EXHIBIT 10.5
HOSPITALITY PROPERTIES TRUST
FIRST AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
This FIRST AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT (this
"Amendment") is dated as of January 26, 2001 and entered into by and among
HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust
("Borrower"), the financial institutions listed on the signature pages hereof
("Lenders"), DRESDNER BANK AG, NEW YORK BRANCH AND GRAND CAYMAN BRANCH, as agent
for Lenders ("Agent"), and, for purposes of Section 4 hereof, the Guarantors
listed on the signature pages hereof, and is made with reference to that certain
Second Amended and Restated Revolving Credit Agreement dated as of June 10, 1998
(the "Credit Agreement") by and among Borrower, Lenders and Agent. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.
WHEREAS, Borrower intends to acquire 100% of the shares of another
company identified to the Lenders in a letter dated December 20, 2000 from the
Borrower to the Agent and the Lenders (the "December 20 Letter"), on
substantially the terms set forth therein (the "2001 Acquisition"), and shortly
thereafter to sell certain of the properties owned by such company to an
Affiliate of Borrower identified in the December 20 Letter, also on
substantially the terms described therein; and
WHEREAS, Borrower, Lenders and Agent desire (i) to make certain
amendments to the Credit Agreement in connection with the 2001 Acquisition, and
(ii) to waive the provisions of the Credit Agreement to the extent required to
permit the 2001 Acquisition and certain related transactions.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT.
1.1 Amendment to Article 1: Definitions. Section 1.1 of the Credit Agreement is
hereby amended by:
A. inserting the following new definitions, in the appropriate order:
"2001 Acquisition" means the "2001 Acquisition" as defined in the First
Amendment.
"First Amendment" means the First Amendment and Limited Waiver to
Credit Agreement dated as of January 26, 2001.
"TRS" means a Subsidiary of the Borrower which is a "taxable REIT
subsidiary" within the meaning of Section 856(l) of the Code.
B. changing the definition of "Business" as follows:
(i) redesignating the term defined therein as "Business" as
"Primary Business," deleting the words "third party" which appear
immediately before the word "Lessees" in the second line thereof and
reinserting the definition (now designated as the definition of
"Primary Business") in the appropriate alphabetical order; and
(ii) inserting the following new definitions in the
appropriate alphabetical order:
"Business" means the Primary Business and the Permitted Ancillary
Business.
"Permitted Ancillary Business" means (a) the management, operation and
maintenance in the ordinary course of business of the hotel management
business acquired in the 2001 Acquisition and ownership of other
non-qualified REIT assets acquired in the 2001 Acquisition in each case
by Subsidiaries of Borrower approved for such purpose by Agent;
provided, that the aggregate gross revenues of such Subsidiaries from
the management and operation of such business constitutes less than 5%
of the consolidated total revenues of Borrower and its Subsidiaries in
any calendar year and (b) the leasing of hotel properties by TRSs;
provided, that (i) Borrower is in compliance with Section 7.1(k) and
(ii) if the Lease is with the Borrower or another of its Subsidiaries,
Agent has approved the TRS as a Lessee under the Lease and the Lease is
reasonably consistent (in the reasonable determination of Agent) with
Leases that the Borrower and its Subsidiaries have previously entered
with third parties.
C. amending the definition of "Lessee" by deleting the parenthetical
"(without Agent's approval)" from the first and second lines thereof and
substituting the following parenthetical therefor: "(without Agent's approval,
which shall not be granted unless the Lease is reasonably consistent (in the
reasonable determination of Agent) with Leases that the Borrower and its
Subsidiaries have previously entered with third parties)."
D. changing the definition of "Permitted Mortgage Investments" by
(i) inserting at the end of the third bullet point paragraph
thereof the parenthetical "(except as permitted by Section 2 of the
First Amendment)" and
(ii) inserting the following words at the end of the last
sentence of the last bullet point paragraph thereof "or properties
acquired in the 2001 Acquisition."
1.2 Amendment to Article 5: Representations and Warranties.
A. The first sentence of Section 5.11 of the Credit Agreement
(Subsidiaries; Ownership of Stock) is hereby amended by deleting it in its
entirety and inserting the following in substitution therefor:
"The only direct or indirect Subsidiaries of Borrower are those listed
in Section 5.11 of the Disclosure Schedule or those created or acquired
after the Closing Date pursuant to
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Section 7.7(c) or pursuant to the 2001 Acquisition and separately
identified to the Agent in writing promptly upon their creation or
acquisition."
B. The first sentence of Section 5.14 of the Credit Agreement (Labor
Matters) is hereby amended by deleting the first sentence thereof in its
entirety and substituting the following therefor:
"There are no labor contracts to which any Credit Party is a party,
except such as have been identified by Borrower to the Agent in writing
promptly upon their assumption or execution."
1.3 Amendment to Article 6: Affirmative Covenants.
Section 6.1 of the Credit Agreement (Financial Reporting) is hereby
amended by inserting the words "the 2001 Acquisition" immediately after the
words "the business affairs and financial condition of all or any of the Credit
Parties" in the second and third lines of clause (f) thereof. Without limiting
the foregoing amendment Agent hereby requests and Borrower hereby agrees to
provide Agent promptly with full details of any non-qualified REIT assets
acquired in the 2001 Acquisition.
1.4 Amendment to Article 7: Financial Covenants; Negative Covenants.
A. Section 7.1 of the Credit Agreement (Financial Covenants) is hereby
amended by inserting the following as a new clause (k) at the end thereof:
"(k) At the end of each Fiscal Quarter, the aggregate net book value of
the assets of the Subsidiaries of the Borrower that are TRSs shall not
exceed the lesser of (x) $200 million or (y) 10% of Consolidated Total
Assets."
B. Section 7.7 of the Credit Agreement (Investments) is hereby amended
by inserting the words "Permitted Mortgage Investments and" at the beginning of
clause (g) thereof.
C. Section 7.10 of the Credit Agreement (Additional Subsidiaries) is
hereby amended by deleting the word "and" after clause (iii) of the first
sentence thereof and inserting the following as a new clause (v) at the end of
such sentence "and (v) the 2001 Acquisition."
Section 2. LIMITED WAIVER.
2.1 Waiver. Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrower herein contained, Lenders
hereby waive compliance with the provisions of (a) Sections 7.3(d) and 7.5 of
the Credit Agreement to the extent, and only to the extent, necessary to permit
Borrower to incur (and the Guarantors to guaranty) Permitted New Indebtedness
that matures before the Maturity Date in an amount up to $200,000,000 for the
sole purpose of financing the 2001 Acquisition; provided, that such Permitted
New Indebtedness is unsecured and (b) Sections 7.2, 7.3 and 7.8 of the Credit
Agreement, to the extent, and only to the extent necessary to permit Borrower
and its Subsidiaries to (i) own certain non-hotel properties acquired in the
2001 Acquisition and identified in the December 20 Letter,
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assume the Indebtedness secured thereby and sell such properties and the
Subsidiary that is the direct owner of the properties to an Affiliate identified
in the first paragraph of the December 20 Letter; provided, that (x) such
Indebtedness is existing on the date of the 2001 Acquisition and not created in
anticipation thereof; (y) such properties are sold to, and such Indebtedness
assumed by, such Affiliate within 35 days of the date of consummation of the
2001 Acquisition and (z) none of the Credit Parties remain liable after such
sale with respect to such Indebtedness; (ii) provide seller financing not to
exceed $250,000,000 to such Affiliate in connection with the sale of such
properties and (iii) manage and operate such properties; provided, that (x) the
transactions described in clauses (ii) and (iii) hereof are upon fair and
reasonable terms no less favorable to any Credit Party than could be obtained in
a comparable arm's length transaction with an unaffiliated Person; and (y) the
financing described in clause (ii) hereof is secured by Permitted Mortgage
Investments.
2.2 Consent to Change in Basis of Calculations of Assigned Value in Certain
Cases. The Required Lenders hereby consent to the "Assigned Value" for those 10
Hotels (as identified in the first bullet point of the third paragraph of
December 20 Letter) that will be acquired in the 2001 Acquisition being
calculated on the basis described in the second bullet point paragraph of the
definition of "Assigned Value" set forth in Section 1.1 of the Credit Agreement
even though the Hotels will have been owned for less than six full Fiscal
Quarters.
2.3 Limitation of Waiver. Without limiting the generality of the provisions of
Section 10.12 of the Credit Agreement, the waiver set forth above shall be
limited precisely as written and nothing in this Amendment shall be deemed to:
(a) constitute a waiver of compliance by Borrower with respect
to (i) Sections 7.2, 7.3, 7.5 or 7.8 of the Credit Agreement in any
other instance or (ii) any other term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to
therein (whether in connection with the 2001 Acquisition and the
related transactions or otherwise); or
(b) prejudice any right or remedy that Agent or any Lender may
now have or may have in the future under or in connection with the
Credit Agreement or any other instrument or agreement referred to
therein.
Section 3. BORROWER'S REPRESENTATIONS AND WARRANTIES.
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Borrower represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Trust or Corporate Power and Authority. Borrower and each Guarantor
has all requisite organizational power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
respective obligations under, the Credit Agreement as amended by this Amendment
(the "Amended Agreement").
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B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary trust or corporate action on the part of Borrower and
Guarantors.
C. No Conflict. The execution and delivery by Borrower and Guarantors
of this Amendment and the performance by Borrower and Guarantors of the Amended
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Borrower or any of its
Subsidiaries, the Declaration of Trust, or Certificates or Articles of
Incorporation or Bylaws of Borrower or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
contractual obligation of Borrower or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries, or (iv) require any approval of
stockholders or any approval or consent of any Person under any contractual
obligation of Borrower or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the date hereof.
D. Governmental Consents. The execution and delivery by Borrower and
Guarantors of this Amendment and the performance by Borrower and Guarantors of
the Amended Agreement do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. Binding Obligation. This Amendment and the Amended Agreement have
been duly executed and delivered by Borrower and each Guarantor and are the
legally valid and binding obligations of Borrower and Guarantors against
Borrower and each Guarantor in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limited creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Article 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the date hereof and to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
G. Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute a Default or an Event of Default.
Section 4. ACKNOWLEDGEMENT AND CONSENT
Each Guarantor hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment and consents to the
amendment of the Credit Agreement
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effected pursuant to this Amendment. Each Guarantor hereby confirms that it will
continue to guaranty to the fullest extent possible the full and punctual
payment of the principal and interest (including, without limitation, interest
which, but for the filing of a petition in bankruptcy with respect to Borrower
would accrue hereunder) on all Loans made to Borrower and the full and punctual
payment of all other amounts payable by Borrower under the Credit Agreement
(including amounts that would become due but for the operation of the automatic
stay under Section 362(e) of the United States Bankruptcy Code) subject to the
limitations expressly set forth in the Guaranty.
Each Guarantor acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Guarantor is not
required by the terms of the Credit Agreement or any other Credit Document to
consent to the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other
Credit Document shall be deemed to require the consent of such Guarantor to any
future amendments to the Credit Agreement.
Section 5. CONSENT TO CERTAIN AFFILIATE LESSEES.
Agent hereby confirms to Borrower its approval (as contemplated by the
definition of Lessee set forth in Section 1.1 of the Credit Agreement) of
Subsidiaries of the Borrower becoming the Lessees (whether under a lease or
sublease) of (i) certain Hotels pursuant to the 2001 Acquisition, and (ii)
Hotels purchased following the 2001 Acquisition for an aggregate consideration
not to exceed the cash received in partial consideration for the 2001
Acquisition; provided, that Borrower is in compliance with Section 7.1(k) and,
in each case, the Lease and the Lessee meet the conditions set forth in clause
(ii) of the proviso to clause (b) of the definition of "Permitted Ancillary
Business".
Section 6. MISCELLANEOUS
6.1 Reference to and Effect on the Credit Agreement and the Other Credit
Documents.
A. On and after the Effective Date, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of the
like import referring to the Credit Agreement, and each reference in the other
Credit Documents to the "Credit Agreement," "thereunder," "thereof" or words of
like import referring to the Credit Agreement shall mean and be a reference to
the Amended Agreement.
B. Except as specifically amended or waived by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.
C. The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of Agent or any Lender under,
the Credit Agreement or any of the other Credit Documents.
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6.2 Fees and Expenses. Borrower acknowledges that all costs, fees and expenses
as described in Section 10.11 of the Credit Agreement incurred by Agent and its
counsel with respect to this Amendment and the documents and transactions
contemplated hereby shall be for the account of Borrower.
6.3 Headings. Sections and subsection heading in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
amendment for any other purpose or be given any substantive effect.
6.4 Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS OF LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
6.5 Counterparts; Effectiveness. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective upon (i) the execution
of a counterpart hereof by Borrower, Agent and Required Lenders, and receipt by
Borrower and Agent of written or telephonic notification of such execution and
authorization of delivery thereof, (ii) the payment by Borrower to Agent for its
own account of a non-refundable amendment fee in immediately available funds in
the amount separately agreed between Borrower and Agent and (iii) the payment by
Borrower to Agent, for distribution to the Lenders that have executed this
Amendment, of a non-refundable amendment fee in immediately available funds in
an amount equal to 0.05% of each such Lender's Commitment.
6.6 Non-Liability of Trustees. THE DECLARATION OF TRUST ESTABLISHING BORROWER,
DATED MAY 12, 1995, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY PROPERTIES TRUST"
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF BORROWER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, BORROWER. ALL PERSONS
DEALING WITH BORROWER, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF BORROWER FOR
THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
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IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer and CFO
DRESDNER BANK AG, New York Branch
and Grand Cayman Branch, as Agent and as
a Lender
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
ALLIED IRISH BANKS, P.L.C.,
as a Lender
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Senior Vice President
By: /s/ Xxxxxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title: Vice President
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BANK HAPOALIM B.M.,
as a Lender
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
BANK OF MONTREAL,
as a Lender
By: /s/ Xxxxxx X Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
BANK ONE, NA,
as a Lender
By: /s/ Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: Senior Vice President
BW BANK IRELAND PLC,
as a Lender
By: /s/ Xxxxxx X'Xxxx
Name: Xxxxxx X'Xxxx
Title: Portfolio Management Director
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Manager, Portfolio Management
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CIBC INC.,
as a Lender
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Executive Director
COMMERZBANK AG, New York Branch,
as a Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
ERSTE BANK,
as a Lender
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxx Xxx
Name: Xxxx Xxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
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XXXXX BANK N.A.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
RZB FINANCE LLC,
as a Lender
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Dieter Beintrexler
Name: Dieter Beintrexler
Title: President
SOCIETE GENERALE, Southwest Agency,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
By:
---------------------------------------
Name:
Title:
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WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as a Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
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For the purposes of Section 4: HPT CW PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer and CFO
HPTCY PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer and CFO
HPTMI PROPERTIES TRUST
(successor by merger with HPTMI Corporation)
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer and CFO
HPTMI II PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPTSHC PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPT SUITE PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
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HPTRI PROPERTIES TRUST
(successor by merger with HPTRI Corporation)
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPTWN PROPERTIES TRUST
(successor by merger with HPTSLC Properties
Trust)
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPT XX XX PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPT MI III PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
HPT HSD PROPERTIES TRUST
By: /s/ Xxxxxx X. X'Xxxxx
Name: Xxxxxx X. X'Xxxxx
Title: Treasurer
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