Leasing in connection with such audit.
(d) ANNUAL BUDGETS. No later than 60 days after the start of each
Fiscal Year, the annual operating budget and Capital Expenditure and FF&E
expenditure budget for such Fiscal Year for each Hotel Property owned or
leased by the Parent or one of its Subsidiaries and such budgets on a
Consolidated basis for the Parent and its subsidiaries, all in reasonable
detail and duly certified by a Responsible Officer of the Parent as the
budgets presented or to be presented to the Parent's Board of Directors for
their review.
(e) SECURITIES LAW FILINGS. Promptly and in any event within 10
Business Days after the sending or filing thereof, copies of all proxy
material, reports and other information which the Borrower, the Parent or
any of their respective Subsidiaries sends to or files with the United
States Securities and Exchange Commission or sends to all shareholders of
the Parent or partners of the Borrower.
(f) DEFAULTS. As soon as possible and in any event within five
days after the occurrence of each Default known to a Responsible Officer of
the Borrower, the Parent or any of their respective Subsidiaries, a
statement of an authorized financial officer or Responsible Officer of the
Borrower setting forth the details of such Default and the actions which
the Borrower has taken and proposes to take with respect thereto.
(g) ERISA NOTICES. As soon as possible and in any event (i) within
30 days after the Parent, the Borrower or any of a Controlled Group knows
that any Termination Event described in clause (a) of the definition of
Termination Event with respect to any Plan has occurred, (ii) within 10
days after the Parent, the Borrower or any of a Controlled Group knows that
any other Termination Event with respect to any Plan has occurred, a
statement of the Chief Financial Officer of the Parent describing such
Termination Event and the action, if any, which the Parent, the Borrower or
such member of such Controlled Group proposes to take with respect thereto;
(iii) within 10 days after receipt thereof by the Parent, the Borrower or
any of a Controlled Group from the PBGC, copies of each notice received by
the Parent, the Borrower or any such member of such Controlled Group of the
PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan; and (iv) within 10 days after receipt thereof by the
Parent, the Borrower or any member of a Controlled Group from a
Multiemployer Plan sponsor, a copy of each notice received by the Parent,
the Borrower or any member of such Controlled Group concerning the
imposition or amount of withdrawal liability pursuant to Section 4202 of
ERISA.
(h) ENVIRONMENTAL NOTICES. Promptly upon receipt thereof by the
Parent, the Borrower or any of their Subsidiaries, a copy of any form of
notice, summons or citation received from the United States Environmental
Protection Agency, or any other Governmental Authority concerning (i)
violations or alleged violations of Environmental Laws, which seeks to
impose liability therefor, (ii) any action or omission on the part of the
Parent or Borrower or any of their present or former Subsidiaries in
connection with Hazardous Waste or Hazardous Substances which, based upon
information reasonably available to the Borrower, could reasonably be
expected to cause a Material Adverse Change or an Environmental Claim in
excess of $1,000,000, (iii) any notice of potential responsibility under
CERCLA, or (iv) concerning the filing of a Lien upon, against or in
connection with the Parent, Borrower, their present or former Subsidiaries,
or any of their leased or owned Property, wherever located.
(i) OTHER GOVERNMENTAL NOTICES OR ACTIONS. Promptly and in any
event within five Business Days after receipt thereof by the Borrower, the
Parent or any of their respective Subsidiaries, (i) a copy of any notice,
summons, citation, or proceeding seeking to adversely modify in any
material respect, revoke, or suspend any license, permit, or other
authorization from any Governmental Authority, which action could
reasonably be expected to cause a Material Adverse Change, and (ii) any
revocation or involuntary termination of any license, permit or other
authorization from any Governmental Authority, which revocation or
termination could reasonably be expected to cause a Material Adverse
Change.
(j) REPORTS AFFECTING THE BORROWING BASE. On or prior to the 5th
day following any Adjustment Event, a Property Adjustment Report with
respect to such Adjustment Event.
(k) PRESS RELEASES. Promptly and in any event within 5 days after
the sending or releasing thereof, copies of all press releases or other
releases of information to the public by the Borrower, the Parent or any of
their respective Subsidiaries or releases of information to the Parent's
shareholders.
(l) OTHER NOTICES.
(i) Promptly, a copy of any notice of default or any other
material notice (including without limitation property condition reviews)
received by the Borrower or any Guarantor from any franchisor, Approved
Manager, or any ground lessor under a Qualified Ground Lease, and
(ii) Promptly following any merger or dissolution of any
Subsidiary of the Borrower which is permitted hereunder or event which
would make any of the representations in Section 4.01-4.04 untrue, notice
thereof.
(m) MATERIAL LITIGATION. As soon as possible and in any event
within five days of any of the Borrower, the Parent or any of their
respective Subsidiaries having knowledge thereof, notice of any litigation,
claim or any other event which could reasonably be expected to cause a
Material Adverse Change.
(n) PRELIMINARY PROPERTY PLAN. Prior to making Capital
Expenditures or FF&E expenditures for the renovation or expansion of a
Hotel Property, the Preliminary Property Plan for such renovation or
expansion in sufficient detail as the Administrative Agent shall reasonably
request.
(o) OTHER INFORMATION. Such other information respecting the
business or Properties, or the condition or operations, financial or
otherwise, of the Borrower, the Parent or any of their respective
Subsidiaries, as the Administrative Agent may from time to time reasonably
request.
SECTION 5.06 MAINTENANCE OF PROPERTY AND REQUIRED WORK. The
Borrower will, and will cause each of its Subsidiaries to, (a) maintain
their owned, leased, or operated Property in a manner consistent for hotel
properties and related property of the same quality and character and shall
keep or cause to be kept every part thereof and its other properties in
good condition and repair, reasonable wear and tear excepted, and make all
reasonably necessary repairs, renewals or replacements thereto as may be
reasonably necessary to conduct the business of the Borrower and its
Subsidiaries, (b) not remove, demolish or structurally alter, or permit or
suffer the removal, demolition or structural alteration of, any of the
Improvements except for the renovation or expansion of a Hotel Property (i)
for which the Borrower has delivered a Preliminary Property Plan to the
Administrative Agent and (ii) which complies with the limitations set forth
in this Agreement on the aggregate amount of renovations and expansions the
Borrower, the Parent and their Subsidiaries are permitted at any one time,
(c) not knowingly or willfully permit the commission of waste or other
injury, or the occurrence of pollution, contamination or any other
condition in, on or about any Hotel Property, (d) maintain and repair each
Hotel Property as required by any franchise agreement, license agreement,
management agreement or ground lease for such Hotel Property, (e) commence
the Required Work for any Hotel Property by a date which would allow a
reasonable period of time to complete such work on or prior to the deadline
set for such Required Work agreed to by the Borrower and the Administrative
Agent, and (f) after any commencement of any of work for any Hotel Property
diligently perform such work (i) for the Required Work, by the required
deadline, (ii) in a good and workmanlike manner and (iii) in compliance in
all material respects with all Legal Requirements. Except as may be
required to maintain the Parent's status as a REIT under the Code, any
Capital Expenditures or expenditures or leases for FF&E made for any Hotel
Property shall be in the name of the Property Owner for such Hotel
Property.
SECTION 5.07 INSURANCE. The Borrower will maintain and/or remain
the beneficiary under, and cause each of its Subsidiaries to maintain
and/or remain the beneficiary under, the insurance required pursuant to
Schedule 5.07.
SECTION 5.08 BORROWING BASE REQUIREMENTS. The Borrower shall cause
the Hotel Properties in the Borrowing Base to at all times comply with the
Borrowing Base Requirements; PROVIDED that (a) if the requirements of
clauses (a), (b), (c), or (e) of the definition of Borrowing Base
Requirements are not met, then within 2 Business Days of notice of such
failure either (i) the Borrower shall have cured such failure or (ii) for
Borrowing Base purposes the Borrower shall have lowered the Hotel Value of
those Eligible Properties that contributed to such failure to the point
that such failure no longer exists, (b) if the requirements of clause (f)
of the definition of Borrowing Base Requirements are not met, then within
180 days of notice of such failure either (i) the Borrower shall have cured
such failure or (ii) for Borrowing Base purposes the Borrower shall have
lowered the Hotel Value of those Eligible Properties that contributed to
such failure to the point that such failure no longer exists, and (c) if
the requirements of clause (g) of the definition of Borrowing Base
Requirements are not met and such failure remains uncured 180 days after
notice of the commencement of such failure, then such failure shall
constitute an Event of Default without any notice being given to the
Borrower or any Guarantor in connection therewith.
SECTION 5.09 SUPPLEMENTAL GUARANTIES. The Borrower has requested
and the Administrative Agent has agreed that any partner of the Borrower
except the Parent or any other Guarantor may execute a Supplemental
Guaranty. However, the execution of or release of any Supplemental
Guaranty shall not be construed as a release or modification of any
obligation of a Guarantor under a Guaranty or Environmental Indemnity.
SECTION 5.10 LASALLE LEASING. Prior to the consummation of the
Permitted Proposed Transaction, upon knowledge of a material default by
LaSalle Leasing under an Approved Participating Lease, the Borrower will
send, or will cause the Guarantor who is a party to such Approved
Participating Lease to send, a notice of such default to LaSalle Leasing as
provided in the document under which such default has occurred and provide
a copy of such notice to the Administrative Agent. For purposes of this
Section 5.10, a "material default" shall mean a monetary default and any
default, which if not cured, would be a default under any applicable
franchise agreement and Approved Management Agreement allowing the Person
party to such agreement to terminate such agreement.
SECTION 5.11 USE OF PROCEEDS. The proceeds of the Advances have
been, and will be used by the Borrower for the purposes set forth in
Section 4.09(a).
SECTION 5.12 NEW GUARANTORS. Within ten (10) days of the creation
of or Investment in a Person which falls within the definition of a
Guarantor, Borrower shall cause such Person to deliver to the
Administrative Agent either (A) an original Guaranty and Environmental
Indemnity executed by such Person or (B) an Accession Agreement executed by
such Person.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Bank
shall have any Commitment, the Borrower agrees, unless the Administrative
Agent shall otherwise consent in writing (subject to the provisions of
Section 10.01), to comply with the following covenants.
SECTION 6.01 LIENS, ETC. The Borrower will not create, assume,
incur or suffer to exist, or permit any of its Subsidiaries (except for
Permitted Other Subsidiaries) to create, assume, incur, or suffer to exist,
any Lien on or in respect of any of its Property whether now owned or
hereafter acquired, or assign any right to receive income, except that the
Borrower and its Subsidiaries may create, incur, assume or suffer to exist
Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on
Property of the Borrower or any Guarantor to the extent not required to be
paid pursuant to Sections 5.03;
(c) Liens imposed by law (such as landlords', carriers', warehouse-
men's and mechanics' liens or otherwise arising from litigation) (a) which
are being contested in good faith and by appropriate proceedings, (b) with
respect to which reserves in conformity with GAAP have been provided, (c)
which have not resulted in any Hotel Property being in jeopardy of being
sold, forfeited or lost during or as a result of such contest, (d) neither
the Administrative Agent nor any Bank could become subject to any civil
fine or penalty or criminal fine or penalty, in each case as a result of
non-payment of such charge or claim and (e) such contest does not, and
could not reasonably be expected to, result in a Material Adverse Change;
(d) on leased personal property to secure solely the lease
obligations associated with such property;
(e) Liens securing Secured Recourse Indebtedness and Secured Non-
Recourse Indebtedness permitted pursuant to the provisions of Section 6.02;
and
(f) Liens on the Hyatt Boston Replacement Bonds Proceeds as
contemplated by Section 10.21.
SECTION 6.02 INDEBTEDNESS. The Borrower, the Parent and their
respective Subsidiaries will not incur or permit to exist any Indebtedness
other than the Obligations and the following:
(a) Unsecured Indebtedness which is less than or equal to
$50,000,000;
(b) Secured Recourse Indebtedness and Secured Non-Recourse
Indebtedness incurred by Permitted Other Subsidiaries to the extent (i)
that the covenants contained in Article VII are complied with, (ii) the
Secured Recourse Indebtedness secured by a Hotel Property does not exceed
65% of the Hotel Value of such Hotel Property and all Secured Recourse
Indebtedness in the aggregate secured by Hotel Properties does not exceed
65% of the aggregate Hotel Value of such Hotel Properties, and (iii) the
Secured Non-Recourse Indebtedness secured by a Hotel Property does not
exceed 70% of the Hotel Value of such Hotel Property and all Secured Non-
Recourse Indebtedness in the aggregate secured by Hotel Properties does not
exceed 70% of the aggregate Hotel Value of such Hotel Properties;
(c) Indebtedness in the form of Interest Rate Agreements; provided
that (i) such agreements shall be unsecured, (ii) the dollar amount of
indebtedness subject to such agreements and the indebtedness subject to
Interest Rate Agreements in the aggregate shall not exceed the sum of the
amount of the Commitments and other Indebtedness permitted pursuant to this
Section 6.02 which bears interest at a variable rate, and (iii) the
agreements shall be at such interest rates and otherwise in form and
substance reasonably acceptable to the Administrative Agent;
(d) Any of the following Indebtedness incurred by the Parent:
(i) guaranties in connection with the Indebtedness secured by
a Hotel Property of (A) if the Hotel Property is subject to a ground lease,
the payment of rent under such ground lease, (B) real estate taxes relating
to such Hotel Property, and (C) capital reserves required under such
Indebtedness; and
(ii) indemnities for certain acts of malfeasance,
MISAPPROPRIATION and misconduct and an environmental indemnity for the
lender under Indebtedness permitted under this Agreement; and
(iii) indemnities for certain acts of malfeasance,
misappropriation and misconduct by the Permitted Other Subsidiaries and
environmental indemnities, all for the benefit of the lenders of other
Permitted Other Subsidiary Indebtedness in connection with such
Indebtedness; and
(iv) guaranties of franchise agreements; and
(v) extensions, renewals and refinancing of any of the
Indebtedness specified in paragraphs (a) - (d) above so long as the
principal amount of such Indebtedness is not thereby increased; and
(e) The Indebtedness secured by the Hyatt Boston Replacement Bonds
Proceeds as contemplated by Section 10.21.
SECTION 6.03 AGREEMENTS RESTRICTING DISTRIBUTIONS FROM SUBSIDIARIES.
The Borrower will not, nor will it permit any of its Subsidiaries (other
than Permitted Other Subsidiaries) to, enter into any agreement (other than
a Credit Document) which limits distributions to or any advance by any of
the Borrower's Subsidiaries to the Borrower.
SECTION 6.04 RESTRICTED PAYMENTS. Neither the Parent, the Borrower,
nor any of their respective Subsidiaries, will make any Restricted Payment,
except that:
(a) provided no Default has occurred and is continuing or would
result therefrom, the Parent may in any Fiscal Quarter, based on the
immediately preceding Rolling Period, make cash payments to its
shareholders (including in connection with the repurchase of Stock or Stock
Equivalents) which with the previous such cash payments in the three
immediately preceding Fiscal Quarters are not in excess of the greater of
(i) the lesser of (A) ninety percent (90%) of the Funds From Operations of
the Parent during such preceding Rolling Period or (B) one hundred percent
(100%) of Free Cash Flow of the Parent during such preceding Rolling Period
and (ii) the greater of (A) the amount required for the Parent to maintain
its status as a REIT or (B) the amount required to ensure that the Parent
will avoid imposition of an excise tax for failure to make certain minimum
distributions on a calendar year basis;
(b) provided no Default has occurred and is continuing or would
result therefrom, the Borrower shall be entitled to make cash distributions
to its partners, including the Parent;
(c) a Subsidiary of the Borrower may make a Restricted Payment to
the Borrower,
(d) the limited partners of the Borrower shall be entitled to
exchange limited partnership interests in the Borrower for the Parent's
stock or redeem such interests for cash, as provided in the Borrower's
limited partnership agreement;
(e) the Borrower shall be entitled to issue limited partnership
interests in the Borrower in exchange of ownership interests in
Subsidiaries and Unconsolidated Entities which own a Future Property to the
extent such Investment is permitted pursuant to the provisions of Section
6.07; and
(f) provided no Default has occurred and is continuing or would
result therefrom, the Parent may repurchase up to $25,000,000 of Parent
Common Stock in the aggregate.
SECTION 6.05 FUNDAMENTAL CHANGES; ASSET DISPOSITIONS. Neither the
Parent, the Borrower, nor any of their respective Subsidiaries (other than
the Permitted Other Subsidiaries) will, (a) merge or consolidate with or
into any other Person, unless (i) a Guarantor is merged into the Borrower
or another Guarantor and the Borrower or such other Guarantor, as the case
may be, is the surviving Person or a Subsidiary (other than a Permitted
Other Subsidiary which has Indebtedness other than the Obligations) is
merged into any Subsidiary (other than a Permitted Other Subsidiary which
has Indebtedness other than the Obligations), and (ii) immediately after
giving effect to any such proposed transaction no Default would exist; (b)
sell, transfer, or otherwise dispose of all or any of the such Person's
material property except for a Permitted Hotel Sale, dispositions or
replacements of personal property in the ordinary course of business, or
Hotel Properties which are not Eligible Properties; (c) enter into a lease
(other than an Approved Participating Lease) of all or substantially all of
any Eligible Property with any Person without the consent of the
Administrative Agent; (d) sell or otherwise dispose of any material shares
of capital stock, membership interests or partnership interests of any
Subsidiary (except for a Permitted Other Subsidiary); (e) except for the
Permitted Proposed Transaction, sales of ownership interests permitted
under this Agreement, and the issuance of limited partnership interests in
the Borrower in exchange for ownership interests in Subsidiaries and
Unconsolidated Entities to the extent permitted pursuant to the provisions
of Section 6.04, materially alter the corporate, capital or legal structure
of any such Person (except for a Permitted Other Subsidiary); (f)
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) provided that nothing herein shall prohibit the Borrower from
dissolving any Subsidiary which has no assets on the date of dissolution or
(g) materially alter the character of their respective businesses from that
conducted as of the date of this Agreement.
SECTION 6.06 APPROVED PARTICIPATING LESSEE OWNERSHIP. Neither the
Parent nor the Borrower shall, nor shall permit any of their respective
Subsidiaries to own directly or indirectly such a percentage of the
beneficial ownership interest in any Approved Participating Lessee as would
cause a potential Event of Default under Section 8.01(o) of this Agreement.
SECTION 6.07 INVESTMENTS, LOANS, FUTURE PROPERTIES. Neither the
Parent nor the Borrower shall, nor shall permit any of their respective
Subsidiaries to, acquire by purchase, or otherwise, all or substantially
all of the business, property or fixed assets of any Person or any Hotel
Property, make or permit to exist any loans, advances or capital
contributions to, or make any Investments in (including without limitation,
loans and advances to, and other Investments in, Subsidiaries), or purchase
or commit to purchase any evidences of Indebtedness of, stock or other
securities, partnership interests, member interests or other interests in
any Person, except the following (provided that after giving effect thereto
there shall exist no Default):
(a) the purchase of Liquid Investments with any Person which
qualifies as an Eligible Assignee;
(b) trade and customer accounts receivable which are for goods
furnished or services rendered in the ordinary course of business and are
payable in accordance with customary trade terms, and other assets owned in
the ordinary course of owning the Parent Hotel Properties;
(c) a Future Property which qualifies as an Eligible Property or a
Permitted Non-Eligible Property;
(d) Investments in (i) unimproved land which do not in the
aggregate have an Investment Amount which exceeds 5% of the Parent
Aggregate Asset Value; (ii) Development Properties which do not in the
aggregate have an Investment Amount which exceeds 20% of the Parent
Aggregate Asset Value, (iii) Unconsolidated Entities (A) which do not in
the aggregate have an Investment Amount which exceeds 20% of the Parent
Aggregate Asset Value, (B) for which the Investment Amounts for those
Investments which are in the form of preferred stock or a loan or advance
do not exceed $5,000,000 in the aggregate, and (C) which have not for any
individual Unconsolidated Entity incurred Indebtedness which exceeds 75% of
the lesser of the appraised value or the Investment Amount of the Hotel
Properties owned by such Unconsolidated Entity, and (iv) mortgages, deeds
of trust, deeds to secure debt or similar instruments that are a lien on
real property which are improved by fully operational hotels and secure
Indebtedness evidenced by a note or bond which do not in the aggregate have
an Investment Amount which exceeds 10% of the Parent Aggregate Asset Value;
PROVIDED that the aggregate Investment Amount for all Investments made
pursuant to this Section 6.07(d) shall not exceed 30% of the Parent
Aggregate Asset Value;
(e) The Investment to be made in connection with the Permitted
Proposed Transaction; and
(f) The Investment in the Hyatt Boston Replacement Bonds Proceeds
as contemplated by Section 10.21.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor
their respective Subsidiaries shall acquire a Future Property or otherwise
make an Investment which would (a) cause the Eligible Properties in the
aggregate to violate the Borrowing Base Requirements, (b) cause the Parent
Hotel Properties in the aggregate to violate in any material way the Parent
Hotel Property Requirements without the Administrative Agent's written
consent, (c) cause a Default, (d) cause or result in the Borrower or the
Parent failing to comply with any of the financial covenants contained
herein, (e) cause the aggregate Investment Amount for (i) all Future
Properties located outside the United States and (ii) all Investments made
pursuant to Section 6.07(d) which are either located outside the United
States or in an Unconsolidated Entity which has at least 50% of its assets
located outside the United States to exceed 15% of the Parent Aggregate
Asset Value, (f) cause the Parent's or any Subsidiary's Investment in the
Personal Property for any Hotel Property to cause a potential Event of
Default under Section 8.01(o) of this Agreement.
SECTION 6.08 AFFILIATE TRANSACTIONS. Except for the Advisory
Agreement and payments allowed in accordance therewith, the Approved
Participating Leases, the Permitted Proposed Transaction, and as otherwise
approved by a majority of the Board of Trustees of the Parent including a
majority of the independent trustees, the Borrower will not, and will not
permit any of its Subsidiaries to, make, directly or indirectly (a) any
transfer, sale, lease, assignment or other disposal of any assets to any
Affiliate of the Borrower which is not a Guarantor or any purchase or
acquisition of assets from any such Affiliate; or (b) any arrangement or
other transaction directly or indirectly with or for the benefit of any
such Affiliate (including without limitation, guaranties and assumptions of
obligations of an Affiliate), other than in the ordinary course of business
and at market rates.
SECTION 6.09 SALE AND LEASEBACK. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any arrangement with any
Person, whereby in contemporaneous transactions the Borrower or such
Subsidiary sells essentially all of its right, title and interest in a
material asset and the Borrower or such Subsidiary acquires or leases back
the right to use such property.
SECTION 6.10 SALE OR DISCOUNT OF RECEIVABLES. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, sell with recourse, or discount or otherwise sell for less than
the face value thereof, any of its notes or accounts receivable.
SECTION 6.11 NO FURTHER NEGATIVE PLEDGES. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into or suffer to
exist any agreement (other than this Agreement and the Credit Documents)
(a) prohibiting the creation or assumption of any Lien upon the Properties
of the Borrower or any of its Subsidiaries (except for the Permitted Other
Subsidiaries), whether now owned or hereafter acquired, or (b) requiring an
obligation to be secured if some other obligation is or becomes secured.
SECTION 6.12 INTENTIONALLY DELETED.
SECTION 6.13 MATERIAL DOCUMENTS. The Borrower will not, nor will it
permit any of its Subsidiaries (other than Permitted Other Subsidiaries) or
any Approved Participating Lessee (other than as a lessee of a Permitted
Non-Eligible Property) to, enter into any termination, material
modification or material amendment any of the following documents without
the written consent of the Administrative Agent:
(a) Approved Management Agreement;
(b) Approved Participating Lease;
(c) Qualified Ground Lease; and
(d) Any other material agreement.
In addition, the Borrower will not permit the Parent to enter into any
termination, material modification or material amendment of the Advisory
Agreement or any Approved Substitute Advisory Agreement without the written
consent of the Administrative Agent; provided that the Advisory Agreement
or any Approved Substitute Advisory Agreement may be terminated without the
consent of the Administrative Agent if either (a) within 10 days of such
termination the Parent enters into an Approved Substitute Advisory
Agreement or (b) within 10 days of such termination the Parent or the
Borrower employs ▇▇▇ ▇. ▇▇▇▇▇ or another person reasonably acceptable to
the Required Lenders as such Person's chairman of the board, president or
chief executive officer. Any termination, modification or amendment
prohibited under this Section 6.13 shall, to the extent permitted by
applicable law, be void and of no force and effect.
SECTION 6.14 LIMITATIONS ON DEVELOPMENT, CONSTRUCTION, RENOVATION
AND PURCHASE OF HOTEL PROPERTIES. Neither the Parent nor the Borrower
shall or shall permit any of their respective Subsidiaries to (a) engage in
the development, construction or expansion of any Hotel Properties (except
for Development Properties permitted by the provisions of Section 6.07 or
Renovating Properties) or (b) enter into any binding agreements to purchase
Hotel Properties or other assets; provided that the Parent, the Borrower
and their Subsidiaries may enter into binding agreements to purchase Hotel
Properties or other assets if at all times such Person has available
sources of capital equal to the portion of the purchase price of such Hotel
Properties or other assets which constitutes a recourse obligation of the
Parent, the Borrower or its Subsidiary, which available sources of capital
may include Advances to the extent that the Borrower may borrow the same
for the purposes required or other Indebtedness permitted by the terms of
this Agreement.
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Bank
shall have any Commitment hereunder, unless the Administrative Agent shall
otherwise consent in writing (subject to the provisions of Section 10.01),
the Borrower agrees to comply and cause the Parent to comply with the
following covenants.
SECTION 7.01 PARENT'S FIXED CHARGE COVERAGE RATIO. The Parent shall
maintain at the end of each Rolling Period a Parent's Fixed Charge Coverage
Ratio of not less than 2.00 to 1.0.
SECTION 7.02 PARENT'S INTEREST COVERAGE RATIO. The Parent shall
maintain at the end of each Rolling Period a Parent's Interest Coverage
Ratio of not less than 2.25 to 1.0.
SECTION 7.03 UNSECURED INTEREST COVERAGE RATIO. The Parent shall
maintain at the end of each Rolling Period an Unsecured Interest Coverage
Ratio of not less than 2.25 to 1.0.
SECTION 7.04 MAINTENANCE OF NET WORTH. The Parent shall at all
times maintain an Adjusted Net Worth of not less than the Minimum Tangible
Net Worth.
SECTION 7.05 LIMITATIONS ON TOTAL LIABILITIES. The Parent shall not
on any date permit the Leverage Ratio to be greater than 50%.
SECTION 7.06 LIMITATIONS ON SECURED RECOURSE INDEBTEDNESS. The
Parent shall not on any date on a Consolidated basis permit the Secured
Recourse Indebtedness (excluding the Obligations) of the Parent, to exceed
15% of the Parent Aggregate Asset Value.
SECTION 7.07 LIMITATIONS ON SECURED INDEBTEDNESS. The Parent shall
not at any time on a Consolidated basis permit the sum of the Parent's
Secured Non-Recourse Indebtedness and Secured Recourse Indebtedness to
exceed 35% of the Parent Aggregate Asset Value.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
SECTION 8.01 EVENTS OF DEFAULT. The occurrence of any of the
following events shall constitute an "Event of Default" under any Credit
Document:
(a) PRINCIPAL OR LETTER OF CREDIT OBLIGATION PAYMENT. The Borrower
shall fail to pay any principal of any Note or any Letter of Credit
Obligation when the same becomes due and payable as set forth in this
Agreement;
(b) INTEREST OR OTHER OBLIGATION PAYMENT. The Borrower shall fail
to pay any interest on any Note or any fee or other amount payable
hereunder or under any other Credit Document when the same becomes due and
payable as set forth in this Agreement, provided however that the Borrower
will have a grace period of five days after the payments covered by this
Section 8.01(b) becomes due and payable for the first two defaults under
this Section 8.01(b) in every calendar year;
(c) REPRESENTATION AND WARRANTIES. Any representation or warranty
made or deemed to be made (i) by the Borrower in this Agreement or in any
other Credit Document, (ii) by the Borrower (or any of its officers) in
connection with this Agreement or any other Credit Document, or (iii) by
any Subsidiary in any Credit Document shall prove to have been incorrect in
any material respect when made or deemed to be made;
(d) COVENANT BREACHES. (i) The Borrower shall fail to perform or
observe any covenant contained in Sections 5.02(a)(i), (b)(i) or (f),
Article VI or Article VII of this Agreement or the Borrower shall fail to
perform or observe, or shall fail to cause any Guarantor to perform or
observe any covenant in any Credit Document beyond any notice and/or cure
period for such default expressly provided in such Credit Document or (ii)
the Borrower or any Guarantor shall fail to perform or observe any term or
covenant set forth in any Credit Document which is not covered by
clause (i) above or any other provision of this Section 8.01, in each case
if such failure shall remain unremedied for 30 days after the earlier of
the date written notice of such default shall have been given to the
Borrower or such Guarantor by the Administrative Agent or any Bank or the
date a Responsible Officer of the Borrower or any Guarantor has actual
knowledge of such default, unless such default in this clause (ii) cannot
be cured in such 30 day period and the Borrower is diligently proceeding to
cure, or caused to be cured, such default, in which event the cure period
shall be extended to 90 days;
(e) CROSS-DEFAULTS.
(i) with respect to (A) any Secured Non-Recourse Indebtedness
which is outstanding in a principal amount of at least $10,000,000
individually or when aggregated with all such Secured Non-Recourse
Indebtedness of the Borrower, the Parent or any of their respective
Subsidiaries or (B) any other Indebtedness (but excluding Indebtedness
evidenced by the Notes) which is outstanding in a principal amount of at
least $5,000,000 individually or when aggregated with all such Indebtedness
of the Borrower, the Parent or any of their respective Subsidiaries, any of
the following:
A. any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof,
B. the Borrower, the Parent or any of their respective
Subsidiaries shall fail to pay any principal of or premium or interest of
any of such Indebtedness (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or
C. any other event shall occur or condition shall exist under any
agreement or instrument relating to such Indebtedness, and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to permit the
holders of such Indebtedness to accelerate the maturity of such
Indebtedness;
(f) INSOLVENCY. The Borrower, the Parent, any of their respective
Subsidiaries, or the Approved Participating Lessee or Approved Manager for
Hotel Properties which comprise twenty-five percent (25%) or more of the
Borrowing Base Hotel Value shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against the Borrower, the
Parent, any of their respective Subsidiaries, or the Approved Participating
Lessee or Approved Manager for Hotel Properties which comprise twenty-five
percent (25%) or more of the Borrowing Base Hotel Value seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against the Borrower, the Parent, any of their
respective Subsidiaries, or the Approved Participating Lessee or Approved
Manager for Hotel Properties which comprise twenty-five percent (25%) or
more of the Borrowing Base Hotel Value, either such proceeding shall remain
undismissed for a period of 60 days or any of the actions sought in such
proceeding shall occur; or the Borrower, the Parent, any of their
respective Subsidiaries, or the Approved Participating Lessee or Approved
Manager for Hotel Properties which comprise twenty-five percent (25%) or
more of the Borrowing Base Hotel Value shall take any corporate action to
authorize any of the actions set forth above in this paragraph (f);
(g) JUDGMENTS. Any judgment or order for the payment of money in
excess of $10,000,000 (reduced for purposes of this paragraph for the
amount in respect of such judgment or order that a reputable insurer has
acknowledged being payable under any valid and enforceable insurance
policy) shall be rendered against the Borrower, the Parent or any of their
respective Subsidiaries which, within 60 days from the date such judgment
is entered, shall not have been discharged or execution thereof stayed
pending appeal;
(h) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is likely to result in the termination of such Plan for purposes of
Title IV of ERISA, unless such Reportable Event, proceedings or appointment
are being contested by the Parent or the Borrower in good faith and by
appropriate proceedings, (iv) any Plan shall terminate for purposes of
Title IV of ERISA, (v) the Parent, the Borrower or any member of a
Controlled Group shall incur any liability in connection with a withdrawal
from a Multiemployer Plan or the insolvency (within the meaning of Section
4245 of ERISA) or reorganization (within the meaning of Section 4241 of
ERISA) of a Multiemployer Plan, unless such liability is being contested by
the Parent or the Borrower in good faith and by appropriate proceedings, or
(vi) any other event or condition shall occur or exist, with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
subject the Borrower or any Guarantor to any tax, penalty or other
liabilities in the aggregate exceeding $10,000,000;
(i) GUARANTY. Any Guaranty except a Supplemental Guaranty shall
for any reason cease to be valid and binding on any Guarantor or any
Guarantor shall so state in writing;
(j) ENVIRONMENTAL INDEMNITY. Any Environmental Indemnity shall for
any reason cease to be valid and binding on any Person party thereto or any
such Person shall so state in writing;
(k) APPROVED PARTICIPATING LESSEE. Either (i) a material default
by the Approved Participating Lessee shall occur under any Approved
Participating Lease related to Hotel Properties which comprise twenty-five
percent (25%) or more of the Borrowing Base Hotel Value which shall remain
uncured following any notice and cure period under such document, or (ii)
with respect to Hotel Properties which comprise twenty-five percent (25%)
or more of the Borrowing Base Hotel Value, the Approved Participating Lease
for any Hotel Property is terminated;
(l) INTENTIONALLY DELETED.;
(m) DEFAULT UNDER QUALIFIED GROUND LEASE. Qualified Ground Leases
for Hotel Properties which comprise twenty-five percent (25%) or more of
the Borrowing Base Hotel Value have in the aggregate either (i) been
terminated because of a default by the lessee under such Qualified Ground
Lease or (ii) are subject to a default by the lessee under such Qualified
Ground Lease which has not been cured or waived 10 days prior to the date
the ground lessors under such Qualified Ground Lease would have the right
to terminate such Qualified Ground Leases;
(n) MANAGER. The Approved Participating Lessees for Hotel
Properties which comprise twenty-five percent (25%) or more of the
Borrowing Base Hotel Value shall not have replaced the Approved Manager for
such Hotel Properties with a reputable, nationally known, third party
manager acceptable to the Administrative Agent within 120 days of the
terminations of the Approved Management Agreements for such Hotel
Properties except in connection with an Asset Disposition;
(o) PARENT'S REIT STATUS. There shall be a determination from the
applicable Governmental Authority from which no appeal can be taken that
the Parent's tax status as a REIT has been lost;
(p) PARENT COMMON STOCK. The Parent at any time hereafter fails to
cause the Parent Common Stock to be duly listed on the New York Stock
Exchange, Inc.; or
(q) CHANGES IN OWNERSHIP AND CONTROL. Any of the following occur
without the written consent of the Required Lenders : (a) the Parent (i)
amends the Borrower's partnership agreement in any material respect, (ii)
admits a new general partner to the Borrower, (iii) own less than 70% of
the partnership interests in and beneficial ownership of the Borrower, or
(iv) resigns as general partner of the Borrower; (b) the Advisory Agreement
or any Approved Substitute Advisory Agreement shall be modified, amended or
terminated except as permitted by the provisions of Section 6.13; or (c) if
(i) neither the Advisory Agreement nor any Approved Substitute Advisory
Agreement remains in effect for 10 or more days, (ii) the Parent or the
Borrower shall cease to employ ▇▇▇ ▇. ▇▇▇▇▇ or other persons as
contemplated by Section 6.13, and, (iii) within 180 days following the
termination of such employment of ▇▇. ▇▇▇▇▇ or other such persons for any
reason, another person reasonably acceptable to the Required Lenders is not
employed as the applicable officer of the Parent or the Borrower.
SECTION 8.02 OPTIONAL ACCELERATION OF MATURITY. If any Event of
Default (other than an Event of Default pursuant to paragraph (f) of
Section 8.01 with respect to the Borrower or the Parent) shall have
occurred and be continuing, then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare
the obligation of each Bank to make Advances and the obligation of each
Issuing Bank to issue, increase, or extend Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at
the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon, the Letter of Credit
Obligations, and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest, all such
Letter of Credit Obligations and all such amounts shall become and be
forthwith due and payable in full, without presentment, demand, protest or
further notice of any kind (including, without limitation, any notice of
intent to accelerate or notice of acceleration), all of which are hereby
expressly waived by the Borrower,
(b) the Borrower shall, on demand of the Administrative Agent at
the request or with the consent of the Required Lenders, deposit into the
Cash Collateral Account an amount of cash equal to the Letter of Credit
Exposure as security for the Obligations to the extent the Letter of Credit
Obligations are not otherwise paid at such time, and
(c) the Administrative Agent shall at the request of, or may with
the consent of, the Required Lenders proceed to enforce its rights and
remedies under the Credit Documents for the ratable benefit of the Banks by
appropriate proceedings.
SECTION 8.03 AUTOMATIC ACCELERATION OF MATURITY. If any Event of
Default pursuant to paragraph (f) of Section 8.01 with respect to the
Borrower or the Parent shall occur,
(a) the obligation of each Bank to make Advances and the obligation
of each Issuing Bank to issue, increase, or extend Letters of Credit shall
immediately and automatically be terminated and the Notes, all interest on
the Notes, all Letter of Credit Obligations, and all other amounts payable
under this Agreement shall immediately and automatically become and be due
and payable in full, without presentment, demand, protest or any notice of
any kind (including, without limitation, any notice of intent to accelerate
or notice of acceleration), all of which are hereby expressly waived by the
Borrower and
(b) to the extent permitted by law or court order, the Borrower
shall deposit into the Cash Collateral Account an amount of cash equal to
the outstanding Letter of Credit Exposure as security for the Obligations
to the extent the Letter of Credit Obligations are not otherwise paid at
such time.
SECTION 8.04 CASH COLLATERAL ACCOUNT.
(a) PLEDGE. The Borrower hereby pledges, and grants to the
Administrative Agent for the benefit of the Banks, a security interest in
all funds held in the Cash Collateral Account maintained with Societe
Generale, New York Branch from time to time, but under the control of the
Administrative Agent, and all proceeds thereof, as security for the payment
of the Obligations, including without limitation all Letter of Credit
Obligations owing to any Issuing Bank or any other Bank due and to become
due from the Borrower to any Issuing Bank or any other Bank under this
Agreement in connection with the Letters of Credit and the Borrower agrees
to execute all cash management or cash collateral agreements and UCC-1
Financing Statements requested by the Administrative Agent as needed or
desirable for the Administrative Agent to have a perfected first lien
security interest in the Cash Collateral Account.
(b) APPLICATION AGAINST LETTER OF CREDIT OBLIGATIONS. The
Administrative Agent may, at any time or from time to time apply funds then
held in the Cash Collateral Account to the payment of any Letter of Credit
Obligations owing to any Issuing Bank, in such order as the Administrative
Agent may elect, as shall have become or shall become due and payable by
the Borrower to any Issuing Bank under this Agreement in connection with
the Letters of Credit.
(c) DUTY OF CARE. The Administrative Agent shall cause Societe
Generale, New York Branch to exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account and Societe
Generale, New York Branch shall be deemed to have exercised such care if
such funds are accorded treatment substantially equivalent to that which
Societe Generale, New York Branch accords its own property, it being
understood that neither Societe Generale, New York Branch, nor the
Administrative Agent shall have any responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such
funds.
SECTION 8.05 NON-EXCLUSIVITY OF REMEDIES. No remedy conferred upon
the Administrative Agent or the Banks is intended to be exclusive of any
other remedy, and each remedy shall be cumulative of all other remedies
existing by contract, at law, in equity, by statute or otherwise.
SECTION 8.06 RIGHT OF SET-OFF. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the granting of the
consent, if any, specified by Section 8.02 to authorize the Administrative
Agent to declare the Notes and any other amount payable hereunder due and
payable pursuant to the provisions of Section 8.02 or the automatic
acceleration of the Notes and all amounts payable under this Agreement
pursuant to Section 8.03, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Bank to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement, the Note held by such Bank, and the other Credit Documents,
irrespective of whether or not such Bank shall have made any demand under
this Agreement, such Note, or such other Credit Documents, and although
such obligations may be unmatured. Each Bank agrees to promptly notify the
Borrower after any such set-off and application made by such Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Bank under this Section are in
addition to any other rights and remedies (including, without limitation,
other rights of set-off) which such Bank may have.
ARTICLE IX
AGENCY AND ISSUING BANK PROVISIONS
SECTION 9.01 AUTHORIZATION AND ACTION. Each Bank hereby appoints
and authorizes the Administrative Agent to take such action as the
Administrative Agent on its behalf and to exercise such powers under this
Agreement and the other Credit Documents as are delegated to the
Administrative Agent by the terms hereof and of the other Credit Documents,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement or any other Credit
Document (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Banks and all holders of Notes;
PROVIDED, however, that the Administrative Agent shall not be required to
take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement, any other Credit
Document, or applicable law. The functions of the Administrative Agent are
administerial in nature and in no event shall the Administrative Agent have
a fiduciary or trustee relation in respect of any Bank by reason of this
Agreement or any other Credit Document. Within 5 Business Days of the
Administrative Agent or a Bank receiving actual notice (without any duty to
investigate) of a Default, the Administrative Agent or such Bank, as
applicable, will provide written notice of such Default to the Banks.
SECTION 9.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken
(including such Person's own negligence) by it or them under or in
connection with this Agreement or the other Credit Documents, except for
its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent:
(a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Administrative
Agent; (b) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Bank and shall not
be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement or the other
Credit Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any other Credit Document on the part of
the Parent, the Borrower or their Subsidiaries or to inspect the property
(including the books and records) of the Borrower or its Subsidiaries; (e)
shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Credit Document; and (f) shall incur no liability
under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 9.03 ADMINISTRATIVE AGENT AND ITS AFFILIATES. With respect
to its Commitment, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
the Administrative Agent. The term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include the Administrative Agent in its
individual capacity. The Administrative Agent and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of,
and generally engage in any kind of business with, the Borrower or any of
its Subsidiaries, and any Person who may do business with or own securities
of the Borrower or any such Subsidiary, all as if the Administrative Agent
were not the Administrative Agent hereunder and without any duty to account
therefor to the Banks.
SECTION 9.04 BANK CREDIT DECISION. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or
any other Bank and based on the Parent's and the Borrower's financial
statements and the Parent's filings under the Exchange Act and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
SECTION 9.05 INDEMNIFICATION. The Banks severally agree to
indemnify the Administrative Agent and each Issuing Bank (to the extent not
reimbursed by the Borrower), according to their respective Pro Rata Shares
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Administrative Agent or such Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted
by the Administrative Agent or such Issuing Bank under this Agreement or
any other Credit Document (including the Administrative Agent's or such
Issuing Bank's own negligence), provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's or such Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank agrees
to reimburse the Administrative Agent promptly upon demand for its Pro Rata
Share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement or
any other Credit Document, to the extent that the Administrative Agent is
not reimbursed for such expenses by the Borrower.
SECTION 9.06 SUCCESSOR ADMINISTRATIVE AGENT AND ISSUING BANKS. The
Administrative Agent or any Issuing Bank may resign at any time by giving
written notice thereof to the Banks and the Borrower and may be removed at
any time with cause by the Required Lenders upon receipt of written notice
from the Required Lenders to such effect. Upon receipt of notice of any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent or Issuing Bank acceptable to the
Borrower. If no successor Administrative Agent or Issuing Bank shall have
been so appointed, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's or Issuing Bank's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent or Issuing Bank, then the retiring Administrative
Agent or Issuing Bank may, on behalf of the Banks and the Borrower, appoint
a successor Administrative Agent or Issuing Bank acceptable to the
Borrower, which shall be a commercial bank meeting the financial
requirements of an Eligible Assignee and, in the case of an Issuing Bank, a
Bank. Upon the acceptance of any appointment as Administrative Agent or
Issuing Bank by a successor Administrative Agent or Issuing Bank, such
successor Administrative Agent or Issuing Bank shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent or Issuing Bank, and the retiring
Administrative Agent or Issuing Bank shall be discharged from its duties
and obligations under this Agreement and the other Credit Documents, except
that the retiring Issuing Bank shall remain an Issuing Bank with respect to
any Letters of Credit issued by such Issuing Bank and outstanding on the
effective date of its resignation or removal and the provisions affecting
such Issuing Bank with respect to such Letters of Credit shall inure to the
benefit of the retiring Issuing Bank until the termination of all such
Letters of Credit. After any retiring Administrative Agent's or Issuing
Bank's resignation or removal hereunder as Administrative Agent or Issuing
Bank, the provisions of this Article IX shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was such
Administrative Agent or Issuing Bank under this Agreement and the other
Credit Documents.
SECTION 9.07 JOINT BOOK RUNNERS, SYNDICATION AGENT AND DOCUMENTATION
AGENT. Bank of Montreal, Chicago Branch shall be named Syndication Agent
under the Credit Documents, but the Syndication Agent shall have no right
or duty to act as agent on behalf of the Banks in such capacity. Deutsche
Banc Alex. ▇▇▇▇▇ shall be named Joint Book Runner and Documentation Agent
under the Credit Documents, but such Joint Book Runner and the
Documentation Agent shall have no right or duty to act as agent on behalf
of the Banks in such capacities. Societe Generale, Southwest Agency shall
be named Joint Book Runner Agent under the Credit Documents, but such Joint
Book Runner shall have no right or duty to act as agent on behalf of the
Banks in such capacity.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, the Notes, or any other Credit Document, nor
consent to any departure by the Borrower or any Guarantor therefrom, nor
increase in the aggregate Commitments of the Banks, shall in any event be
effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, however, that no amendment shall increase the Commitment of any
Bank without the written consent of such Bank, and no amendment, waiver or
consent shall, unless in writing and signed by all the Banks, do any of the
following: (a) increase the aggregate Commitments of the Banks in excess
of $300,000,000, (b) reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder or under any other Credit
Document or otherwise release the Borrower from any Obligations, (c)
postpone any date fixed for any scheduled payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (d)
change the percentage of the Commitments of the Banks which shall be
required for the Banks or any of them to take any action hereunder or under
any other Credit Document, (e) amend this Section 10.01, (f) amend the
definition of "Required Lenders", (g) amend the definition of "Borrowing
Base", "Borrowing Base Hotel Value" or "Hotel Value", but not the
definitions that are used in such definitions, or (h) release the Parent
from its obligations under the Guaranty; and PROVIDED, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent or any Issuing Bank in addition to the Banks required
above to take such action, affect the rights or duties of the
Administrative Agent or such Issuing Bank, as the case may be, under this
Agreement or any other Credit Document. In addition, none of the following
decisions shall be made without the written consent of the Required
Lenders:
(a) release any Guarantor except the Parent from its obligations
under any of the Guaranties, provided that the Administrative Agent can (i)
release any Supplemental Guarantor from its obligations under any of the
Supplemental Guaranties and (ii) if no Default then exists, release any
Subsidiary of the Borrower which no longer is a Property Owner of an
Eligible Property;
(b) release any Person from its obligations under any of the
Environmental Indemnities;
(c) any determination to make a Borrowing after the occurrence and
during the continuance of an Event of Default;
(d) increases the maximum duration of Interest Periods permitted
under this Agreement;
(e) any waiver or any amendment to the financial covenants
contained in Article VII of this Agreement or any definitions used therein;
(f) any material waiver or modification of the covenants contained
in Article V or Article VI;
(g) amends any of the definitions that are used in the definition
of "Borrowing Base" or "Borrowing Base Hotel Value";
(h) any amendment, supplement or modification to, or waiver of, the
provisions of Section 8.01 of this Agreement;
(i) any determination to send notice to the Borrower of, or
otherwise declare, an Event of Default pursuant to Section 8.01 of this
Agreement;
(j) any determination to accelerate the Obligations pursuant to
Section 8.02 of this Agreement;
(k) any exercise remedies under any Credit Document;
(l) any material decision regarding the operation, maintenance,
sale or other disposition of any Property after the foreclosure upon such
Property, provided that Administrative Agent shall be able to take any
action it determines necessary to preserve or maintain any such Property
and provided further that if the Required Lenders cannot agree on the sale
or disposition of such Property, the Administrative Agent shall not sell or
dispose of such Property, but shall continue to hold such Property for the
benefit of the Banks;
(m) any waiver for more than 45 days of, or any material amendment
to, the reporting requirements set forth in clauses (a)-(d) of Section 5.05
of this Agreement;
(n) any material waiver of the conditions to a Hotel Property
qualifying as either an Eligible Property or a Permitted Non-Eligible
Property; and
(o) any other material waiver or modification of the Credit
Documents.
Any amendment to a covenant of the Parent or any of its Subsidiaries or
amendment to a definition shall require the Borrower's written consent.
SECTION 10.02 NOTICES, ETC. Except a specifically provided herein,
all notices and other communications shall be in writing (including
telecopy or telex) and mailed, telecopied, telexed, hand delivered or
delivered by a nationally recognized overnight courier, (a) if to the
Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ at ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; telecopy (▇▇▇) ▇▇▇-▇▇▇▇)
and a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ at ▇▇▇▇▇ & Associates, Suite 4322, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
telecopy (▇▇▇) ▇▇▇-▇▇▇▇); (b) if to any Bank at its Domestic Lending
Office; (c) if to the Administrative Agent or to Societe Generale,
Southwest Agency in its capacity as an Issuing Bank, at its address at 4900
▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇, (telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); or,
(d) as to each party, at such other address or teletransmission number as
shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, when mailed, telecopied, telexed
or hand delivered or delivered by overnight courier, be effective three
days after deposited in the mails, when telecopy transmission is completed,
when confirmed by telex answer-back or when delivered, respectively, except
that notices and communications to the Administrative Agent pursuant to
Article II or Article IX shall not be effective until received by the
Administrative Agent.
SECTION 10.03 NO WAIVER; REMEDIES. No failure on the part of any
Bank, the Administrative Agent, or any Issuing Bank to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate as
a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies provided in this Agreement and the other Credit
Documents are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04 COSTS AND EXPENSES. The Borrower agrees to pay on
demand all out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, due diligence,
administration, modification and amendment of this Agreement, the Notes and
the other Credit Documents and syndication of the Obligations including,
without limitation, (a) the reasonable fees and out-of-pocket expenses of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the Administrative Agent and the
Banks, and (b) to the extent not included in the foregoing, the costs of
any local counsel, travel expenses of the Administrative Agent and its
consultants and representatives, Engineering Reports, Environmental
Reports, mortgage and intangible taxes (if any), and any title or Uniform
Commercial Code search costs, any flood plain search costs, insurance
consultant costs and other costs usual and customary in connection with a
credit facility of this type. In addition, the Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses, if any, of the
Administrative Agent, each Issuing Bank, and each Bank (including, without
limitation, reasonable counsel fees and expenses of the Administrative
Agent, such Issuing Bank, and each Bank) in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement and the other Credit Documents.
SECTION 10.05 BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative
Agent, and when the Administrative Agent shall have, as to each Bank,
either received a counterpart hereof executed by such Bank or been notified
by such Bank that such Bank has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent,
each Issuing Bank, and each Bank and their respective successors and
assigns, except that the Borrower shall not have the right to assign its
rights or delegate its duties under this Agreement or any interest in this
Agreement without the prior written consent of each Bank.
SECTION 10.06 BANK ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS. Any Bank may assign to one or more banks or other
entities all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it, the Notes held by it, and the
participation interest in the Letter of Credit Obligations held by it);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all of such Bank's rights and obligations
under this Agreement and shall involve a ratable assignment of such Bank's
Commitment, such Bank's Advances and such Bank's participation in Letter of
Credit Exposure, (ii) the amount of the resulting Commitment and Advances
of the assigning Bank (unless it is assigning all its Commitment) and the
assignee Bank pursuant to each such assignment (determined as of the date
of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 and shall be an integral multiple of
$1,000,000, (iii) each such assignment shall be to an Eligible Assignee,
(iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with the Notes subject to such
assignment, (v) the Administrative Agent shall consent to such assignment,
which consent shall not be unreasonably withheld or delayed, and (vi) each
Eligible Assignee (other than an Eligible Assignee which is an Affiliate of
the assigning Bank) shall pay to the Administrative Agent a $3,500
administrative fee. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least three Business Days
after the execution thereof, (A) the assignee thereunder shall be a party
hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and (B)
such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of such Bank's rights and obligations
under this Agreement, such Bank shall cease to be a party hereto).
Notwithstanding anything herein to the contrary, any Bank may assign, as
collateral or otherwise, any of its rights under the Credit Documents to
any Federal Reserve Bank.
(b) TERM OF ASSIGNMENTS. By executing and delivering an Assignment
and Acceptance, the Bank thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such Bank makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency of value of this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such Bank makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or the Guarantors or the
performance or observance by the Borrower or the Guarantors of any of their
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements and filings under the Exchange Act referred to in Sections 4.06
and 5.05, if applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Administrative Agent, such Bank or any other
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) THE REGISTER. The Administrative Agent shall maintain at its
address referred to in Section 10.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the Commitments of,
and principal amount of the Advances owing to, each Bank from time to time
(the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent, the Issuing Banks, and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
(d) PROCEDURES. Upon its receipt of an Assignment and Acceptance
executed by a Bank and an Eligible Assignee, together with the Note subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of the
attached Exhibit B, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register, and (iii) give prompt
notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Note, a
new Note payable to the order of such Eligible Assignee in amount equal to,
respectively, the Commitment and the outstanding Advances assumed by it
pursuant to such Assignment and Acceptance, and if the assigning Bank has
retained any Commitment hereunder, a new Note payable to the order of such
Bank in an amount equal to, respectively, the Commitment and the
outstanding Advances retained by it hereunder. Such new Note shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the attached Exhibit A.
(e) PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it, its participation
interest in the Letter of Credit Obligations, and the Notes held by it);
PROVIDED, HOWEVER, that (i) such Bank's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder)
shall remain unchanged, (ii) such Bank shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
such Bank shall remain the holder of any such Note for all purposes of this
Agreement, (iv) the Borrower, the Administrative Agent, and the Issuing
Banks and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement, and (v) such Bank shall not require the participant's consent to
any matter under this Agreement, except for change in the principal amount
of any Note in which the participant has an interest, reductions in fees or
interest, or extending the Maturity Date except as permitted in this
Agreement. The Borrower hereby agrees that participants shall have the
same rights under Sections 2.08, 2.09, and 2.11(c) hereof as the Bank to
the extent of their respective participations, PROVIDED that no participant
shall be able to collect in excess of amounts payable to the Bank selling
to such participant under such Sections in respect of the interest sold to
such participant or to collect any such amounts from the Borrower.
(f) CONFIDENTIALITY. Each Bank may furnish any information
concerning the Borrower and its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including prospective
assignees and participants);PROVIDED that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree
in writing to preserve the confidentiality of any confidential information
relating to the Borrower and its Subsidiaries received by it from or on
behalf of such Bank in accordance with Section 10.20. Such Bank shall
promptly deliver a signed copy of any such confidentiality agreement to the
Administrative Agent.
SECTION 10.07 INDEMNIFICATION. The Borrower shall indemnify the
Administrative Agent, the Banks (in any capacity or title and including any
lender which was a Bank hereunder prior to any full assignment of its
Commitment), the Issuing Banks, and each affiliate thereof and their
respective directors, officers, employees and agents from, and discharge,
release, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or
result from (i) any actual or proposed use by the Borrower or any Affiliate
of the Borrower of the proceeds of any Advance, (ii) any breach by the
Borrower or any Guarantor of any provision of this Agreement or any other
Credit Document, (iii) any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the
foregoing, or (iv) any Environmental Claim or requirement of Environmental
Laws concerning or relating to the present or previously-owned or operated
properties, or the operations or business, of the Borrower or any of its
Subsidiaries, and the Borrower shall reimburse the Administrative Agent,
each Issuing Bank, and each Bank, and each affiliate thereof and their
respective directors, officers, employees and agents, upon demand for any
reasonable out-of-pocket expenses (including legal fees) incurred in
connection with any such investigation, litigation or other proceeding; and
expressly including any such losses, liabilities, claims, damages, or
expense incurred by reason of the Person being indemnified's own
negligence, but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified.
SECTION 10.08 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
SECTION 10.09 SURVIVAL OF REPRESENTATIONS, INDEMNIFICATIONS, ETC.
All representations, warranties contained in this Agreement or made in
writing by or on behalf of the Borrower in connection herewith shall
survive the execution and delivery of this Agreement and the Credit
Documents, the making of the Advances and any investigation made by or on
behalf of the Banks, none of which investigations shall diminish any Bank's
right to rely on such representations and warranties. All obligations of
the Borrower provided for in Sections 2.08, 2.09, 2.11(c), 9.05 and 10.07
shall survive any termination of this Agreement and repayment in full of
the Obligations.
SECTION 10.10 SEVERABILITY. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall not be affected or impaired thereby.
SECTION 10.11 ENTIRE AGREEMENT. This Agreement, the Notes and the
other Credit Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.
SECTION 10.12 USURY NOT INTENDED. It is the intent of the Borrower
and each Bank in the execution and performance of this Agreement and the
other Credit Documents to contract in strict compliance with applicable
usury laws, including conflicts of law concepts, governing the Advances of
each Bank including such applicable laws of the State of New York and the
United States of America from time to time in effect. In furtherance
thereof, the Banks and the Borrower stipulate and agree that none of the
terms and provisions contained in this Agreement or the other Credit
Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a
rate in excess of the Maximum Rate and that for purposes hereof "interest"
shall include the aggregate of all charges which constitute interest under
such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or
paid on the Advances, include amounts which by applicable law are deemed
interest which would exceed the Maximum Rate, then such excess shall be
deemed to be a mistake and each Bank receiving same shall credit the same
on the principal of its Notes (or if such Notes shall have been paid in
full, refund said excess to the Borrower). In the event that the maturity
of the Notes is accelerated by reason of any election of the holder thereof
resulting from any Event of Default under this Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the
Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on
the applicable Notes (or, if the applicable Notes shall have been paid in
full, refunded to the Borrower). In determining whether or not the
interest paid or payable under any specific contingencies exceeds the
Maximum Rate, the Borrower and the Banks shall to the maximum extent
permitted under applicable law amortize, prorate, allocate and spread in
equal parts during the period of the full stated term of the Notes all
amounts considered to be interest under applicable law at any time
contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
SECTION 10.13 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER, THE
ADMINISTRATIVE AGENT, THE ISSUING BANK, ANY BANK, OR ANY INDEMNITEE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
OTHER CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF
THE STATE OF NEW YORK.
SECTION 10.14 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
OTHER CREDIT DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED
IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT
PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE
ADMINISTRATIVE AGENT, ANY BANK OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR
(2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH
PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH
PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(c) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE
MAILING THEREOF BY THE ADMINISTRATIVE AGENT OR THE BANKS BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER ADDRESSED AS PROVIDED
HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF
THE ADMINISTRATIVE AGENT OR THE BANKS TO SERVE ANY SUCH WRITS, PROCESS OR
SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED
WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE
PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL
PROCESS OR PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT
INJUNCTION, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT.
(f) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY,
THE PROVISIONS OF THIS SECTION 10.14, WITH ITS COUNSEL.
SECTION 10.15 KNOWLEDGE OF BORROWER. For purposes of this
Agreement, "knowledge of the Borrower" means the actual knowledge of any of
the executive officers and all other Responsible Officers of the Parent.
SECTION 10.16 BANKS NOT IN CONTROL. None of the covenants or other
provisions contained in the Credit Documents shall or shall be deemed to,
give the Banks the rights or power to exercise control over the affairs
and/or management of the Borrower, any of its Subsidiaries or any
Guarantor, the power of the Banks being limited to the right to exercise
the remedies provided in the Credit Documents; provided, however, that if
any Bank becomes the owner of any stock, or other equity interest in, any
Person whether through foreclosure or otherwise, such Bank shall be
entitled (subject to requirements of law) to exercise such legal rights as
it may have by being owner of such stock, or other equity interest in, such
Person.
SECTION 10.17 HEADINGS DESCRIPTIVE. The headings of the several
Sections and paragraphs of the Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any
provision of this Agreement.
SECTION 10.18 TIME IS OF THE ESSENCE. Time is of the essence under
the Credit Documents.
SECTION 10.19 SCOPE OF INDEMNITIES. THE BORROWER ACKNOWLEDGES AND
AGREES THAT CERTAIN OF ITS OBLIGATIONS AND INDEMNITIES UNDER THIS AGREEMENT
INCLUDE ANY CLAIMS RESULTING FROM THE NEGLIGENCE OR ALLEGED NEGLIGENCE OF
THE ADMINISTRATIVE AGENT, THE BANKS, OR ANY OTHER PERSON BEING INDEMNIFIED.
SECTION 10.20 CONFIDENTIALITY. The Administrative Agent, Issuing
Bank and each Bank severally agrees that it will use its best efforts not
to disclose without the prior written consent of the Parent or the Borrower
(other than to an Affiliate or such Person's or their Affiliate's
directors, officers, employees, auditors, regulators or counsel) any
information with respect to the Parent or the Borrower which is furnished
pursuant to this Agreement except that the Administrative Agent, Issuing
Bank and each Bank may disclose any such information (a) which is or
becomes generally available to the public other than by a breach of this
Section 10.20, (b) which is known by or becomes known by such Person from
another Person, (c) as may be required or appropriate in any report,
statement or testimony submitted to any Governmental Authority (whether in
the United States or elsewhere), (d) as may be required or appropriate in
response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Agent, Issuing Bank or Bank and (e) to any prospective
participant or assignee in connection with any contemplated transfer
pursuant to Section 10.06 in accordance with the provisions of Section
10.06(f).
SECTION 10.21 HYATT BOSTON. The Borrower represents to the Banks
that the Borrower currently anticipates that (a) in order to refinance the
Hyatt Boston Existing Bonds the Hyatt Boston Issuer will issue the Hyatt
Boston Replacement Bonds, (b) that for a period of time (the "Hyatt Boston
Bond Overlap Period") currently anticipated to be less than sixty (60) days
(i) both the Hyatt Boston Existing Bonds and the Hyatt Boston Replacement
Bonds will be outstanding at the same time, and (ii) the Hyatt Boston
Replacement Bonds Proceeds will be deposited in an account and serve as
collateral for the Hyatt Boston Replacement Bonds and the Hyatt Boston
Replacement Bonds Credit Enhancement until such time as (A) such sums are
used to redeem the Hyatt Boston Existing Bonds and (B) the Hyatt Boston
Replacement Bonds and the Hyatt Boston Replacement Bonds Credit Enhancement
are secured by the Hyatt Boston and the Hyatt Boston Lease. For purposes
of the financial covenants set forth in Article 7, the definitions used in
such financial covenants, and the determination of the Leverage Ratio,
during the Hyatt Boston Bond Overlap Period, (a) the interest paid on the
Hyatt Boston Existing Bonds will be excluded up to an amount equal to the
interest earned from the Hyatt Boston Replacement Bonds Proceeds, (b)
except as provided in the preceding clause (a), the interest earned from
the Hyatt Boston Replacement Bonds Proceeds will be excluded, (c) the Hyatt
Boston Replacement Bonds will not be deemed Indebtedness of the Parent, the
Borrower or any of their Subsidiaries, and (d) the Hyatt Boston Replacement
Bonds Proceeds will not be deemed an asset of the Parent, the Borrower or
any of their Subsidiaries; PROVIDED that (i) no Default exists, (ii)
neither the Parent, nor the Borrower nor any of their Subsidiaries except
for the Hyatt Boston Lessee has any recourse liability for either the Hyatt
Boston Existing Bonds, the Hyatt Boston Existing Credit Enhancement, the
Hyatt Boston Replacement Bonds, or the Hyatt Boston Replacement Bonds
Credit Enhancement except for customary exceptions of non-recourse
Indebtedness, (iii) the Hyatt Boston Bond Overlap Period does not exceed
ninety (90) days, (iv) no event of default has been declared for any of the
Hyatt Boston Existing Bonds, the Hyatt Boston Existing Credit Enhancement,
the Hyatt Boston Replacement Bonds, or the Hyatt Boston Replacement Bonds
Credit Enhancement, and (v) the transactions contemplated by this Section
10.21 are completed pursuant to documentation reasonably acceptable to the
Administrative Agent.
[SIGNATURE PAGE OF SENIOR UNSECURED CREDIT AGREEMENT]
EXECUTED as of the date first referenced above.
BORROWER:
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
By: LaSalle Hotel Properties,
its general partner
By:
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