EXHIBIT 10
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
among
HOSPITALITY PROPERTIES TRUST,
as Borrower,
THE INSTITUTIONS PARTY HERETO
FROM TIME TO TIME AS LENDERS,
and
DRESDNER BANK AG,
NEW YORK BRANCH AND GRAND CAYMAN BRANCH,
as Agent
ARRANGER:
DRESDNER KLEINWORT XXXXXX NORTH AMERICA LLC
Dated as of June 10, 1998
Counsel to Agent
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS .................................................... 1
1.1 Defined Terms ........................................... 1
1.2 Other Definitional Provisions.............................23
ARTICLE 2 LOANS ...........................................................24
2.1 Revolving Credit Commitments..............................24
2.2 Procedure for Borrowings .................................24
2.3 Disbursement of Loans ....................................24
2.4 Defaulting Lenders........................................25
ARTICLE 3 COMPENSATION, REPAYMENT AND COMMITMENT REDUCTIONS................26
3.1 Interest Rate ............................................26
3.2 Commitment Fee ...........................................27
3.3 Maintenance of Loan Account...............................27
3.4 Commitment Reductions ....................................27
3.5 Voluntary Prepayments ....................................28
3.6 Mandatory Payments and Prepayments .......................28
3.7 Payments; Calculations ...................................28
3.8 Special Provisions Relating to Eurodollar Loans ..........29
3.9I ncreased Costs; Capital Adequacy .........................31
3.10 Taxes ....................................................33
3.11 Sharing of Payments ......................................35
3.12 Administrative Fee........................................35
ARTICLE 4 CONDITIONS PRECEDENT ............................................35
4.1 Conditions to Initial Loans...............................35
4.2 Conditions Precedent to All Loans.........................36
ARTICLE 5 REPRESENTATIONS AND WARRANTIES...................................37
5.1 Organization and Qualification ...........................37
5.2 Authority ................................................37
5.3 Enforceability ...........................................37
5.4 No Conflict ..............................................37
5.5 Consents and Filings .....................................38
5.6 Government Regulation ....................................38
5.7 Solvency .................................................38
5.8 Financial Data ...........................................38
5.9 Names ....................................................39
5.10 Locations of Offices, Records and other Property .........39
5.11 Subsidiaries; Ownership of Stock .........................39
5.12 Litigation ...............................................39
5.13 No Defaults ..............................................40
5.14 Labor Matters ............................................40
5.15 ERISA ....................................................40
5.16 Compliance with Law ......................................40
5.17 Taxes and Tax Returns ....................................41
5.18 Intellectual Property ....................................41
5.19 Licenses and Permits .....................................41
5.20 Material Contracts .......................................42
5.21 Use of Proceeds ..........................................42
5.22 Accuracy and Completeness of Information .................42
5.23 Leases and Management Agreements..........................42
5.24 Title to Hotels...........................................42
5.25 REIT Compliance...........................................43
5.26 Insurance.................................................43
5.27 Year 2000 Problem.........................................43
5.28 Certificates and Deliveries...............................43
5.29 Merger of Certain Subsidiaries............................44
ARTICLE 6 AFFIRMATIVE COVENANTS ...........................................44
6.1 Financial Reporting ......................................44
6.2 Notification Requirements ................................46
6.3 Trust Existence ..........................................47
6.4 Books and Records; Inspections ...........................47
6.5 Borrower's Calculations and Certifications ...............48
6.6 Taxes.....................................................48
6.7 Compliance With Laws .....................................48
6.8 Insurance.................................................49
6.9 Fiscal Year ..............................................49
6.10 Maintenance of Property ..................................49
6.11 ERISA Documents ..........................................49
6.12 Tradenames, Etc. .........................................49
6.13 Acquisitions of New Hotels................................49
6.14 Performance of Obligations ...............................49
6.15 Advisory Agreement........................................50
6.16 REIT Qualification........................................50
6.17 Annual Meetings of Lenders................................50
6.18 Required Interest Rate Cap................................50
6.19 Year 2000 Problems........................................51
6.20 Process Agent's Consent...................................51
ARTICLE 7 FINANCIAL COVENANTS; NEGATIVE COVENANTS ..........................52
7.1 Financial Covenants ......................................52
7.2 Other Assets or Business .................................53
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7.3 Additional Indebtedness ..................................53
7.4 Liens ....................................................53
7.5 Contingent Obligations ...................................54
7.6 Restricted Payments ......................................54
7.7 Investments ..............................................55
7.8 Affiliate Transactions ...................................56
7.9 Additional Negative Pledges ..............................56
7.10 Additional Subsidiaries ..................................56
7.11 Amendments ...............................................56
7.12 Dividends.................................................57
7.13 Certain Transactions .....................................57
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES ..................................57
8.1 Events of Default ........................................57
8.2 Remedies .................................................58
8.3 Right of Setoff ..........................................59
8.4 No Marshalling; Deficiencies; Remedies Cumulative ........59
8.5 Application of Payments ..................................59
ARTICLE 9 THE AGENT .......................................................59
9.1 Appointment of Agent .....................................60
9.2 Nature of Duties of Agent ................................60
9.3 Lack of Reliance on Agent ................................60
9.4 Certain Rights of Agent ..................................61
9.5 Reliance by Agent ........................................61
9.6 Indemnification of Agent .................................61
9.7 Agent in its Individual Capacity .........................61
9.8 Successor Agent ..........................................62
9.9I ntentionally Omitted......................................62
9.10 Defaults .................................................62
9.11 Anticipated Receipt of Funds..............................62
9.12 Miscellaneous.............................................63
ARTICLE 10 MISCELLANEOUS ..................................................63
10.1 GOVERNING LAW ............................................63
10.2 SUBMISSION TO JURISDICTION ...............................63
10.3 CERTAIN DAMAGES...........................................64
10.4 SERVICE OF PROCESS .......................................64
10.5 JURY TRIAL ...............................................64
10.6 LIMITATION OF LIABILITY ..................................64
10.7 Delays ...................................................64
10.8 Notices ..................................................64
10.9 Assignments and Participations ...........................65
10.10 Confidentiality ..........................................66
10.11 Reimbursement of Expenses; Indemnification ...............66
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10.12 Amendments and Waivers ...................................67
10.13 Counterparts and Effectiveness ...........................68
10.14 Severability .............................................68
10.15 Maximum Rate .............................................68
10.16 Entire Agreement; Successors and Assigns .................69
10.17 Currency Translation .....................................69
10.18 Foreign Judgments ........................................69
10.19 Acknowledgments...........................................70
10.20 Approvals.................................................70
10.21 Amendment and Restatement...................................71
10.22 NONLIABILITY OF TRUSTEES..................................71
INDEX OF DEFINED TERMS .....................................................73
ANNEXES
Annex I-List of Lenders and Commitment Amounts
Annex II-List of Closing Documents
Annex III-Pricing Grid
EXHIBITS
Exhibit A-Form of Revolver Note
Exhibit B-Form of Assignment and Assumption Agreement
Exhibit C-Form of Compliance Certificate
Exhibit D-Form of Notice of Borrowing
Exhibit E-Form of Notice of Continuation/Conversion
Exhibit F-Form of Investment Manager's Subordination Agreement
Exhibit G-Form of Register
SCHEDULES
Schedule A-Disclosure Schedule
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SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (as
amended, modified and supplemented from time to time, this "Agreement") is
entered into as of June 10, 1998 (the "Syndication Closing Date"), among
HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust
("Borrower"), each institution identified as a lender on Annex I (each, together
with its successors and assigns, a "Lender"), and DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN BRANCH, acting as agent for itself and the other Lenders
("Agent").
RECITALS
WHEREAS, Borrower is in the business of acquiring and owning real
property (including leasehold estates), which Borrower leases to various
companies in exchange for a stream of lease payments, and in the business of
acquiring certain mortgages;
WHEREAS, Borrower desires to obtain a revolving line of credit for
Borrower's general corporate purposes, including future acquisitions of real
property, and Arranger has arranged such a facility; and
WHEREAS, Lenders are prepared to provide such a revolving line of
credit subject to and upon the terms and conditions set forth in this Agreement,
which amends and restates in its entirety the Amended and Restated Revolving
Credit Agreement previously entered into among Borrower, Agent and Dresdner Bank
AG, New York Branch and Grand Cayman Branch, as Lender, and dated as of March
19, 1998 (the "Closing Date").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1 DEFINITIONS
1.1 Defined Terms.
The following terms when used in this Agreement shall each have the
definition set forth below. The same definitions shall apply in all the other
Credit Documents, except where another Credit Document provides some other
express definition for any term. Terms may be used before they are defined. An
Index of Defined Terms follows the signature blocks.
"Accrual Date" means, with respect to Agent's receipt of an Agent's
Distribution, (i) if Agent shall receive such Agent's Distribution before 1:00
p.m., New York City time, on a Business Day, the date on which Agent shall
receive such Agent's Distribution, and (ii) otherwise, the first Business Day
following Agent's receipt of such Agent's Distribution.
"Acquisition Cost" of a Hotel means Borrower's or its Subsidiary's
actual bona-fide third party acquisition cost of such Hotel, including
reasonable and bona fide third-party transaction costs, plus the amount of any
capital outlays or other capital investments in such Hotel after initial
acquisition, but excluding any operating losses.
"Adjusted Eurodollar Rate" means, with respect to the Interest Period
for each Eurodollar Loan, the rate obtained by dividing (a) the Eurodollar Rate
for such Interest Period by (b) a percentage equal to one (1.00) minus the
stated maximum rate (stated as a decimal) of all reserves, if any, required to
be maintained against "Eurocurrency liabilities" as specified in Regulation D
(or against any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-U.S. office of any Lender to U.S.
residents).
"Advisory Agreement" means the Advisory Agreement, dated as of January
1, 1998, as extended and renewed from time to time, between Borrower and
Investment Manager, as amended, supplemented or modified from time to time in
compliance with this Agreement and the Investment Manager's Subordination
Agreement.
"Administrative Agent" means Agent or such Lender as Agent, with the
consent of the Required Lenders, shall have designated from time to time to
perform administrative services with regard to the Loan.
"Administrative Fee" means a fee of Fifty Thousand Dollars ($50,000)
per year payable by Borrower to Administrative Agent in equal quarterly
installments as compensation for performance of administrative services in
connection with the Loan.
"Affiliate" of a Person means another Person who directly or indirectly
controls, is controlled by, is under common control with, or is a director,
officer or partner of, such Person. A Person shall be deemed to control another
Person if (a) such Person possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise, or
(b) for purposes of Section 7.8 only, such Person owns or controls the power to
vote, directly or indirectly, more than five percent (5%) of any class of the
Capital Stock of such other Person. Notwithstanding the foregoing, Health and
Retirement Properties Trust, a Maryland real estate investment trust, shall not
be deemed an "Affiliate."
"Agent's Distribution" is defined in Section 3.1(e).
"Applicable Margin" means a fluctuating rate of interest per annum
determined as follows.
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o For a Base Rate Loan, the Applicable Margin shall be zero, except that
(as set forth in Annex III) the Applicable Margin shall be One-Tenth of
One Percent (0.10%) per annum (10 basis points) if both: (a) no Rating
is in effect for Borrower; and (b) Borrower's Leverage Ratio equals or
exceeds Forty Percent (40%).
o For a Eurodollar Loan, the Applicable Margin shall be based on the
then-applicable Pricing Parameter in accordance with the table set
forth in Annex III.
"Arranger" means Dresdner Kleinwort Xxxxxx North America LLC.
"Assigned Value" of any Hotel means, as of the last day of each Fiscal
Quarter, the following amount, as calculated and determined by Borrower with
Agent's approval:
o For any Hotel that the Credit Parties Have Owned for Less Than Six Full
Fiscal Quarters, an amount equal to the product of (a) Ninety Five
Percent (95%) times (b) the Credit Parties' aggregate Acquisition Cost
of such Hotel.
o For any Hotel that the Credit Parties Have Owned for Six Full Fiscal
Quarters or Longer, an amount equal to ten (10) times the annual sum
(determined on the basis of the last twelve completed calendar months)
of the following for such Hotel: (a) Base Rent; less (b) a reasonable
allocation (based on relative Acquisition Costs) of all annual cash
corporate expenses of Borrower and its Subsidiaries (including, for
example, general and administrative overhead, including advisory fees)
except Consolidated Debt Service.
"Assignment and Assumption Agreement" means an agreement in
substantially the form of Exhibit B.
"Auditors" means Xxxxxx Xxxxxxxx LLP or another nationally recognized
firm of independent public accountants selected by Borrower and satisfactory to
Required Lenders.
"Bankruptcy Code" means Title 11 of the U.S. Code (11 U.S.C. xx.xx. 101
et seq.), as amended from time to time, and any successor statute.
"Base Rate" means a fluctuating rate of interest per annum equal at any
time to the greater at such time of (a) the Federal Funds Rate plus one-half of
one percent (0.50%) and (b) the rate which the Agent establishes as its base
lending rate from time to time. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Agent and each of the Lenders may make loans at rates of interest at, above or
below the Base Rate.
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"Base Rate Loan" means a Loan that is made or being maintained at a
rate of interest based upon the Base Rate.
"Base Rent" means the minimum or base rent that a Lease requires Lessee
to pay. The term excludes: (a) payments (such as real estate taxes, insurance
premiums, and costs of maintenance) that the Lease requires the Lessee to pay
third parties; (b) any element of rent that is conditional, contingent, or not
yet capable of determination; and (c) FF&E Deposits. If Lease(s) for multiple
Hotels do not separately allocate Base Rent to such Hotels, then Base Rent shall
be reasonably allocated between such Hotels (where necessary) in a manner
satisfactory to Agent.
"Benefit Plan" means a "defined benefit plan" (as defined in Section 3
of ERISA) for which any Credit Party or any ERISA Affiliate has been an
"employer" (as defined in Section 3 of ERISA) within the past six years.
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the incurrence of a Revolving Loan from all
Non-Defaulting Lenders on a given day (or resulting from conversions or
continuations on a given date), having in the case of Eurodollar Loans the same
Interest Period.
"Business" means Borrower's business consisting of the acquisition and
ownership of (a) real property (including leaseholds) leased to third party
Lessees pursuant to Leases, and operated by such Lessees as branded hotels and
(b) mortgage investments.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which commercial banks in New York, New York are required or permitted by law to
be closed. When used in connection with Eurodollar Loans, this definition also
excludes any day on which commercial banks are not open for dealing in U.S.
dollar deposits in the London interbank market.
"Capital Expenditures" for any Person for any period means the sum of
all expenditures of such Person which would be capitalized for purposes of
financial statements for such period in accordance with GAAP (whether payable in
cash or other property or accrued as a liability), including expenditures for
maintenance and repairs which should be capitalized and the capitalized portion
of Capital Leases.
"Capital Lease" means, for any Person, any lease of property (whether
real, personal or mixed) by that Person as lessee which, in conformity with
GAAP, is required to be accounted for as a capital lease on the balance sheet of
such Person.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person other than a corporation
(including partnership interests in a partnership, member interests in a limited
liability company and beneficial interests in a trust), and any and all
warrants, options or other rights to purchase any of the foregoing.
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"Cash Available for Distribution" means Funds from Operations, less
FF&E Deposits included in Funds from Operations and adjusted for any recurring
non-revenue-enhancing capital expenditures and for non-cash expenses and
non-cash revenues, such as revenues arising from "straight-lining" of rents.
"Cash Equivalents" means any of the following, denominated in Dollars:
(a) securities issued or directly and fully guaranteed or insured by the U.S. or
any agency or instrumentality thereof (provided that the full faith and credit
of the U.S. is pledged in support thereof) having maturities of not more than
ninety (90) days from the date of acquisition ("Government Obligations"), (b)
time deposits and certificates of deposit of any commercial bank either
incorporated in the U.S. or incorporated in a foreign jurisdiction and having a
branch office in the U.S., in each case of recognized standing having capital
and surplus in excess of $500,000,000 and whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than ninety (90) days from the date of
acquisition, (c) commercial paper issued by an Approved Bank or the parent
corporation of an Approved Bank (so long as such parent maintains an office in
the U.S. from which it issues such commercial paper) and commercial paper issued
by any Person incorporated in the U.S. rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's, and in
each case maturing within ninety (90) days of the date of acquisition, (d)
repurchase obligations of an Approved Bank for Government Obligations and with a
term of not more than seven (7) days, and (e) investments in money market mutual
funds having assets in excess of $2,500,000,000, substantially all of whose
assets are comprised of Government Obligations.
"Casualty Loss" means (a) the loss, damage, or destruction of any asset
owned or used by any Credit Party or (b) the condemnation, confiscation, or
other taking, in whole or in part, of any such asset.
"Change of Control" means any event, transaction or condition as a
result of which (a) the Managing Trustees (together with their Affiliates) shall
cease to own (and maintain control over) in the aggregate full beneficial
ownership with full voting and dispositive power as to at least 250,000 of the
total outstanding shares of Capital Stock of Borrower that are ordinarily
entitled to vote for its Board of Directors (which figure of 250,000 shall be
appropriately adjusted for stock splits, stock dividends, and similar
transactions) or (b) the Managing Trustees (together with their Affiliates)
shall cease to maintain Control of Investment Manager.
"Closing Date" means March 19, 1998.
"Closing Documents List" means the List of Closing Documents attached
hereto as Annex II.
"Code" means the Internal Revenue Code of 1986, amendments thereto,
successor statutes, and regulations, rulings and guidance promulgated or issued
thereunder.
5
"Co-Documentation Agent" shall mean each of Societe Generale, Southwest
Agency and the Bank of Montreal; provided, however, that each Co-Documentation
Agent shall continue to be a Co-Documentation Agent hereunder only so long as
such Co-Documentation Agent shall continue to be a Lender hereunder.
"Commitment Fee" is defined in Section 3.2.
"Common Stock" means the common shares of Borrower, par value $0.01 per
share.
"Compliance Certificate" means a written certificate, substantially in
the form of Exhibit C, executed by Borrower's Chief Financial Officer, which
shall demonstrate that as of the date of such certificate, and assuming the full
funding of any Revolver Loans then being requested by Borrower, Borrower is and
shall continue to be in compliance with the financial (and all other material)
covenants of this Agreement in all material respects. Any Compliance Certificate
shall also set forth: (a) a list of all Hotels constituting the Unencumbered
Pool (and identifying the Hotels in each Hotel Pool within the Unencumbered
Pool); (b) Borrower's certification that all Hotels so listed fully qualify
under the criteria for inclusion in the Unencumbered Pool; (c) to the extent
required by Agent from time to time, such detail and calculations as will in
Agent's judgment substantiate the certifications described in "a" and "b"; and
(d) any changes in the composition of the Unencumbered Pool since the preceding
Compliance Certificate delivered by Borrower, if any. Each Compliance
Certificate shall also have attached thereto a schedule of calculations
demonstrating compliance with the financial covenants contained in this
Agreement.
"Consolidated Debt Service" means, for any fiscal period of Borrower,
Consolidated Interest Expense plus required scheduled amortization payments
(other than payments due upon maturity) of Borrower and its Subsidiaries with
respect to Indebtedness of any of them for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA" for a period means (a) the consolidated net
income (excluding extraordinary or unusual and non-recurring items) of Borrower
and its Subsidiaries (net of minority interests where applicable) for the period
plus (b) all Consolidated Interest Expense, income tax expense, depreciation and
amortization (including amortization of any goodwill or other intangibles) for
the period and excluding (unless already deducted in calculating net income) (c)
FF&E Deposits (and related income arising from payments made by Lessees to
Borrower or its Subsidiaries). Adjustment shall be made for any non-cash
expenses and non-cash revenues, such as for revenues arising from
"straight-lining" of rents. Except where otherwise expressly stated herein,
Consolidated EBITDA shall be measured as to the last four completed quarters on
a rolling four quarters basis.
"Consolidated Indebtedness" means all Indebtedness of Borrower and all
its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, for any fiscal period of
Borrower, the total interest expense (excluding amortization of paid deferred
costs, discounts or premiums, if any, and including interest expense
attributable to Capital Leases in accordance with GAAP)
6
on all Consolidated Indebtedness of Borrower and all its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP. Except where
otherwise expressly stated herein, Consolidated Interest Expense shall be
measured as to the last four completed quarters on a rolling four quarters
basis.
"Consolidated Secured Debt" means all Consolidated Indebtedness that is
secured by or otherwise the subject of a Lien on any property of Borrower or any
Subsidiary. The Obligations do not constitute Consolidated Secured Debt.
"Consolidated Total Assets" means, as of the date of any determination
thereof, the net book value of the assets of Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Contingent Obligation" means any direct or indirect, contingent
obligation for, or guaranty of, the Indebtedness of another, except endorsements
in the ordinary course of business. The amount of any Contingent Obligation
shall be equal to the maximum reasonably anticipated liability in respect of the
obligations guarantied or otherwise supported, calculated using the assumption
that the obligor is or will be required to fully perform thereunder. Any
particular contingent obligation shall be counted only once for purposes of this
definition.
"Control" (together with the corresponding terms "controls," "is
controlled by," or "is under common control with") means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a person or entity, whether through the ownership of voting
securities, by contract or otherwise.
"Credit Documents" means this Agreement, the Notes, each Guaranty, and
all other agreements, instruments and documents, including opinions and
certificates, now or hereafter executed and delivered in connection with any of
the foregoing, each as amended, modified and supplemented from time to time.
"Credit Parties" means, collectively, Borrower and each and all of its
Subsidiaries. "Credit Party" means any one of them.
"Debt Service Coverage Ratio" means the ratio of Consolidated EBITDA to
Consolidated Debt Service, with respect to the last four completed Fiscal
Quarters in aggregate, as of the end of each Fiscal Quarter.
"Default" means an event or condition which would constitute an Event
of Default with the giving of notice, the passage of time or both.
"Default Rate" is defined in Section 3.1(d).
"Defaulting Lender" is defined in Section 2.4(a).
"Disclosure Schedule" means the Schedule A to this Agreement labeled as
such, in form and substance satisfactory to Agent and the Lenders as of the
Closing Date.
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"Dollar Equivalent" as to any monetary sum expressed in a foreign
currency means such monetary sum converted to Dollars based on the then
Prevailing Exchange Rate.
"Dollars" and the sign "$" each mean lawful money of the U.S.
"D&P" means Duff & Xxxxxx Inc., and any successor thereto.
"Due Diligence Reports" means, as to any Hotel, environmental,
engineering, and title reports, and such other third-party reports as any Credit
Party shall obtain in connection with the acquisition of any Hotel or as Agent
shall require from time to time (but no more frequently than upon acquisition
and only for cause thereafter) to be updated, in the case of any of the
foregoing reports each dated no earlier than one year before the date of the
Credit Party's acquisition of the Hotel (with, in the case of environmental
reports, a database search at either the closing of the acquisition of such
Hotel or (b) the date such Hotel is included in the Unencumbered Pool) and
prepared by an independent vendor or consultant (including a licensed title
insurance company where applicable) satisfactory to Agent, which report(s) shall
be in form and substance satisfactory to Agent.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the U.S., or any State thereof, and having total assets in excess of
$5,000,000,000; (ii) a commercial bank organized under the laws of any OECD
Nation or a political subdivision of any such nation, and having total assets in
excess of $5,000,000,000; provided, however, that such bank is acting through a
branch or agency located in the country in which it is organized or in another
OECD Nation or the Cayman Islands; (iii) the central bank of any OECD Nation;
(iv) an insurance company organized under the laws of the U.S. (or any State
thereof or the District of Columbia) and having total assets in excess of
$5,000,000,000 (but excluding an insurance company that is a "captive"
subsidiary of an entity that would itself not qualify as an Eligible Assignee);
(v) a savings bank or savings and loan association organized under the laws of
the U.S., or any State thereof or the District of Columbia, and having total
assets in excess of $5,000,000,000; (vi) any Lender party to this Agreement;
(vii) any Affiliate of any Lender party to this Agreement; (viii) any U.S.
Federal Reserve Bank; or (ix) any other governmentally regulated financial
institution approved by Administrative Agent, such approval not to be
unreasonably withheld. Notwithstanding the foregoing, none of the following
shall constitute an Eligible Assignee: (x) Borrower or any Affiliate of
Borrower; (y) anyone acting by, on behalf of, or pursuant to any separate
agreement or arrangement with Borrower or any Affiliate of Borrower; or (z) any
Person that, in Agent's discretion, either (a) has an adverse business
reputation or (b) is or may be acquiring its interest in the Loan for purposes
other than providing financing to Borrower in accordance with the terms and
conditions of this Agreement.
"Environmental Affiliate" means any Person whose liability for any
Environmental Claim a Credit Party has or may have retained, assumed or
otherwise become liable for (contingently or otherwise), either contractually or
by operation of law.
"Environmental Approvals" means any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.
8
"Environmental Claim" means, with respect to any Person, any notice,
claim, demand or similar communication (written or oral) by any other Person
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(a) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by such Person or
(b) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" means all federal, state, local and foreign laws
and regulations relating to pollution or protection of human health or the
environment (including ambient air, surface water, ground water, land surface or
subsurface strata), including laws and regulations relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern, in each case as have been, are now, or may at any time
hereafter be in effect and as the same may be amended or modified hereafter,
including: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. xx.xx. 9601 et seq.; the Toxic Substance
Control Act, 15 U.S.C. xx.xx. 9601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. xx.xx. 1802 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. xx.xx. 6901 et seq.; the Clean Water Act, 33 U.S.C.
xx.xx. 1251 et seq.; the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq., and other
similar federal and/or state environmental laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. xx.xx. 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means any entity required to be aggregated with any
Credit Party under Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" means a Loan that is made or being maintained at a
rate of interest based upon the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan, the rate per annum (rounded upwards to the nearest whole multiple of
one-sixteenth of one percent) equal to the offered quotation of the rate for
Dollar deposits with maturities comparable to the Interest Period for which such
Eurodollar Rate will apply) which appear on the Telerate Screen Page 3750 (or
successor page) as at 11:00 a.m. London time, on the day that is two Business
Days prior to the beginning of such Interest Period (or with respect to the
initial Interest Period, the Closing Date rather than two Business Days prior to
the beginning of the initial Interest Period) and in an amount comparable to the
amount of the Loan to be outstanding during such Interest Period or, if such
Telerate shall not exist on such Business Day, an interest rate per annum equal
to the rate (rounded upward to the nearest whole multiple of one-sixteenth
(1/16) of one percent (1.00%) per annum, if such rate is not such a multiple) of
average of the offered quotations, if any, to first class banks in the
Eurodollar market by Agent and each Co-Documentation Agent for Dollar deposits
of amounts in
9
immediately available funds comparable to the principal amount of the Eurodollar
Loan for which the Eurodollar Rate is being determined, with maturities
comparable to the Interest Period for which such Eurodollar Rate will apply, as
of approximately 11:00 A.M. New York time two (2) Business Days prior to the
commencement of such Interest Period.
"Event of Default" is defined in Article 8.
"Excess Floating Rate Exposure" means the excess, if any, of: (a) all
Consolidated Indebtedness bearing interest at a floating rate (including the
principal amount of all Loans hereunder) over (b) an amount equal to Twenty
Percent (20%) of the sum of (i) GAAP consolidated shareholders' equity (plus
minority interests) of Borrower and its Subsidiaries; plus (ii) all long-term
funded Consolidated Indebtedness (other than Contingent Obligations).
"Expenses" means all reasonable costs and expenses of Agent (including
reasonable fees and expenses of counsel) incurred in connection with the Credit
Documents and the transactions contemplated herein and therein, including in
connection with the preparation, execution, and delivery of this Agreement and
the other Credit Documents and any amendment, waiver or consent relating hereto
or thereto, in connection with Agent's initial syndication efforts with respect
to this Agreement and in connection with the enforcement of this Agreement and
the other Credit Documents, specifically including (without limiting the
generality of the foregoing) (a) administration costs of Agent and costs of
enforcement of the rights of Agent or any Lender under the Credit Documents, (b)
the reasonable fees and expenses of accountants, appraisers and other
consultants, experts or advisors retained by Agent, (c) reasonable fees and
expenses (including reasonable legal fees and expenses) incurred by Agent in
connection with the initial syndication of the Revolver Commitments and the
Loans, (d) the cost of fees and taxes, if any, in connection with the filing of
financing statements, if any, (e) the costs, if any, of preparing waivers,
amendments, and terminations of any of the Credit Documents, and (f) Agent's
costs of obtaining any Due Diligence Reports, if any; provided, however, that
the costs and expenses with respect to Agent's employees shall not be included
within the definition of the term "Expenses."
"Federal Funds Rate" means a fluctuating interest rate per annum equal
at any time 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 determined by Agent.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Fees" means the Administrative Fee and the Commitment Fee.
"FF&E Deposits" means funds that any Lease requires a Lessee to hold or
to remit to any Credit Party, which funds are to be held by such Lessee or by
such Credit Party in reserve accounts for furnishings, fixtures, and equipment
for any Hotel(s).
"Financial Statements" means the consolidated balance sheets,
statements of operations, statements of cash flows and statements of changes in
shareholder's equity of Borrower and its Subsidiaries for the period specified,
prepared in accordance with GAAP consistently applied.
10
"Fiscal Quarter" means a fiscal quarter of each Credit Party's Fiscal
Year, with appropriate interpolations or adjustments to accommodate variations
between the Credit Parties' fiscal quarters and those of Lessees or mortgagors.
"Fiscal Year" means the fiscal year of the applicable Credit Party,
which, for Borrower and each of its Subsidiaries as of the Closing Date, begins
on January 1 and ends on December 31 of each calendar year, with appropriate
interpolations or adjustments to accommodate variations between the Credit
Parties' fiscal years and those of Lessees or mortgagors.
"Fitch" means Fitch Investors Service, Inc., and any successor thereto.
"Funds from Operations" means consolidated net income of Borrower and
its Subsidiaries, adjusted as follows in a manner satisfactory to Agent: (a)
gains and losses from debt restructuring and sales of property shall be
excluded; (b) depreciation and amortization of real estate assets shall be added
back; and (c) appropriate adjustments shall be made for unconsolidated
partnerships and joint ventures.
"GAAP" means generally accepted accounting principles as in effect in
the U.S. on the Closing Date and as amended from time to time, subject however
to Section 6.1(e).
"Governing Documents" of any Person means the declaration of trust,
certificate or articles of incorporation, by-laws, partnership agreement or
operating or members agreement, as the case may be, and any other organizational
or governing documents, of such Person.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any foreign, federal, state or other court or
governmental agency, authority, instrumentality or regulatory body.
"Group" is used herein as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended.
"Guaranty" means that certain Second Amended and Restated Subsidiaries'
Guarantee dated as of the date hereof executed by each of the Guarantors in
favor of Agent and the Lenders, as amended and restated from time to time.
"Guarantor" means each and every Subsidiary of Borrower, other than a
Subsidiary that satisfies the following conditions: (a) such Subsidiary does not
own any Hotel in the Unencumbered Pool; and (b) based on bona fide restrictions
in other credit documents with other lenders (or in the charter documents of any
Subsidiary that is not a Wholly-Owned Subsidiary), such Subsidiary is not
permitted to be a Guarantor as to the Obligations. The Guarantors are identified
in greater detail in Section 5.11 of the Disclosure Schedule.
11
"Highest Lawful Rate" means, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Obligations, under the laws of the State of
New York (or the law of any other jurisdiction whose laws are mandatorily
applicable notwithstanding the provisions of this Agreement and the other Credit
Documents), or under applicable federal laws which may presently or hereafter be
in effect and which allow a higher maximum nonusurious interest rate than under
New York (or such other jurisdiction's) law, in any case after taking into
account, to the extent permitted by applicable law, any and all relevant
payments or charges under this Agreement and any other Credit Documents executed
in connection herewith, and any available exemptions, exceptions and exclusions.
"Hotel" means any parcel of real property and the improvements and
business operations thereon owned or ground leased at any time (as of the
Closing Date or thereafter acquired) by Borrower or a Subsidiary the
improvements of which are operated as a hotel, whether or not such Hotel is part
of the Unencumbered Pool.
"Hotel Net Cash Flow" means the net operating cash flow of a Hotel,
after (a) all taxes (except income taxes), insurance, salaries, utilities, and
other operating expenses, all sums that the applicable Lease or Management
Agreement requires Lessee or Manager to pay (without duplication; excluding (i)
all items payable to Manager that are subordinated to Base Rent and (ii) Base
Rent), and (b) all FF&E Deposits. Hotel Net Cash Flow shall be determined as of
any date based on the last four completed Fiscal Quarters of the Credit Party
that owns such Hotel (subject to reasonable adjustment or interpolation to
accommodate differences between such Subsidiary's Fiscal Quarters and those of
its Lessee).
"Hotel Pool" means any group of two or more Hotels leased pursuant to a
single Lease or whose Leases are cross-defaulted (as to defaults by Lessee),
together with all other Hotels whose Leases are cross-defaulted (as to defaults
by Lessee) with such Lease(s).
"Indebtedness" of a Person means (a) indebtedness for borrowed money or
for the deferred purchase price of property or services (excluding, however,
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), whether on open account or evidenced by a
note, bond, debenture or similar instrument or otherwise, (b) obligations under
Capital Leases, (c) reimbursement obligations for letters of credit, banker's
acceptances or other credit accommodations, (d) liabilities, as determined by
Agent, under any Interest Rate Agreement, (e) Contingent Obligations of such
Person, (f) obligations secured by any Lien on that Person's property, even if
that Person has not assumed such obligations, and (g) liabilities that are
subordinate to the Loan. The Loan constitutes Indebtedness of Borrower and its
Subsidiaries. Lessee Deposits shall not constitute Indebtedness.
"Insolvency Event" means, with respect to any Person, the occurrence of
any of the following: (a) such Person shall be adjudicated insolvent or
bankrupt, or shall generally fail to pay or admit in writing its inability to
pay its debts as they become due, (b) such Person shall seek dissolution or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or business
or to effect a plan
12
or other arrangement with its creditors, (c) such Person shall make a general
assignment for the benefit of its creditors, or consent to or acquiesce in the
appointment of a receiver, trustee, custodian or liquidator for a substantial
portion of its property, assets or business, (d) such Person shall file a
voluntary petition under any bankruptcy, insolvency or similar law, or (e) such
Person, or a substantial portion of its property, assets or business shall
become the subject of an involuntary proceeding or petition for its dissolution,
reorganization, or the appointment of a receiver, trustee, custodian or
liquidator and any such proceeding or petition shall not be dismissed within one
hundred twenty (120) days after commencement or filing, as the case may be, or
any order for relief shall be entered in any such proceeding.
"Intellectual Property" means patents, patent applications, trademarks,
service marks, trade names, copyrights and other such rights, or valid licenses
thereof.
"Interest Coverage Ratio" means the ratio of Consolidated EBITDA to
Consolidated Interest Expense, considered for the last four completed Fiscal
Quarters, as of the end of each Fiscal Quarter.
"Interest Period" means, for each Eurodollar Loan, a period of one,
two, three or six months during which the interest rate for such Loan is fixed;
provided, however, that (a) no Interest Period with respect to any portion of
the Loan may end after the Maturity Date, and (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, unless such extension would cause the last day of such
Interest Period to occur in the next following calendar month, in which case the
last day of such Interest Period shall occur on the next preceding Business Day.
"Interest Rate Agreement" means an interest rate cap agreement or other
interest rate protection or hedge agreement.
"Interest Rate Cap" means an Interest Rate Agreement that is an
interest rate cap or other Interest Rate Agreement that imposes no obligations
on the beneficiary thereof, and is in all respects satisfactory in form and
substance to Agent.
"Investment" means (a) all expenditures made and (without duplication)
all liabilities incurred or assumed (including Contingent Obligations) for or in
connection with the acquisition of any beneficial or other interest in, all or
substantially all of the assets of, or any obligations, securities or other
Indebtedness of, a Person, and (b) all direct or indirect loans, advances,
capital contributions or transfers of property to a Person. In determining the
aggregate amount of Investments outstanding at any particular time: (1) a
guaranty shall be valued at not less than the principal amount guarantied and
outstanding; (2) returns of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution) shall
be deducted; (3) earnings, whether as dividends, interest or otherwise, shall
not be deducted; and (4) decreases in the market value shall not be deducted.
"Investment Grade Rating" of a Person means that the senior, unsecured
debt rating of such Person satisfies either of the following: (a) a rating of
BBB- or higher by S&P; or (b) a rating of Baa3 or higher by Xxxxx'x.
13
"Investment Manager" means REIT Management & Research, Inc., a Delaware
corporation, or such other investment manager to Borrower as Agent shall have
approved in Agent's sole and absolute discretion.
"Investment Manager's Subordination Agreement" means an agreement
between Investment Manager and Agent on behalf of the Lenders in substantially
the form of Exhibit F.
"IRS" means the U.S. Internal Revenue Service and any successor
thereto.
"Judgment Currency" is defined in Section 10.18.
"Last Financial Statement Date" means September 30, 1997.
"Lease" means a (sub)lease of a Hotel, entered into between Borrower
(or a Subsidiary) and a Lessee, provided that 100% of the payments by the Lessee
under any Lease shall constitute "rents from real property" within the meaning
of Section 856(d)(1) of the Code.
"Lessee" means the (sub)lessee of a Hotel pursuant to a Lease, provided
that (without Agent's approval) no such (sub)lessee shall be an Affiliate of
Borrower, any Subsidiary, Investment Manager, or any Managing Trustee, except so
long as the following conditions are satisfied: (a) the affected Hotel is not
counted as part of the Unencumbered Pool; and (b) based on particular
circumstances affecting a particular Hotel Pool (e.g., default by the Lessee),
Borrower enters into interim leasing arrangements for up to one year with an
Affiliate of Borrower, any Subsidiary, Investment Manager, or any Managing
Trustee (which arrangements shall not be extended, renewed, or continued for
longer than the original one-year term); and (c) no more than one Hotel Pool is
subject to such arrangements at any one time.
"Lessee Deposits" means the amount of funds delivered to and/or held by
any Credit Party (including the amount of any prospective offset that could be
asserted against a Credit Party) on account of the following: (a) any Cash
Equivalent deposited with any Credit Party by any Lessee to secure such Lessee's
performance under its Lease; (b) the total amount of any deferred purchase price
payable by a Credit Party to a Lessee or a Lessee's Affiliates, against which
payment obligation such Credit Party is entitled, pursuant to such Lessee's
Lease, to offset damages resulting from such Lessee's default under its Lease;
and (c) deposits held by any Credit Party in connection with third-party
undertakings regarding performance or profitability as to any Lease.
"Leverage Ratio" means, as of the last day of each Fiscal Quarter of
Borrower, the quotient of (a) Consolidated Indebtedness plus Lessee Deposits
divided by (b) the Assigned Value of all Hotels.
"Lien" means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title, or other preferential arrangement having substantially the
same economic effect as any of the
14
foregoing, whether voluntary or imposed by law. The term "Lien" shall also
include (and wherever a creditor holds, such creditor shall be deemed to be
secured by a Lien): (a) any so-called "negative pledge" agreement, pursuant to
which a Person owning an asset agrees with its creditor that such Person shall
not subject property of such Person (whether specifically identified property,
or a class or type of property owned by such Person) to a Lien as defined in the
first sentence of this paragraph; and (b) any arrangement by which a Lien of the
type described in the first sentence of this paragraph (excluding a Permitted
Lien) may "spring" into existence or otherwise arise, or any Person has
covenanted to create or provide such a Lien, upon the occurrence or
nonoccurrence of specified events or the passage of time.
"Loan Account" is defined in Section 3.3.
"Loans" means the Revolver Loans.
"Management Agreement" means any management agreement, operating
agreement, operating lease, license, or other arrangement for operation of a
Hotel by a Manager, entered into by the Lessee of a Hotel.
"Management Fee" means a fee payable by a Lessee to a Manager pursuant
to a Management Agreement.
"Manager" means the manager of a Hotel pursuant to a Management
Agreement.
"Managing Trustee" means either of Xx. Xxxxx X. Xxxxxxx, and/or Xx.
Xxxxxx X. Xxxxxx, both having a business address c/o the Investment Manager.
"Mandatory Redeemable Obligation" means an obligation of any Credit
Party (or guarantied by any of them) which must be redeemed or paid (a) at a
fixed or determinable date, whether by operation of sinking fund or otherwise,
(b) at the option of any Person other than the applicable Credit Party, or (c)
upon the occurrence of a condition not solely within the control of the
applicable Credit Party, such as a redemption required to be made out of future
earnings.
"Margin Stock" shall have the meaning provided for such term in
Regulations G, T, U and X of the Federal Reserve.
"Material Adverse Effect" means, as to any matter, fact, or
circumstance, that such matter, fact, or circumstance would reasonably be
expected to have: (a) a material adverse effect on the business, operations,
results of operations, assets, liabilities, prospects or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a whole, or (b) a material
adverse effect on the ability of a Credit Party to perform its obligations under
the Credit Documents to which it is a party, or (c) the material impairment of
the ability of Agent or any Lender to enforce the Obligations.
"Material Contract" means any contract, lease or other agreement or
arrangement to which any Credit Party is a party (other than the Credit
Documents) involving aggregate
15
consideration payable to or by any Credit Party of $10,000,000 or more (other
than contracts that by their terms may be terminated by any party thereto in the
ordinary course of business upon less than thirty (30) days notice, and purchase
orders for capital expenditures permitted under this Agreement or which is
otherwise material to the business, operations, results of operations, assets,
liabilities, prospects or condition (financial or otherwise) of any Credit
Party. Without limiting the generality of the foregoing, all present and future
Leases and the Advisory Agreement are Material Contracts.
"Material Lessee" means any Lessee that holds Leases (whether or not
cross-defaulted) affecting Hotels having an aggregate Assigned Value equal to or
exceeding Twenty Percent (20%) of Borrower's Consolidated Total Assets.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic or hazardous substances, petroleum (including crude
oil and any fraction thereof) and petroleum products and any other gas, liquid
or solid regulated under any Environmental Law, other than those maintained in
accordance with law.
"Maturity Date" means the Revolver Maturity Date.
"Xxxxx'x" means Xxxxx'x Investors Services, Inc. or any successor
agency.
"Multiemployer Plan" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which any Credit Party or any ERISA Affiliate
has contributed within the past six years or with respect to which any Credit
Party may incur any liability.
"Non-Defaulting Lender" is defined in Section 2.4.
"Non-Pool Hotel" means a Hotel that is not a Pool Hotel.
"Note" means each Revolver Note.
"Notice of Borrowing" is defined in Section 2.2.
"Notice of Continuation" is defined in Section 3.8(a).
"Notice of Conversion" is defined in Section 3.8(b).
"Obligations" means the collective reference to the unpaid principal
of, and the accrued and unpaid interest on, the Loans and all other obligations
and liabilities of Borrower to Agent and the Lenders (including each Credit
Party's liability for all interest that accrues after the maturity of the Loans
and all interest that accrues after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any Credit Party, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, that may
arise under, out of, or in connection with, this Agreement, any other Credit
Document, or any other document made, delivered or given in connection with this
Agreement, any other Credit Document or whether
16
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including all fees and disbursements of counsel to
Agent and the Lenders that are required to be paid by Borrower pursuant to the
terms of any such agreement), and all other obligations and liabilities of any
or all of the Credit Parties to Agent and/or any Lender under this Agreement,
any Note or any other Credit Document.
"OECD Nation" means a member nation of the Organization for Economic
Cooperation and Development.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Permitted Liens" is defined in Section 7.4.
"Permitted Mortgage Investments" means any leasehold or fee mortgage(s)
or deed(s) of trust held beneficially and of record by Borrower or a Subsidiary,
provided that such mortgage(s) or deed(s) of trust comply with all of the
following requirements, which shall apply cumulatively:
o The aggregate value of all such mortgage(s) and deed(s) of trust, as
determined pursuant to GAAP, shall not exceed Twenty Percent (20%) of
Consolidated Total Assets.
o The real property collateral for such mortgage(s) or deed(s) of trust
shall not be the subject of any material Environmental Claim(s), shall
be free of Materials of Environmental Concern other than those
maintained in accordance with applicable, and shall not consist of the
(sub)leasehold estate arising under any Lease.
o No mortgagor or trustor under any such mortgage or deed of trust shall
be an Affiliate of Borrower, any Subsidiary, Investment Manager, or any
Managing Trustee.
o Such mortgage or deed of trust shall not be subject to any collateral
assignment, hypothecation, or other Lien.
o The aggregate value of all such mortgage(s) or deed(s) of trust that
are in monetary or other material default at the time of acquisition or
origination by Borrower or a Subsidiary shall not exceed Ten Percent
(10%) of Consolidated Total Assets.
o If Borrower were to acquire the encumbered real property, Borrower
would not then be in Default under this Agreement as a result. Without
limiting the generality of the foregoing, the collateral shall consist
solely of assets that would be Hotels if owned by a Credit Party.
"Permitted New Indebtedness" means any Indebtedness incurred by
Borrower or any Subsidiary after the Closing Date, but only if such Indebtedness
satisfies the following
17
requirements: (a) after taking into account such Indebtedness Borrower is in
full compliance with all provisions of this Agreement, including the financial
covenants set forth in Section 7.1; and (b) either (i) the stated maturity date
of such Indebtedness is at least 270 days after the Maturity Date and such
Indebtedness is on arm's length and upon terms and conditions that are
substantially normal and customary for comparable indebtedness of comparable
companies; or (ii) such Indebtedness is incurred by a Subsidiary (not by
Borrower) and both: (x) such Subsidiary does not own any Hotel(s) in the
Unencumbered Pool; and (y) either (1) such Indebtedness is wholly nonrecourse to
all Credit Parties or (2) after taking into account the Recourse Exposure
Amount, if any, the Credit Parties are in full compliance with all provisions of
this Agreement.
"Permitted Transaction Amount" means One Million Dollars ($1,000,000)
plus an integral multiple of Five Hundred Thousand Dollars ($500,000).
"Person" means any individual, sole proprietorship, corporation,
limited liability company, partnership, joint venture, trust, unincorporated
organization, association, institution, entity, party or government (including
any division, agency or department thereof).
"Plan" means any employee benefit plan, program or arrangement
maintained or contributed to by any Credit Party, or with respect to which any
of them may incur liability.
"Pool Hotel" means any Hotel that is part of a Hotel Pool.
"Prevailing Exchange Rate" means, as to any foreign currency, the spot
rate at which Dollars are offered on such day by Agent in New York, New York for
such foreign currency. The Prevailing Exchange Rate shall be adjusted by Agent
on a daily basis in accordance with Agent's customary procedures as in effect
from time to time for foreign currency transactions.
"Pricing Parameter" means: (a) if a Rating is presently in effect for
Borrower, then such Rating; and (b) otherwise, Borrower's Leverage Ratio.
"Pro Rata Share" of any Lender means such Lender's proportionate
interest in the Revolver Loans, calculated as follows. Divide the amount of that
Lender's Revolver Commitment by the total amount of all Revolver Commitments at
the time, unless there are no such commitments at the time. In that event,
divide the sum of the principal amount of that Lender's outstanding Revolver
Loans by the sum of the total principal amount of all Revolver Loans outstanding
at the time. While any Lender is a Defaulting Lender, the amount of its Revolver
Commitment (or Revolver Loans, as applicable) will be deemed to be zero for
purposes of calculating Required Lenders.
"Qualified Counterparty" means: (a) Agent or any Affiliate of Agent; or
(b) a financial institution whose long term debt shall be rated not lower than
A+ by S&P and A1 by Xxxxx'x and which is otherwise satisfactory to Agent and
Borrower.
18
"Rating" of Borrower means the rating of Borrower's senior, unsecured
debt issued by any Rating Agency and in effect at the time of determination. For
purposes of such determination, the highest two ratings (or the two equally
highest) shall first be identified. Whichever of those two ratings is lower (if
either) shall govern. If the two highest ratings are equal, then that rating
shall be deemed Borrower's "Rating." If at any time Agent determines that the
preceding Rating cannot be determined or calculated or does not exist, or if
Borrower does not have an Investment Grade Rating, or if only one Rating Agency
has issued a rating as to Borrower, then it shall be deemed that no Rating is in
effect for Borrower.
"Rating Agency" means any of the following rating agencies: S&P;
Xxxxx'x; Fitch; or D&P.
"Recourse Exposure Amount" for any Hotel means zero, except that if a
Hotel is subject to a Lien as to which Borrower (i.e., Hospitality Properties
Trust, a Maryland real estate investment trust, as opposed to any Subsidiary
thereof) is or may become personally liable (in whole or in part) for payment of
principal and interest, then the Recourse Exposure Amount means the lesser of
(i) the excess, if any, of (a) the total amount of principal and more-than-
sixty-days-overdue interest secured by such Lien (and any other Lien(s) equal or
prior in lien to such Lien) over (b) an amount equal to Sixty-Five Percent (65%)
of the Acquisition Cost of such Hotel; or (ii) the maximum amount of Borrower's
actual or potential personal liability with respect to the principal and
more-than-sixty-days-overdue interest secured by such Lien (and any other
Lien(s) equal or prior in lien to such Lien).
"Register" means a register of the names and addresses of all Lenders,
their Revolver Commitments, and the principal amount of their Loans, as in
effect from time to time, all in substantially the form of Exhibit G.
"REIT" means a real estate investment trust as defined in Section 856
of the Code.
"Reportable Event" means any of the events described in Section 4043 of
ERISA or the regulations thereunder.
"Required Lenders" means Lenders the Pro Rata Shares of which total
more than sixty-six and two-thirds percent (66-2/3%) of the total Pro Rata
Shares of all Lenders.
"Requirement of Law" means (a) the Governing Documents of a Person, (b)
any law, treaty, rule or regulation or determination of an arbitrator, court or
other Governmental Authority, or (c) any franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval binding on a Person or any of its property.
"Reset Date" means the Closing Date and, thereafter: (a) so long as
Borrower maintains a Rating, the effective date of each and every change in
Borrower's Rating, effective upon each such change; and (b) at all other times,
the first day of each calendar month.
"Restricted Payments" shall have the meaning set forth in Section 7.6.
19
"Retiree Health Plan" means an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
"Revolver Commitment" of a Lender means its commitment to make Revolver
Loans, in an outstanding amount not to exceed, at any time, the amount set forth
opposite its name on Annex I under the heading "Revolver Commitment," plus
(without duplication) any amount so described in an Assignment and Assumption
Agreement executed by such Lender, as such aggregate amount may be reduced from
time to time. The aggregate amount of all the Revolver Commitments shall not
exceed Three Hundred Million Dollars ($300,000,000).
"Revolver Loans" is defined in Section 2.1.
"Revolver Maturity Date" means the earlier of (a) the fourth
anniversary of the Closing Date and (b) the date, if any, on which the Revolver
Loans mature by notice of prepayment, acceleration or otherwise.
"Revolver Note" means a promissory note of Borrower substantially in
the form of Exhibit A.
"SEC Filing" means any filing, report, or disclosure of any kind made
with the United States Securities and Exchange Commission relating to Borrower,
any securities issued by Borrower, or Borrower's affairs or operations.
"S&P" means Standard & Poor's Rating Group, or any successor agency.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company or other entity (a) in which that Person directly or
indirectly owns or controls shares of stock or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
governing body of such entity or (b) of which that Person is a general partner
or a managing member or which that Person otherwise controls, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. Without limiting the generality of the foregoing, as of the Closing
Date all Subsidiaries of Borrower are listed in Section 5.11 of the Disclosure
Schedule.
"Ten-Year Treasury Rate" means as of any date, the interest rate per
annum on such date for U.S. Government Treasury Securities with a ten (10) year
remaining term, as calculated by the U.S. Treasury and available on the screen
entitled Government Markets PX1 on the Bloomberg Information Service, or if not
so available, determined on the basis of comparable yields for comparable U.S.
obligations as published in a reputable publication designated by Agent. Where
relevant to this Agreement, the Ten-Year Treasury Rate shall be ascertained by
Borrower and certified to Agent subject to verification by Agent.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (b) the withdrawal of Borrower, any of its
Subsidiaries or any ERISA Affiliate from a Benefit Plan during a plan year in
which it was a "substantial employer" (as defined in Section 4001(a)(2) of
ERISA); (c) the provision of notice of intent
20
to terminate a Benefit Plan in a distress termination (as described in Section
4041(c) of ERISA); (d) the institution by the PBGC of proceedings to terminate a
Benefit Plan or Multiemployer Plan; (e) any event or condition (1) which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan,
or (2) that may result in termination of a Multiemployer Plan pursuant to
Section 4041A of ERISA; or (f) the partial or complete withdrawal within the
meaning of Sections 4203 and 4205 of ERISA, of Borrower, any of its Subsidiaries
or any ERISA Affiliate from a Multiemployer Plan.
"Total Commitments" means at any time, the total Revolver Commitments
of all Lenders at such time. The Total Commitments shall not exceed Three
Hundred Million Dollars ($300,000,000).
"Type" of Loan refers to whether it is a Eurodollar Loan or a Base Rate
Loan.
"UCC" means the Uniform Commercial Code as in effect in New York from
time to time.
"Unencumbered Pool" means, collectively, all of the Hotels each of
which satisfies all of the following criteria:
o Such Hotel is, directly or indirectly, owned or leased 100% by
Borrower, and no other Person (other than a Credit Party that is
directly or indirectly 100% owned by Borrower) holds any direct or
indirect interest in such Hotel (except for Permitted Liens).
o If such Hotel is owned or ground-leased by a Subsidiary, then no asset
of such Subsidiary is subject to a Lien (except for Permitted Liens),
and such Subsidiary has not directly or indirectly guarantied or
assumed liability for any Indebtedness (secured or unsecured) of any
Subsidiary that is not a Credit Party or with respect to any Lessee
Deposits for which any Subsidiary that is not a Credit Party is
responsible.
o If such Hotel is a Pool Hotel, then all other Pool Hotels in the same
Hotel Pool shall also be part of the Unencumbered Pool.
o No Credit Party has pledged, hypothecated, or encumbered, directly or
indirectly, or granted any Lien (other than a Permitted Lien) with
respect to, its direct or indirect interest in such Hotel or in the
Credit Party that owns or leases such Hotel.
o Where a Credit Party's estate in a Hotel consists of a leasehold, such
leasehold shall have a remaining term of at least thirty-five (35)
years (twenty-five (25) years in the case of the ground-leased Hotel
located in Willow Grove, Pennsylvania) and shall otherwise be on terms
and conditions satisfactory to Agent.
21
o If such Hotel is subject to a Management Agreement entered into or
modified after the Closing Date, then either: (a) such agreement and
the Manager thereunder shall have been approved by Agent; or (b) such
Management Agreement unconditionally, automatically, and completely
terminates (with no rights of Manager nondisturbance and no rights for
Manager to obtain a new or replacement Management Agreement),
automatically or at Borrower's option, if the Lessee's estate in the
Hotel terminates.
o Such Hotel is free of Materials of Environmental Concern other than
those maintained in accordance with applicable law in all material
respects, material Environmental Claims, material structural defects,
any Liens other than Permitted Liens, all as evidenced by Due Diligence
Reports.
o Such Hotel shall be fully operational and (in the case of rooms and
suites) available for paying guests, except that no more than the
following percentage of rooms (or suites, where applicable) may be out
of service for renovation or remodeling at any particular time:
Unencumbered Pool in Aggregate 15%
Any Non-Pool Hotel 25%
Each Hotel Pool 20%
o Such Hotel shall be subject to a Lease satisfactory to Agent with a
Lessee satisfactory to Agent, and such Lessee shall not be in material
default beyond the expiration of any notice or cure period under its
Lease or as to any material obligation to Borrower or any Subsidiary.
o As to each Hotel in an Unencumbered Pool, either: (a) as to no more
than twenty percent (20%) of the Hotels in the Unencumbered Pool
(measured by Assigned Value), all obligations of Lessee under its Lease
shall be unconditionally guarantied in favor of Borrower or the
applicable Subsidiary by a Person having an Investment Grade Rating (or
some other guarantor satisfactory to Agent (all guarantors as of the
Closing Date being hereby approved)), pursuant to a form of guaranty
reasonably satisfactory to Agent; or (b) as to at least eighty percent
(80%) of the Hotels in the Unencumbered Pool (measured by Assigned
Value), Hotel Net Cash Flow from such Hotel shall equal or exceed the
following percentage of Base Rent for such Hotel considered
individually (or in the aggregate within each Hotel Pool):
Any Non-Pool Hotel 110%
Each Hotel Pool in the Aggregate 100%
22
o Hotels having an Assigned Value representing at least sixty-five
percent (65%) of the aggregate Assigned Value of the Unencumbered Pool
shall be operated under brand names satisfactory to Agent (Agent hereby
approving all brand names of Hotels in place as of the Closing Date);
any franchise arrangements relating to such brand names shall be in
full force and effect and no material uncured default shall have
occurred and be continuing beyond applicable cure periods(s)
thereunder; and, to the extent that such franchise arrangements exist,
the franchisor shall not have given notice of intention not to renew
any such arrangements, unless Borrower shall have arranged a
replacement brand name satisfactory to Agent.
o No more than twenty percent (20%) of the Hotels in the Unencumbered
Pool (measured by Assigned Value) shall be ground leased, as opposed to
fee Hotels, without the consent of the Required Lenders.
"U.S." means the United States of America.
"Wholly-Owned Subsidiary" means a wholly-owned Subsidiary of Borrower
which has guarantied the Obligations to Agent for the benefit of Agent and the
Lenders, in each case pursuant to guaranties in substantially the form of the
Guaranty executed and delivered on the Syndication Closing Date.
"Year 2000 Problem" means any significant risk that computer hardware
or software used in the business or operations of Borrower, any Subsidiary of
Borrower, or Investment Manager will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively and reliably
as in the case of times or time periods occurring before January 1, 2000.
1.2 Other Definitional Provisions.
(a) All accounting terms used in this Agreement or in any other Credit
Document shall be construed in accordance with GAAP, applied on a basis
consistent with the Financial Statements delivered to Agent covering the period
through the Last Financial Statement Date, unless otherwise specified in the
applicable Credit Document.
(b) The word "including" means "including without limitation." Each of
the words "hereof," "herein," and "hereunder" refer to this Agreement as a
whole, not to any particular portion of this Agreement. References to Articles,
Sections, Annexes, Schedules and Exhibits are internal references to this
Agreement and to its attachments, unless otherwise specified. The headings and
the Table of Contents are for convenience of reference only and shall not affect
the meaning or construction of any provision of this Agreement.
23
ARTICLE 2 LOANS
2.1 Revolving Credit Commitments. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make loans and advances to
Borrower ("Revolver Loans"), from the Syndication Closing Date through the last
Business Day before the Revolver Maturity Date, provided, that the outstanding
principal amount of such Lender's Revolver Loans must never exceed its Pro Rata
Share of the amount of the total Revolver Commitments. Revolver Loans may be
voluntarily prepaid (subject to Section 3.5) and any principal amounts so
prepaid may be reborrowed as set forth above.
2.2 Procedure for Borrowings. To request a Borrowing of Revolver Loans,
Borrower shall deliver to Agent (to all notice recipients for Agent as listed in
Annex I) a written notice, substantially in the form of Exhibit D (a "Notice of
Borrowing"), together with a Compliance Certificate. Each Notice of Borrowing
shall specify (1) whether the requested Borrowing is of Base Rate Loans or
(subject to all applicable restrictions contained in this Agreement) Eurodollar
Loans, and (2) the Business Day on which Borrower requests that such Loans be
made. Notices of Borrowing for Base Rate Loans shall be received by Agent before
11:00 A.M. New York time on the Business Day prior to the date of the proposed
Borrowing, and Notices of Borrowing for Eurodollar Loans shall be received by
Agent not later than 11:00 A.M. New York time on the third Business Day prior to
the date of the proposed Borrowing. Each Notice of Borrowing shall, unless
otherwise specifically provided herein, consist entirely of Loans of the same
Type and, if the requested Borrowing is to consist of Eurodollar Loans, shall be
in an aggregate amount for all Lenders equal to a Permitted Transaction Amount.
Borrower shall specify in each Notice of Borrowing whether the conditions for
the requested Borrowing are satisfied. Each Notice of Borrowing shall be deemed
to automatically constitute Borrower's representation and warranty, to Agent and
to each and every Lender considered separately, that all representations and
warranties contained in this Agreement are and remain true and correct as of the
date of such Notice of Borrowing; as of the date of the making of the requested
Loan; and immediately thereafter taking into account the effect of the requested
Loan. Borrower may request a Borrowing of Loans no more than three (3) times per
month (unless an Event of Default has occurred, in which case no further
Borrowings of Loans shall be permitted). Once given, a Notice of Borrowing is
irrevocable by and binding on Borrower. Borrower shall provide to Agent a list,
with specimen signatures, of officers authorized to request Loans. Agent is
entitled to rely upon such list until it is replaced by Borrower. Agent shall
give each Lender prompt notice by telephone or facsimile transmission of a
Notice of Borrowing.
2.3 Disbursement of Loans. Subject to the determination by Agent and
the Lenders that the applicable conditions for borrowing contained in Article 4
are satisfied or duly waived, each Lender shall make available to Agent at
Agent's address, no later than 11:00 A.M. New York time on the date of the
proposed Borrowing as set forth in the Notice of Borrowing, an amount in
immediately available funds equal to such Lender's Pro Rata Share of the
requested Borrowing, provided, however, that in no event shall such amount
exceed the unutilized amount of such Lender's Commitment to make Revolving
Loans. Unless Agent receives contrary written notice prior to the date of any
such Borrowing of Loans, it is entitled to assume that each Lender will make
available its Pro Rata Share of the Borrowing and in reliance upon that
assumption, but without any obligation to do so, may
24
advance such Pro Rata Share on behalf of the Lender. The proceeds of Revolver
Loans shall be transmitted by Agent as reasonably requested by Borrower in its
Notice of Borrowing.
2.4 Defaulting Lenders.
(a) A Lender who fails to pay Agent its Pro Rata Share of any Loans
made available by Agent on such Lender's behalf, or who fails to pay any other
amount owing by it to Agent, is a "Defaulting Lender." Agent may recover all
such amounts owing by a Defaulting Lender on demand. If the Defaulting Lender
does not pay such amounts on Agent's demand, Agent shall promptly notify
Borrower and Borrower shall pay such amounts within five Business Days. In
addition, the Defaulting Lender shall pay Agent interest on such amount for each
day from the date it was made available by Agent to Borrower to the date it is
recovered by Agent at a rate per annum equal to (1) the overnight Federal Funds
Rate, if paid by the Defaulting Lender, or (2) the then applicable rate of
interest calculated under Article 3, plus, in each case, Agent's costs, losses
and expenses, if any, incurred as a result of the Defaulting Lender's failure to
perform its obligations. The foregoing shall not limit any rights or claims of
Borrower against any Defaulting Lender, including any rights or claims as a
result of Borrower's payment of any amounts that should have been paid by the
Defaulting Lender.
(b) The failure of any Lender to fund its Pro Rata Share of any Loan
shall not relieve any other Lender of its obligation to fund its Pro Rata Share
of such Loan. Conversely, no Lender shall be responsible for the failure of
another Lender to fund its Pro Rata Share of a Loan. Revolver Loans shall be
incurred pro rata from the Lenders (the "Non-Defaulting Lenders") which are not
Defaulting Lenders based on their Revolver Commitments, provided, that each such
Lender shall have at least one (1) Business Day's advance notice of its
obligation to fund the increased amount.
(c) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrower to Agent for the Defaulting Lender's benefit; nor
shall a Defaulting Lender be entitled to the sharing of any payments hereunder.
Amounts payable to a Defaulting Lender shall instead be paid to or retained by
Agent. Agent may hold and, in its discretion, re-lend to Borrower the amount of
all such payments received or retained by it for the account of such Defaulting
Lender. For purposes of voting or consenting to matters with respect to the
Credit Documents and determining Pro Rata Shares such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Revolver Commitment shall be
deemed to be zero. This Section 2.4 shall remain effective with respect to such
Lender until (1) the Obligations under this Agreement shall have been declared
or shall have become immediately due and payable or (2) Required Lenders, Agent
and Borrower shall have waived such Lender's default in writing. The operation
of this Section 2.4 shall not be construed to increase or otherwise affect the
Revolver Commitment of any Lender, or relieve or excuse the performance by
Borrower of its duties and obligations hereunder.
(d) Nothing in this Section 2.4 shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice any rights which
Borrower, Agent, or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.
25
ARTICLE 3 COMPENSATION, REPAYMENT AND COMMITMENT REDUCTIONS
3.1 Interest Rate.
(a) Interest on Base Rate Loans. Borrower shall pay to Agent for the
account of the Lenders, quarterly in arrears, on the last Business Day of each
Fiscal Quarter of Borrower, interest on Base Rate Loans outstanding during such
calendar quarter at an interest rate per annum equal to the Base Rate plus the
Applicable Margin. The rate hereunder shall change each day the Base Rate
changes. After maturity of such Base Rate Loans (whether by acceleration or
otherwise), interest shall be payable upon demand. Each determination by Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(b) Interest on Eurodollar Loans. Interest on each Eurodollar Loan
shall be payable on the last day of the Interest Period for such Eurodollar Loan
(and, in the case of any Eurodollar Loan with an Interest Period of six months,
also on the three-month anniversary of the commencement of that Interest
Period), at the date of conversion of such Eurodollar Loan (or a portion
thereof) to a Base Rate Loan and at maturity of such Eurodollar Loan, as
applicable, at an interest rate per annum equal to the Adjusted Eurodollar Rate
for the Interest Period for such Eurodollar Loan plus the Applicable Margin.
After maturity of such Eurodollar Loans (whether by acceleration or otherwise),
interest shall be payable upon demand. Each determination by Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(c) Applicable Margin; Reset Dates. At any time when no Rating is in
effect for Borrower, within five Business Days after the end of each calendar
month, Borrower shall deliver to Agent a certificate executed by the President
or Chief Financial Officer of Borrower showing Borrower's calculations of the
Leverage Ratio for the calendar month just ended. The first day after the last
day of the calendar month just ended will be the applicable "Reset Date"
corresponding to such certificate delivered by Borrower. The Applicable Margin
shall be adjusted or continued, as the case may be, on each Reset Date based on
the then-current Pricing Parameter as set forth in the table set forth in Annex
III, and the Applicable Margin as so adjusted or continued shall remain in
effect until the next Reset Date.
(d) Interest After Default. Notwithstanding anything to the contrary in
this Agreement or any other Credit Document, from the date of occurrence of an
Event of Default until the earlier of (i) the date all Obligations have been
paid and satisfied in full or (ii) the date such Event of Default is cured or
waived, Borrower shall be obligated to pay to Agent for the account of the
Lenders interest on all amounts then outstanding under this Agreement calculated
at a rate per annum (the "Default Rate") equal to the higher of (x) the Base
Rate plus the Applicable Margin thereon, and (y) the Adjusted Eurodollar Rate
plus the Applicable Margin thereon, plus in each case two percent (2.00%) per
annum (200 basis points).
26
(e) Distribution of Interest. Interest on the Loans shall be allocated
by Agent to each Lender in accordance with the Pro Rata Share of Loans actually
advanced by and repaid to each Lender, and shall accrue from and including the
date such Loans are so advanced and to but excluding the date such Loans are
repaid by Borrower. Agent shall diligently endeavor to distribute interest on
Loans and any other payment that Agent is required hereunder to make to the
Lenders (collectively, an "Agent's Distribution") before 5:00 p.m., New York
City time, on the related Accrual Date. In any event, Agent shall distribute
Agent's Distribution no later than 5:00 p.m., New York City time, on the second
Business Day following the day on which Agent shall receive such Agent's
Distribution. Without limiting the foregoing, Agent shall pay interest on each
Agent's Distribution at the Federal Funds Rate, which interest shall accrue from
the Accrual Date until the date on which Agent shall distribute such Agent's
Distribution together with such interest (including the Accrual Date but
excluding the date of distribution).
3.2 Commitment Fee. Borrower shall pay in arrears to Agent for the
account of the Lenders, on the last Business Day of each calendar quarter (in
equal quarterly installments), and on the Revolver Maturity Date, a quarterly
fee (the "Commitment Fee") calculated at a fluctuating rate per annum,
determined based on the applicable Pricing Parameter as of the most recent Reset
Date from the table set forth in Annex III, on the average unused portion of the
aggregate Revolver Commitments at the end of each day during the applicable
period. (The Commitment Fee set forth in Annex III represents an annualized
Commitment Fee, which shall be calculated for each Fiscal Quarter based on
one-quarter of the stated annualized Commitment Fee and the daily average unused
portion of the aggregate Revolver Commitments during such Fiscal Quarter.) The
annualized Commitment Fee shall be adjusted or continued, as the case may be, on
each Reset Date based on the then-current determination of the applicable
Pricing Parameter, and such annualized Commitment Fee as so adjusted or
continued shall remain in effect until the next Reset Date.
3.3 Maintenance of Loan Account. Agent shall maintain an account on its
books in the name of Borrower (the "Loan Account") in which Borrower will be
charged with all loans and advances made by the Lenders to Borrower or for
Borrower's account and the other Obligations of Borrower under the Credit
Documents, including the Revolver Loans, the Fees, and any other Obligations.
The Loan Account will be credited with all payments received by Agent from
Borrower. Absent manifest error, books and records of Agent regarding the Loan
Account shall be final, conclusive and binding on Borrower.
3.4 Commitment Reductions.
(a) On the Revolver Maturity Date, the Revolver Commitment, if any, of
each Lender shall automatically reduce to zero and may not be reinstated.
(b) Borrower may reduce or terminate the Revolver Commitments at any
time and from time to time in whole or in part; provided, that (1) such
reduction shall be of an identical percentage of each applicable Lender's
Revolver Commitment, and (2) the amount of such reduction shall be One Million
Dollars ($1,000,000) or an integral multiple thereof, and (3) Borrower shall
give Agent at least fifteen days prior written notice of each such
27
reduction. Once reduced, no portion of the Revolver Commitments that has been
reduced may be reinstated. Agent shall promptly forward to each Lender any
notice that Agent shall receive from Borrower pursuant to this Section.
3.5 Voluntary Prepayments. Borrower shall have the right to prepay the
Loans in whole or in part from time to time on the following terms and
conditions:
(a) Borrower shall give Agent written notice (or telephonic notice
promptly confirmed in writing), which notice shall be irrevocable, of its intent
to prepay the Loans, at least three Business Days prior to a prepayment of
Eurodollar Loans and at least one Business Day prior to a prepayment of Base
Rate Loans, which notice shall specify the amount of such prepayment and what
Types of Loans are to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing(s) pursuant to which made, which notice Agent shall promptly
transmit to each of the Lenders;
(b) each prepayment shall be in an aggregate principal amount equal to
a Permitted Transaction Amount;
(c) prepayments of Eurodollar Loans made pursuant to this Section 3.4
may only be made on the last day of the Interest Period applicable thereto,
unless Borrower pays Agent the breakage costs for each Lender required under
Section 3.8(d)(2).
3.6 Mandatory Payments and Prepayments. The aggregate balance of
Revolver Loans outstanding at any time in excess of the principal amount of
Revolver Loans that would cause Borrower to be in full compliance with the
covenants contained in this Agreement shall be due and payable immediately
without the necessity of any demand. The entire then remaining principal amount
of the Revolver Loans shall be due and payable on the Revolver Maturity Date.
Subject to Section 2.4, all repayments of any Loans shall be paid to Agent for
the account of each Lender based upon its Pro Rata Share of such Loans.
3.7 Payments; Calculations. All calculations of (i) interest hereunder,
except for interest on Eurodollar Loans, and (ii) Fees, including, without
limitation, Commitment Fees, shall be made by Agent, on the basis of a year of
365/366 days for the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest or Fees
are payable. All calculations of interest on Eurodollar Loans hereunder shall be
made by Agent, on the basis of a year of 360 days for the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which such interest is payable. Each determination by Agent of
interest rates, Commitment Fees, and other fees, charges, expenses and payments
hereunder shall be conclusive and binding for all purposes, absent manifest
error. Each Credit Party shall make all payments owing by it to Agent or to any
Lender hereunder or under any other Credit Document immediately available funds
at such payment office as Agent shall designate by written notice to Borrower
from time to time. Pending further written notice from Agent, Agent hereby
designates the following account:
Method of Payment: Fedwire
Address: Dresdner Bank AG, New York
28
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA No.: 026 008 303
Account Name: Hospitality Properties Trust
Attn: Xxxx Xxxxxxxxx
Comments: Indicate type of payment - interest, principal, etc.
Contact: Xxxx Xxxxxxxxx
Xxxxxxxx Bank, AG, New York
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000-000-0000
000-000-0000
3.8 Special Provisions Relating to Eurodollar Loans.
(a) Continuation. With respect to any Borrowing consisting of
Eurodollar Loans, subject to Section 3.8(c) and so long as no Event of Default
has occurred and is continuing, Borrower may elect to maintain such Borrowing or
any portion thereof equal to a Permitted Transaction Amount as a Borrowing
consisting of Eurodollar Loans by selecting a new Interest Period for such
Borrowing, which new Interest Period shall commence on the last day of the
immediately preceding Interest Period. Each selection of a new Interest Period
shall be made by notice given by Borrower to Agent not later than 11:00 A.M. New
York time on the third Business Day prior to the date of any such continuation.
Such notice by Borrower of a continuation (a "Notice of Continuation") shall be
substantially in the form of Exhibit E and shall specify (i) the date of such
continuation, (ii) the Type of Loans subject to such continuation, (iii) the
aggregate amount of Loans subject to such continuation (which must be a
Permitted Transaction Amount) and (iv) the duration of the selected Interest
Period. Borrower shall be deemed to have delivered a Notice of Continuation
(requesting another Interest Period equal to the expiring Interest Period and
contemplating a continuation of the same Borrowing in the same amount) unless,
by 11:00 A.M. New York time on the third Business Day prior to the date of any
such continuation Borrower has notified Agent otherwise in writing. Borrower may
combine Borrowings with Interest Periods which end on the same Business Day into
a single new Borrowing and may split one Borrowing into two or more Borrowings
each consisting of a Permitted Transaction Amount, pursuant to this Section
3.8(a). If Borrower shall fail to select a new Interest Period for any Borrowing
consisting of Eurodollar Loans in accordance with this Section 3.8(a), then such
Loans will automatically, on the last day of the then existing Interest Period
therefor, continue as a Eurodollar Loan and be renewed for the same Interest
Period and the same Borrowing amount. Agent shall give each Lender prompt notice
by telephone or facsimile transmission of each Notice of Continuation.
(b) Conversion. Subject to Section 3.8(c) and (in the case of
conversions to Eurodollar Loans) so long as no Event of Default has occurred and
is continuing, Borrower may, on any Business Day upon written notice (each such
notice, a "Notice of Conversion")
29
given to Agent, convert the entire amount of or a portion of all Loans of one
Type comprising the same Borrowing into Loans of another Type; provided,
however, that any conversion of any Eurodollar Loans into Base Rate Loans shall
be made on, and only on, the last day of an Interest Period for such Eurodollar
Loans and, upon conversion of any Base Rate Loans into Eurodollar Loans,
Borrower shall pay accrued interest to the date of conversion on the principal
amount of Base Rate Loans converted. Each such Notice of Conversion shall be
given not later than 11:00 A.M. New York time on the Business Day prior to the
date of any proposed conversion into Base Rate Loans and on the third Business
Day prior to the date of any proposed conversion into Eurodollar Loans. Subject
to the restrictions specified above, each Notice of Conversion shall be
substantially in the form of Exhibit E and shall specify (i) the requested date
of such conversion, (ii) the Type of Loans to be converted, (iii) the portion of
such Type of Loans to be converted, (iv) the Type of Loan such Loans are to be
converted into and (v) if such conversion is into Eurodollar Loans, the duration
of the Interest Period of such Loans. Each conversion into Eurodollar Loans
shall be in an aggregate amount for the Loans of all Lenders in an amount equal
to a Permitted Transaction Amount. Borrower may elect to convert the entire
amount of or a portion of all Loans of one Type comprising more than one
Borrowing into Loans of another Type by combining such Borrowings into one
Borrowing, provided, that if the Borrowings so combined consist of Eurodollar
Loans, such Loans shall have Interest Periods ending on the same date. Agent
shall give each Lender prompt notice by telephone or facsimile transmission of
any Notice of Conversion.
(c) Certain Limitations on Eurodollar Loans. The right of Borrower to
maintain, select, continue or convert Eurodollar Loans shall be limited as
follows:
(1) If Agent is not offering U.S. dollar deposits (in the
applicable amounts) in the London interbank market, or Agent determines that
adequate and fair means do not otherwise exist for ascertaining the Adjusted
Eurodollar Rate for Eurodollar Loans comprising any requested Borrowing,
continuation or conversion, the right of Borrower to select Eurodollar Loans for
such Borrowing, continuation or conversion or any subsequent Borrowing,
continuation or conversion shall be suspended until Agent shall notify Borrower
and the Lenders that the circumstances causing such suspension no longer exist,
and each Loan comprising such requested Borrowing, continuation or conversion
shall be made as a Base Rate Loan.
(2) If Required Lenders shall determine and notify Agent that
the Adjusted Eurodollar Rate for Loans comprising a Borrowing will not
adequately reflect the cost to such Lenders of making or funding their
respective Loans for such Borrowing, the right of Borrower to select Eurodollar
Loans for such Borrowing shall be suspended until Agent shall notify Borrower
and the Lenders that the circumstances causing such suspension no longer exist,
and each Loan comprising such Borrowing shall be made as a Base Rate Loan.
(3) If at any time any Lender determines (which determination
shall, absent manifest error, be conclusive and binding on all parties) that the
making, continuation or conversion of any Loan as a Eurodollar Loan has become
unlawful or impermissible by reason of compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental Authority (whether or
not having the force of law and whether or not
30
failure to do so would result in costs or penalties), then such Lender may give
notice of that determination in writing to Borrower and Agent and Agent shall
promptly transmit the notice to each other Lender. Until such Lender gives
notice otherwise, the right of Borrower to select Eurodollar Loans from that
Lender shall be suspended and, to the extent required by applicable law, rule,
regulation, or order, each Eurodollar Loan outstanding from that Lender shall
automatically and immediately convert to a Base Rate Loan.
(4) Except as otherwise expressly provided in this Agreement,
there shall not be outstanding at any one time more than an aggregate of eight
(8) Borrowings of Eurodollar Loans.
(d) Compensation.
(1) Each Notice of Continuation and Notice of Conversion shall
be irrevocable by and binding on Borrower. In the case of any Borrowing,
continuation or conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Eurodollar
Loans, Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill, on or before the
date for such Borrowing, continuation or conversion specified in such Notice of
Borrowing, Notice of Continuation or Notice of Conversion, the applicable
conditions set forth in Article 4, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Loan to be made by such Lender as part of such Borrowing,
continuation or conversion.
(2) If any payment of principal of, or conversion or
continuation of, any Eurodollar Loan is made other than on the last day of the
Interest Period for such Loan for any reason, Borrower shall pay to Agent for
the account of the affected Lender(s) any amounts required to compensate any
Lender(s) for any additional losses, costs or expenses which such Lender(s) may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Loan. Such payment shall be due: (a)
simultaneously with such payment on account of the Loan, if Agent shall have
advised Borrower of the amount of such supplemental payment; and (b) otherwise,
within ten (10) Business Days of written demand by any affected Lender (a copy
of which demand such Lender shall deliver to Agent).
3.9 Increased Costs; Capital Adequacy.
(a) If after the date of this Agreement the adoption of or any change
in any Requirement of Law or in the interpretation or administration thereof by
any Governmental Authority (whether or not having the force of law) or
compliance by Agent or any Lender with any direction, request or requirement
(whether or not having the force of law) of any Governmental Authority or
monetary authority, including Regulation D of the Federal Reserve as from time
to time in effect (and any successor thereto), in each case after the Closing
Date:
31
(1) shall change the basis of taxation of payments to Agent or
any Lender in respect of the principal of or interest on any Loan made by such
Lender (other than taxes imposed on or measured by the overall net income of
Agent or such Lender, as the case may be, by the jurisdiction in which such
Person has its principal office (or lending office) or by any political
subdivision or taxing authority therein); or
(2) shall impose, modify or hold applicable any reserve,
deposit, compulsory loan or other similar requirement against assets of,
deposits with or for the account of, or other extensions of credit by, any
office of Agent or any Lender (which requirement, with respect to Loans, is not
otherwise included in the determination of the Adjusted Eurodollar Rate or the
Base Rate, as applicable);
and the result of any of the foregoing is to increase the cost to such Person of
making, converting into, continuing or maintaining Loans or of purchasing and
maintaining any participation therein, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, Borrower shall pay to
Agent or such Lender, as the case may be, any additional amounts necessary to
compensate such Person for such increased cost or reduced receipt, together with
interest on such amount from the date of the required payment until payment in
full thereof at a rate equal at all times to the Base Rate or the Default Rate,
as applicable. If any Person becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify Borrower, through Agent,
of the event by reason of which it has become so entitled. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) If Agent or any Lender shall have determined that the applicability
of any law, rule, regulation or guideline adopted after the Closing Date
pursuant to or arising out of the July 1988 report of the Basic Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or the adoption after
the Closing Date of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any such Person or any such Person's holding company
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Person's or such holding company's capital as a consequence of its obligations
hereunder to a level below that which such Person or such holding company could
have achieved but for such adoption, change or compliance (taking into
consideration such Person's or such holding company's policies with respect to
capital adequacy) by an amount deemed by such Person to be material, then from
time to time, after submission by such Person to Borrower (with a copy to Agent)
of a written request therefor, Borrower shall pay to such Person such additional
amount or amounts as will compensate such Person for any such reduction
suffered.
(c) A certificate of Agent or the applicable Lender, as the case may
be, setting forth such amount or amounts as shall be necessary to compensate
such Person or its holding company as specified in paragraph (a) or (b) above,
as the case may be, shall be delivered to
32
Borrower (with a copy to Agent) and shall be conclusive absent manifest error.
Borrower shall pay such Person the amount shown as due on any such certificate
delivered by it within 10 Business Days after its receipt of the same.
3.10 Taxes.
(a) All payments made by Borrower under this Agreement and the Notes
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future taxes, levies, imposts, charges, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding (i) net income taxes or any other taxes
imposed on or measured by the net income or profits of Agent or a Lender, as the
case may be, in each case by the jurisdiction under the laws of which such
Person is organized or any political subdivision thereof or by the jurisdiction
in which the principal or applicable lending or issuing office of such Person is
located or any political subdivision thereof and (ii) U.S. withholding taxes
payable with respect to payments hereunder under laws (including any treaty,
ruling, determination or regulation, including presently issued regulations
having a future effective date) in effect on, but not any increase in U.S.
withholding tax resulting from any subsequent change in such laws (but not the
mere occurrence of a future effective date as to final regulations already in
place) occurring after, (x) the Closing Date in the case of Agent and any Person
which is a Lender as of the Syndication Closing Date, and (y) in the case of any
other Lender, the date of the Assignment and Acceptance Agreement pursuant to
which it became a Lender (all such non-excluded taxes, levies, imposts, charges,
deductions and withholdings the "Non-Excluded Taxes"). In addition, Borrower
agrees to pay to the relevant Governmental Authority in accordance with
applicable law any current or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Credit Document ("Other Taxes"). If
any Non-Excluded Taxes or Other Taxes are required by law to be withheld from
any amounts payable to Agent or any Lender hereunder or under the Notes, the
amounts so payable to such Person shall be increased to the extent necessary to
yield to such Person interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Notes. Whenever any
Non- Excluded Taxes or Other Taxes are payable by Borrower, upon receipt thereof
Borrower shall send to Agent for its own account or for the account of the
applicable Lender, as the case may be, a certified copy of any original official
receipt received by Borrower showing payment thereof. Borrower shall indemnify
Agent and the Lenders for the full amount of Non-Excluded Taxes, Other Taxes and
any taxes imposed by any jurisdiction on amounts payable under this Section 3.10
that are paid by such indemnified Person (including penalties, interest and
expenses arising therefrom or with respect thereto). If Agent or a Lender
receives a refund which it determines is in respect of any Non-Excluded Taxes or
Other Taxes for which such Person has received payment from Borrower hereunder,
such Person shall, within 30 days of such determination by such Person, repay
such refund to Borrower, provided that Borrower, upon the request of such
Person, agrees to return such refund (plus any penalties, interest or other
charges) to such Person in the event such Person is required to repay such
refund. The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
33
(b) Each Lender that is not incorporated under the laws of the U.S. or
a State thereof shall:
(1) in the case of a Lender that is a "bank" under Section
881(c)(3)(A) of the Code:
(A) on or before the date of the first payment to such Lender
pursuant to this Agreement following the Syndication Closing Date or on
or before the effective date of the Assignment and Acceptance Agreement
pursuant to which such Person becomes a Lender, deliver to Borrower and
Agent (x) two duly completed copies of U.S. Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case may be,
and (y) a U.S. Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be; and
(B) deliver to Borrower and Agent two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and promptly upon the
occurrence of any event requiring a change in the most recent form
previously delivered by it to Borrower; or
(2) in the case of a Lender that is not a "bank" under Section
881(c)(3)(A) of the Code:
(A) on or before the date of the first payment to such Lender
pursuant to this Agreement following the Syndication Closing Date or on
or before the effective date of the Assignment and Acceptance Agreement
pursuant to which such Person becomes a Lender, deliver to Borrower and
Agent (i) a statement under penalties of perjury that (to the extent
true) such Lender (x) is not a "bank" under Section 881(c)(3)(A) of the
Code, is not subject to regulatory or other legal requirements as a
bank in any jurisdiction, and has not been treated as a bank for
purposes of any tax, securities law or other filing or submission made
to any Governmental Authority, any application made to a rating agency
or qualification for any exemption from tax, securities law or other
legal requirements, (y) is not a 10-percent shareholder within the
meaning of Section 881(c)(3)(B) of the Code and (z) is not a controlled
foreign corporation receiving interest from a related person within the
meaning of Section 881(c)(3)(C) of the Code and (ii) an Internal
Revenue Service Form W-8; and
(B) deliver to Borrower and Agent a further copy of said Form
W-8, or any successor applicable form or other manner of certification
on or before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event requiring a change in the
most recent form previously delivered by such Lender;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders any such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises Borrower and Agent, in which
case such Lender shall provide substitute or replacement forms, if any. Such
Lender shall certify (i) in the case of a Form 1001 or 4224,
34
that it is entitled to receive payments under this Agreement without deduction
or withholding of any U.S. federal income taxes and (ii) in the case of a Form
W-8 or W-9, that it is entitled to an exemption from U.S. backup withholding
tax. Each Person that shall become a Participant pursuant to Section 10.9(d)
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this Section 3.10 to the
Lender from which the related participation shall have been purchased. Borrower
shall be entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the U.S. (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) to
the extent that such Lender has not provided to Borrower on or prior to the date
required pursuant to this Section 3.10(b) the IRS form or forms, if any, so
required to be provided to Borrower, and Borrower shall not be obligated under
this Section 3.10 to gross-up payments to be made to such a Lender in respect of
income or similar taxes imposed by the U.S. if such Lender has not provided to
Borrower on or prior to the date so required the IRS form or forms required to
be provided to Borrower pursuant to this Section 3.10(b).
(c) Each Lender agrees to use reasonable efforts, including reasonable
efforts to change its lending office, to avoid or to minimize any amounts which
might otherwise be payable pursuant to Sections 3.9 and 3.10, provided that such
efforts do not cause the imposition on such Lender of additional costs or legal
or regulatory burdens deemed by such Lender to be material in the context.
3.11 Sharing of Payments. If any Lender obtains any payment in excess
of its Pro Rata Share of payments on account of the Revolver Loans (whether
through direct payment, right of setoff, banker's lien, counterclaim, or any
other means, including direct payment), such Lender shall immediately purchase
from the other Lenders with Revolver Commitments portions of their Revolver
Loans sufficient to cause that Lender to share the excess payment ratably with
all the other Lenders, and the Lenders shall otherwise take such actions as
shall be reasonably requested by Agent to cause such excess payment to be
equitably shared by all Lenders in proportion to Pro Rata Shares.
3.12 Administrative Fee. Borrower shall pay Administrative Agent the
Administrative Fee in equal quarterly installments in advance, each due on the
first day of a Fiscal Quarter, except that the first installment, prorated,
shall be due promptly upon billing by Administrative Agent after the Closing
Date. Notwithstanding anything to the contrary in this Agreement, no Lender
(other than Administrative Agent) shall have any interest in, or right to
receive any portion of, Administrative Fee.
ARTICLE 4 CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The obligation of each Lender to fund
its Pro Rata Share of the initial Revolver Loan (if any disbursements thereof
are made on the Closing Date or the Syndication Closing Date, as applicable) are
subject to the satisfaction or waiver of the following conditions precedent on
the Closing Date (or the Syndication Closing Date, as applicable):
35
(a) Closing Documents List. Agent and the Lenders shall have received
each of the agreements, opinions, reports, approvals, consents, certificates and
other documents set forth on the Closing Documents List, each duly executed
(where applicable) and delivered by all appropriate Persons and in form and
substance satisfactory to Agent and the Lenders.
(b) Liquidity and Financial Compliance. Agent and the Lenders shall
have received evidence satisfactory to them that Borrower will be in full
compliance with this Agreement (including the financial covenants contained in
Section 7.1) after giving effect to consummation of the transactions completed
herein and the making of any initial advance of the Revolver Loan to be funded
on the Closing Date or the Syndication Closing Date, as applicable.
(c) Fees and Expenses. All Fees and Expenses (including reasonable
attorneys' fees and expenses) payable on or before the Syndication Closing Date
shall have been paid in full, including all fees and other sums payable by
Borrower pursuant to that certain engagement letter dated January 30, 1998,
between Borrower and Arranger. (Notwithstanding the foregoing, Agent may
determine to defer Borrower's obligation to pay for certain Expenses until some
later date. Accordingly, Agent's failure to require Borrower to pay any such
Expenses as of the Closing Date or the Syndication Closing Date shall not be
deemed a waiver of Agent's right to require Borrower to pay such Expenses at a
later date as determined by Agent.)
(d) Structure; Due Diligence. Agent and each Lender shall have reviewed
and be satisfied with the structure, prospective liabilities (including
environmental and pension liabilities) and regulatory compliance of Borrower and
its Subsidiaries, including review of a completed audit report by Xxxxxx
Xxxxxxxx LLP and review of insurance certificates, copies of which shall have
been provided to Agent and each Lender.
(e) No Material Adverse Change. There shall not have been any material
adverse change in the financial condition, assets, operation or prospects of
Borrower since the Last Financial Statement Date.
(f) Additional Documents. Borrower and its Subsidiaries shall have
executed and delivered (or caused to be executed and delivered) to Agent for
distribution to the Lenders any and all other information, agreements,
instruments, certificates, opinions and other documents regarding the
transactions contemplated hereby as Agent or any Lender shall request.
4.2 Conditions Precedent to All Loans. The obligation of each Lender to
fund its Pro Rata Share of any requested Loan is subject to the following
additional conditions precedent, and each Notice of Borrowing and each
acceptance of the proceeds of a Loan shall constitute a representation and
warranty by Borrower that such conditions are satisfied:
(a) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Credit Documents shall be true and
correct in all material respects on and as of the date of such Notice of
Borrowing and on and as of the date such
36
Loan is made, as if then made, other than representations and warranties that
expressly relate solely to an earlier date;
(b) No Defaults. No Default or Event of Default shall have occurred, or
would result from the making of the requested Loan, which has not been waived;
and
(c) No Adverse Change. No event shall have occurred since the Last
Financial Statement Date, which has had or would reasonably be expected to have
a Material Adverse Effect.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES.
To induce Agent and the Lenders to enter into this Agreement and to
make the Loans and other financial accommodations described herein, Borrower
hereby represents and warrants to Agent and the Lenders that as of the Closing
Date and the Syndication Closing Date the following representations and
warranties are true in all material respects. Such representations and
warranties, and all other representations and warranties made by any Credit
Party in any other Credit Document, shall survive the execution and delivery of
the Credit Documents.
5.1 Organization and Qualification. Each Credit Party (i) is a
corporation, limited liability company, partnership or real estate investment
trust duly organized or formed, validly existing and, if applicable, in good
standing under the laws of the state of its formation; (ii) has the power and
authority to own its properties and assets and to transact the businesses in
which it is engaged; and (iii) is duly qualified and is authorized to do
business and, if applicable, is in good standing in each jurisdiction where it
is engaged in business and where such qualification is required, except where
failure to comply with any of the foregoing would not have a Material Adverse
Effect. As of the Syndication Closing Date, Section 5.1 of the Disclosure
Schedule lists all jurisdictions in which the Credit Parties are qualified to do
business as foreign entities.
5.2 Authority. Each Credit Party has the requisite organizational power
and authority to execute, deliver and perform each of the Credit Documents to
which it is a party. All organizational action necessary for the execution,
delivery and performance of each of the Credit Documents by each Credit Party
which is a party thereto has been taken.
5.3 Enforceability. This Agreement and each other Credit Document is
the legal, valid and binding obligation of each Credit Party which is a party
thereto, enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether enforceability is considered in a
proceeding in equity or at law).
5.4 No Conflict. The execution, delivery and performance of each Credit
Document by each Credit Party which is a party thereto are not in contravention
of any Requirement of Law or any indenture, contract, lease, agreement,
instrument or other
37
commitment to which any Credit Party is a party or by which any Credit Party or
any of their properties are bound and will not result in the imposition of any
Liens upon any of the property of any Credit Party (other than Liens in favor of
Agent).
5.5 Consents and Filings. No authorization, consent, approval, order,
license or permit from, or filing, registration or qualification with, any
Person is required in connection with the execution, delivery and performance of
this Agreement or any other Credit Document, except those that have been
obtained or made.
5.6 Government Regulation. Neither Borrower nor any Subsidiary is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of
1940, nor is Borrower or any Subsidiary subject to any other Requirement of Law
which purports to regulate or restrict its ability to borrow money or grant
Liens on its assets.
5.7 Solvency. Both before and after giving effect to the transactions
contemplated in this Agreement: (i) the fair saleable value of the assets of
each Credit Party is not less than the amount that will be required to pay the
probable liabilities of such Credit Party on its existing debts as they become
due; (ii) no Credit Party is engaged in, or about to become engaged in, a
business or transaction for which such Credit Party's property would constitute
unreasonably small capital in relation to such business or transaction; and
(iii) no Credit Party has incurred, intends to incur or believes that it will
incur, debts and liabilities beyond its ability to pay as such debts and
liabilities become absolute and matured.
5.8 Financial Data.
(a) Borrower has provided to Agent complete and accurate copies of
annual audited Financial Statements for the Fiscal Years 1995, 1996 and 1997
(and, after the Closing Date, for any Fiscal Year as to which this Agreement
requires Borrower to have delivered annual audited Financial Statements), and
unaudited Financial Statements for the partial Fiscal Year ended on the Last
Financial Statement Date (and, after the Closing Date, for any period as to
which this Agreement requires Borrower to have delivered unaudited partial-year
Financial Statements). All such Financial Statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved and
fairly present the respective consolidated financial positions, results of
operations and cash flows of Borrower as at such dates and for such periods,
except as otherwise specifically described in the notes to any of such Financial
Statements. As of the date of the most recent Financial Statements delivered to
Agent and each Lender, neither Borrower nor any of its Subsidiaries has any
Contingent Obligation, contingent liability or liability for taxes, long-term
leases or commitments which is not reflected in such Financial Statements but,
pursuant to GAAP, would be required to be reflected in such Financial
Statements.
(b) Borrower has provided to Agent complete and accurate copies of the
pro forma balance sheet of Borrower as of the Closing Date, giving effect to the
transactions contemplated in this Agreement to occur on the Closing Date. Such
pro forma balance sheet fairly presents the pro forma combined financial
condition of Borrower and all other Credit Parties as of the Closing Date,
giving effect to such transactions.
38
(c) As of the Syndication Closing Date, no event has occurred since
Borrower has filed with the United States Securities and Exchange Commission
Borrower's quarterly report on form 10-Q with respect to Borrower's Fiscal
Quarter that ended on March 31, 1998 which has had or would reasonably be
expected to have a Material Adverse Effect on the financial condition of
Borrower.
5.9 Names. As of the Syndication Closing Date, the only names under
which each Credit Party has conducted business during the last five years are
listed in Section 5.9 of the Disclosure Schedule.
5.10 Locations of Offices, Records and other Property. The address of
the principal place of business and chief executive office of each Credit Party
is set forth in Section 5.10 of the Disclosure Schedule (or has changed since
the Closing Date to another location as to which Borrower has complied with the
requirements of Section 7.3(f)). The books and records of each Credit Party are
maintained exclusively at such locations. The location of all real property
owned or leased by any Credit Party is set forth in Section 5.10 of the
Disclosure Schedule, except for real property first owned or leased after the
Closing Date, as to all of which Borrower has complied with the requirements of
Section 7.3(f). There is no jurisdiction in which any Credit Party owns or
leases any real property other than those jurisdictions identified in Section
5.10 of the Disclosure Schedule.
5.11 Subsidiaries; Ownership of Stock. The only direct or indirect
Subsidiaries of Borrower (after the Closing Date, other than Subsidiaries
established or acquired in accordance with Section 7.7(c)) are those listed in
Section 5.11 of the Disclosure Schedule. Section 5.11 of the Disclosure Schedule
correctly indicates, for each Subsidiary that is not a Guarantor, the basis for
such Subsidiary's not being a Guarantor. Borrower is the record and beneficial
owner of all of the Capital Stock of each of its Subsidiaries except as provided
in Section 5.11 of the Disclosure Schedule or, after the Closing Date, as
otherwise disclosed in writing to Agent and not in violation of this Agreement.
Except as set forth in Section 5.11 of the Disclosure Schedule or, after the
Closing Date, as otherwise disclosed in writing to Agent, there are no proxies,
irrevocable or otherwise, with respect to such Capital Stock, and no equity
securities of any of such Subsidiaries are or may become required to be issued
by reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any Capital Stock of any such Subsidiary,
and there are no contracts, commitments, understandings or arrangements by which
any such Subsidiary is or may become bound to issue additional Capital Stock or
securities convertible into or exchangeable for such Capital Stock. All of such
Capital Stock so owned by Borrower is owned by Borrower free and clear of any
Liens other than Permitted Liens.
5.12 Litigation. Except as set forth in Section 5.12 of the Disclosure
Schedule, no judgments, orders, writs or decrees are outstanding against or
affecting any Credit Party or any of the properties, rights, revenues or assets
of any Credit Party, nor is there now pending or, to the best of Borrower's
knowledge, threatened, any litigation, claim, investigation, arbitration, or
other proceeding against or affecting any Credit Party or any of the properties,
rights, revenues or assets of any Credit Party, including any counterclaim
39
brought in a litigation or arbitration in which any Credit Party is the
plaintiff that would result in a Material Adverse Effect.
5.13 No Defaults. To Borrower's knowledge, no Credit Party is in
default under any term of any indenture, contract, lease, agreement, instrument
or other commitment to which it is a party or by which it is bound and Borrower
knows of no dispute regarding any such indenture, contract, lease, agreement,
instrument or other commitment, in either case, which default would have a
Material Adverse Effect.
5.14 Labor Matters. There are no labor contracts to which any Credit
Party is a party. No Credit Party is engaged in any unfair labor practice that
would reasonably be expected to have a Material Adverse Effect. There is no
strike, labor dispute, union organizing activity, slowdown or stoppage pending
or, to the best knowledge of Borrower, threatened against any Credit Party
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
5.15 ERISA. No ERISA Affiliate maintains or contributes to any Plan or
is obligated to do so. No Credit Party, ERISA Affiliate, or fiduciary of any
Plan is subject to any direct or indirect liability with respect to any Plan
under any Requirement of Law or agreement.
5.16 Compliance with Law.
(a) Generally. Neither Borrower nor any other Credit Party has violated
or failed to comply with any Requirement of Law, which failure would have a
Material Adverse Effect.
(b) Compliance with Environmental Laws.
(1) Except as set forth in Section 5.16 of the Disclosure Schedule or
that would not have a Material Adverse Effect, (A) each of the Credit Parties
and, to Borrower's knowledge, Environmental Affiliates are in compliance in all
material respects with all applicable Environmental Laws, (B) each of the Credit
Parties and, to Borrower's knowledge, Environmental Affiliates have all
Environmental Approvals required to operate their businesses as presently
conducted, (C) none of the Credit Parties has received and, to the best of
Borrower's knowledge, no Environmental Affiliate has received any communication
from a Governmental Authority, employee or any other Person or group that
alleges that such Credit Party is not in compliance in all material respects
with all Environmental Laws (which, if first received after the Closing Date,
has not been disclosed to the Lenders if and to the extent required under
Section 6.2(b)) and (D) to Borrower's knowledge, there are no circumstances
known to Borrower which may prevent or interfere with such compliance in the
future.
(2) Except as set forth in Section 5.16 of the Disclosure Schedule or
which would not have a Material Adverse Effect: there is no Environmental Claim
pending or threatened against any Credit Party or, to Borrower's knowledge,
Environmental Affiliate which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse
40
Effect; and, to Borrower's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including the
release, emission, discharge or disposal of any Material of Environmental
Concern, that would reasonably be expected to form the basis of any
Environmental Claims against any Credit Party or Environmental Affiliate, which
Environmental Claims, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
(3) Without limiting the generality of the foregoing, except as
disclosed in any environmental report made available to Agent or in Section 5.16
of the Disclosure Schedule, to Borrower's knowledge: (i) there are no on-site or
off-site locations at which any Credit Party or Environmental Affiliate has
stored, disposed of or arranged for the disposal of Materials of Environmental
Concern; (ii) there are no underground storage tanks located on property owned
or leased by any Credit Party or Environmental Affiliate; (iii) there is no
asbestos contained in or forming part of any building, building component,
structure or office space owned or leased by any Credit Party or Environmental
Affiliate; and (iv) no polychlorinated biphenyls ("PCB's") are used or stored at
any property owned or leased by any Credit Party or Environmental Affiliate, in
any such case that is reasonably expected to have a Material Adverse Effect.
5.17 Taxes and Tax Returns. Each Credit Party has timely filed all tax
returns it is required to file and has paid all taxes, penalties, assessments
and other governmental charges payable by it which have become due, other than
those not yet delinquent and those being contested in good faith by appropriate
proceedings and for which adequate reserves have been made in conformity with
GAAP. The information filed in such tax returns is accurate and complete in all
material respects. All deductions taken in such income tax returns are
appropriate and in accordance with applicable laws and regulations in all
material respects. No tax Liens have been filed against any assets of any Credit
Party. No deficiencies for taxes have been claimed, proposed or assessed by any
taxing or other Governmental Authority against any Credit Party; there are no
pending or threatened audits, investigations or claims for or relating to any
liability for taxes and there are no matters under discussion with any
Governmental Authority that, in any such case, could result in a material
additional liability for taxes and which would reasonably be expected to have a
Material Adverse Effect. No federal income tax returns of any Credit Party have
been audited by the Internal Revenue Service as of the Syndication Closing Date.
Except as set forth in Section 5.17 of the Disclosure Schedule, no extension of
a statute of limitations relating to taxes, assessments, fees or other
governmental charges is in effect with respect to any Credit Party. No Credit
Party has any obligation under any written tax sharing agreement or agreement
regarding payments in lieu of income taxes with any Person other than another
Credit Party.
5.18 Intellectual Property. Each Credit Party has obtained and holds in
full force and effect all Intellectual Property, free from burdensome
restrictions, which are necessary for the operation of its business as presently
conducted, except where failure to obtain and/or hold such Intellectual Property
would not have a Material Adverse Effect. No product, process, method,
substance, part or other material presently sold or employed by any Credit Party
in connection with such business infringes any Intellectual Property owned by
any other Person.
41
5.19 Licenses and Permits. Each Credit Party has obtained and holds in
full force and effect, free from burdensome restrictions, all franchises,
licenses, leases, permits, certificates, authorizations, qualifications,
easements, rights of way and other rights and approvals which are necessary for
the operation of its business as presently conducted, except where the failure
to obtain such rights and approvals, individually and in the aggregate, would
not be reasonably expected to have a Material Adverse Effect. No Credit Party is
in violation of the terms or conditions of any such right or approval, which
violation would reasonably be expected to have a Material Adverse Effect.
5.20 Material Contracts. Section 5.20 of the Disclosure Schedule
contains a true, correct and complete list of all the Material Contracts in
effect on the Syndication Closing Date. Except as described in Section 5.20 of
the Disclosure Schedule and except as would not reasonably be expected to have a
Material Adverse Effect, no Material Contract contains any burdensome
restrictions on any Credit Party or any of their respective properties, all of
the Material Contracts are in full force and effect, and, to Borrower's
knowledge, no material defaults currently exist thereunder.
5.21 Use of Proceeds. No part of the proceeds of any Loan will be used
by any Credit Party to purchase or carry any Margin Stock or to extend credit to
any other Person for the purpose of purchasing or carrying any Margin Stock or
for any other purpose in violation of any Requirement of Law or the terms and
conditions of any of the Credit Documents. Neither the making of any Loan nor
the use of the proceeds thereof has been or will be in violation of or
inconsistent with the provisions of Regulations G, T, U or X of the Federal
Reserve.
5.22 Accuracy and Completeness of Information. To Borrower's knowledge,
all factual information furnished by or on behalf of any Credit Party in writing
to Agent, any Lender, or the directors, officers, employees, independent
contractors and agents of any of them for purposes of or in connection with this
Agreement or any other Credit Documents, or any transaction contemplated hereby
or thereby is or will be true and accurate in all material respects on the date
as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information not
misleading at such time.
5.23 Leases and Management Agreements. Section 5.23 of the Disclosure
Schedule correctly identifies all Leases and Management Agreements to which any
Credit Party is a party as of the Syndication Closing Date. To the extent that
such Section summarizes Base Rent of Leases and other economic terms of Leases
and Management Agreements, such summary is accurate and correct in all material
respects. All Leases and Management Agreements listed in such Section are in
full force and effect and have not been amended, modified, terminated or waived
in any way, orally or in writing except as disclosed in the Disclosure Schedule.
No material default beyond the expiration of any applicable notice or cure
period exists under any such Lease to which any Credit Party is a party or, to
the best of Borrower's knowledge, under any Management Agreement (whether or not
a Credit Party is a party thereto). All Leases in each of the seven groups of
Leases set forth in Section 5.23 of the Disclosure Schedule are on substantially
the same terms and conditions (other than as to amount of Base Rent and
percentage rent and identity of the leased premises).
42
5.24 Title to Hotels. As to all or substantially all of the Hotels,
Borrower or a Subsidiary is the insured under a policy of title insurance issued
by a title insurer licensed to do business in the jurisdiction where such Hotel
is located. As to each such policy of title insurance: (a) the coverage amount
equals or exceeds the Acquisition Cost of the related Hotel; (b) exceptions to
title do not include any Liens, except for Permitted Liens and Liens that have
been repaid as of the Closing Date; (c) no claims are pending that, if adversely
determined, would have a Material Adverse Effect; and (d) no title insurer has
given notice to the insured Person that such policy of title insurance is no
longer in effect. Except for Permitted Liens, neither Borrower nor any
Subsidiary has knowledge of any defect in title that could, individually or in
the aggregate, have a Material Adverse Effect. Borrower represents and warrants
that as of the Closing Date, Borrower has terminated and repaid all previously
existing secured debt of Borrower or any other Credit Party. To the extent, if
any, that any mortgages, deeds, of trust, and other security documents relating
to such secured debt (the "Former Mortgages") have not been released of record
as of the Closing Date: (a) Borrower represents and warrants that Borrower has
received documents that Borrower has been advised by the holder of the Former
Mortgages constitute release and satisfaction documents for all the Former
Mortgages; and (b) Borrower shall, on or before July 1, 1998, submit all such
releases and satisfactions to the appropriate public offices for recordation.
Provided that Borrower performs its obligations under the preceding sentence,
the Former Mortgages shall not be deemed a breach of this paragraph or of any
other provision of this Agreement.
5.25 REIT Compliance. Borrower fully complies with all requirements for
qualification as a REIT and has done so since its inception, except where the
failure to qualify would not have a Material Adverse Effect. None of the assets
owned, or hereafter to be acquired, by Borrower or any Subsidiary constitute (or
will constitute) property held primarily for sale to customers in the ordinary
course of Borrower's trade or business.
5.26 Insurance. All Leases require the Lessees thereunder to maintain
with respect to the Hotels insurance coverage of a nature, on terms, and
providing coverage in accordance with the insurance that a commercially
reasonable person would maintain with respect to similar properties and a
similar business. No Credit Party has received notice that any such insurance
has been cancelled, nonrenewed, or impaired in any way.
5.27 Year 2000 Problem. Borrower has reviewed its operations and those
of its Subsidiaries and of Investment Manager with a view to assessing whether
its or any of their respective businesses will, in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission, or other
utilization of data be vulnerable to a Year 2000 Problem. Based on such review,
Borrower has no reason to believe that a Material Adverse Effect will occur with
respect to its or its Subsidiaries' business or operations resulting from a Year
2000 Problem.
5.28 Certificates and Deliveries. At all times until all Obligations
have been paid in full and all Commitments have terminated, all Compliance
Certificates and other certificates, deliveries and reports delivered by
Borrower to Agent or any Lender pursuant to this Agreement are and shall be true
and correct in all material respects. Without limiting the generality of the
foregoing, at all times the most recent Compliance Certificate delivered by
43
Borrower accurately describes the Unencumbered Pool and the basis upon which
each and every Hotel in the Unencumbered Pool qualifies for inclusion in the
Unencumbered Pool.
5.29 Merger of Certain Subsidiaries. HPTWN Properties Trust is the
successor by merger to HPTWN Corporation and has assumed all the rights and
obligations of HPTWN Corporation; HPTCY Properties Trust is the successor by
merger to HPTCY Corporation and has assumed all the rights and obligations of
HPTCY Corporation; and HPTSLC Properties Trust is the successor by merger to
HPTSLC Corporation and has assumed all the rights and obligations of HPTSLC
Corporation.
ARTICLE 6 AFFIRMATIVE COVENANTS
Until termination of the Commitments and this Agreement and full and
final payment and satisfaction of all Obligations due hereunder or under any
other Credit Document:
6.1 Financial Reporting. Borrower shall timely deliver to Agent
(separately to each notice recipient for Agent as listed in Annex I) the
following information:
(a) Annual Financial Statements. As soon as available, but not later
than ninety (90) days after each Fiscal Year end: (i) Borrower's annual
consolidated audited Financial Statements; (ii) a comparison in reasonable
detail to the prior year audited Financial Statements; (iii) the Auditors'
unqualified opinion; (iv) a "Management Letter," if any, prepared by the
Auditors; (v) a narrative discussion of Borrower's consolidated financial
condition and results of operations and the consolidated liquidity and capital
resources for such Fiscal Year, prepared by the chief financial officer of
Borrower; and (vi) a Compliance Certificate.
(b) Projections. Not later than thirty (30) days prior to the
commencement of each Fiscal Year, projections of Borrower's financial condition,
operating budgets, and results of operations for such Fiscal Year, containing
projected consolidated annual balance sheets and statements of operations,
certified by Borrower's chief financial officer as having been made reasonably,
in good faith, and based upon the facts reasonably known to management at the
time.
(c) Quarterly Financial Statements. As soon as available, but not later
than forty-five (45) days after the end of each Fiscal Quarter (other than the
fourth Fiscal Quarter of each Fiscal Year, as to which fourth Fiscal Quarter
reports under this paragraph shall not be required): (i) Borrower's Financial
Statements as of the Fiscal Quarter then ended, and for the Fiscal Year to date;
(ii) a comparison in reasonable detail to the Financial Statements for the
corresponding periods of the prior Fiscal Year; and (iii) the certification of
the chief executive officer or chief financial officer of Borrower that such
Financial Statements have been prepared in accordance with GAAP (subject to
year-end audit adjustments).
(d) Quarterly Supplemental Information. As soon as available, but not
later than forty-five (45) days after the end of each Fiscal Quarter: (i) a
narrative discussion of Borrower's consolidated financial condition and results
of operations and the consolidated liquidity and capital resources for such
Fiscal Quarter and Fiscal Year to date, prepared by
44
the chief financial officer of Borrower; (ii) a Compliance Certificate; and
(iii) a report on all material acquisitions and dispositions of assets by
Borrower and its Subsidiaries during the Fiscal Quarter (to the extent not
otherwise disclosed in the Compliance Certificate).
(e) Changes in GAAP. All accounting determinations for purposes of
determining compliance with the financial covenants contained in this Agreement
shall be made in accordance with GAAP as in effect on the Closing Date and
applied on a basis consistent in all material respects with the audited
Financial Statements delivered to Agent on or before the Closing Date. The
Financial Statements required to be delivered hereunder from and after the
Closing Date, and all financial records, shall be maintained in accordance with
GAAP. If (a) GAAP shall change from the basis used in preparing the audited
Financial Statements delivered to Agent on or before the Closing Date, (b)
Borrower (with the consent of the Auditor) intends to institute any such change
and so notifies Agent, and (c) such change would result in a change in the
method of calculation of any of the covenants, standards or terms in this
Agreement, the parties hereto agree to enter into negotiations to amend such
provisions so as equitably to reflect such change, with the desired result that
the criteria for evaluating compliance with such covenants, standards and terms
shall be the same after such change as if such change had not been made and will
only be adjusted to reflect such change in GAAP; provided, however, that no
change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms of this Agreement or of any other Credit Document
shall be given effect for purposes hereof or thereof until the applicable
provisions are amended, in a manner satisfactory to Required Lenders and
Borrower, to so reflect such change in accounting principles. Until such an
amendment is so agreed, the certificates required to be delivered pursuant to
Section 6.1 demonstrating compliance with the covenants contained herein shall
include calculations setting forth the adjustments necessary to demonstrate how
Borrower is in compliance with the financial covenants based upon GAAP as in
effect on the Closing Date.
(f) Further Assurances. When requested by Agent or any Lender, any
further information regarding the business affairs and financial condition of
all or any of the Credit Parties, or any matter that is the subject of any
representation, warranty, covenant or other obligation contained in this
Agreement provided such information is available to or can be obtained by or
calculated by Borrower. Without limiting the generality of the foregoing,
Borrower shall within five (5) Business Days after request by Agent or any
Lender, which request may be made at any time but no more frequently than once
in any thirty-day period, deliver to Agent an updated and current Compliance
Certificate.
(g) Material Mortgagors and Material Lessees. Borrower shall, with
respect to each material mortgagor under any Permitted Mortgage Investment and
with respect to each Material Lessee, deliver to Agent the same reports and
information required by Sections 6.1(a)(i)(ii) and (iii) and (c)(i) and (ii),
except that: (i) every reference to Borrower and its Subsidiaries shall be
deemed to refer to such material mortgagor or Material Lessee; and (ii) the time
periods within which Borrower shall deliver such reports as to material
mortgagors and Material Lessees shall each be thirty days longer than the time
periods set forth in Sections 6.1(a) and (c).
45
(h) Failure to Timely Deliver. At any time when Borrower has failed
timely to deliver any information required to be delivered by this Agreement,
Agent may in Agent's discretion estimate the information that Borrower should
have, but failed to, deliver. All rights and obligations under this Agreement
(including Borrower's compliance with the financial covenants in Section 7.1 and
the occurrence of any Default or Event of Default) shall be determined based on
such estimated information unless and until Borrower shall have delivered actual
information in compliance with this Agreement. Nothing in this paragraph shall
be deemed to waive any Default or Event of Default arising from Borrower's
failure to deliver any information required by this Agreement.
(i) Securities and Exchange Commission Filings. Within five business
days after Borrower makes any SEC Filing, Borrower shall provide Agent with a
complete and accurate copy of such SEC Filing. Within ten business days after
Borrower becomes aware of any SEC Filing relating to Borrower made by a third
party, Borrower shall provide Agent with a complete and accurate copy of such
SEC Filing.
6.2 Notification Requirements. Borrower shall timely give Agent
(separately to each notice recipient for Agent designated on Annex I) the
following notices, each in reasonable detail:
(a) Notice of Defaults, Proceedings and Adverse Changes. Promptly, and
in any event within two (2) Business Days after Borrower becomes aware of any of
the following, a certificate of the chief executive officer or chief financial
officer of Borrower specifying the nature thereof and describing the event or
condition and any action taken or planned to be taken with respect thereto by
any Credit Party: (1) the occurrence of an Event of Default; (2) any proceeding
being instituted or threatened to be instituted (including pursuant to a cross-
claim or counterclaim) against any Credit Party in or before any federal, state,
local or foreign court, commission or other regulatory body that, if adversely
determined, would have a Material Adverse Effect; (3) any order, judgment or
decree being entered against any Credit Party or to Borrower's knowledge any of
its properties or assets that would have a Material Adverse Effect; (4) any
breach, modification, or termination of any Material Contract; or (5) any actual
change, development or event which has had or would reasonably be expected to
have a Material Adverse Effect.
(b) Environmental. Promptly and in any event within two Business Days
after the occurrence of any of the following events or conditions, a certificate
of the chief executive officer or chief financial officer of Borrower specifying
the nature of such condition and the applicable Credit Party's or Environmental
Affiliate's proposed response thereto: (1) the receipt by any Credit Party or to
Borrower's knowledge any of its Environmental Affiliates of any communication
from a Governmental Authority, employee or other Person or group that alleges
that a Credit Party or Environmental Affiliate is not in substantial compliance
with applicable Environmental Laws; (2) any Credit Party shall obtain actual
knowledge that there exists any Environmental Claim pending or threatened
against a Credit Party or Environmental Affiliate that, if adversely determined,
would have a Material Adverse Effect; or (3) any release, emission, discharge or
disposal of any Material of Environmental Concern that could form the basis of
any Environmental Claim against any Credit Party or Environmental Affiliate
that, if adversely determined, would have a Material Adverse Effect.
46
(c) ERISA Notices. Promptly, and in any event within five (5) Business
Days after receipt, any notice relating to any Credit Party's compliance with,
or obligations under, ERISA.
(d) New Material Contracts. Within five (5) Business Days after being
entered into, Borrower's entry into any new Material Contract, together with a
copy thereof and of all related or ancillary documentation.
(e) Certain Changes. At least ten (10) Business Days prior written
notice to Agent of any change in Borrower's name, identity or structure from
that described herein.
(f) Additions to Unencumbered Pool. Within ten (10) Business Days after
Borrower's acquisition of any new Hotel to be added to the Unencumbered Pool or
any change affecting a previously existing Hotel so that such Hotel will qualify
to be included in the Unencumbered Pool, notice of such acquisition or
modification, setting forth: (a) the Acquisition Cost; and (b) as to such Hotel
only, the same information that Borrower would be required to include in a
Compliance Certificate. Such notice shall be accompanied by a copy of the Lease
and Management Agreement for such Hotel and copies of any Due Diligence Reports
for such Hotel not previously delivered to Agent.
(g) Removals from Unencumbered Pool. Within ten (10) Business Days
after Borrower's disposition or other removal of any Hotel from the Unencumbered
Pool or after any Hotel previously in the Unencumbered Pool otherwise ceases to
qualify for inclusion in the Unencumbered Pool, notice of such disposition,
removal, or disqualification, setting forth: (a) the identity of the Hotel(s)
being disposed of, removed, or disqualified; and (b) the Assigned Value of such
Hotel(s).
6.3 Trust Existence. Borrower shall, and shall cause each Subsidiary of
Borrower to, (i) maintain its existence, (ii) maintain in full force and effect
all licenses, bonds, franchises, leases, trademarks and qualifications to do
business, and all patents, contracts and other rights necessary to the conduct
of their businesses, except where the failure to maintain such rights would not
reasonably be expected to have a Material Adverse Effect, and (iii) continue in,
and limit their operations to, the Business. Nothing in this paragraph shall be
deemed to prevent the transfer of interests in, or Borrower's terminating and/or
liquidating Subsidiaries from time to time, provided that after such transfer,
termination and/or liquidation Borrower and its remaining Subsidiaries are in
full compliance with this Agreement in all material respects.
6.4 Books and Records; Inspections. Borrower shall maintain, and shall
cause each other Credit Party to maintain, proper books and records in which
entries in conformity with GAAP and all requirements of law shall be made of,
and which entries shall fairly reflect, all transactions and dealings in
relation to its business and activities and books and records pertaining thereto
in such detail, form and scope as is consistent with good business practice.
Borrower agrees that Agent or its agents and any Lender may enter upon the
premises of Borrower at any time and from time to time, during normal business
hours and upon reasonable notice under the circumstances, and at any time at all
on and after the occurrence and during the continuance of an Event of Default,
for the purposes of discussing
47
the affairs, finances and business of any Credit Party with any officers,
employees and directors of any Credit Party.
6.5 Borrower's Calculations and Certifications. Wherever this Agreement
requires or permits Borrower to calculate any amount or ratio, or certify as to
any factual matter, Agent shall have the right, but not the obligation, to
require Borrower to promptly provide reasonable substantiation and backup for
Borrower's determination, all in a manner satisfactory to Agent, and Agent and
Agent's representatives and advisers shall have the right to inspect and review
Borrower's books and records to audit and/or otherwise determine the correctness
of Borrower's calculation or certification. If Agent determines that Borrower's
calculation or certification was incorrect, or that Agent cannot promptly
affirmatively confirm that it was correct, then Agent shall have the right but
not the obligation to replace Borrower's calculation or certification with an
estimate made in good faith by Agent or Agent's advisors or consultants. Such
estimate shall then apply for all purposes of this Agreement (including as to
Borrower's compliance with the financial covenants contained in Section 7.1 and
the occurrence or nonoccurrence of a Default or an Event of Default) unless and
until Agent has accepted Borrower's calculation or certification as to the
matter in question. Nothing in this paragraph shall be deemed to waive any
Default or Event of Default arising from Borrower's failure to accurately
deliver any certificate or calculation required by this Agreement.
6.6 Taxes. Borrower agrees to pay, when due, and to cause each other
Credit Party and to pay when due, all taxes lawfully levied or assessed against
Borrower or any other Credit Party or any of Borrower's or any Credit Party's
property before any penalty or interest accrues thereon; provided, however,
that, unless such taxes have become a federal tax or ERISA Lien on any of the
assets of a Credit Party, no such tax need be paid if the same is being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted and if an adequate reserve or other appropriate provision
shall have been made therefor to the extent required by GAAP.
6.7 Compliance With Laws.
(a) Generally. Borrower agrees to comply, and to cause each other
Credit Party to comply, with all Requirements of Law applicable to the operation
of its business or its assets, unless, so long as no xxxxxx tax or ERISA Lien
arises as a result thereof or in connection therewith, (a) the applicable Credit
Party is contesting such Requirement of Law in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision shall have been made therefor to the
extent required by GAAP, or (b) such failure to comply would not reasonably be
expected to have a Material Adverse Effect.
(b) Environmental Laws. Without limiting the generality of the
foregoing, Borrower shall:
(1) Comply with all Environmental Laws applicable to it, and
obtain, comply with and maintain all Environmental Approvals necessary for its
operations as conducted and as planned to be conducted except where the failure
to comply or maintain
48
would not have a Material Adverse Effect; and (ii) take all reasonable efforts
to ensure that all of its tenants, subtenants, contractors, subcontractors and
invitees comply with all Environmental Laws, and obtain, and comply with, any
and all Environmental Approvals applicable to them except where the failure to
comply or maintain would not have a Material Adverse Effect.
(2) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions, required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings or the failure to
comply would not reasonably be expected to have a Material Adverse Effect.
6.8 Insurance. Borrower and its Subsidiaries shall at all times cause
the applicable Lessees to maintain with respect to the Hotels insurance of a
nature, on terms, and providing coverage in accordance with the insurance that a
commercially reasonable person would maintain with respect to similar properties
and a similar business.
6.9 Fiscal Year. Borrower agrees to maintain its fiscal year, and to
cause each of its Subsidiaries to maintain its fiscal year, as a year ending
December 31.
6.10 Maintenance of Property. Borrower agrees to keep, and to cause
each other Credit Party to keep, all property necessary to their respective
businesses in good working order and condition (ordinary wear and tear excepted)
in accordance with their past operating practices and not to commit any waste
with respect to any of their properties.
6.11 ERISA Documents. Borrower will cause to be delivered to Agent,
upon Agent's request, any document relating to Borrower's or any Subsidiary's
compliance with ERISA.
6.12 Tradenames, Etc. Borrower shall, and shall cause each other Credit
Party to, do or cause to be done, all things necessary to preserve and keep in
full force and effect its patents, trademarks, service marks, trade names,
copyrights, franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals, except where the failure to so preserve any of the
foregoing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or is otherwise expressly permitted by Section
6.3.
6.13 Acquisitions of New Hotels. To the extent that Borrower acquires
Hotels after the Closing Date and desires to include such Hotels in the
Unencumbered Pool, Borrower shall provide Agent with Due Diligence Reports for
any such Hotel(s) at least twenty (20) days before such Hotels shall be included
in the Unencumbered Pool.
6.14 Performance of Obligations. Borrower shall, and shall cause each
other Credit Party to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, debt instrument, lease, undertaking and
contract by which it or any of its
49
properties is bound or to which it is a party (including all Material
Contracts), if the failure to so perform, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
6.15 Advisory Agreement. Borrower shall maintain the Advisory Agreement
in full force and effect at all times after the Closing Date, and shall not
modify or amend the Advisory Agreement in any material respect without Agent's
prior written consent. No later than thirty days before each expiration date of
the Advisory Agreement, (a) Borrower and Investment Manager shall renew the
Advisory Agreement on substantially the same terms as are in effect on the
Closing Date, and (b) Borrower shall provide Agent with a copy of the renewal
Advisory Agreement fully signed by both parties.
6.16 REIT Qualification. Borrower is qualified as a REIT and shall at
all times hereafter continue so to qualify.
6.17 Annual Meetings of Lenders. To the extent (if any) requested by
Agent from time to time, Borrower shall cause the Managing Trustees and
Borrower's other senior executive officers to attend a meeting of the Lenders
annually to discuss the business and affairs of Borrower and the status of the
Loans. Each such meeting shall be held on a mutually agreeable date, upon
reasonable notice to all Lenders, within 100 days after the end of Borrower's
Fiscal Year, at a location in the Borough of Manhattan or as otherwise agreed by
Borrower and Agent.
6.18 Required Interest Rate Cap. If, at any time, both (a) the sum of
the Ten-Year Treasury Rate plus 1.75% per annum exceeds 9.50% per annum and (b)
any Excess Floating Rate Exposure exists, then within five Business Days after
the occurrence of the foregoing (unless at the end of such five-Business-Day
period either or both of such conditions "a" or "b" has ceased to exist),
Borrower shall purchase and fully pay for Interest Rate Cap(s) from Qualified
Counterparty(ies) (and Borrower shall thereafter maintain and continue such
Interest Rate Cap(s) through the earlier of the Revolver Maturity Date or the
date condition "a" ceases to be satisfied), and enter into such other
documentation in connection therewith as Agent shall reasonably require,
requiring the counterparty to make a stream of payments equal to the outcome,
from time to time, of the following formula:
Payments by = Excess X (Adjusted Eurodollar Rate for a - 9.5% per
Counterparty Floating Rate 30-Day LIBOR Period + Applicable annum)
Exposure Margin for Eurodollar Loans
For purposes of the preceding formula, Excess Floating Rate Exposure and
Applicable Margin shall be determined as of the date that Borrower is required
to provide the Interest Rate Cap. If Excess Floating Rate Exposure or Applicable
Margin changes thereafter, then Borrower shall as requested by Agent promptly
adjust the notional amount or terms of the Interest Rate Cap or deliver
additional Interest Rate Cap(s). If an Interest Rate Cap consists of a "cap,"
then Borrower shall pay the entire cost of the Interest Rate Cap at the time
Borrower is required to obtain it. If Borrower purchases any such Interest Rate
Cap from Agent or any Affiliate of Agent or any Lender, then all rights and
obligations of Borrower under such Interest Rate Cap shall be independent of
Borrower's rights and obligations under
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this Agreement, and for purposes of this Agreement such Interest Rate Cap shall
be deemed to have been issued by a third-party Qualified Counterparty. Any
Interest Rate Cap shall be issued by the Qualified Counterparty directly in
favor of Agent for the benefit of the Lenders. To the extent that Agent receives
any payments under such Interest Rate Cap, Agent shall apply such payments first
against Borrower's obligations under this Agreement and Agent shall promptly
release any excess to Borrower. If at any time Borrower is no longer required to
maintain or continue an Interest Rate Cap pursuant to this paragraph, then
provided that no uncured Event of Default shall have occurred, Agent shall
consent to cancellation of the Interest Rate Cap in place and otherwise
cooperate to facilitate its termination. If an uncured Event of Default occurs,
then Borrower shall no longer have the right to terminate any Interest Rate Cap
that is in place. If at any time Borrower is required to deliver or maintain an
Interest Rate Cap but has not done so, Agent shall be entitled to suspend any
Advances of the Loan. If Borrower fails to obtain an Interest Rate Cap in
Agent's name when and as required by this Agreement, then Agent shall have the
right, without notice to Borrower, to obtain from any Qualified Counterparty
(including Agent or an Affiliate of Agent) such an Interest Rate Cap on terms
satisfactory to Agent in its reasonable discretion. Borrower shall pay all costs
and expenses of Agent in connection therewith, including any fees charged by the
Qualified Counterparty (including Agent or an Affiliate of Agent) issuing such
Interest Rate Cap and any reasonable attorneys' fees and disbursements incurred
by Borrower in connection therewith. Neither Agent nor any Lender shall be
deemed to have assumed any obligations or duties under such Interest Rate Cap,
except to the extent that Agent or a Lender is a Qualified Counterparty under
such Interest Rate Cap and has thereby assumed the obligations of such a
Qualified Counterparty. In such event, if such Qualified Counterparty fails to
perform its obligations under the Interest Rate Cap, then notwithstanding
anything to the contrary in this Agreement Agent shall be entitled to an offset
against any sums otherwise payable to such Qualified Counterparty under this
Agreement. If any Interest Rate Cap (including one required by this sentence)
expires and thereafter (or simultaneously with such expiration) conditions "a"
and "b" set forth at the beginning of this paragraph are satisfied, then
Borrower shall again be obligated to provide an Interest Rate Cap as required by
this paragraph.
6.19 Year 2000 Problems. Borrower shall take all action necessary to
assure that its computer-based system (and those of Investment Manager and of
all Subsidiaries) are able to process effectively data, including dates on and
after January 1, 2000, without any Year 2000 Problem. At the request of Agent or
of any Lender, Borrower shall provide Agent or such Lender with assurances and
substantiations reasonably acceptable to Agent or such Lender as to Borrower's,
its Subsidiaries', and Investment Manager's capability to process data on and
after January 1, 2000 without any Year 2000 Problem.
6.20 Process Agent's Consent. Within thirty days after the Closing
Date, Borrower shall obtain written consent (in form reasonably satisfactory to
Agent) by Corporation Service Company to serve as agent for service of process
pursuant to Section 10.4 of this Agreement.
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ARTICLE 7 FINANCIAL COVENANTS; NEGATIVE COVENANTS
Until termination of the Commitments and this Agreement and full and
final payment and satisfaction of all Obligations due hereunder or under any
other Credit Document, Borrower shall comply with, and, where required, shall
cause each other Credit Party to comply with, the following covenants:
7.1 Financial Covenants. Borrower shall not at any time or for any
period (except where the following financial covenants expressly refer to
compliance as of the end of a Fiscal Quarter, in which cases compliance shall be
tested only at the end of each Fiscal Quarter) cause or permit any one or more
of the following financial covenants not to be satisfied. If for any reason or
at any time (or, where applicable, at the end of a Fiscal Quarter) any one or
more financial ratio(s) or amount(s) set forth below fails to comply with the
requirement set forth below, then regardless of the cause of such noncompliance,
such noncompliance shall constitute a Default under this Agreement.
(a) The aggregate Assigned Value of the portion of the Unencumbered
Pool located in any single "Metropolitan Area" as defined in the Statistical
Abstract of the United States shall at no time be greater than 20% of the
aggregate Assigned Value of the Unencumbered Pool.
(b) The aggregate Assigned Value of the Unencumbered Pool shall at no
time be less than 200% times the sum of (a) the Obligations, plus (b) all other
Consolidated Indebtedness, other than Consolidated Secured Debt, plus (c) the
Recourse Exposure Amount for all Hotels.
(c) The Assigned Value of Hotels owned by Subsidiaries that are neither
(a) Wholly- Owned Subsidiaries nor (b) Guarantors shall at no time be greater
than Ten Percent (10%) of Consolidated Total Assets.
(d) At the end of each Fiscal Quarter, Consolidated EBITDA for the
Unencumbered Pool (considered separately) divided by Consolidated Interest
Expense (excluding Consolidated Interest Expense on Consolidated Secured Debt)
shall be no less than 2.50.
(e) The sum of Consolidated Indebtedness plus Lessee Deposits (Leverage
Ratio) shall at no time be greater than 50% of the aggregate Assigned Value of
all Hotels.
(f) At the end of each Fiscal Quarter, consolidated tangible net worth
of all Credit Parties shall be no less than $900,000,000 plus an amount equal to
80% of gross proceeds to the Credit Parties of all equity offerings (common or
preferred) consummated by any of them after the Closing Date.
(g) Consolidated Secured Debt shall at no time be greater than 35% of
the aggregate Assigned Value of all Hotels.
(h) At the end of each Fiscal Quarter, the Debt Service Coverage Ratio
shall be no less than 2.25 to 1.
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(i) At the end of each Fiscal Quarter, the Interest Expense Coverage
Ratio shall be no less than 2.50 to 1.
(j) Permitted Mortgage Investments as a percentage of Consolidated
Total Assets shall at no time be greater than Twenty Percent (20%).
7.2 Other Assets or Business. No Credit Party shall conduct any
business other than the Business. The Credit Parties shall continue to conduct
business after the Closing Date in substantially the same manner as they
conducted business before the Closing Date, subject to compliance with this
Agreement.
7.3 Additional Indebtedness. Borrower shall not, and shall not permit
any other Credit Party to, directly or indirectly incur, create, assume,
guaranty or suffer to exist any Indebtedness other than the following, subject
in all cases to the restrictions of Section 7.1:
(a) Indebtedness under the Credit Documents;
(b) Indebtedness outstanding on the Closing Date and listed in Section
7.3 of the Disclosure Schedule;
(c) Indebtedness of Borrower to any Subsidiary and Indebtedness of any
Subsidiary to Borrower or any other Subsidiary;
(d) Permitted New Indebtedness;
(e) The Advisory Agreement; and
(f) Contingent Obligations permitted by Section 7.5.
7.4 Liens. Borrower shall not, and shall not permit any other Credit
Party, directly or indirectly, to create, incur, assume, or suffer to exist any
Lien on any Hotel within the Unencumbered Pool now owned or hereafter acquired
except the following Liens ("Permitted Liens"):
(a) Liens granted to the Lenders under the Credit Documents;
(b) Liens listed in Section 7.4 of the Disclosure Schedule;
(c) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers, or landlords, liens for taxes, assessments or other
governmental charges (other than xxxxxx federal tax and ERISA Liens), and other
similar Liens arising by operation of law, in each case for amounts that are not
yet due and payable or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and for which an
adequate reserve or other appropriate provision shall have been made to the
extent required by GAAP, so long as Agent has been notified thereof;
53
(d) any attachment or judgment Liens the existence of which,
individually and in the aggregate, does not constitute an Event of Default under
Section 8.1(k);
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, individually and
in the aggregate, do not materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of Borrower or any of its Subsidiaries;
(f) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(g) deposits to secure trade contracts (other than for borrowed money),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(h) the lessor's interest in property leased to Borrower or any of its
Subsidiaries pursuant to a lease permitted by this Agreement;
(i) a Lessee's interest under a Lease permitted by this Agreement and
the Manager's interest under a Management Agreement permitted by this Agreement;
and
(j) Liens in favor of other Credit Parties securing Permitted New
Indebtedness that is subordinate to the Obligations pursuant to subordination
arrangements satisfactory to Agent.
7.5 Contingent Obligations. Borrower shall not, and shall not permit
any other Credit Party to, directly or indirectly incur, assume, or suffer to
exist any Contingent Obligation, excluding:
(a) the Guaranty and other Contingent Obligations in favor of Agent or
any Lender under the Credit Documents;
(b) surety bonds described in Section 7.4(g);
(c) Contingent Obligations existing on the Closing Date and listed in
Section 7.5 of the Disclosure Schedule; and
(d) Guaranties in favor of Lessees of the obligations of other Credit
Parties under Leases.
7.6 Restricted Payments. Borrower shall not, and shall not permit any
other Credit Party to, directly or indirectly, make or cause to be made any of
the following payments (collectively, the "Restricted Payments") except as
otherwise expressly permitted by this Section 7.6 or with the approval of the
Required Lenders in their sole and absolute discretion: (a) declare or pay any
dividend (other than dividends payable solely in common or preferred stock of
Borrower or dividends payable to the Borrower by any Subsidiary) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
54
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any Capital Stock of any Credit Party, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of any Credit Party, except for
the minimum dividends and distributions required to maintain Borrower's status
as a REIT; (b) make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or analogous
fund) or repurchase of any Indebtedness (other than Indebtedness pursuant to
this Agreement or Indebtedness owing to Borrower from one of its Subsidiaries)
or of any Mandatory Redeemable Obligation; (c) make any payment, whether of
principal or interest, on account of any Indebtedness of any Credit Party which
Indebtedness is subordinate to the Loan; or (d) make any payments to Investment
Manager pursuant to the Advisory Agreement or otherwise. Notwithstanding the
foregoing, Borrower may make any Restricted Payments that would otherwise become
payable in the ordinary course of Borrower's business, provided that: (i) both
before and after making such Restricted Payment no Default or Event of Default
shall exist under this Agreement or any of the other Credit Documents; and (ii)
even after the making of such Restricted Payment, Borrower shall be holding Cash
Equivalents in an amount sufficient to pay the next installment of interest to
become due under this Agreement after first taking into account all other
payments required to be made by or to Borrower on or before the date such
payment of interest is due. Nothing in this paragraph shall prohibit a
Subsidiary that is not a Wholly-Owned Subsidiary from paying required minimum
payments that must be made to partners or members who are not Credit Parties,
pursuant to the terms of the organizational documents of such Subsidiary.
7.7 Investments. Borrower shall not, and shall not permit any other
Credit Party to, directly or indirectly, make any Investment in any Person
(including any director, officer or employee of any Credit Party), whether in
cash, securities, or other property of any kind, other than:
(a) loans, investments and advances between the Credit Parties in
existence as of the Closing Date and described in Section 7.7 of the Disclosure
Schedule;
(b) loans and advances by (i) Borrower to any Subsidiary and (ii) any
Subsidiary to Borrower or any other Subsidiary;
(c) Investments by Borrower in Subsidiaries for the purpose of
capitalization thereof, provided that such Subsidiaries shall be formed solely
for the purpose of conducting the Business;
(e) extensions of trade credit in the ordinary course of business to
Persons who are not Affiliates of Borrower or any of its Subsidiaries;
(f) Cash Equivalents;
(g) Investments in additional Hotels consistent with the Business and
the operation, prosecution, and expansion of the Business, and otherwise in
compliance with this Agreement; and
55
(h) Such other Investments as Required Lenders may approve in writing
in their sole discretion.
7.8 Affiliate Transactions. Borrower shall not, and shall not permit
any other Credit Party to, directly or indirectly, enter into any transaction
with, including, without limitation, the purchase, sale or exchange of property
or the rendering of any service to, any Affiliate of any Credit Party, except in
the ordinary course of and pursuant to the reasonable requirements of the Credit
Party's business, and 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.
7.9 Additional Negative Pledges. Borrower shall not, and shall not
permit any other Credit Party, directly or indirectly, to create or otherwise
cause or suffer to exist or become effective, directly or indirectly, for the
benefit of any party other than Agent and the Lenders, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any Person in the event a Lien is granted to or for the benefit of any other
Person) on the creation or existence of any Lien upon the assets of any Credit
Party except in connection with Permitted New Indebtedness of the affected
Credit Party or (ii) any contractual obligation which may restrict or inhibit
Agent's rights or ability to sell or otherwise exercise its rights or remedies
under any of the Credit Documents after the occurrence of an Event of Default.
Borrower has disclosed to Agent that certain existing Leases or Management
Agreements restrict Borrower from granting Liens upon the related Hotels. Such
existing restrictions shall not be deemed to violate this Agreement. Borrower
represents and warrants that by entering into this Agreement, Borrower is not in
violation of such existing restrictions.
7.10 Additional Subsidiaries. Borrower shall not, and shall not permit
any Credit Party, directly or indirectly, by operation of law or otherwise, to,
merge with, consolidate with, acquire all or substantially all of the assets or
Capital Stock of, or otherwise combine with any Person, other than in connection
with (i) the creation of a Subsidiary after which Borrower and all of Borrower's
Subsidiaries remain in compliance with this Agreement in all material respects,
(ii) a Subsidiary merging with or consolidating into, or acquiring the assets
of, one or more other Subsidiaries, (iii) one or more Subsidiaries engaged in
the Business merging with or consolidating into Borrower, and (iv) any
transaction pursuant to which Borrower or a Subsidiary is the surviving and
continuing entity or succeeds to the business or pursuant to which the acquired
entity survives but becomes a Subsidiary of Borrower and Borrower is in
compliance with this Agreement in all material respects. Any newly formed
Subsidiary shall, simultaneously with its formation, join in the Guaranty unless
such Subsidiary does not satisfy the conditions to be a Guarantor.
7.11 Amendments. Borrower shall not, and shall not permit any other
Credit Party, without the prior written consent of Agent, to amend, supplement
or otherwise modify in any material respect, or waive or release any of its
material rights under or with respect to, (i) the Governing Documents of any
Credit Party (except for Governing Documents of a Subsidiary where the action
being taken has no Material Adverse Effect), (ii) any agreement, instrument or
document (other than a Credit Document) evidencing or relating to Indebtedness
of any Credit Party (other than Indebtedness entirely between or among Credit
56
Parties), (iii) any Lease affecting any Hotel in the Unencumbered Pool, or (iv)
any Management Agreement affecting any Hotel in the Unencumbered Pool (to the
extent of any rights of Borrower or any other Credit Party thereunder).
7.12 Dividends. Except to the extent necessary to permit Borrower to
maintain Borrower's status as a REIT, Borrower shall not pay or declare any
dividend or distribution to shareholders with respect to any Fiscal Year in
excess of the lesser of (a) Ninety-Five Percent (95%) of Funds from Operations
for such Fiscal Year or (b) One Hundred Percent (100%) of Cash Available for
Distribution for such Fiscal Year.
7.13 Certain Transactions. Borrower shall not consummate any purchase
or sale of assets, financing, or other transaction if, after giving effect to
such transaction, a Default or Event of Default will exist hereunder.
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES
8.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) Failure to Pay. Borrower shall fail to pay any principal on any
Loan when due or Borrower shall fail to pay any interest or other amounts
payable under any Credit Document within five (5) Business Days after such
interest or other payment becoming due in accordance with the terms of the
applicable Credit Document.
(b) Breach of Certain Covenants. Any Credit Party shall fail to comply
with any covenant contained in Sections 5.24, 6.3 (as to Borrower only), 7.1,
7.2, 7.3, 7.4, 7.5, 7.6, 7.7, or 7.12 hereof.
(c) Breach of Representation or Warranty. Any material representation
or warranty made or deemed to be made by any Credit Party in this Agreement or
in any other Credit Document (or in any statement, certificate, or calculation
delivered or provided under this Agreement or any other Credit Document), shall
be false or misleading in any material respect when made or deemed to be made.
(d) Other Defaults. Any Credit Party shall fail to comply with any
provisions contained in this Agreement or any other Credit Document, other than
as set forth in Sections 8.1(a) and 8.1(b), and such failure shall continue for
thirty (30) days after its occurrence, or (if such failure is reasonably
curable) such additional period as may reasonably be required to cure the same.
(e) Dissolution. Either (a) Borrower shall dissolve, wind up or
otherwise cease to do business, or (b) any Subsidiary shall do so and such
Subsidiary's dissolution, winding up, or cessation would have a Material Adverse
Effect.
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(f) Insolvency Event. Any Credit Party shall become the subject of an
Insolvency Event, unless: (a) such Insolvency Event relates to a Subsidiary; (b)
such Subsidiary does not own or ground lease any Hotel(s) in the Unencumbered
Pool; and (c) such Insolvency Event does not otherwise have a Material Adverse
Effect.
(g) Change of Control. A Change of Control shall occur, including as a
result of death or disability of both (but not merely one) of the Managing
Trustees.
(h) Cross Default. A default or event of default shall occur (and
continue beyond any applicable grace period) under any note, agreement or
instrument evidencing any Indebtedness of Borrower or any Subsidiary (other than
the Obligations) in an aggregate principal amount in excess of $10,000,000,
which default or event of default permits the acceleration of the maturity of
such Indebtedness.
(i) Failure of Enforceability of Credit Documents; Security. Any
material covenant, agreement or obligation of any Credit Party contained in or
evidenced by any of the Credit Documents shall cease to be enforceable, or shall
be determined to be unenforceable, in accordance with its terms; or any Credit
Party shall deny or disaffirm in writing its obligations under any of the Credit
Documents.
(j) ERISA. Borrower or any Credit Party shall establish any Plan or
shall incur any liability under ERISA, without Agent's consent.
(k) Judgments. One or more judgments, writs, orders or warrants of
attachment or other similar process or decrees in an aggregate amount of
$10,000,000 or more shall be entered by a court or courts of competent
jurisdiction against any or all of the Credit Parties (other than any judgment,
writs, orders or warrants of attachment or other similar process as to which,
and only to the extent, a reputable insurance company has acknowledged coverage
thereof in writing) and (i) any such judgments, writs, orders or warrants of
attachment or other similar process or decrees shall not be stayed, discharged,
paid, bonded or vacated within 30 days or (ii) enforcement proceedings shall be
commenced by any creditor on any such judgments, writs, orders or warrants of
attachment or other similar process or decrees.
(l) Advisory Agreement. For any reason, the Advisory Agreement shall
cease to be in full force and effect.
(m) REIT Qualification. Borrower shall cease to qualify as a REIT.
8.2 Remedies. Upon the occurrence and during the continuance of an
Event of Default, Agent may, and upon the direction of Required Lenders shall,
do any or all of the following:
(a) Acceleration. Upon the written request of the Required Lenders,
Agent shall declare all Obligations to be immediately due and payable (except
with respect to any Event of Default set forth in Section 8.1(f), in which case
all Obligations shall automatically become immediately due and payable without
the necessity of any request of the Required
58
Lenders or notice or other demand to Borrower) without presentment, demand,
protest or any other action or obligation of Agent or any Lender.
(b) Termination of Commitments. Upon the written request of the
Required Lenders, Agent shall, by written notice to Borrower, declare all the
Revolver Commitments to be terminated, whereupon all such Commitments shall
terminate immediately and, at all times thereafter, all Loans made by any Lender
pursuant to this Agreement shall be at such Lender's sole discretion.
(c) Other Remedies. Agent may exercise any other rights or remedies
afforded Agent or any Lender under any Credit Document or applicable law.
8.3 Right of Setoff. In addition to all rights of offset that Agent or
any Lender may have under applicable law or otherwise, upon the occurrence and
during the continuance of any Event of Default, and whether or not Agent or any
Lender has made any demand or the Obligations of any Credit Party have matured,
Agent and each Lender shall have the right to appropriate and apply to the
payment of the Obligations (in accordance with Section 8.5) all deposits and
other obligations then or thereafter owing by Agent or such Lender to such
Credit Party. Each Lender exercising such rights shall notify Agent thereof and
any amount received as a result of the exercise of such rights shall be shared
in accordance with Section 3.11.
8.4 No Marshalling; Deficiencies; Remedies Cumulative. The foregoing
remedies are not intended to be exhaustive and the full or partial exercise of
any of them shall not preclude the full or partial exercise of any other
available remedy under this Agreement, under any other Credit Document, at
equity or at law. During the pendency of any uncured Event of Default, Borrower
shall have no right to obtain any Borrowings hereunder and no right to consent
to or approve any matter that would otherwise have required Borrower's consent
under any Credit Document.
8.5 Application of Payments. Upon the occurrence and during the
continuance of an Event of Default, all amounts received by Agent pursuant to
any Credit Documents or the exercise of any rights or remedies thereunder or
under applicable law shall be applied in the following order: first, to the
payment of any Fees, expenses and other Obligations due and payable to Agent
under any of the Credit Documents, including any amounts advanced by Agent on
behalf of the Lenders; second, to the ratable payment of any Fees, expenses and
other Obligations due and payable to the Lenders under any of the Credit
Documents other than those Obligations specifically referred to in this Section
8.5; third, to the ratable payment of interest due on the Revolver Loans; and
fourth, to the ratable payment of principal due on the Revolver Loans.
ARTICLE 9 THE AGENT
Other than Borrower's rights under Section 9.8, this Article 9 is for
the benefit of Agent and the Lenders only.
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9.1 Appointment of Agent. Each Lender hereby designates Dresdner Bank
AG, New York and Grand Cayman Branches, as its agent and irrevocably authorizes
Agent to take action on its behalf under the Credit Documents, to exercise the
powers and perform the duties described therein, and to exercise such other
powers reasonably incidental thereto. Agent may perform any of its duties
through its agents or employees. In its capacity as Administrative Agent, Agent
(or any other Lender designated by Agent from time to time as Administrative
Agent) shall be entitled to the same protections, exculpations, and indemnities
as are set forth in this Article 9 with respect to Agent.
9.2 Nature of Duties of Agent. Agent has no duties or responsibilities
except those expressly set forth in the Credit Documents. Neither Agent nor any
of its officers, directors, employees or agents shall be liable for any action
taken or omitted hereunder or in connection herewith, except to the extent of
damages or losses directly caused by such Person's gross negligence or willful
misconduct. The duties of Agent shall be mechanical and administrative in
nature. Agent shall not have a fiduciary relationship to any Lender or any
participant of any Lender. Agent shall act only for the Lenders. Except for the
express obligations of Agent and the Lenders under this Agreement, neither Agent
nor any Lender assumes any obligation to any Credit Party. Neither Agent nor any
Lender assumes any agency or trust relationship with any Credit Party. Agent
shall have no liability for the acts or omissions of any subagents engaged or
selected by Agent, provided that Agent was not grossly negligent in the
engagement or selection of such subagents. Agent may deem and treat each Lender
as the holder of the Loan made by it for all purposes hereof. Agent shall not be
required to deal with any Person that has acquired a participation in any Loan.
9.3 Lack of Reliance on Agent. Independently and without reliance upon
Agent, each Lender has made and shall continue to make its own independent
investigation and analysis of the content and validity of the Credit Documents
and of the performance and creditworthiness of the Credit Parties thereunder.
Based on such documents and information as it has deemed appropriate, each
Lender has made its own credit analysis of Borrower and of whether to enter into
this Agreement. Each Lender shall, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Credit Document.
Agent assumes no responsibility and undertakes no obligation to make inquiry
with respect to such matters. Agent shall not be responsible to any Lender for
any recitals, statements, representations or warranties made by Borrower or any
officer, employee or official of Borrower or any other Person contained in this
Agreement or any other Credit Document, or in any certificate or other document
or instrument referred to or provided for it, or received by any of them under,
this Agreement or any other Credit Document, or for the value, legality,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Credit Document or any other document or instrument
referred to or provided for herein or therein, or for any failure by Borrower to
perform any obligations hereunder or thereunder. Agent shall not be required to
keep itself informed as to Borrower's compliance with this Agreement or any
other Credit Document or any other document referred to or provided for herein
or therein or to inspect the properties or books and records and Borrower.
Except for notices, reports, and other documents and information that this
Agreement expressly requires Agent to furnish to the Lenders, Agent shall have
no duty or obligation to provide any
60
Lender with any credit or other information concerning the affairs, financial
condition or business of any Credit Party. Agent shall not be required to file
this Agreement, any other Credit Document, or any document or instrument
referred to herein or therein, for record, or to give notice to anyone of any of
the foregoing.
9.4 Certain Rights of Agent. Agent may request instructions from
Required Lenders at any time. If Agent requests instructions from Required
Lenders at such time with respect to any action or inaction, Agent shall be
entitled to await instructions from Required Lenders at such time before such
action or inaction. No Lender shall have any right of action based upon Agent's
action or inaction in response to instructions from Required Lenders at such
time. Any action taken or failure to act pursuant to instructions of Required
Lenders shall be binding on all Lenders and any other holder of all or any
portion of the Loan or any participation therein. Except for actions expressly
required of Agent under this Agreement, Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall have received
further assurances (which may include a requirement for cash collateral) of the
Lenders' indemnity obligations under this Article 9 in respect of any and all
liability and expense that Agent may incur by reason of taking or continuing to
take any such action.
9.5 Reliance by Agent. Agent may rely upon written or telephonic
communications it believes to be genuine and to have been signed, sent or made
by the proper person. Agent may obtain the advice of legal counsel (including,
for matters concerning Borrower, counsel for Borrower), independent public
accountants and other experts selected by it and shall have no liability for
action or inaction in good faith based upon such advice.
9.6 Indemnification of Agent. To the extent Agent is not reimbursed and
indemnified by Borrower, each Lender will reimburse and indemnify Agent, to the
extent of such Lender's Pro Rata Share of the Loans, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
reasonable costs, reasonable expenses (including reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever (including all
reasonable Expenses) which may be imposed on, incurred by or asserted against
Agent in performing its duties hereunder or otherwise relating to the Credit
Documents, or any other documents contemplated hereby or thereby (including any
costs and expenses that Borrower is obligated but fails to reimburse) or the
enforcement of any of the terms hereof or thereof. Notwithstanding the
foregoing, no Lender shall be liable to Agent: (a) to the extent of losses
directly resulting from Agent's gross negligence or willful misconduct; (b) with
respect to any loss of principal or interest under Agent's Loan; or (c) for any
loss suffered by Agent or its Affiliate in connection with any Interest Rate
Agreement Agent may enter into with Borrower.
9.7 Agent in its Individual Capacity. In its individual capacity, Agent
shall have the same rights and powers hereunder as any other Lender and may
exercise them as though it was not performing the duties of an agent for the
Lenders. The terms "Lenders," "Required Lenders," or any similar terms shall,
unless the context clearly other-wise indicates, include Agent in its
individual capacity. Agent and its Affiliates may accept deposits from, lend
money to, acquire equity interests in, and generally engage in any kind
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of banking, trust, financial advisory or other business with Borrower or any
Affiliate of Borrower as if it were not performing the duties of an agent for
the Lenders, and may accept fees and other consideration from Borrower for
services in connection with this Agreement and otherwise without having to
account for the same to any Lender.
9.8 Successor Agent.
(a) Agent may, upon thirty days' notice to the Lenders and Borrower,
resign at any time by giving written notice thereof to the Lenders and Borrower.
Agent may be removed, upon thirty days' notice to Agent, by written action of
all the Lenders (other than Agent) in the event that Agent commits a willful
breach of, or is grossly negligent in the performance of, its material
obligations under this Agreement. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent, subject to
the reasonable approval of Borrower. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after notice of Agent's retirement or resignation, then the
retiring Agent may, on behalf of the Lenders, appoint one of the Lenders as
successor Agent, which successor Agent shall be subject to Borrower's reasonable
approval.
(b) Upon its acceptance of the agency hereunder, a successor Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Agreement. The retiring Agent shall
continue to have the benefit of this Article 9 for any action or inaction while
it was Agent.
9.9 Co-Documentation Agents. Each of the Co-Documentation Agents shall
act and shall be named as Co-Documentation Agent hereunder, but such Persons in
such capacities shall have no right or duty to act as agent on behalf of the
Lenders.
9.10 Defaults. Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default unless Agent has received notice
from a Lender or from Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default." If Agent receives such a
notice, then Agent shall give prompt notice thereof to the Lenders. In addition
to Agent's right to take actions on its own accord as permitted under this
Agreement, Agent shall take such action with respect to a Default or Event of
Default as shall be directed by Required Lenders. Until Agent shall have
received such directions, Agent may act (or not act) as it in good xxxxx xxxxx
to be in the best interests of the Lenders. In no event shall Agent be required
to take any action that it determines to be contrary to law.
9.11 Anticipated Receipt of Funds. Unless Agent shall have received
notice from a Lender or from Borrower (either, as applicable, a "Payor") prior
to the date on which such Lender is to make payment hereunder to Agent of the
proceeds of a Loan or Borrower is to make payment to Agent, as the case may be
(either such payment, a "Required Payment"), which notice shall be effective
upon receipt, that Payor will not make the Required Payment in full to Agent,
Agent may assume that the Required Payment has been made in full to Agent on
such date, and Agent in its sole and absolute discretion may, but shall not be
62
obligated to, in reliance upon such assumption, make the amount thereof
available to the intended recipient on such date. If and to the extent that
Payor shall not in fact have made the Required Payment in full to Agent, the
recipient of such payment (from Agent, made based upon Agent's inappropriate
reliance on Agent's receipt of the Required Payment) shall repay to Agent
forthwith on demand such amount made available to it together with interest
thereon, for each day from the date such amount was to be made available by
Agent until the date Agent recovers such amount, at the Federal Funds Rate for
three (3) Business Days and thereafter at the Base Rate.
9.12 Miscellaneous. Notwithstanding anything to the contrary in this
Agreement, Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Credit Document that affects its
duties, rights, or functions hereunder or thereunder unless Agent shall have
given its prior written consent thereto. Agent shall have no liabilities or
responsibilities to Borrower or any Lender on account of any Lender's (except
Agent's), or Borrower's failure to perform its obligations hereunder or under
any other Credit Document. Without consent of Borrower or any Lender, Agent may
at any time or from time to time transfer its functions as Agent hereunder to
any of its offices wherever located in the United States, provided that Agent
shall promptly notify Borrower and all Lenders thereof.
ARTICLE 10 MISCELLANEOUS
10.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, WHETHER
SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF
THE STATE OF NEW YORK.
10.2 SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG ANY OR ALL OF THE
CREDIT PARTIES AND THE LENDERS OR AGENT, WHETHER SOUNDING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED
IN NEW YORK, NEW YORK, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN;
PROVIDED, HOWEVER, THAT AGENT, ON BEHALF OF THE LENDERS, SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST ANY OR ALL OF THE
CREDIT PARTIES AND/OR THEIR PROPERTY IN ANY LOCATION REASONABLY SELECTED BY
AGENT IN GOOD FAITH TO ENABLE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. BORROWER AGREES THAT IT WILL
NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS- CLAIMS IN ANY
PROCEEDING BROUGHT BY AGENT. BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH AGENT HAS COMMENCED A PROCEEDING,
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INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
FORUM NON CONVENIENS.
10.3 CERTAIN DAMAGES. BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION
OR PROCEEDING TO WHICH AGENT OR ANY LENDER IS A PARTY ANY SPECIAL, EXEMPLARY,
PUNITIVE, OR CONSEQUENTIAL DAMAGES.
10.4 SERVICE OF PROCESS. BORROWER HEREBY IRREVOCABLY DESIGNATES
CORPORATION SERVICE COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF BORROWER TO
RECEIVE, FOR AND ON BEHALF OF BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT.
10.5 JURY TRIAL. EACH OF BORROWER, AGENT, AND THE LENDERS HEREBY WAIVE
ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY DISPUTES WILL BE RESOLVED IN A BENCH
TRIAL.
10.6 LIMITATION OF LIABILITY. NEITHER AGENT NOR ANY LENDER SHALL HAVE
ANY LIABILITY TO ANY CREDIT PARTY (WHETHER SOUNDING IN TORT, CONTRACT, OR
OTHERWISE) FOR CONSEQUENTIAL DAMAGES SUFFERED BY ANY CREDIT PARTY IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS
CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH.
10.7 Delays. No delay or omission of Agent or the Lenders to exercise
any right or remedy hereunder shall impair any such right or operate as a waiver
thereof.
10.8 Notices. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to Agent or any of the Lenders, then to its address
for notices set forth on Annex I or such other address as Agent or any Lender
may notify the other parties hereto from time to time (and in Agent's case, each
notice and each item of correspondence shall be delivered in multiple copies by
separate deliveries to each of the notice recipients designated for Agent in
Annex I), or by facsimile transmission, promptly confirmed in writing sent by
first class mail, to the appropriate telecopier number(s) set forth on Annex I
or to such other number(s) as Agent or any Lender may notify the other parties
hereto from time to time (again, in multiple separate transmissions to each of
the individuals identified in Annex I, and if to any Credit Party then to such
Credit Party at the following address or facsimile number, as applicable, or to
such other number as Credit Party may notify the other parties hereto from time
to time:
If to Borrower or any other Credit Party:
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000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. X'Xxxxx
(telecopy number: 617-969-5730)
(telephone number: 000-000-0000);
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
(telecopy number: 617-338-2880)
(telephone number: 000-000-0000).
All such notices and correspondence shall be deemed given (i) if sent by
certified or registered mail, three Business Days after being delivered to the
U.S. Postal Service, (ii) if sent by overnight delivery service, when received
at the above stated addresses or when delivery is refused, and (iii) if sent by
telex or facsimile transmission, when receipt of such transmission is
acknowledged.
10.9 Assignments and Participations.
(a) Borrower Assignment. Borrower shall not assign this Agreement, or
any rights or obligations hereunder, without the prior written consent of Agent
and all Lenders.
(b) Lender Assignments. Each Lender may assign all or a portion of its
rights and obligations under this Agreement, the Notes and the other Credit
Documents, to any Eligible Assignee, upon execution and delivery to Agent, for
its acceptance and recording in the Register, of an Assignment and Assumption
Agreement, together with surrender of any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000.00 payable to
Administrative Agent. No such assignment shall be for less than $5,000,000 of
the Commitments unless it is to another Lender or any Affiliate of the Lender
making such assignment or a Federal Reserve Bank or it constitutes the entire
remaining Commitment of the assigning Lender.
(c) Agent's Register. Agent shall maintain the Register and shall also
maintain a copy of each Assignment and Assumption Agreement delivered to and
accepted by it and modify the Register to give effect to each Assignment and
Assumption Agreement. Upon its receipt of each Assignment and Assumption
Agreement and surrender of the affected Note or Notes, Agent will give prompt
notice thereof to Borrower and deliver to Borrower a copy of the Assignment and
Assumption Agreement and the surrendered Note or Notes. Within five (5) Business
Days after its receipt of such notice, Borrower shall execute and deliver to
Agent a new Note or Notes to the order of the assignee in the amount of the
Revolver Commitments assumed by it and to the assignor in the amount of the
Revolver Commitment retained by it, if any. Such new Note or Notes shall
re-evidence the Indebtedness outstanding under the surrendered Note or Notes and
shall be dated as of the Closing Date
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(or the Syndication Closing Date, if applicable). Agent shall be entitled to
rely upon the Register exclusively for purposes of identifying the Lenders
hereunder.
(d) Lender Participations. Each Lender may sell participations (without
the consent of Agent, Borrower or any other Person) to one or more Persons in or
to all or a portion of its rights and obligations under this Agreement, the
Notes and/or the other Credit Documents. Notwithstanding a Lender's sale of a
participation interest, its obligations hereunder shall remain unchanged.
Borrower, Agent, and the other Lenders shall continue to deal solely and
directly with such Lender. No participant shall have rights to approve any
amendment or waiver of this Agreement except to the extent such amendment or
waiver would (i) increase the Revolver Commitment of the Lender from whom the
participant purchased its participation interest; (ii) reduce the principal of,
or rate or amount of interest on the Loans subject to such participation, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Loans subject to the participation interest, or (iv) release any guarantor of
the Obligations, except when otherwise permitted hereunder. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation.
(e) Estoppels. In connection with Agent's initial syndication of the
Loan, Borrower shall at Borrower's expense diligently endeavor to obtain
estoppel certificates from all Lessees to the extent such certificates are
required to be delivered pursuant to the applicable Leases. Borrower shall not
be obligated to commence litigation to enforce the obligations of Lessees to
deliver estoppel certificates.
10.10 Confidentiality. Each Lender agrees that it will use reasonable
efforts not to disclose without the prior consent of Borrower any information
with respect to any Credit Party which is furnished pursuant to or in connection
with this Agreement and which is designated by Borrower to the Lenders in
writing as confidential; provided, however, that any Lender may disclose any
such information (a) to its Affiliates, employees, auditors, advisors or counsel
or to Agent or another Lender, (b) as has become generally available to the
public other than by means of a breach of this Section 10.10 by such Lender, (c)
as may be required or appropriate in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction
over such Lender, (d) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (e) in order to comply
with any Requirement of Law, and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Lender, provided,
that such transferee or participant agrees to be bound by the provisions of this
Section 10.10 as if it were a Lender.
10.11 Reimbursement of Expenses; Indemnification. Whether or not the
transactions contemplated in this Agreement are consummated:
(a) Borrower shall, upon demand, pay all Expenses of Agent;
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(b) Borrower shall, upon demand, pay to the Agent and any and all
Lenders all reasonable costs and expenses (including the reasonable fees and
disbursements of counsel and other professionals) paid or incurred by such
Person in (i) enforcing its rights under or in respect of this Agreement, the
other Credit Documents or any other agreement, instrument or document now or
hereafter executed and delivered in connection herewith or therewith, (ii) in
collecting the Loans or any other Obligations, and (iii) in obtaining any legal,
accounting or other advice in connection with any of the foregoing; and
(c) Borrower shall indemnify and does hereby agree to defend and hold
harmless Agent and each of the Lenders and their respective shareholders,
directors, officers, employees, agents, advisors, counsel and Affiliates (each,
an "Indemnified Person" and, collectively, the "Indemnified Persons") from and
against any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from the negligence or willful
misconduct of the Indemnified Person seeking indemnification) arising out of or
by reason of (x) any litigation, investigations, claims or proceedings which
arise out of or are in any way related to (i) this Agreement or any other Credit
Document or the transactions contemplated hereby or thereby, (ii) any actual or
proposed use by Borrower of the proceeds of the Loans or (iii) Agent's or the
Lenders' entering into this Agreement, the other Credit Documents or any other
agreements, instruments and documents relating hereto, including, without
limitation, amounts paid in settlement, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with any
of the foregoing, (y) any remedial or other action taken by Borrower or any of
the Lenders in connection with compliance by Borrower or any of its
Subsidiaries, or any of their respective properties, with any foreign, federal,
state or local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines, and (z) any violation of, noncompliance with
or liability under any Environmental Law applicable to the operations and/or
conduct of any Credit Party or its properties, whether owned or leased (each, a
"Property"); provided, however, that Borrower shall have no obligation hereunder
to any Indemnified Person with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of such Indemnified Person.
(d) Notwithstanding anything to the contrary contained in paragraph (c)
of this Section 10.10, in all such litigations, investigations, claims,
proceedings or actions, or the preparation therefore, the Indemnified Persons
shall be entitled to select their own counsel.
10.12 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement (including, without limitation, the definition of "Assigned
Value" and Section 7.1 of this Agreement), any part of the Disclosure Schedule
or any part of any other Credit Document shall be effective unless in writing
and signed by Agent and Required Lenders, except that:
(a) the consent of all the Lenders is required to: (i) increase the
Revolver Commitments; (ii) reduce the principal of, or interest on, any or all
of the Notes or any Fees hereunder (other than Fees that are exclusively for the
account of Agent); (iii) postpone any date fixed for any payment in respect of
principal of, or interest on, any or all of the Notes
67
or any Fees hereunder; (iv) change the percentage of the Revolver Commitments,
or any minimum requirement necessary for the Lenders or Required Lenders to take
any action hereunder; (v) amend or waive this Section 10.12(a), or change the
definition of Required Lenders; or (vi) as to any Credit Party that owns any
Hotel(s) in the Unencumbered Pool, release such Credit Party from its
obligations to pay principal and interest hereunder;
(b) if the interest rate or scheduled repayments of the Loan are being
increased (except as expressly set forth herein) or the date of any scheduled
repayment is being shortened or accelerated, the consent of Required Lenders of
the facilities taken as a whole and the consent of Required Lenders shall be
required in connection therewith;
(c) the consent of Agent shall be required for any amendment, waiver or
consent affecting the rights or duties of Agent under any Credit Document, in
addition to the consent of the Lenders otherwise required by this Section 10.12;
and
(d) the consent of Borrower shall be required for any amendment, waiver
or consent affecting the rights or duties of Borrower under any Credit Document,
in addition to the other consents required by this Section 10.12, provided, that
the Lenders and Agent may modify or waive, as among themselves, any of the
provisions of Article 9, provided that (without Borrower's consent) no such
modification or waiver made by the Lenders and Agent shall impose any
obligations upon Borrower or limit Borrower's rights.
Borrower and the Lenders hereby authorize Agent to modify this Agreement by
unilaterally amending or supplementing Annex I to reflect assignments of the
Revolver Commitments.
10.13 Counterparts and Effectiveness. This Agreement and any waiver of
amendment hereto may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. This Agreement shall become effective on
the date on which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to
Agent or, in the case of the Lenders, shall have given to Agent written,
telecopied or telex notice (actually received) at such office that the same has
been signed and mailed to it.
10.14 Severability. In case any provision in or obligation under this
Agreement, any or all of the Notes or the other Credit Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby.
10.15 Maximum Rate. Notwithstanding anything to the contrary contained
elsewhere in this Agreement or in any other Credit Document, Borrower, Agent and
the Lenders hereby agree that all agreements among them under this Agreement and
the other Credit Documents, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever shall the amount paid, or agreed to be paid, to Agent or any
Lender for the use, forbearance, or detention of the money loaned to Borrower
and evidenced hereby or thereby or for the performance or
68
payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Agreement or any of the other Credit Documents at the time
performance of such provision shall be due shall exceed the Highest Lawful Rate,
then, automatically, the obligation to be fulfilled shall be modified or reduced
to the extent necessary to limit such interest to the Highest Lawful Rate, and
if from any such circumstance any Lender should ever receive anything of value
deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to Borrower. All
sums paid or agreed to be paid to Agent or any Lender for the use, forbearance,
or detention of the Obligations and other Indebtedness of Borrower to Agent or
any Lender, to the extent permitted by applicable law, shall be amortized,
prorated, allocated and spread throughout the full term of such Indebtedness,
until payment in full thereof, so that the actual rate of interest on account of
all such Indebtedness does not exceed the Highest Lawful Rate throughout the
entire term of such Indebtedness. The terms and provisions of this Section 10.15
shall control every other provision of this Agreement and each Note and all
other agreements among Borrower, Agent and the Lenders.
10.16 Entire Agreement; Successors and Assigns. This Agreement and the
other Credit Documents constitute the entire agreement among Borrower, Agent,
and the Lenders, supersede any prior agreements among them, and shall bind and
benefit Borrower, Agent and the Lenders and their respective successors and
permitted assigns.
10.17 Currency Translation. Unless specifically provided otherwise, all
dollar figures and dollar calculations under this Agreement or the other Credit
Documents are denominated in Dollars (unless otherwise specifically stated) and
all loans made hereunder will be made in Dollars. The foreign currency amount of
all totals and subtotals submitted by or on behalf of the Credit Parties to any
Lender or Agent will be converted into Dollars at the Prevailing Exchange Rate
on the date prior to submission to Agent or such Lender, or, in the case of
financial statements, in accordance with GAAP. All payments made by any Credit
Party or applied by Agent or any Lender to the Obligations shall be first
converted into Dollars at the Prevailing Exchange Rate on the date of payment or
application (if not already in Dollars) and then credited against the
Obligations.
10.18 Foreign Judgments. If for the purposes of obtaining or enforcing
a judgment in any court in any jurisdiction it becomes necessary to convert into
the currency of the country giving such judgment (the "Judgment Currency") an
amount due hereunder in Dollars, then the date of such conversion shall be known
as the "Conversion Date." If there is a change in the rate of exchange between
the Judgment Currency and Dollars occurring between the Conversion Date and the
date of actual receipt of the amount due hereunder or under such judgment, the
applicable Credit Party will, notwithstanding such judgment, to the extent
permitted by law, pay all such additional amounts as may be necessary to ensure
the amount paid and received in the Judgment Currency when converted at the rate
of exchange prevailing on the date of such receipt will produce the amount then
due in Dollars. The obligation to make such additional payment shall constitute
a separate and independent
69
obligation of such Credit Party and shall not merge with any judgment or any
partial payment or enforcement of payment. The term "rate of exchange" used
herein shall include any premiums and costs payable in connection with the
conversion being effected.
10.19 Acknowledgments. Borrower hereby acknowledges that:
(a) It has been advised by counsel in the negotiation,
execution, and delivery of this Agreement and the other Credit Documents;
(b) Neither Agent nor any Lender has any fiduciary
relationship with or fiduciary duty to Borrower arising out of or in connection
with this Agreement or any of the other Credit Documents, and the relationship
between Agent and the Lenders on the one hand, and Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and
(c) No joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among Borrower and the Lenders or between Borrower and
Agent.
10.20 Approvals. In all cases where the consent, approval, or any
discretionary concurrence of Agent and/or the Lenders and/or Borrower is
required, such consent shall not be unreasonably withheld, delayed or
conditioned, subject to the following provisions:
(a) Agent and the Lenders may withhold their consent for any
reason or no reason (and may be arbitrary, capricious, and unreasonable in
withholding consent) with respect to any of the following matters and any
matter(s) directly or indirectly related thereto: (i) any Change of Control,
(ii) replacement or substitution of both Managing Trustees, (iii) any change in
the Business or scope of Borrower's permitted Indebtedness or Investments or the
making of any Restricted Payments not otherwise permitted by this Agreement,
(iv) any matter that, in Agent's reasonable judgment, could or would cause a
Material Adverse Effect, (v) replacement of Investment Manager, and (vi) the
granting of any waivers or forbearances under any Credit Documents.
(b) A Person shall be deemed to be "reasonable" by
demonstrating the existence of any rational basis for such Person's
determination, disapproval, action or inaction, based upon such considerations
and factors as such Person shall have determined relevant, each given such
weight (if any) as such Person shall have determined. A Person shall not be
obligated to demonstrate that: (a) their determination, disapproval, action or
inaction is consistent with the action that an institutional lender or real
estate investor would normally or typically take in the same circumstances; (b)
there is no rational basis for the action such Person has disapproved; (c) such
Person has considered all relevant or applicable considerations or factors; or
(d) some other course of action, other than the course of action being
disapproved by such Person, would be more appropriate under the circumstances.
(c) If a Person has covenanted to be "reasonable" and, in
violation of such covenant, withholds, delays, or conditions consent or approval
as to any matter, then as the sole remedy for such wrongful withholding, delay,
or conditioning, any Person aggrieved by
70
such act or omission shall be entitled to seek injunctive relief compelling such
Person to grant the consent in question or deeming such consent to have been
granted. Such injunctive relief shall constitute the sole remedy with respect to
such consent. Each party specifically waives any right to damages or any offset,
claim, defense, or counterclaim against such party's obligations under the
Credit Documents on account of any such wrongful withholding, delay, or
conditioning of consent.
10.21 Amendment and Restatement. This Agreement amends and restates in
its entirety, and continues the indebtedness previously evidenced by, that
certain Amended and Restated Revolving Credit Agreement previously entered into
among the parties dated as of the Closing Date. The terms of such former Amended
and Restated Revolving Credit Agreement are replaced by the terms and conditions
of this Agreement, effective as of the Syndication Closing Date. This Agreement
is intended to continue and re-evidence the indebtedness previously created by
the former Amended and Restated Revolving Credit Agreement, none of which is
being repaid or terminated. Simultaneously herewith, Borrower is executing new
Notes to replace the Note previously executed and delivered with respect to such
previous Amended and Restated Revolving Credit Agreement, which new Notes refers
to this Agreement and constitute Revolver Notes as referred to herein. Wherever
any Credit Document as defined in the previous Amended and Restated Revolving
Credit Agreement or in the original Revolving Credit Agreement refers to such
Amended and Restated Revolving Credit Agreement or the original Revolving Credit
Agreement, such reference is intended to refer to this Agreement. The Credit
Parties acknowledge that all Obligations outstanding on the Syndication Closing
Date constitute valid and binding obligations of such Credit Parties and the
Credit Parties have no defense, setoff or counterclaim of any kind, nature or
description to the Obligations or the payment thereof when due.
10.22 NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST OF BORROWER,
DATED MAY 12, 1995, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF 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.
71
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER:
HOSPITALITY PROPERTIES TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxxx X. X'Xxxxx
Xxxxxx X. X'Xxxxx, Treasurer
AGENT:
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH, as Agent
By: /s/ Xxxxxxxx Xxxxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
Revolver Commitment: $50,000,000.00
LENDER:
SOCIETE GENERALE, SOUTHWEST
AGENCY, as Lender
By: /s/ Xxxxxx X. Day
Name: Xxxxxx X. Day
Title: Vice President
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
Revolver commitment: $35,000,000.00
LENDER:
BANK OF MONTREAL, CHICAGO BRANCH,
as Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
Revolver Commitment: $35,000,000.00
LENDER:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE - NEW YORK BRANCH, as
Lender
By: /s/ Xxxxxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Revolver Commitment: $32,500,000.00
LENDER:
PNC BANK, NATIONAL ASSOCIATION, as
Lender
By: Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Commercial Banking Officer
Revolver Commitment: $32,500,000.00
LENDER:
COMMERZBANK AG, NEW YORK
BRANCH, as Lender
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
Revolver Commitment: $20,000,000.00
LENDER:
CIBC INC., as Lender
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Executive Director
CIBC Oppenheimber Corp., AS AGENT
Revolver Commitment: $20,000,000.00
LENDER:
BANK ONE, ARIZONA, NA, as Lender
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
Revolver Commitment: $15,000,000.00
LENDER:
ERSTE BANK DE OESTERREICHISCHEN
SPARKASSEN AG, as Lender
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: First Vice President
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Transactor
Revolver Commitment: $10,000,000.00
LENDER:
BANK HAPOALIM B.M., as Lender
By: /s/ Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: First Vice President & Branch Manager
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
Revolver Commitment: $10,000,000.00
LENDER:
BW BANK IRELAND PLC, as Lender
By: /s/ X. Xxxx
Name: X. Xxxx
Title: Manager
By: /s/ X. Xxxxxxxx
Name: X. Xxxxxxxx
Title: Head of Corp.
Revolver Commitment: $10,000,000.00
LENDER:
ALLIED IRISH BNAK - CAYMAN ISLANDS,
as Lender
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
Revolver Commitment: $10,000,000.00
LENDER:
RZB FINANCE LLC, as Lender
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
Revolver Commitment: $10,000,000.00
LENDER:
XXXXX BANK N.A., as Lender
By: /s/
Name:
Title:
Revolver Commitment: $10,000,000.00
INDEX OF DEFINED TERMS
$ ........................................................8
Accrual Date ........................................................2
Acquisition Cost ........................................................2
Adjusted Eurodollar Rate..................................................2
Administrative Agent......................................................2
Administrative Fee........................................................2
Advisory Agreement........................................................2
Affiliate ........................................................2
Agent ........................................................1
Agent's Distribution..................................................2, 27
Agreement ........................................................1
Applicable Margin ........................................................2
Approved Bank ........................................................5
Arranger ........................................................3
Assigned Value ........................................................3
Assignment and Assumption
Agreement...............................................3
Auditors ........................................................3
Bankruptcy Code ........................................................3
Base Rate ........................................................3
Base Rate Loan ........................................................4
Base Rent ........................................................4
Benefit Plan ........................................................4
Borrower .....................................................1, 4
Borrowing ........................................................4
Business ........................................................4
Business Day ........................................................4
Capital Expenditures......................................................4
Capital Lease ........................................................4
Capital Stock ........................................................4
Cash Available for Distribution...........................................5
Cash Equivalents ........................................................5
Casualty Loss ........................................................5
Change of Control ........................................................5
Closing Date .....................................................1, 5
Closing Documents List....................................................5
Code ........................................................5
Commitment Fee ....................................................6, 27
Common Stock ........................................................6
Compliance Certificate....................................................6
Consolidated Debt Service.................................................6
Consolidated EBITDA.......................................................6
Consolidated Indebtedness.................................................6
Consolidated Interest Expense.............................................6
Consolidated Secured Debt.................................................7
Consolidated Total Assets.................................................7
Contingent Obligation.....................................................7
Control ........................................................7
Conversion Date. .......................................................69
Credit Documents ........................................................7
Credit Parties ........................................................7
Credit Party ........................................................7
D&P ........................................................8
Debt Service Coverage Ratio...............................................7
Default ........................................................7
Default Rate ....................................................7, 26
Defaulting Lender ........................................................7
Defaulting Lender........................................................25
Disclosure Schedule.......................................................7
Dollar Equivalent ........................................................8
Dollars ........................................................8
Due Diligence Reports.....................................................8
Eligible Assignee ........................................................8
Environmental Affiliate...................................................8
Environmental Approvals...................................................8
Environmental Claim.......................................................9
Environmental Laws........................................................9
ERISA ........................................................9
ERISA Affiliate ........................................................9
Eurodollar Loan ........................................................9
Eurodollar Rate ........................................................9
Event of Default .......................................................10
Excess Floating Rate Exposure............................................10
Expenses .......................................................10
Federal Funds Rate.......................................................10
Federal Reserve .......................................................10
Fees .......................................................10
FF&E Deposits .......................................................10
Financial Statements.....................................................10
Fiscal Year .......................................................11
Fitch .......................................................11
Former Mortgages .......................................................43
Funds from Operations....................................................11
Governing Documents......................................................11
Government Obligations....................................................5
Governmental Authority...................................................11
Group .......................................................11
Guarantor .......................................................11
Guaranty .......................................................11
Herein, .......................................................23
Hereof, .......................................................23
Hereunder .......................................................23
Highest Lawful Rate......................................................12
Hotel .......................................................12
Hotel Net Cash Flow......................................................12
Hotel Pool .......................................................12
Including .......................................................23
Indebtedness .......................................................12
Indemnified Person.......................................................67
Indemnified Persons......................................................67
Insolvency Event .......................................................12
Intellectual Property....................................................13
Interest Coverage Ratio..................................................13
Interest Period .......................................................13
Interest Rate Agreement..................................................13
Interest Rate Cap .......................................................13
Investment .......................................................13
Investment Grade Rating..................................................13
Investment Manager.......................................................14
Investment Manager's Subordination
Agreement..............................................14
IRS .......................................................14
Judgment Currency ...................................................14, 69
Last Financial Statement Date............................................14
Lease .......................................................14
Lender ....................................................1, 25
Lenders .......................................................61
Lessee .......................................................14
Lessee Deposits .......................................................14
Leverage Ratio .......................................................14
Lien ...................................................14, 15
Loan Account ...................................................15, 27
Loans .......................................................15
Management Agreement.....................................................15
Management Fee .......................................................15
Manager .......................................................15
Mandatory Redeemable Obligation..........................................15
Margin Stock .......................................................15
Material Adverse Effect..................................................15
Material Contract .......................................................15
Material Lessee .......................................................16
Materials of Environmental Concern.......................................16
Maturity Date .......................................................16
Moody's .......................................................16
Multiemployer Plan.......................................................16
Non-Defaulting Lender....................................................16
Non-Defaulting Lenders...................................................25
Non-Excluded Taxes.......................................................33
Non-Pool Hotel .......................................................16
Note .......................................................16
Notice of Borrowing..................................................16, 24
Notice of Continuation...............................................16, 29
Notice of Conversion.................................................16, 29
Obligations .......................................................16
OECD Nation .......................................................17
Other Taxes .......................................................33
Payor .......................................................62
PBGC .......................................................17
PCB's .......................................................41
Permitted Liens ...................................................17, 53
Permitted Mortgage Investments...........................................17
Permitted New Indebtedness...............................................17
Permitted Transaction Amount.............................................18
Person .......................................................18
Plan .......................................................18
Pool Hotel .......................................................18
Prevailing Exchange Rate.................................................18
Pricing Parameter .......................................................18
Principals .......................................................15
Pro Rata Share .......................................................18
Property .......................................................67
Qualified Counterparty...................................................18
Rate of exchange .......................................................70
Rating .......................................................19
Rating Agency .......................................................19
Recourse Exposure Amount.................................................19
Register .......................................................19
REIT .......................................................19
Reportable Event .......................................................19
Required Lenders ...................................................19, 61
Required Payment .......................................................62
Requirement of Law.......................................................19
Restricted Payments..................................................19, 54
Retiree Health Plan......................................................20
Revolver Commitment......................................................20
Revolver Loans ...................................................20, 24
Revolver Maturity Date...................................................20
Revolver Note .......................................................20
S&P .......................................................20
SEC Filing .......................................................20
Subsidiary .......................................................20
Syndication Closing Date..................................................1
Ten-Year Treasury Rate...................................................20
Termination Event .......................................................20
Total Commitments .......................................................21
Type .......................................................21
U.S. .......................................................23
UCC .......................................................21
Unencumbered Pool .......................................................21
Wholly-Owned Subsidiary..................................................23
Year 2000 Problem .......................................................23
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