EXHIBIT 10.4
U.S. $1,000,000,000
SECOND AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT
Dated as of August 3, 1998
Among
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.
as the Borrower,
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SOCIETE GENERALE, SOUTHWEST AGENCY
as Arranger and Administrative Agent,
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BANKERS TRUST COMPANY
as Arranger and Syndication Agent,
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XXXXXX COMMERCIAL PAPER INC.
as Arranger and Documentation Agent,
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XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Documentation Agent
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and
THE LENDERS NAMED HEREIN
as the Lenders
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TABLE OF CONTENTS
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Page
ARTICLE IDEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms............................ 2
Section 1.02 Computation of Time Periods...................... 47
Section 1.03 Accounting Terms; Changes in GAAP................ 47
Section 1.04 Classes and Types of Advances.................... 48
Section 1.05 Miscellaneous.................................... 48
Section 1.06 Recitals......................................... 48
Section 1.07 Amendment and Restatement........................ 48
Section 1.08 Senior Indebtedness.............................. 49
ARTICLE IITHE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01 The Advances..................................... 49
Section 2.02 Method of Borrowing.............................. 53
Section 2.03 Fees............................................. 58
Section 2.04 Reduction of the Commitments..................... 59
Section 2.05 Repayment of Advances............................ 59
Section 2.06 Interest, Late Payment Fee....................... 59
Section 2.07 Prepayment....................................... 61
Section 2.08 Breakage Costs................................... 64
Section 2.09 Increased Costs.................................. 64
Section 2.10 Payments and Computations........................ 66
Section 2.11 Taxes............................................ 68
Section 2.12 Illegality....................................... 71
Section 2.13 Letters of Credit................................ 71
Section 2.14 Determination of Leverage Ratio.................. 75
Section 2.15 Lender Replacement............................... 76
Section 2.16 Sharing of Payments, Etc......................... 77
ARTICLE III CONDITIONS OF LENDING
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Section 3.01 Conditions Precedent to Amendment and
Restatement and Additional Advances.................. 78
Section 3.02 Conditions Precedent for Each Borrowing
or Letter of Credit................................... 81
ARTICLE IVREPRESENTATIONS AND WARRANTIES
Section 4.01 Existence; Qualification; Partners; Subsidiaries...... 82
Section 4.02 Partnership and Corporate Power....................... 83
Section 4.03 Authorization and Approvals........................... 84
Section 4.04 Enforceable Obligations............................... 84
Section 4.05 Parent Common Stock................................... 84
Section 4.06 Financial Statements and Registration Statements...... 85
Section 4.07 True and Complete Disclosure.......................... 85
Section 4.08 Litigation............................................ 86
Section 4.09 Use of Proceeds....................................... 86
Section 4.10 Investment Company Act................................ 86
Section 4.11 Taxes................................................. 86
Section 4.12 Pension Plans......................................... 87
Section 4.13 Condition of Hotel Property; Casualties; Condemnation. 88
Section 4.14 Insurance............................................. 88
Section 4.15 No Burdensome Restrictions; No Defaults............... 88
Section 4.16 Environmental Condition............................... 89
Section 4.17 Legal Requirements, Zoning, Utilities, Access......... 90
Section 4.18 Existing Indebtedness................................. 90
Section 4.19 Title; Encumbrances................................... 91
Section 4.20 Leasing Arrangements.................................. 91
Section 4.21 Franchise Agreements.................................. 91
Section 4.22 Management Agreements................................. 92
Section 4.23 Senior Indebtedness................................... 92
Section 4.24 Specified Secured Indebtedness........................ 92
ARTICLE VAFFIRMATIVE COVENANTS
Section 5.01 Compliance with Laws, Etc............................. 92
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Section 5.02 Preservation of Existence; Separateness, Etc............... 93
Section 5.03 Payment of Taxes, Etc...................................... 94
Section 5.04 Visitation Rights; Lender Meeting.......................... 94
Section 5.05 Reporting Requirements..................................... 95
Section 5.06 Maintenance of Property and Required Work.................. 98
Section 5.07 Insurance.................................................. 99
Section 5.08 Interest Rate Agreements................................... 99
Section 5.09 Approved Participating Leases.............................. 99
Section 5.10 Use of Proceeds............................................ 100
Section 5.11. Collateral................................................. 100
Section 5.12. New Subsidiaries........................................... 100
Section 5.13 Year 2000 Compatibility.................................... 100
Section 5.14 Excluded Foreign Subsidiaries.............................. 101
ARTICLE VINEGATIVE COVENANTS
Section 6.01 Liens, Etc................................................. 101
Section 6.02 Indebtedness............................................... 102
Section 6.03 Agreements Restricting Distributions From Subsidiaries..... 105
Section 6.04 Restricted Payments........................................ 105
Section 6.05 Fundamental Changes; Asset Dispositions.................... 106
Section 6.06 Personal Property Leases................................... 106
Section 6.07 Investments, Loans, Future Properties...................... 107
Section 6.08 Affiliate Transactions..................................... 109
Section 6.09 Sale and Leaseback......................................... 109
Section 6.10 Sale or Discount of Receivables............................ 110
Section 6.11 No Further Negative Pledges................................ 110
Section 6.12 Material Documents......................................... 110
Section 6.13 Limitations on Development, Construction, Renovation and
Purchase of Hotel Properties............................... 111
ARTICLE VIIFINANCIAL COVENANTS
Section 7.01 Interest Coverage Ratio.................................... 111
Section 7.02 Fixed Charge Coverage Ratio................................ 111
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Section 7.03 Maintenance of Net Worth................................... 112
Section 7.04 Leverage Ratio............................................. 112
Section 7.05 Limitations on Secured Indebtedness........................ 112
Section 7.06 Limitations on Secured Recourse Indebtedness............... 112
Section 7.07 Unsecured Interest Coverage Ratio.......................... 112
Section 7.08 Permitted Non-Voting Stock Company Adjustment.............. 113
ARTICLE VIIIEVENTS OF DEFAULT; REMEDIES
Section 8.01 Events of Default.......................................... 113
Section 8.02 Optional Acceleration of Maturity; Other Actions........... 117
Section 8.03 Automatic Acceleration of Maturity......................... 118
Section 8.04 Cash Collateral Account.................................... 118
Section 8.05 Swingline Advances and Commitment.......................... 119
Section 8.06 Non-exclusivity of Remedies................................ 119
Section 8.07 Right of Set-off........................................... 119
ARTICLE IXAGENCY AND ISSUING BANK PROVISIONS
Section 9.01 Authorization and Action................................... 120
Section 9.02 Administrative Agent's Reliance, Etc....................... 120
Section 9.03 Each Agent and Its Affiliates.............................. 121
Section 9.04 Lender Credit Decision..................................... 121
Section 9.05 Indemnification............................................ 122
Section 9.06 Successor Agent and Issuing Banks.......................... 122
Section 9.07 Arrangers, Syndication Agent and Documentation Agents...... 123
ARTICLE XMISCELLANEOUS
Section 10.01 Amendments, Etc............................................ 123
Section 10.02 Notices, Etc............................................... 127
Section 10.03 No Waiver; Remedies........................................ 127
Section 10.04 Costs and Expenses......................................... 127
Section 10.05 Binding Effect............................................. 128
Section 10.06 Lender Assignments and Participations...................... 128
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Section 10.07 Indemnification.......................................... 132
Section 10.08 Execution in Counterparts................................ 132
Section 10.09 Survival of Representations, Indemnifications, etc....... 132
Section 10.10 Severability............................................. 133
Section 10.11 Florida Liens............................................ 133
Section 10.12 Release of Guarantors.................................... 133
Section 10.13 Supplemental Guaranties.................................. 134
Section 10.14 Usury Not Intended....................................... 134
Section 10.15 GOVERNING LAW............................................ 135
Section 10.16 CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL............................................... 135
Section 10.17 Lender Interest Rate Agreements.......................... 137
Section 10.18 Knowledge of Borrower.................................... 137
Section 10.19 Lenders Not in Control................................... 138
Section 10.20 Headings Descriptive..................................... 138
Section 10.21 Time is of the Essence................................... 138
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EXHIBITS:
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Term A Note
Exhibit A-3 - Form of Term B Note
Exhibit A-4 - Form of Swingline Note
Exhibit B - Form of Adjustment Report
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Environmental Indemnity
Exhibit F - Form of Guaranty
Exhibit G - Form of Notice of Borrowing
Exhibit H - Form of Notice of Conversion or Continuation
Exhibit I - Form of Pledge Agreement
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SCHEDULES:
Schedule 1.01(a) - Commitments
Schedule 1.01(b) - Initial Properties and Investment Amount
Schedule 1.01(c) - Approved Franchisors
Schedule 1.01(d) - Engineer Report Scope of Services
Schedule 1.01(e) - Approved Engineers
Schedule 1.01(f) - Environmental Report Scope of Services
Schedule 1.01(g) - Approved Environmental Consultants
Schedule 1.01(h) - Existing AGH Letters of Credit
Schedule 1.01(i) - Guarantors
Schedule 4.01 - Subsidiaries
Schedule 4.08 - Litigation
Schedule 4.17 - Legal Requirements; Zoning; Utilities; Access
Schedule 4.18 - Existing Indebtedness
Schedule 4.20 - Ground Leases
Schedule 4.21 - Franchise Agreements
Schedule 4.22 - Management Agreements
Schedule 5.06 - Required Work
Schedule 5.07 - Insurance
Schedule 10.02 - Notice Information
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SECOND AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT, dated as of
August 3, 1998, is among MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (fka American General Hospitality Operating
Partnership, L.P.), as the Borrower; SOCIETE GENERALE, SOUTHWEST AGENCY, as
Arranger and Administrative Agent; BANKERS TRUST COMPANY, as Arranger and
Syndication Agent; XXXXXX COMMERCIAL PAPER INC., as Arranger and Documentation
Agent; XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Documentation Agent; and the
Lenders.
PRELIMINARY STATEMENTS:
WHEREAS, in connection with the Merger, CapStar is merging with and into AGH
REIT to form the Parent and the CapStar Hotel LLCs are merging with and into AGH
OP to form the Borrower, all as more particularly described in the Registration
Statements;
WHEREAS, contemporaneously with the Merger CapStar will utilize Advances to
repay the Existing CapStar Indebtedness to be Repaid;
WHEREAS, certain of the parties hereto previously entered into the Existing
AGH Credit Agreement pursuant to which the Existing AGH Lenders have made
advances to AGH OP, and have issued or participated in the Existing AGH Letters
of Credit, in each case on the terms and conditions set forth therein;
WHEREAS, the Borrower has requested that the Existing AGH Lenders amend the
Existing AGH Credit Agreement and the other Existing AGH Credit Documents in
order to revise certain terms thereof and the Existing AGH Lenders have agreed
to do so on the terms and conditions set forth herein;
WHEREAS, the parties hereto have agreed to amend and restate the Existing AGH
Credit Agreement as amended in its entirety for clarity only, and amend the
other Existing AGH Credit Documents, in order to (i) add certain Lenders as
parties to this Agreement, (ii) acknowledge that those Existing AGH Lenders who
will be repaid in full in connection with this Agreement are no longer parties
to this Agreement and have been repaid in full as if the Existing AGH Credit
Agreement had been repaid in full, (iii) increase the Commitments under this
Agreement to $1,000,000,000 and in part change the Class of Commitments, (iv)
provide for the Obligations to be secured by certain Collateral and (v) amend
certain other provisions of the Existing AGH Credit Agreement and the other
Existing AGH Credit Documents as more fully set forth in this Agreement;
WHEREAS, this Amended and Restated Senior Credit Agreement constitutes for
all purposes an amendment to the Existing AGH Credit Agreement and not a new or
substitute agreement and each reference to an "Advance" and "Letter of Credit"
herein shall mean each such Advance made and each Letter of Credit issued
heretofore under the Existing AGH Credit Agreement;
WHEREAS, Bank One, Texas, N.A., Societe Generale, Southwest Agency and the
other Existing AGH Lenders who are agents under the Existing AGH Credit
Agreement desire to resign from their respective agency capacities under the
Existing AGH Credit Agreement, and the Lenders desire to appoint Societe
Generale, Southwest Agency as Administrative Agent and make certain other
changes with respect to the other agents for the facilities described in this
Agreement, all as more fully provided herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions contained in this Agreement, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.0 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Acceptable Security Interest" means a security interest which (a) exists in
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favor of the Administrative Agent for its benefit and the ratable benefit of the
Lenders, (b) is superior to all other security interests, (c) secures the
Obligations and (d) is perfected and enforceable against all Persons in
preference to any rights of any Person in the property encumbered thereby.
"Accession Agreement" means an Accession Agreement in the form attached
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respectively
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the Guaranty, Environmental Indemnity and Pledge Agreement as Annex 1 thereto,
which agreement causes the Person executing and delivering the same to the
Administrative Agent to become a party to the Guaranty, Environmental Indemnity
and Pledge Agreement.
"Adjusted EBITDA" means, for any Person or Hotel Property, as applicable, for
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any period, the EBITDA of such Person or Hotel Property, as applicable, for such
period less the aggregate FF&E Reserves for such period in respect of, as
----
applicable, each Hotel Property owned by such Person or its Subsidiaries
(whether located on land owned by or land leased to such owner of the Hotel
Property) or such Hotel Property.
"Adjusted Net Worth" means, for the Parent as of any date, the sum of (a) the
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Parent's Net Worth on such date plus (b) the minority interest of the Parent on
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such date determined in accordance with GAAP (excluding that portion of the
minority interest attributable to ownership interests in any Subsidiary of the
Parent held by Persons [other than Persons who own partnership interests in the
Borrower] for any such Subsidiary which (i) is not a Guarantor and (ii) has not
granted a Lien on all or substantially all of such Subsidiary's assets to the
Borrower to secure Indebtedness of such Subsidiary to the Borrower) plus (c) the
----
OP Adjustment on such date.
"Adjusted Base Rate" means, for any day, the fluctuating rate per annum of
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interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Rate in effect on such day plus 1/2%.
"Adjustment Event" has the meaning set forth in Section 2.14(b).
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"Adjustment Report" means a certificate of the Borrower in substantially the
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form of the attached Exhibit B.
"Administrative Agent" means Societe Generale, Southwest Agency in its
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capacity as Administrative Agent for the Lenders pursuant to Article IX and any
successor Administrative Agent appointed pursuant to Section 9.06.
"Administrative Agent Fee Letter" means the letter agreement dated as of May
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21, 1998 among CapStar, AGH Reit, and Societe Generale, Southwest Agency, as
amended.
"Advance" means a Revolving Advance, a Term A Advance, a Term B Advance, or a
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Swingline Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
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indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise. A Person holding
35% or more of the voting capital stock of another Person shall be deemed to
have control.
"AGH GP" means AGH GP, Inc., a Nevada corporation.
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"XXXX" means American General Hospitality, Inc., a Texas corporation.
----
"AGH Leasing" means AGH Leasing, L.P., a Delaware limited partnership.
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"AGH LP" means AGH LP, Inc., a Nevada corporation.
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"AGH OP" means American General Hospitality Operating Partnership, L.P., a
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Delaware limited partnership.
"AGH REIT" means American General Hospitality Corporation, a Maryland
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corporation.
"Agreement" has the meaning given such term in the initial paragraph of this
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agreement.
"Applicable Lending Office" means, with respect to each Lender, such Lender's
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Domestic Lending Office in the case of a Base Rate Advance or a Swingline
Advance and such Lender's LIBOR Lending Office in the case of a LIBOR Advance.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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"Applicable Margin" means, (a) with respect to a Swingline Advance at any
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date, the applicable percentage per annum set forth below based upon the Status
then in effect under the column for Revolving Advances which are Base Rate
Advances, (b) with respect to any other Class of Advance at any date, the
applicable percentage per annum set forth below based upon the Status then in
effect under the column for such Type and Class of Advance, (c) with respect to
the letter of credit fee payable under Section 2.03(b) at any date, the
applicable percentage per annum set forth below based upon the Status then in
effect under the column for Revolving Advances which are LIBOR Advances and (d)
with respect to the commitment fee payable under Section 2.03(a) at any date,
the applicable percentage per annum set forth below based upon the Status then
in effect under the column "Unused Commitment Fee."
Revolving Advances and Term A Advances Term Advances
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Unused
Base Rate LIBOR Commitment Base Rate LIBOR
Advances Advances Fee Advances Advances
-------- --------- ----------- -------- --------
Level I 0% 1.00% .125% .25% 1.75%
Status
Level II 0% 1.125% .15% .25% 1.75%
Status
Level III 0% 1.17% .15% .25% 1.75%
Status
Level IV 0% 1.225% .20% .25% 1.75%
Status
Level V 0% 1.25% .20% .25% 1.75%
Status
Level VI 0% 1.325% .20% .25% 1.75%
Status
Level VII 0% 1.40% .20% .25% 1.75%
Status
Level VIII .125% 1.50% .25% .25% 1.75%
Status
Level IX .20% 1.65% .25% .50% 2.00%
Status
Level X .30% 1.875% .25% .50% 2.00%
Status
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"Approved Franchisor" means those certain franchisors listed on Schedule
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1.01(c) attached hereto, or any other reputable, nationally known, third party
franchisor or licensor of a Hotel Property approved by the Administrative Agent
in writing.
"Approved Fund" means any fund that invests in commercial loans which is
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advised or managed by an investment advisor which has total assets under
management in excess of $100,000,000.
"Approved Other Country" means each of the following countries: Canada,
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Mexico, United Kingdom, France, Germany, Spain, Belgium, The Netherlands,
Luxembourg, Italy, Portugal, Austria, Switzerland, Norway, Sweden, Denmark, U.
S. Virgin Islands, British Virgin Islands, Bahamas, Puerto Rico, and Japan.
"Approved Participating Lease" means a participating lease with an Approved
----------------------------
Participating Lessee in substantially the form of those participating leases
being executed in connection with the Merger or such other form as is approved
by the Administrative Agent in writing (which approval shall not be unreasonably
withheld).
"Approved Participating Lessee" means OPCO, OPCO OP, AGH Leasing, Twin
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Towers Leasing, L.P. (approved only with respect to the Initial Property for
which it is a lessee), Prime Hospitality (approved only with respect to the
Initial Properties for which it is a lessee and those Future Properties which
the Borrower has already agreed to purchase from Prime Hospitality), any
Approved Franchisor, any of the foregoing Person's respective Affiliates and any
future participating lessee for a Hotel Property approved by two out of the
three Arrangers in writing.
"Arranger" means each of Societe Generale, Southwest Agency, Bankers Trust
--------
Company, and Xxxxxx Commercial Paper Inc., in its capacity as Arranger for the
Lenders and any successor Arranger appointed for any of such Persons pursuant to
Section 9.06.
"Asset Disposition" means (a) any sale or lease of all or substantially all
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of a Hotel Property (in which the Borrower or a Guarantor is lessor but
exclusive of the Approved Participating Leases), or conveyance, exchange,
transfer, or assignment of any other Investment or Property by the Borrower or a
Guarantor to a Person other than the Borrower or a Guarantor; (b) any sale of
timeshare intervals for any Hotel Property, but not a Permitted Timeshare
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Conversion; and (c) any loss, casualty or condemnation of a Hotel Property owned
by the Borrower or any Guarantor.
"Assignment and Acceptance" means an assignment and acceptance entered into
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by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of the attached Exhibit C.
"Base Rate Advance" means an Advance which bears interest as provided in
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Section 2.06(a).
"Borrower" means MeriStar Hospitality Operating Partnership, L.P., a
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Delaware limited partnership.
"Borrowing" means a Revolving Borrowing, a Term A Borrowing, a Term B
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Borrowing or a Swingline Advance.
"Business Day" means a day of the year on which banks are not required or
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authorized to close in New York City or Dallas, Texas and, if the applicable
Business Day relates to any LIBOR Advances, any day other than a Saturday or
Sunday or a day on which banking institutions are generally authorized or
obligated by law or executive order to close in the City of London, England.
"Capital Expenditure" means any payment made directly or indirectly for the
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purpose of acquiring or constructing fixed assets, Real Property or equipment
which in accordance with GAAP would be capitalized in the fixed asset accounts
of such Person making such expenditure, including, without limitation, amounts
paid or payable for such purpose under any conditional sale or other title
retention agreement or under any Capital Lease, but excluding repairs of
Property in the normal and ordinary course of business in keeping with the past
practices of the Borrower.
"Capital Lease" means, for any Person, any lease of any Property (whether
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real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"Capitalized Lease Obligations" means, as to any Person, the capitalized
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amount of all obligations of such Person or any of its Subsidiaries under
Capitalized Leases, as determined on a consolidated basis in conformity with
GAAP.
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"CapStar" means CapStar Hotel Company, a Delaware corporation.
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"CapStar Hotel LLCs" means CapStar Hotel Operating Company, LLC and CapStar
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Hotel Operating Company II, LLC, each a Delaware limited liability company.
"Cash Collateral Account" means a special cash collateral account
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containing cash deposited pursuant to the terms of this Agreement to be
maintained at the Administrative Agent's office in accordance with Section 8.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
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Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"Change in Control" means for any Person a change in ownership or control
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of such Person effected through either of the following transactions:
(a) any Person or related group of Persons (other than such
Person or an Affiliate of such Person) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of securities possessing more than
thirty-five percent (35%) of the total combined voting power of such
Person's outstanding securities; or
(b) there is a change in the composition of such Person's Board
of Directors over a period of thirty-six (36) consecutive months (or less)
such that a majority of Board members (rounded up to the nearest whole
number) ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (i) who
were still in office at the time such election or nomination was approved
by the Board.
"Class" has the meaning set forth in Section 1.04.
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"Closing Date" means August 3, 1998.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Collateral" means the Parent's and its Subsidiaries' (except Permitted
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Other Subsidiaries') interest in the capital stock, limited liability interests
and partnership interests of all existing Subsidiaries of the Parent which are
not Permitted Other Subsidiaries and any future Material Subsidiaries, and any
other collateral described in the Pledge Agreement.
"Commitments" means, (a) as to any Lender, its Revolving Commitment, its
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Term A Commitment and its Term B Commitment, and (b) as to the Swingline Lender,
its Swingline Commitment.
"Compliance Certificate" means a certificate of the Borrower in
----------------------
substantially the form of the attached Exhibit D.
"Consolidated" refers to the consolidation of the accounts of the Borrower
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with the Borrower's Subsidiaries and the Parent with the Parent's Subsidiaries,
as applicable, in accordance with GAAP, including principles of consolidation
consistent with those applied in the preparation of the Registration Statements.
"Control Percentage" means, with respect to any Person, the percentage of
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the outstanding capital stock of such Person having ordinary voting power which
gives the direct or indirect holder of such stock the power to elect a majority
of the Board of Directors of such Person.
"Controlled Group" means all members of the controlled group of
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corporations and all trades (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Convert", "Conversion", and "Converted" each refers to a conversion of
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Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
"Convertible Indebtedness" means CapStar's 4.75% Convertible Subordinated
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Notes due October 15, 2004 in the aggregate principal amount of $172,500,000 and
any notes issued in exchange thereof pursuant to the Convertible Indebtedness
Indenture.
"Convertible Indebtedness Indenture" means the Indenture dated as if
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October 16, 1997
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between CapStar and First Trust of New York, National Association, as trustee.
"Credit Documents" means this Agreement, the Notes, the Guaranties, the
----------------
Environmental Indemnities, the Security Documents, the Fee Letter, the
Administrative Agent Fee Letter, and each other agreement, instrument or
document executed by the Borrower or any of its Subsidiaries at any time in
connection with this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition which
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with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Defaulting Lender" means any Lender which has wrongfully refused or failed
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to make available its portion of any Borrowing or to fund its portion of any
unreimbursed payment under Section 9.05, or notified in writing the Borrower or
the Administrative Agent that such Lender does not intend to comply with its
obligations under this Agreement.
"Development Property" means either (a) a new Hotel Property under
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construction including the conversion of a non-Hotel Property into a Hotel
Property or (b) an existing Hotel Property which is undergoing an expansion
pursuant to which the total guest rooms for such Hotel Property will be
increased by 25% or more.
"Dollar Equivalent" means the equivalent in another currency of an amount
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in U.S. Dollars to be determined by reference to the rate of exchange quoted by
the Administrative Agent, at 11:00 a.m. (Dallas, Texas time) on the date of
determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
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"Domestic Lending Office" means, with respect to any Lender, the office of
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such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule 10.02 or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Administrative Agent.
"EBITDA" means for any Person or Hotel Property, as applicable, for any
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period for which such amount is being determined, an amount equal to (a) the Net
Income for such Person or Hotel Property, as applicable, for such period plus
----
(b) to the extent deducted in determining Net
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Income, Interest Expense, income taxes, depreciation, amortization, and other
non-cash items for such period, as determined on a Consolidated basis in
accordance with GAAP plus (c) to the extent deducted in determining Net Income,
----
deductions for minority interest attributable to the ownership interests in the
Borrower not owned (directly or indirectly) by the Parent; provided that with
--------
respect to EBITDA attributable to an Unconsolidated Entity, (i) for any such
Unconsolidated Entity for which the Unconsolidated Entity Percentage is equal to
or greater than 20%, such Person shall only be deemed to have received the
Unconsolidated Entity Percentage of such Unconsolidated Entity's EBITDA to the
extent not subject to (A) any limitation or restriction (except for the
obligation to repay Indebtedness of such Person) on the right to distribute such
EBITDA to such Person's owners or (B) any decision by another Person to not
distribute the available cash of such Unconsolidated Entity to the owners of
such Unconsolidated Entity, and (ii) for any such Unconsolidated Entity for
which the Unconsolidated Entity Percentage is less than 20%, such Person shall
only be deemed to have received the actual sums paid by such Unconsolidated
Entity to such Person.
"Effective Date" means the date all of the conditions precedent set forth
--------------
in Section 3.01 have been satisfied.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
-----------------
the United States, or any State thereof, and having primary capital of not less
than $250,000,000 and approved by the Administrative Agent and the Issuing Bank,
which approvals will not be unreasonably withheld, (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development and having primary capital
(or its equivalent) of not less than $250,000,000 (or its Dollar Equivalent) and
approved by the Administrative Agent and the Issuing Bank, which approvals will
not be unreasonably withheld, (c) an investment bank organized under the laws of
the United States, or any State thereof, and having total assets in excess of
$5,000,000,000, (d) an insurance company, finance company or financial
institution (whether a corporation, partnership, trust or other Person)
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $5,000,000,000, (e) any Approved Fund, (f) any
"accredited investor" (as defined in Regulation D of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder) which has
total assets in excess of $100,000,000, (g) a Lender, and (h) an Affiliate of
the respective assigning Lender, without approval of any Person but otherwise
meeting the eligibility requirements of (a), (b), (c), (d), (e) or (f) above.
-11-
"Engineering Report" means with respect to any Hotel Property, an
------------------
engineering report in accordance with the scope of services attached hereto as
Schedule 1.01(d) reasonably satisfactory to the Administrative Agent prepared
for the Lenders by a Person set forth on Schedule 1.01(e) or otherwise
reasonably satisfactory to the Administrative Agent covering the physical
condition of the Hotel Property, including without limitation the structural,
electrical, plumbing, mechanical and other essential components of the Hotel
Property.
"Environment" or "Environmental" shall have the meanings set forth in 42
----------- -------------
U.S.C. (S) 9601(8), as amended.
"Environmental Claim" means any third party (including governmental
-------------------
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
"Environmental Indemnity" means one or more environmental indemnity
-----------------------
agreements dated of even date herewith in substantially the form of the attached
Exhibit E executed or to be executed by the Borrower, the Parent and all
Subsidiaries of the Borrower (excluding the Permitted Other Subsidiaries), and
any future environmental indemnities executed in connection with any Hotel
Property, as any of such environmental indemnities may be amended hereafter in
accordance with the terms of such agreements.
"Environmental Law" means all Legal Requirements arising from, relating to,
-----------------
or in connection with the Environment, health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment, processing,
recycling, reclamation, cleanup, storage, disposal or transportation; (c)
exposure to pollutants, contaminants, hazardous, medical, infectious, or toxic
substances, materials or wastes; (d) the safety or health of employees; or (e)
the manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, medical, infectious, or toxic substances,
materials or wastes.
-12-
"Environmental Permit" means any permit, license, order, approval or other
--------------------
authorization under Environmental Law.
"Environmental Report" means with respect to any Hotel Property, an
--------------------
environmental report in accordance with the scope of services attached hereto as
Schedule 1.01(f) prepared for the Lenders by a Person set forth on Schedule
1.01(g) or otherwise reasonably satisfactory to the Administrative Agent
covering the Hotel Property and the soil and the groundwater thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"Event of Default" has the meaning set forth in Section 8.01.
----------------
"Exchange Act" has the meaning set forth in Section 2.04.
------------
"Excluded Foreign Subsidiaries" means those Subsidiaries of the Borrower
-----------------------------
which (a) are incorporated or organized under the laws of any jurisdiction other
than the United States or any state or territory thereof, (b) own only Hotel
Properties and related assets which are Unencumbered except for FF&E which is
collateral for Indebtedness permitted by this Agreement and (c) do not own Hotel
Properties and other Investments which for all such Subsidiaries in the
aggregate have an Investment Amount in excess of $75,000,000.
"Existing AGH Credit Agreement" means that Amended and Restated Senior
-----------------------------
Unsecured Credit Agreement, dated as of February 13, 1998, among AGH OP, Societe
Generale, Southwest Agency, as Arranger, Syndication Agent, and Documentation
Agent, Bank One, Texas, N.A., as Administrative Agent, The Bank of Nova Scotia
and Xxxxx Fargo Bank, National Association, as Managing-Agents and the Existing
AGH Lenders, as amended by First Amendment to Credit Agreement dated as of
February 27, 1998, among such same Persons.
"Existing AGH Credit Documents" means the Credit Documents (as defined in
-----------------------------
the Existing AGH Credit Agreement).
"Existing AGH Lenders" means the banks and other financial institutions
--------------------
party to the
-13-
Existing AGH Credit Agreement.
"Existing AGH Letters of Credit" means the letters of credit outstanding on
------------------------------
the date of this Agreement issued for the account of the Borrower or its
Subsidiaries which are described in the attached Schedule 1.01(h), as the same
may be amended, supplemented, and otherwise modified from time to time.
"Existing AGH Notes" means the promissory notes payable under the Existing
------------------
AGH Credit Agreement.
"Existing CapStar Indebtedness to be Repaid" means all Indebtedness owing
------------------------------------------
pursuant to that certain Credit Agreement dated as of June 30, 1997, by and
between CapStar; Xxxxxx Brothers Holdings, Inc., Bankers Trust Company,
BANKBOSTON, N.A., and Xxxxx Fargo Bank, N.A., as various agents; and the other
lenders party thereto, as amended.
"Existing Subordinate Indebtedness" means CapStar's 8.75% Senior
---------------------------------
Subordinated Notes due August 19, 2007 in the aggregate principal amount of
$150,000,000 and any notes issued in exchange thereof pursuant to the Existing
Subordinate Indebtedness Indenture.
"Existing Subordinate Indebtedness Indenture" means the Indenture dated as
-------------------------------------------
of August 19, 1997 between CapStar and IBJ Xxxxxxxx Bank & Trust Company, as
trustee.
"Expiration Date" means, with respect to any Letter of Credit, the date on
---------------
which such Letter of Credit will expire or terminate in accordance with its
terms.
"Facilitators" means Societe Generale, Southwest Agency, Bankers Trust
------------
Company, and Xxxxxx Commercial Paper Inc.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
------------------
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing
-14-
selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System or any of its successors.
"Fee Letter" means the letter agreement dated as of May 21, 1998 among
----------
CapStar, AGH REIT, and the Facilitators, as amended.
"FF&E" means furniture, fixtures and equipment.
----
"FF&E Reserve" means, for any Person or any Hotel Property for any period,
------------
a reserve equal to four percent (4%) of gross revenues from any Hotel Property
owned by such Person or from such Hotel Property, as applicable, for such
period, excluding, however, from such calculation for the applicable Persons and
Hotel Properties the gross revenues generated by the office, retail and garage
portions of such Hotel Properties or Hotel Properties owned or leased by such
Persons.
"Financial Statements" means the respective financial statements of AGH
--------------------
REIT and its Subsidiaries and CapStar and its Subsidiaries dated as of March 31,
1998.
"Fiscal Quarter" means each of the three-month periods ending on March 31,
--------------
June 30, September 30 and December 31.
"Fiscal Year" means the twelve-month period ending on December 31.
-----------
"Fixed Charges" means, for any Person for the period for which such amount
-------------
is being determined, the amount (without duplication) of all scheduled principal
payments and mandatory prepayments (excluding optional prepayments and scheduled
principal payments in respect of any such Indebtedness which is payable in a
single installment at final maturity), Interest Expense during such period, all
payments scheduled to be made in respect of Capital Leases of such Person and
such Person's Subsidiaries on a Consolidated basis during such period, and all
preferred stock dividends and preferred partnership distributions paid during
such period by such Person and such Person's Subsidiaries on a Consolidated
basis.
"Fixed Charge Coverage Ratio" means, as of the end of any Rolling Period, a
---------------------------
ratio of (a) the Parent's Adjusted EBITDA for such Rolling Period to (b) the
Parent's Fixed Charges for such Rolling Period.
-15-
"Florida Liens" means the Liens securing the Existing AGH Credit Documents
-------------
on the Initial Properties located in the State of Florida except for those Liens
pertaining to the cash management system used in the Existing AGH Credit
Documents.
"Free Cash Flow" means, for any Person for any period, (a) the Funds From
--------------
Operations for such period plus (b) any amortization costs for such period not
----
previously added back in the computation of Funds From Operations less (c) the
----
sum of (i) the aggregate FF&E Reserves for such Person and its Subsidiaries for
such period, and (ii) the aggregate amount of scheduled principal payments and
mandatory prepayments on the Total Indebtedness of such Person (excluding
optional prepayments, scheduled principal payments in respect of any such
Indebtedness which is payable in a single installment at final maturity and
mandatory prepayments in connection with Asset Dispositions) required to be made
during such period.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance Response
---- ---------- ---------
Trust Fund, established pursuant to 42 U.S.C. (S) 9631 (1988) and the Post-
closure Liability Trust Fund, established pursuant to 42 U.S.C. (S) 9641 (1988),
which statutory provisions have been amended or repealed by the Superfund
Amendments and Reauthorization Act of 1986, and the "Fund," "Trust Fund," or
"Superfund" that are now maintained pursuant to 42 U.S.C. (S) 9507.
"Funds From Operations" means, for any Person for any period for which such
---------------------
amount is being determined, an amount equal to such Person's (a) Net Income for
such period excluding gains (losses) from debt restructuring and sales of
property (including furniture and equipment) plus (b) depreciation and
----
amortization (excluding amortization of deferred financing costs) plus (or
----
minus) (c) adjustments for Unconsolidated Entities owned by such Person to
-----
reflect the actual cash received by such Person from such Unconsolidated
Entities in lieu of those amounts included in the preceding clauses (a) and (b)
for such Unconsolidated Entities.
"Future Property" means any Hotel Property except for the Initial
---------------
Properties which the Parent or any Subsidiary of the Parent acquires which Hotel
Property may be subject to a timeshare program to the extent that the Permitted
Timeshare Requirements would be satisfied upon the acquisition of such Hotel
Property.
"GAAP" means United States generally accepted accounting principles as in
----
effect from time to time, applied on a basis consistent with the requirements of
Section 1.03.
-16-
"Governmental Authority" means any foreign governmental authority, the
----------------------
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, securities exchange, self-regulatory organization, authority or
instrumentality, bureau or court having jurisdiction over any Lender, the
Parent, the Borrower, any Subsidiaries of the Borrower or the Parent, an
approved participating lessee, a property manager or any of their respective
Properties.
"Governmental Proceedings" means any action or proceedings by or before any
------------------------
Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Guarantor" means each of the Parent and each Subsidiary of the Borrower
---------
(except the Permitted Other Subsidiaries and the Subsidiaries which respectively
own the Atlanta, Georgia Westin during such time as the Borrower holds a first-
lien mortgage on such Hotel Property), and "Guarantors" means all of such
----------
Persons. The Guarantors on the Effective Date are identified on Schedule
1.01(i).
"Guaranty" means one or more Guaranty and Contribution Agreements in
--------
substantially the form of the attached Exhibit F executed by the Borrower and
all of the Subsidiaries of the Borrower (excluding the Permitted Other
Subsidiaries and the Subsidiary which owns the Atlanta, Georgia Westin during
such time as the Borrower holds a first-lien mortgage on such Hotel Property),
evidencing the joint and several guaranty by the signatories thereto of the
obligations of Borrower in respect of the Credit Documents, and any future
guaranty and contribution agreement executed to secure Advances except for
Supplemental Guaranties, as any of such agreements may be amended hereafter in
accordance with the terms of such agreements.
"Hazardous Substance" means the substances identified as such pursuant to
-------------------
CERCLA and those regulated under any other Environmental Law, including without
limitation pollutants, contaminants, petroleum, petroleum products, radio
nuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
---------------
Environmental Law.
-17-
"Hospitality/Leisure-Related Business" shall mean a full service and
------------------------------------
limited service hotel or resort, executive conference center, an extended stay
lodging, or a convention center, and other businesses incidental to, or in
support of such business, including without limitation, (a) developing,
improving or acquiring lodging facilities, restaurants and other food-service
facilities, golf facilities or other entertainment facilities or club, timeshare
programs, convention or meeting facilities and marketing services or reservation
systems related thereto, and (b) acquiring, developing, or improving any real
estate (including retail, office or garage use) ancillary or connected to any
hotel, resort, executive conference center, extended stay lodging, convention
center or reservation system constructed, leased, owned, managed or operated (or
proposed to be constructed, leased, or owned) by the Borrowers, the Guarantors
or any of their Subsidiaries at any time; provided that such business shall not
-------- ---
include any casino or other gaming (even if only a part of a Hotel Property) or
senior living.
"Hotel Property" for any hotel means the Real Property and the Personal
--------------
Property for such hotel.
"Improvements" for any hotel means all buildings, structures, fixtures,
------------
tenant improvements and other improvements of every kind and description now or
hereafter located in or on or attached to the Land for such hotel; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof.
"Indebtedness" means (without duplication), at any time and with respect to
------------
any Person, (a) indebtedness of such Person for borrowed money (whether by loan
or the issuance and sale of debt securities) or for the deferred purchase price
of property or services purchased (other than amounts constituting trade
payables, accruals or bank drafts arising in the ordinary course of business),
including without limitation indebtedness of such Person which is convertible
into an ownership interest in such Person; (b) indebtedness of others in the
amount which such Person has directly or indirectly assumed or guaranteed or
otherwise provided credit support therefor or for which such Person is liable as
a partner of such Person; (c) indebtedness of others in the amount secured by a
Lien on assets of such Person, whether or not such Person shall have assumed
such indebtedness; (d) obligations of such Person in respect of letters of
credit, acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person (other than trade payables or bank drafts arising in the ordinary
course); (e) obligations of such Person under Capital Leases; (f) to the extent
treated as a liability under GAAP obligations under interest rate swap
agreements, interest rate cap agreements, interest rate
-18-
collar agreements or other similar agreements or arrangements designed to
protect against fluctuations in interest rates; (g) to the extent treated as a
liability under GAAP, unfunded liability under a Plan.
"Initial Properties" means collectively the Hotel Properties listed on
------------------
Schedule 1.01(b), and "Initial Property" means any of such Hotel Properties.
----------------
"Intercompany Agreement" means the Intercompany Agreement dated as of
----------------------
August 3, 1998, by and among the Parent, the Borrower, OPCO, and OPCO OP.
"Interest Coverage Ratio" means, as of the end of any Rolling Period, a
-----------------------
ratio of (a) the Parent's EBITDA to (b) Parent's Interest Expense, for such
Rolling Period.
"Interest Expense" means, for any Person for any period for which such
----------------
amount is being determined, the total interest expense (including that properly
attributable to Capital Leases in accordance with GAAP) and all charges incurred
with respect to letters of credit determined on a Consolidated basis in
conformity with GAAP, plus capitalized interest of such Person and its
----
Subsidiaries.
"Interest Period" means, for each LIBOR Advance comprising part of the same
---------------
Borrowing, the period commencing on the date of such Advance or the date of the
Conversion of any Base Rate Advance into such an Advance and ending on the last
day of the period selected by the Borrower pursuant to the provisions below and
Section 2.02 and, thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and Section
2.02. The duration of each such Interest Period shall be one, two, three or six
months, in each case as the Borrower may select, upon notice received by the
Administrative Agent not later than 11:00 a.m. (Dallas, Texas time) on the third
Business Day prior to the first day of such Interest Period, provided, however,
-------- -------
that:
(a) Interest Periods for Advances of the same Borrowing shall be of the
same duration;
(b) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
--------
extension would cause the last day of such Interest
-19-
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(d) each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires; and
(e) no Interest Period with respect to any portion of any Revolving Advance
shall extend beyond the Revolving Maturity Date, no Interest Period with respect
to any portion of any Swingline Advance shall extend beyond the Swingline
Maturity Date, no Interest Period with respect to any portion of any Term A
Advance shall extend beyond the Term A Maturity Date and no Interest Period with
respect to any portion of any Term B Advance shall extend beyond the Term B
Maturity Date.
"Interest Rate Agreements" means any interest rate swap agreement, interest
------------------------
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect the Borrower, the Parent or any of their
respective Subsidiaries against fluctuations in interest rates.
"Investment" means, with respect to any Person, (a) any loan or advance to
----------
any other Person, (b) the ownership, purchase or other acquisition of, any
Stock, Stock Equivalents, other equity interest, obligations or other securities
of, (i) any other Person, (ii) all or substantially all of the assets of any
other Person, or (iii) all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any other Person, or
(c) any joint venture or partnership with, or any capital contribution to, or
other investment in, any other Person or any real property.
"Investment Amount" means (a) for any Hotel Property the sum of (i) for any
-----------------
Initial Property, the amount set forth for such Initial Property on Schedule
1.01(b) attached hereto, and for any other Hotel Property, the aggregate
purchase price paid by the Borrower or its Subsidiary for such other Hotel
Property (giving effect to any securities used to purchase a Hotel Property at
the fair market value of the securities at the time of purchase based upon the
price at which such
-20-
securities could be exchanged into the Parent's common stock assuming such
exchange occurred on the date of acquiring the Hotel Property), and (ii) the
actual cost of any Capital Expenditures for such Hotel Property made by the
Borrower or its Subsidiaries; provided that with respect to the Investment
--------
Amount for a Hotel Property owned or leased by a Unconsolidated Entity, the
Investment Amount for such Hotel Property shall be deemed to be the
Unconsolidated Entity Percentage of the Investment Amount for such Hotel, and
(b) for any other Investment the aggregate purchase price paid by the Borrower
or its Subsidiary for such other Investment (giving effect to any securities
used to purchase such Investment at the fair market value of the securities at
the time of purchase based upon the price at which such securities could be
exchanged into the Parent's common stock assuming such exchange occurred on the
date of acquiring such Investment).
"Investment Grade Rating Status" means that the Parent has a long-term
------------------------------
senior unsecured debt rating of BBB- or better by S&P and Baa3 or better by
Moody's.
"Issuing Bank" means, for the Existing AGH Letters of Credit, Bank One,
------------
Texas, N.A., and for any future Letter of Credit or renewal of Existing AGH
Letters of Credit, Societe Generale, Southwest Agency or any Lender acting as a
successor Issuing Bank pursuant to Section 9.06, and "Issuing Banks" means,
-------------
collectively, all of such Lenders.
"Land" for any hotel means the real property upon which the hotel is
----
located, together with all rights, title and interests appurtenant to such real
property, including without limitation all rights, title and interests to (a)
all strips and gores within or adjoining such property, (b) the streets, roads,
sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, (d) all reversions and remainders, (e) all air space rights,
and all water, sewer and wastewater rights, (e) all mineral, oil, gas,
hydrocarbon substances and other rights to produce or share in the production of
anything related to such property, and (f) all other appurtenances appurtenant
to such property, including without limitation, any now or hereafter belonging
or in anywise appertaining thereto.
"Legal Requirement" means any law, statute, ordinance, decree, requirement,
-----------------
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"Lenders" means the lenders listed on the signature pages of this Agreement
-------
and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 10.06.
-21-
"Letter of Credit" means, individually, any letter of credit issued by the
----------------
Issuing Bank in accordance with the provisions of Section 2.13 of this Agreement
including any Existing AGH Letter of Credit, and "Letters of Credit" means all
-----------------
such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
--------------------------
such Letter of Credit and any reimbursement or other agreements, documents, and
instruments entered into in connection with or relating to such Letter of
Credit.
"Letter of Credit Exposure" means, at any time, without duplication, the
-------------------------
sum of (a) the aggregate undrawn maximum face amount of each Letter of Credit
and (b) the aggregate unpaid amount of all Letter of Credit Obligations at such
time.
"Letter of Credit Obligations" means all obligations of the Borrower
----------------------------
arising in respect of the Letter of Credit Documents, including without
limitation the aggregate drawn amounts of Letters of Credit which have not been
reimbursed by the Borrower or converted into a Base Rate Advance pursuant to the
provisions of Section 2.13(c).
"Leverage Ratio" means the ratio on any date of (a) the Parent's Total
--------------
Indebtedness on such date; provided that prior to November 1, 1998, the
--------
Convertible Indebtedness will not be included in the calculation of the Parent's
Total Indebtedness solely for the purpose of calculating the Leverage Ratio, to
(b) the EBITDA of the Parent and the Parent's Subsidiaries on a Consolidated
basis for the Rolling Period immediately preceding such date; provided that if
--------
any Parent Property or any of the Parent's or its Subsidiary's other Investments
with an Investment Amount in excess of $5,000,000 has been sold or conveyed by
such Person on or prior to such date, the EBITDA arising from such Parent
Property or Investment, as applicable, for the applicable Rolling Period shall
be excluded from the calculation of EBITDA solely for calculation of the
Leverage Ratio; and provided further that if the Parent or its Subsidiary has
----------------
acquired any Parent Property or any Investment with an Investment Amount in
excess of $5,000,000 on or prior to such date, the EBITDA arising from such
Parent Property or Investment, as applicable, for the applicable Rolling Period
shall be included in the calculation of EBITDA solely for calculation of the
Leverage Ratio (adjusted upward or downward to provide for a deemed management
fee equal to a two and one-half percent (2.5%) of gross revenues from such
Property incurred before the date of acquisition of such Property regardless of
the actual management fees paid in connection with such Property incurred before
the date of acquisition of such Property). For purposes of determining
-22-
the Leverage Ratio when the Parent's Total Indebtedness is measured as of the
Rolling Period ended June 30, 1998 or when the EBITDA of the Parent and the
Parent's Subsidiaries is measured for the Rolling Period ended June 30, 1998,
the calculation of the Parent's Total Indebtedness or such EBITDA, as
applicable, shall be the sum of the separate calculations of such figures for
CapStar and AGH REIT based upon (a) the actual results for such Persons for the
first 3 Fiscal Quarters in such Rolling Period and (b) until the actual results
are known for such Persons for the Fiscal Quarter ending June 30, 1998, the pro
forma projections for such Fiscal Quarter delivered by the Borrower to the
Lenders, and thereafter the actual results for such Fiscal Quarter.
"LIBOR" means, for the Interest Period for each LIBOR Advance comprising
-----
part of the same Borrowing, an interest rate per annum (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum) equal to (A) the rate per annum
at which deposits in Dollars are offered to prime banks in the London interbank
market at 11:00 a.m. (London time) three Business Days before the first day of
such Interest Period as shown on the display designated "British Banker's
Association Interest Settlement Rates" on the Telerate System ("Telerate") at
Page 3750 or Page 3740, or such other page or pages as may replace such pages on
Telerate for purposes of displaying such rate, in an amount substantially equal
to the Administrative Agent's LIBOR Advance comprising part of such Borrowing
and for a period equal to such Interest Period divided by (B) one minus the
LIBOR Reserve Requirement; provided, however, that if such rate is not available
on Telerate then such offered rate shall be otherwise independently determined
by Administrative Agent from an alternate, substantially similar source
available to Administrative Agent or shall be calculated by Administrative Agent
by a substantially similar methodology as that theretofore used to determine
such offered rate in Telerate. It is agreed that for purposes of this
definition, LIBOR Advances made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the
reserve requirements of Regulation D.
"LIBOR Advance" means any Advance which bears interest as provided in
-------------
Section 2.06(b).
"LIBOR Lending Office" means, with respect to any Lender, the office of
--------------------
such Lender specified as its "LIBOR Lending Office" opposite its name on
Schedule 10.02 (or, if no such office is specified, its Domestic Lending Office)
or such other office of such Lender as such Lender may from time to time specify
to the Borrower and the Administrative Agent.
"LIBOR Reserve Requirement" shall mean, on any day, that percentage
-------------------------
(expressed as a
-23-
decimal fraction) which is in effect on such date, as provided by the Federal
Reserve System for determining the maximum reserve requirements generally
applicable to financial institutions regulated by the Federal Reserve Board
comparable in size and type to the Administrative Agent (including, without
limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined in
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding (or other category of
liabilities which includes deposits by reference to which the interest rate on a
LIBOR Advance is determined or any category or extensions of credit which
includes loans by a non-United States office of the Administrative Agent to
United States residents). Each determination by the Administrative Agent of the
LIBOR Reserve Requirement, shall, in the absence of manifest error, be
conclusive and binding upon the Borrower.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
----
interest, encumbrance or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement).
"Liquid Investments" means:
------------------
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days from
the date of acquisition thereof ("bank debt securities"), issued by (A) any
Lender or (B) any other bank or trust company which has a combined capital
surplus and undivided profit of not less than $250,000,000 or the Dollar
Equivalent thereof, if at the time of deposit or purchase, such bank debt
securities are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's, and (ii) commercial paper issued by (A) any Lender
or (B) any other Person if at the time of purchase such commercial paper is
rated not less than "A-2" (or the then equivalent) by the rating service of S&P
or not less than "P-2" (or the then equivalent) by the rating service of
Moody's, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall
be selected by the Borrower with the consent of the Administrative Agent;
-24-
(c) repurchase agreements relating to investments described in clauses (a)
and (b) above with a market value at least equal to the consideration paid in
connection therewith, with any Person who regularly engages in the business of
entering into repurchase agreements and has a combined capital surplus and
undivided profit of not less than $250,000,000 or the Dollar Equivalent thereof,
if at the time of entering into such agreement the debt securities of such
Person are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's; and
(d) such other instruments (within the meaning of New York's Uniform
Commercial Code) as the Borrower may request and the Required Lenders may
approve in writing, which approval will not be unreasonably withheld.
"Mandatory Revolving Borrowing" means a Revolving Borrowing comprised of
-----------------------------
Base Rate Advances made to repay a Swingline Advance which has not been repaid
to the Swingline Lender on the date due.
"Market Value" means for any Hotel Property, at any date, the value thereof
------------
to be calculated as follows:
(a) For a Hotel Property that has been owned for four (4) or more
Fiscal Quarters, by the Parent (or by AGH REIT or CapStar) or by a Person that
has been a Subsidiary of the Parent (or of AGH REIT or CapStar) during such
entire period, the product of (i) the Adjusted EBITDA for such Hotel Property
for the preceding Rolling Period times (b) ten (10); and
-----
(b) For any other Hotel Property, the Investment Amount in such Hotel
Property.
"Material Adverse Change" shall mean a material adverse change (a) in the
-----------------------
business, property, condition (financial or otherwise), prospects or results of
operations of the Borrower, the Parent and the other Guarantors taken as a
whole, in each case since December 31, 1997 (assuming the Merger had occurred on
or before such date) or (b) in the validity or enforceability of this Agreement
or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Credit Documents" means the material credit documents for any
-------------------------
Indebtedness of the Parent or any of its Subsidiaries in excess of $50,000,000.
-25-
"Material Subsidiary" means any Subsidiary of the Parent (except for a
-------------------
Permitted Other Subsidiary) having assets or annual revenues in excess of
$5,000,000, and "Material Subsidiaries" means all such Subsidiaries
---------------------
collectively.
"Maturity Date" means, (a) with respect to any Revolving Advances, the
-------------
Revolving Maturity Date, (b) with respect to any Term A Advances, the Term A
Maturity Date, (c) with respect to any Term B Advances, the Term B Maturity Date
and (d) with respect to the Swingline Advances, the earlier of (i) the Swingline
Maturity Date and (ii) the date of the termination in whole of the Swingline
Commitment pursuant to Section 8.05.
"Maximum OPCO Loan Amount" means the sum of (a) the lesser of (i) the
------------------------
difference of (A) the product of OPCO's EBITDA for the immediately preceding
Rolling Period (determined on a pro forma basis for those Fiscal Quarters in
such Rolling Period for which OPCO does not have actual results) times 5.5 minus
-----
(B) the Indebtedness of OPCO and OPCO's Subsidiaries on a Consolidated basis
other than such loan to OPCO and (ii) $75,000,000 plus (b) the lesser of (i) the
----
amount of the Indebtedness incurred by OPCO to the Parent, the Borrower or any
of their respective Subsidiaries in connection with the purchase by OPCO of FF&E
from such Person in order for the Parent to comply with Section 856(d) of the
Code and (ii) $5,000,000.
"Maximum Rate" means the maximum nonusurious interest rate under applicable
------------
law.
"Merger" means the merger of CapStar with and into AGH REIT and the merger
------
of the CapStar Hotel LLCs with and into AGH OP pursuant to the Merger Agreement,
and the other related transactions contemplated by the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger among CapStar,
----------------
AGH REIT, AGH OP and the other parties specified therein, dated March 15, 1998,
as amended by amendment dated June 5, 1998.
"Minimum Tangible Net Worth" means, with respect to the Parent, at any
--------------------------
time, the sum of $927,000,000 plus (a) 75% of the aggregate net proceeds
----
received by the Parent or any of its Subsidiaries after the date of this
Agreement in connection with any offering of Stock or Stock Equivalents of the
Parent or its Subsidiaries taken as a whole and (b) 75% of the value of any
partnership interests in Borrower issued after the date of this Agreement for
the acquisition of a Hotel Property or any interest in a Hotel Property
permitted hereunder.
-26-
"Moody's" means Xxxxx'x Investor Service Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA to which the Parent, the Borrower or any member of the
Controlled Group is making or accruing an obligation to make contributions.
"Net Cash Proceeds" means (a) the aggregate cash proceeds (including,
-----------------
without limitation, insurance proceeds) received by the Parent, the Borrower or
any of their respective Subsidiaries (as applicable) in connection with any
Asset Disposition or incurrence of Indebtedness, minus (b) the reasonable
-----
expenses of such Person in connection with such Asset Disposition or such
incurrence of Indebtedness, minus (c) to the extent that assets disposed of in
-----
connection with an Asset Disposition secure Indebtedness permitted pursuant to
the provisions of Section 6.02(b), the amount of such Indebtedness which is
required to be repaid pursuant to the terms of such Indebtedness in connection
with such Asset Disposition, as reasonably evidenced by the Borrower to the
Administrative Agent.
"Net Income" means, for any Person or Hotel Property for any period for
----------
which such amount is being determined, the net income of such Person (on a
consolidated basis) or Hotel Property, as applicable, after taxes, as determined
on a Consolidated basis in accordance with GAAP, excluding, however,
extraordinary items, including but not limited to (a) any net gain or loss
during such period arising from the sale, exchange, or other disposition of
capital assets (such term to include all fixed assets and all securities) other
than in the ordinary course of business, (b) any write-up or write-down of
assets, and (c) non-recurring expenses incurred in connection with the Merger.
"Net Worth" means, for any Person, stockholders equity of such Person
---------
determined in accordance with GAAP.
"Non-Defaulting Lender" shall mean and include each Lender other than a
---------------------
Defaulting Lender.
"Note" means a Revolving Note, a Term A Note, a Term B Note or a Swingline
----
Note, and "Notes means all of such promissory notes.
-----
"Notice of Borrowing" means a notice of borrowing in the form of the
-------------------
attached Exhibit G
-27-
signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
------------------------------------
continuation in the form of the attached Exhibit H signed by a Responsible
Officer of the Borrower.
"Obligations" means all Advances, Letter of Credit Obligations, and other
-----------
amounts payable by the Borrower to the Administrative Agent or the Lenders under
the Credit Documents.
"OP Adjustment" means on any measurement date an amount equal to the fair
-------------
market value on the date of issuance of all partnership interests in the
Borrower which on such measurement date (a) are not directly or indirectly owned
by the Parent and (b) have been conveyed to Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx,
Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxx, XX, Xxxxxxx X. Xxxx or Persons
owned or controlled by such individuals in exchange for a Hotel Property or an
ownership interest in a Person which owns a Hotel Property or an ownership
interest in a Person which owns a Hotel Property and are still owned by such
Persons.
"OPCO" means MeriStar Hotels & Resorts, Inc., a Delaware corporation.
----
"OPCO OP" means MeriStar H & R Operating Company, L.P., a Delaware limited
-------
partnership.
"Parent" means MeriStar Hospitality Corporation, a Maryland corporation.
------
"Parent Common Stock" means the common stock of Parent, par value $.01 per
-------------------
share.
"Parent Deemed Investment Amount" means, in connection with measuring the
-------------------------------
Investment Amount in an Unconsolidated Entity which owns or leases an
Unconsolidated Entity Property in a particular category of hotel under the
definition of "Parent Property Requirement", a reasonable allocation of the
portion of the Investment Amount in such Unconsolidated Entity attributable to
the Unconsolidated Entity Property or Unconsolidated Entity Properties owned or
leased by such Unconsolidated Entity which is or are within the category tested.
Such allocation shall be based upon the cost of such Unconsolidated Entity
Property or Unconsolidated Entity Properties and the total cost of all assets
owned by such Unconsolidated Entity, all as proposed by the Borrower and
approved by the Administrative Agent in its reasonable discretion.
-28-
"Parent Property" means a Hotel Property owned or leased by the Parent or
---------------
one of the Parent's Subsidiaries, and "Parent Properties" means all such Hotel
-----------------
Properties.
"Parent Property Requirements" means collectively that as of the last day
----------------------------
of any Rolling Period (a) all Parent Properties must be located within the
United States or in an Approved Other Country, provided that the Investment
Amount for the Parent Properties which are located in an Approved Other Country
shall not exceed 15% of the Investment Amount for all Parent Properties; (b) the
Investment Amount for the Parent Properties which are limited service or
extended stay hotels or executive conference centers (excluding for purposes of
this clause (b) the Xxxxxxxxx at Princeton Hotel and Conference Center) shall
not collectively in the aggregate exceed 20% of the Investment Amount for all
Parent Properties; (c) the Investment Amount for the Parent Properties which
are not operated (or are not subject to a binding agreement to convert to
operation) under any franchise or license agreement with an Approved Franchisor
shall not exceed 15% of the Investment Amount for all Parent Properties; (d) the
Investment Amount or guest rooms, as applicable, for Parent Properties which are
substantially subject to a ground lease shall not exceed 20% of the Investment
Amount or 20% of the total guest rooms for all Parent Properties; (e) no Hotel
Property or other Property shall cause the Parent to forfeit the Parent's tax
status as a REIT; and (f) all Permitted Timeshare Requirements are satisfied.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Asset Disposition" means an Asset Disposition, including a
---------------------------
Permitted Timeshare Disposition and a Permitted Sale/Leaseback Disposition,
which occurs at a time in which no Default has occurred and is continuing and
which would not cause a Default to occur upon the consummation of such Asset
Disposition.
"Permitted Encumbrances" means the Liens permitted to exist pursuant to
----------------------
Section 6.01.
"Permitted Hazardous Substances" means (a) Hazardous Substances, petroleum
------------------------------
and petroleum products which are (i) used in the ordinary course of business and
in typical quantities for a hotel and (ii) generated, used and disposed of in
accordance with all Legal Requirements and good hotel industry practice and (b)
non-friable asbestos to the extent (i) that no applicable Legal Requirements
require removal of such asbestos from the Hotel Property and (ii) such asbestos
is encapsulated in accordance with all applicable Legal Requirements and such
reasonable operations
-29-
and maintenance program as may be reasonably required by the Administrative
Agent.
"Permitted Non-Voting Stock Company" means a corporation (a) which has one
----------------------------------
class of voting common stock which is 91% owned by Xxxx X. Xxxxxxxx or Xxxxxx X.
Xxxxx and 9% owned by the Borrower or a Subsidiary of the Borrower and one class
of non-voting common stock (the "Non-Voting Stock") owned entirely by the
Borrower or a Subsidiary of the Borrower, (b) which has Xxxx X. Xxxxxxxx or
Xxxxxx X. Xxxxx as its president or chief executive officer, (c) which has
articles of incorporation, by-laws or other organizational documents which
provide that the Non-Voting Stock stockholder is entitled to at least 95% of all
dividends declared by the Board of Directors of the Permitted Non-Voting Stock
Company, (d) which has no Liens on any of the Hotel Properties owned by such
Person except Permitted Encumbrances and Liens which are held by the Borrower,
and (e) the ownership of which by the Borrower or any Subsidiary of the Borrower
would not cause a Material Adverse Change.
"Permitted Non-Voting Stock Investment" means (a) the Non-Voting Stock of a
-------------------------------------
Permitted Non-Voting Stock Company and (b) a loan to a Permitted Non-Voting
Stock Company which may or may not be secured by a Permitted Non-Voting Stock
Mortgage.
"Permitted Non-Voting Stock Mortgage" means a Lien on a Hotel Property
-----------------------------------
owned by a Permitted Non-Voting Stock Company which is held by the Borrower.
"Permitted Other Subsidiaries" means either (a) a Subsidiary of the
----------------------------
Borrower which is a single-purpose Person (i) which owns a Hotel Property or
Hotel Properties or an interest in a Person which owns a Property which Property
or interest is pledged to secure Secured Non-Recourse Indebtedness or Secured
Recourse Indebtedness permitted by this Agreement, and (ii) which does not own
any Hotel Properties other than those that secure such Indebtedness or (b) a
direct or indirect Subsidiary of the Parent which is a single-purpose Person and
which is not a Subsidiary of the Borrower and does not have assets or annual
revenues in excess of $5,000,000.
"Permitted Sale/Leaseback Disposition" means the sale by the Borrower or
------------------------------------
its Subsidiary of all or a part of any Hotel Property and the simultaneous
leasing of such Property, as lessee, by a Permitted Other Subsidiary for which
the Net Cash Proceeds from the sale of all such Property sold does not in the
aggregate exceed $100,000,000 and for which such lease under GAAP is treated as
Indebtedness.
"Permitted Sale/Leaseback Indebtedness" means Indebtedness incurred by a
-------------------------------------
Permitted
-30-
Other Subsidiary pursuant to the lease executed in connection with a Permitted
Sale/Leaseback Disposition which constitutes Secured Non-Recourse Indebtedness.
"Permitted Timeshare Conversion" means for any hotel room owned by the
------------------------------
Borrower or its Subsidiary the inclusion of such hotel room in a timeshare
program; provided that the Permitted Timeshare Requirements are satisfied in
--------
connection therewith.
"Permitted Timeshare Disposition" means the sale of any timeshare interval
-------------------------------
for a hotel room which the Parent or any of its Subsidiaries, in accordance with
the provisions of this Agreement, either purchased subject to a timeshare
program or converted to a timeshare program.
"Permitted Timeshare Indebtedness" means Indebtedness incurred by a
--------------------------------
Subsidiary of the Borrower which (a) constitutes Secured Non-Recourse
Indebtedness, (b) is secured solely by the Permitted Timeshare Receivables of
such Person, and (c) is in an amount which does not exceed ninety percent (90%)
of the outstanding amount of the Permitted Timeshare Receivables of such Person.
"Permitted Timeshare Receivables" means the account receivables received by
-------------------------------
the Borrower and its Subsidiaries from purchasers of timeshare intervals in
connection with Permitted Timeshare Dispositions; provided that neither the
--------
Parent, nor any Subsidiary of the Parent shall provide financing for any
purchaser of a timeshare interval which exceeds 90% of the sales price for such
timeshare interval.
"Permitted Timeshare Requirements" means the following:
--------------------------------
(a) Only the Borrower's Subsidiaries may own or lease any Hotel
Property that is subject to a timeshare program. The Borrower's
Subsidiaries shall not own or lease more than 11 Hotel Properties that are
subject to a timeshare program.
(b) The Borrower shall provide the Administrative Agent with 30 days
prior written notice of a Hotel Property being subjected to a timeshare
program which notice shall include the Borrower's timeshare plan for such
Hotel Property, including without limitation the anticipated number of
hotel rooms to be converted to timeshare, the time table for conversion of
hotel rooms to timeshare, and any other information reasonably requested by
the Administrative Agent.
-31-
(c) No Hotel Property shall be subjected to a timeshare program
unless the Borrower intends to convert at least 25% of the hotel rooms in
such Hotel Property into timeshare units within the three years following
the initial subjecting of such Hotel Property to a timeshare program.
(d) The aggregate hotel rooms owned by the Borrower's Subsidiaries
that have been included in a timeshare program shall not (i) in any one
year commencing with July 1, 1998 and thereafter commencing on each July 1
and ending with the following June 30 increase by an amount equal to the
lesser of (A) three and one-third percent (3.33%) of the total hotel rooms
of the Parent and its Subsidiaries at the time of any proposed addition to
the number of rooms included in a timeshare program and (B) 1,000 hotel
rooms and (ii) in the aggregate exceed the lesser of (A) ten percent (10%)
of the total hotel rooms of the Parent and its Subsidiaries at the time of
any proposed addition to the number of rooms included in a timeshare
program and (B) 3,000 hotel rooms.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
"Personal Property" for any Hotel Property means all FF&E, inventory and
-----------------
other personal property of every kind, whether now existing or hereafter
acquired, tangible and intangible, now or hereafter located on or about the
Land, and used or to be used in the future in connection with the operation of
such Hotel Property.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
----
maintained for employees of the Parent, the Borrower or any member of the
Controlled Group and covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
"Pledge Agreement" means the Pledge Agreement in favor of the
----------------
Administrative Agent from the Borrower, the Parent and the other Guarantors,
pledging its current and future ownership interest in all of its direct
operating Subsidiaries (excluding the Permitted Other Subsidiaries) in
substantially the form of the attached Exhibit I.
-32-
"Prime Hospitality" means Prime Hospitality Corp. or an Affiliate of Prime
-----------------
Hospitality Corp.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
----------
effect from time to time equal to the rate of interest publicly announced by the
Administrative Agent as its prime commercial lending rate (which may not be the
lowest rate offered to its customers), whether or not the Borrower has notice
thereof.
"Property" of any Person means any property or assets (whether real,
--------
personal, or mixed, tangible or intangible) of such Person.
"Property Information" for any Hotel Property means an Engineering Report
--------------------
and Environmental Report for such Hotel Property.
"Property Owner" for any Initial Property or Future Property, means the
--------------
Person who owns fee or leasehold title interest (as applicable) in and to such
Property.
"Pro Rata Share" means, at any time with respect to any Lender, the ratio
--------------
(expressed as a percentage) of (a) such Lender's Commitments, plus, to the
extent any Class of Commitment has been terminated, such Lender's outstanding
Advances for such Class (and participation interest in the Letter of Credit
Exposure if the Revolving Commitments have been terminated) to (b) all Lenders'
aggregate Commitments, plus, to the extent any Class of Commitment has been
terminated, all Lenders' aggregate outstanding Advances for such Class (and
participation interest in the Letter of Credit Exposure if the Revolving
Commitments have been terminated); provided that the Swingline Commitment and
--------
Swingline Advances will not be included in the calculation of Pro Rata Share.
"Real Property" for any hotel means the Land and the Improvements for such
-------------
hotel, including without limitation, parking and other ancillary functions
necessary for the operation of such hotel, and office and retail property owned
by the Borrower or a Guarantor other than the Parent in connection with such
hotel.
"Register" has the meaning set forth in paragraph (c) of Section 10.06.
--------
"Registration Statements" means AGH REIT's S-4 filed with the Securities
-----------------------
and Exchange Commission on April 7, 1998 under Registration No. 333-49611, as
amended by Amendment No. 1 filed on May 22, 1998, Amendment No. 2 filed on June
8, 1998, Amendment No. 3 filed on
-33-
June 19, 1998, and Amendment No. 4 filed on June 22, 1998.
"REIT" means a real estate investment trust under Sections 856-860 of the
----
Code.
"Related Fund" means, with respect to any Approved Fund, any fund that
------------
invests in commercial loans which is advised or managed by the same investment
advisor as such Approved Fund.
"Release" shall have the meaning set forth in CERCLA or under any other
-------
Environmental Law.
"Repayment Event" means the occurrence of any of the following at a time
---------------
when the Leverage Ratio is greater than 4.50 or such event would cause the
Leverage Ratio to be greater than 4.50:
(a) the incurrence by the Parent, the Borrower or any of their respective
Subsidiaries of any Indebtedness after the date of this Agreement except:
(i) the Obligations;
(ii) Unsecured Indebtedness permitted pursuant to the provisions of
Section 6.01 to the extent such Unsecured Indebtedness is an extension,
renewal or refinancing of any of such Unsecured Indebtedness set forth on
Schedule 4.18;
(iii) Secured Recourse Indebtedness and Secured Non-Recourse
Indebtedness permitted pursuant to the provisions of Section 6.01 to the
extent such Indebtedness is either (A) an extension, renewal or refinancing
of any of such Indebtedness set forth on Schedule 4.18 or (B) incurred in
connection with the acquisition of Future Properties in accordance with the
provisions of this Agreement; and
(iv) Indebtedness permitted pursuant to the provisions of clauses
(c), (d) or (e) of Section 6.01.
(b) the occurrence of an Asset Disposition after the date of this
Agreement except Asset Dispositions for which (i) the aggregate Net Cash
Proceeds do not exceed $250,000,000, (ii) the Net Cash Proceeds from such Asset
Disposition are used to make an Investment in the
-34-
Hospitality/Leisure-Related Business within one year of the date of such Asset
Disposition and (iii) none of the Parent, the Borrower or any of their
respective Subsidiaries are obligated by an agreement with another Person to
apply such Net Cash Proceeds to the repayment of Indebtedness of such Person;
provided that Net Cash Proceeds from a casualty or condemnation shall not be
counted toward such $250,000,000 threshold to the extent such Net Cash Proceeds
are utilized for the restoration of the Hotel Property affected by such casualty
or condemnation within one year of the date of such casualty or condemnation.
"Reportable Event" means any of the events set forth in Section 4043(b) of
----------------
ERISA.
"Required Lenders" means Non-Defaulting Lenders the sum of whose
----------------
outstanding Term A Advances (and, prior to the termination thereof, Term A
Commitments), Term B Advances (and, prior to the termination thereof, Term B
Commitments) and Revolving Commitments (or after the termination thereof,
outstanding Revolving Advances and participations in Letter of Credit Exposure)
represent at least 51% of the sum of all outstanding Term A Advances (and, if
prior to the termination thereof, Term A Commitments) and Term B Advances (and,
if prior to the termination thereof, Term B Commitments) of Non-Defaulting
Lenders and the sum of all Revolving Commitments of Non-Defaulting Lenders (or
after the termination of the Revolving Commitments, the sum of the then total
outstanding Revolving Advances of Non-Defaulting Lenders, and the aggregate
participations of all Non-Defaulting Lenders of Letter of Credit Exposure at
such time); provided that with respect to a vote which only involves a certain
Class or Classes, only the Commitments and Advances for the applicable Class or
Classes shall be used in the calculation of Required Lenders.
"Required Work" means for any Initial Property, the work described on
-------------
Schedule 5.06 attached hereto as may be modified by agreement between the
Borrower and the Administrative Agent, and for any Future Property, the work
agreed upon by the Borrower and the Administrative Agent, if any, as the
Required Work for such Future Property, if any.
"Response" shall have the meaning set forth in CERCLA or under any other
--------
Environmental Law.
"Responsible Officer" means the Chief Executive Officer, President,
-------------------
Executive Vice President, Chief Operating Officer or Chief Financial Officer of
any Person.
-35-
"Restricted Payment" means (a) any direct or indirect payment, prepayment,
------------------
redemption, purchase, or deposit of funds or Property for the payment (including
any sinking fund or defeasance), prepayment, redemption or purchase of
Indebtedness which Indebtedness is not permitted by this Agreement, and (b) the
making by any Person of any dividends or other distributions (in cash, property,
or otherwise) on, or payment for the purchase, redemption or other acquisition
of, any shares of any capital stock, any limited liability company interests or
any partnership interests of such Person, other than dividends or distributions
payable in such Person's (or the Parent's) stock, limited liability company
interests or any partnership interests.
"Revolving Advance" means any advance by a Lender to the Borrower pursuant
-----------------
to such Lender's Revolving Commitment or a continuation of an existing Revolving
Advance, and refers to a Base Rate Advance or a LIBOR Advance.
"Revolving Borrowing" means a borrowing consisting of simultaneous
-------------------
Revolving Advances of the same Type made by each Lender pursuant to Section
2.01(a) or Converted by each Lender to Revolving Advances of a different Type
pursuant to Section 2.02(b).
"Revolving Commitment" means, for each Lender, the amount set opposite such
--------------------
Lender's name on Schedule 1.01(a) as its Revolving Commitment or, if such Lender
has entered into any Assignment and Acceptance after the Effective Date, set
forth for such Lender as its Revolving Commitment in the Register maintained by
the Administrative Agent pursuant to Section 9.06(b).
"Revolving Maturity Date" means July 31, 2001, as such date may be extended
-----------------------
pursuant to the provisions of Section 2.01(e).
"Revolving Note" means a promissory note of the Borrower payable to the
--------------
order of any Lender, in substantially the form of the attached Exhibit A-1,
evidencing indebtedness of the Borrower to such Lender resulting from Revolving
Advances from such Lender, and "Revolving Notes" means all of such promissory
---------------
notes.
"Revolving Required Lenders" means Non-Defaulting Lenders the sum of whose
--------------------------
Revolving Commitments (or after the termination thereof, outstanding Revolving
Advances and participations in Letter of Credit Exposure) represent at least 51%
of the sum of all Revolving Commitments of Non-Defaulting Lenders (or after the
termination of the Revolving Commitments, the sum of the then total outstanding
Revolving Advances of Non-Defaulting Lenders, and the aggregate
-36-
participations of all Non-Defaulting Lenders of Letter of Credit Exposure at
such time).
"Revolving Share" means, at any time with respect to any Lender with a
---------------
Revolving Commitment, the ratio (expressed as a percentage) of such Lender's
Revolving Commitment at such time to the aggregate Revolving Commitments at such
time.
"Rolling Period" means, as of any date, the four Fiscal Quarters ending on
--------------
or immediately preceding such date.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
---
Inc., or any successor thereof.
"Secured Indebtedness Ratio" means, as of any date, a ratio of (a) the sum
--------------------------
of the Secured Non-Recourse Indebtedness and Secured Recourse Indebtedness of
the Parent and its Subsidiaries on a Consolidated basis (excluding the
Obligations) on such date to (b) the EBITDA of the Parent and its Subsidiaries
on a Consolidated basis for the Rolling Period immediately preceding such date,
as EBITDA is adjusted for acquisitions and dispositions in the definition of
"Leverage Ratio.".
"Secured Non-Recourse Indebtedness" of any Person means all Indebtedness of
---------------------------------
such Person with respect to which recourse for payment is limited to specific
assets encumbered by a Lien securing such Indebtedness; provided, however, that
-------- -------
personal recourse of a holder of Indebtedness against any obligor with respect
thereto for fraud, misrepresentation, misapplication of cash, non-payment of
real estate taxes or ground lease rent, waste and other circumstances
customarily excluded from non-recourse provisions in non-recourse financing of
real estate shall not, by itself, prevent any Indebtedness from being
characterized as Secured Non-Recourse Indebtedness, provided further that if a
-------- ------- ----
personal recourse claim is made in connection therewith, such claim shall not
constitute Secured Non-Recourse Indebtedness for the purposes of this Agreement
to the extent of such claim.
"Secured Recourse Indebtedness" of any Person means any Total Indebtedness
-----------------------------
(excluding any Secured Non-Recourse Indebtedness) of such Person for which the
obligations thereunder are secured by a Lien on any assets of such Person or its
Subsidiaries.
"Security Documents" means the Pledge Agreements, and each other document,
------------------
instrument or agreement executed in connection therewith or otherwise executed
in order to secure all or a
-37-
portion of the Obligations.
"South Seas Portfolio" means those Hotel Properties which CapStar has
--------------------
agreed to acquire pursuant to Asset Purchase Agreement dated as of April 13,
1998 and Contribution Agreement dated as of April 9, 1998.
"Specified Secured Indebtedness" means the Indebtedness evidenced by that
------------------------------
certain Loan Agreement dated as of August 3, 1998, by and between Xxxxxx
Brothers Holdings, Inc. and various Permitted Other Subsidiaries and the
promissory notes and other documents executed in connection with such Loan
Agreement.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
-38-
"Status" means the existence of Level I Status, Level II Status, Level III
------
Status, Level IV Status, Level V Status, Level VI Status, Level VII Status,
Level VIII Status, Level IX Status, Level X Status, as the case may be. As used
in this definition:
"Level I Status" exists at any date if, at such date, (a) the Leverage
--------------
Ratio at the end of the preceding Rolling Period is less than 4.50 and (b)
the Parent has a long-term senior unsecured debt rating of A- or better by
S&P and A3 or better by Xxxxx'x;
"Level II Status" exists at any date if, at such date, (a) the
---------------
Leverage Ratio at the end of the preceding Rolling Period is less than 4.50
and (b) the Parent has a long-term senior unsecured debt rating of BBB+ by
S&P and Baal by Xxxxx'x;
"Level III Status" exists at any date if, at such date, (a) the
----------------
Leverage Ratio at the end of the preceding Rolling Period is less than 4.50
and (b) the Parent has a long-term senior unsecured debt rating of BBB by
S&P and Baa2 by Xxxxx'x;
"Level IV Status" exists at any date if, at such date, (a) the
---------------
Leverage Ratio at the end of the preceding Rolling Period is less than 4.50
and (b) the Parent has a long-term senior unsecured debt rating of BBB- by
S&P and Baa3 by Xxxxx'x;
"Level V Status" exists at any date if, at such date, (a) none of
--------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is less than 3.0;
"Level VI Status" exists at any date if, at such date, (a) none of
---------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is equal to or greater than 3.0 but
less than 3.5;
"Level VII Status" exists at any date if, at such date, (a) none of
----------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is equal to or greater than 3.5 but
less than 4.0;
"Level VIII Status" exists at any date if, at such date, (a) none of
-----------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is equal to or greater than 4.0 but
less than 4.5;
"Level IX Status" exists at any date if, at such date, (a) none of
---------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is equal to or greater than 4.5 but
less than 5.0; and
"Level X Status" exists at any date if, at such date, (a) none of
--------------
Level I Status through Level IV Status exist and (b) the Leverage Ratio at
the end of the preceding Rolling Period is equal to or greater than 5.0.
provided that (i) if S&P and/or Xxxxx'x shall cease to issue ratings of debt
--------
securities of REITs
-39-
generally or (after issuing ratings with respect to the Parent) shall cease to
issue ratings with respect to the Parent, then the Administrative Agent and the
Borrower shall negotiate in good faith to agree upon a substitute rating agency
or agencies (and to correlate the system of ratings of each substitute rating
agency with that of the rating agency for which it is substituting) and (a)
until such substitute rating agency or agencies are agreed upon, Status shall be
determined on the basis of the rating assigned by the other rating agency (or,
if both S&P and Xxxxx'x shall have so ceased to issue such ratings, on the basis
of the Status in effect immediately prior thereto) and (b) after such substitute
rating agency or agencies are agreed upon, Status shall be determined on the
basis of the rating assigned by the other rating agency and such substitute
rating agency or the two substitute rating agencies, as the case may be; (ii) if
the long-term senior unsecured debt ratings of the Parent by S&P and Xxxxx'x are
not equivalent, the higher rating will apply for the purposes of determining
Status; and (iii) if the long-term senior unsecured debt ratings of the Parent
by S&P and Xxxxx'x are two or more Levels apart, the rating one Level below the
higher rating will apply for the purposes of determining Status. Status shall be
determined and changed as of the Status Reset Date following any Fiscal Quarter;
provided that if any of Status I through Status IV is in effect and either S&P,
-------------
Xxxxx'x or a substitute rating agency changes such Person's debt rating of the
Parent, Status shall be determined and changed as of the 10th day following such
rating change; provided further that if the Borrower fails to timely provide the
---------------------
financial statements needed to recalculate the Leverage Ratio as required by the
provisions of Section 5.05(a) prior to the 50th day following the end of any
Fiscal Quarter, then Status shall automatically be reset at the Status one level
higher than the Status existing immediately prior to such Status reset until
such time as the Borrower provides such financial statements. Notwithstanding
the foregoing, (a) the Status in effect under this Agreement shall be Level IX
Status until November 30, 1998, at which time Status for all purposes under this
Agreement other than with respect to Term B Advances shall be based upon the
foregoing provisions of this definition of "Status" and (b) the Status in effect
under this Agreement for Term B Advances shall be Level IX Status until the
Status Reset Date following the Fiscal Quarter ending December 31, 1998, at
which time Status for all purposes under this Agreement, including Term B
Advances, shall be based upon the foregoing provisions of this definition of
"Status."
"Status Reset Date" means the date following the end of any Fiscal Quarter
-----------------
which is the earlier of (a) the 50th day following the end of such Fiscal
Quarter and (b) the date which is 5 days following the delivery of the reports
and other documents required by the provisions of Section 5.05(a) for such
Fiscal Quarter.
"Stock" means shares of capital stock, beneficial or partnership interests,
-----
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or non-voting, and includes,
without limitation, common stock and preferred stock.
-40-
"Stock Equivalents" means all securities (other than Stock) convertible
-----------------
into or exchangeable for Stock and all warrants, options or other rights to
purchase or subscribe for any stock, whether or not presently convertible,
exchangeable or exercisable.
"Subsidiary" of a Person means any corporation, association, partnership or
----------
other business entity of which more than 50% of the outstanding shares of
capital stock (or other equivalent interests) having by the terms thereof
ordinary voting power under ordinary circumstances to elect a majority of the
board of directors or Persons performing similar functions (or, if there are no
such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person. A
Permitted Non-Voting Stock Company shall not be deemed a Subsidiary of either
the Borrower or the Parent for all purposes under this Agreement.
"Super Required Lenders" means Non-Defaulting Lenders the sum of whose
----------------------
outstanding Term A Advances (and, prior to the termination thereof, Term A
Commitments), Term B Advances (and, prior to the termination thereof, Term B
Commitments) and Revolving Commitments (or after the termination thereof,
outstanding Revolving Advances and participations in Letter of Credit Exposure)
represent at least 66.67% of the sum of all outstanding Term A Advances (and, if
prior to the termination thereof, Term A Commitments) and Term B Advances (and,
if prior to the termination thereof, Term B Commitments) of Non-Defaulting
Lenders and the sum of all Revolving Commitments of Non-Defaulting Lenders (or
after the termination of the Revolving Commitments, the sum of the then total
outstanding Revolving Advances of Non-Defaulting Lenders, and the aggregate
participations of all Non-Defaulting Lenders of Letter of Credit Exposure at
such time); provided that with respect to a vote which only involves a certain
Class or Classes, only the Commitments and Advances for the applicable Class or
Classes shall be used in the calculation of Super Required Lenders.
"Supplemental Guarantor" means any partner of the Borrower or a Subsidiary
----------------------
of the Borrower except for the Parent or the Guarantors that executes a
Supplemental Guaranty.
"Supplemental Guaranty" means any future assumption of liability in a form
---------------------
reasonably acceptable to the Administrative Agent executed by a Supplemental
Guarantor to secure a portion
-41-
of Advances, as such future supplemental guaranties may be amended hereafter in
accordance with their terms.
"Swingline Advance" means any advance by the Swingline Lender to the
-----------------
Borrower pursuant to the Swingline Lender's Swingline Commitment, and refers to
a Base Rate Advance.
"Swingline Commitment" means the obligation of the Swingline Lender to make
--------------------
Swingline Advances up to a maximum principal amount of $10,000,000 at any time
outstanding.
"Swingline Lender" means Societe Generale, Southwest Agency or any other
----------------
Lender as a successor Swingline Lender.
"Swingline Maturity Date" means the date 2 Business Days prior to the
-----------------------
Revolving Maturity Date.
"Swingline Note" means a promissory note of the Borrower payable to the
--------------
order of the Swingline Lender in substantially the form of the attached Exhibit
A-4, evidencing indebtedness of the Borrower to the Swingline Lender resulting
from any Swingline Advance.
"Term A Advance" means any advance by a Lender to the Borrower pursuant to
--------------
such Lender's Term A Commitment or a continuation of an existing Term A Advance,
and refers to a Base Rate Advance or a LIBOR Advance.
"Term A Borrowing" means a borrowing consisting of simultaneous Term A
----------------
Advances of the same Type made by each Lender pursuant to Section 2.01(b) or
Converted by each Lender to Term A Advances of a different Type pursuant to
Section 2.02(b).
"Term A Commitment" means, for each Lender, the amount set opposite such
-----------------
Lender's name on Schedule 1.01(a) as its Term A Commitment or, if such Lender
has entered into any Assignment and Acceptance after the Effective Date, set
forth for such Lender as its Term A Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.06(b); provided, however, that after
--------
the date the initial Term A Borrowing is made, the Term A Commitment for such
Lender shall be zero.
"Term A Required Lenders" means Non-Defaulting Lenders the sum of whose
-----------------------
outstanding Term A Advances (and, prior to the termination thereof, Term A
Commitments) represent at least
-42-
51% of the sum of all outstanding Term A Advances (and, if prior to the
termination thereof, Term A Commitments) of Non-Defaulting Lenders.
"Term A Maturity Date" means July 31, 2003.
--------------------
"Term A Note" means a promissory note of the Borrower payable to the order
-----------
of any Lender in substantially the form of the attached Exhibit A-2, evidencing
indebtedness of the Borrower to such Lender resulting from any Term Advance from
such Lender, and "Term A Notes" means all such Term A Notes.
------------
"Term A Share" means, at any time with respect to any Lender with an
------------
outstanding Term A Advance, the ratio (expressed as a percentage) of such
Lender's outstanding Term A Advances at such time to the aggregate outstanding
Term A Advances at such time.
"Term B Advance" means any advance by a Lender to the Borrower pursuant to
--------------
such Lender's Term B Commitment or a continuation of an existing Term B Advance,
and refers to a Base Rate Advance or a LIBOR Advance.
"Term B Borrowing" means a borrowing consisting of simultaneous Term B
----------------
Advances of the same Type made by each Lender pursuant to Section 2.01(c) or
Converted by each Lender to Term B Advances of a different Type pursuant to
Section 2.02(b).
"Term B Commitment" means, for each Lender, the amount set opposite such
-----------------
Lender's name on Schedule 1.01(a) as its Term B Commitment or, if such Lender
has entered into any Assignment and Acceptance after the Effective Date, set
forth for such Lender as its Term B Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.06(b); provided, however, that after
--------
the date the initial Term B Borrowing is made, the Term B Commitment for such
Lender shall be zero.
"Term B Required Lenders" means Non-Defaulting Lenders the sum of whose
-----------------------
outstanding Term B Advances (and, prior to the termination thereof, Term B
Commitments) represent at least 51% of the sum of all outstanding Term B
Advances (and, if prior to the termination thereof, Term B Commitments) of Non-
Defaulting Lenders.
"Term B Maturity Date" means January 31, 2004.
--------------------
-43-
"Term B Note" means a promissory note of the Borrower payable to the order
-----------
of any Lender in substantially the form of the attached Exhibit A-2, evidencing
indebtedness of the Borrower to such Lender resulting from any Term Advance from
such Lender, and "Term B Notes" means all such Term B Notes.
------------
"Term B Share" means, at any time with respect to any Lender with an
------------
outstanding Term B Advance, the ratio (expressed as a percentage) of such
Lender's outstanding Term B Advances at such time to the aggregate outstanding
Term B Advances at such time.
"Termination Event" means (a) the occurrence of a Reportable Event with
-----------------
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of the Controlled Group from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the giving of a notice of intent to terminate a Plan under Section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or
(e) any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"Total Indebtedness" of any Person means the sum of the following (without
------------------
duplication): (a) all Indebtedness of such Person and its Subsidiaries on a
Consolidated basis, plus (b) such Person's Unconsolidated Entity Percentage of
----
Indebtedness (including Secured Non-Recourse Indebtedness) of such Person's
Unconsolidated Entities, plus (c) to the extent not already included in the
----
calculation of either of the preceding clauses (a) or (b), the aggregate amount
of letters of credit for which such Person or any of its Subsidiaries would have
a direct or contingent obligation to reimburse the issuers of such letters of
credit upon a drawing under such letters of credit, minus (d) to the extent
-----
included in the calculation of either of the preceding clauses (a), (b), or (c),
the amount of any minority interests.
"TT Leasing" means Twin Towers Leasing, L.P., a Delaware limited
----------
partnership.
"Type" has the meaning set forth in Section 1.04.
----
"Unconsolidated Entity" means, with respect to any Person, at any date, any
---------------------
other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not
-44-
be consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person, if such statements were
prepared as of such date.
"Unconsolidated Entity Percentage" means, for any Person, with respect to a
--------------------------------
Person's Unconsolidated Entity, the percentage ownership interest of such Person
in such Unconsolidated Entity, provided that, in the event that such Person is
--------------
the general partner of such Unconsolidated Entity, such Person's Unconsolidated
Entity Percentage with respect to the Indebtedness of such Unconsolidated Entity
shall be the percentage of such Indebtedness for which recourse may be made
against any general partner of such Unconsolidated Entity.
"Unconsolidated Entity Property" means a Hotel Property owned or leased by
------------------------------
an Unconsolidated Entity in which the Parent or one of the Parent's Subsidiaries
has an Investment, and "Unconsolidated Entity Properties" means all such Hotel
--------------------------------
Properties.
"Unencumbered" means, with respect to any Hotel Property, at any date of
------------
determination, the circumstance that such Hotel Property or the interest of the
Borrower or a Guarantor therein on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability except for restrictions on the transferability
of ground leases) of any kind (including any such Lien or restriction imposed by
(i) any agreement governing Indebtedness, or (ii) the organizational documents
of the Borrower or any of its Subsidiaries), but excluding Permitted
Encumbrances;
(b) is not subject to any agreement (including (i) any agreement
governing Indebtedness, and (ii) if applicable, the organizational documents of
the Borrower or any of its Subsidiaries) which prohibits or limits the ability
of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon such Hotel Property, other than Permitted Encumbrances
(excluding any agreement or organizational document which limits generally the
amount of Indebtedness which may be incurred by the Borrower or its
Subsidiaries); and
(c) is not subject to any agreement (including any agreement
governing Indebtedness) which entitles any Person to the benefit of any Lien
(other than Permitted Encumbrances) on such Hotel Property, or would entitle any
Person to the benefit of any such Lien upon the occurrence of any contingency
(including, without limitation, pursuant to an "equal and ratable" clause).
-45-
For the purposes of this Agreement, (a) any Hotel Property owned by a Subsidiary
of the Borrower shall not be deemed to be Unencumbered unless both (i) such
Hotel Property and (ii) all Stock owned directly or indirectly by Borrower in
such Subsidiary is Unencumbered and (b) any Hotel Property leased by the
Borrower or a Subsidiary of the Borrower, as lessee, which lease constitutes
Indebtedness of such lessee shall not be deemed "Unencumbered."
"Unencumbered EBITDA" means for any Person for any period for which such
-------------------
amount is being determined, an amount equal to the EBITDA for such Person for
such period derived from Unencumbered Hotel Properties; provided that with
--------
respect to EBITDA attributable to an Unconsolidated Entity which owns or leases
Unencumbered Hotel Properties, (a) for any such Unconsolidated Entity for which
the Unconsolidated Entity Percentage is equal to or greater than 20%, such
Person shall only be deemed to have received the Unconsolidated Entity
Percentage of such Unconsolidated Entity's EBITDA derived from Unencumbered
Hotel Properties to the extent not subject to (i) any limitation or restriction
(except for the obligation to repay Indebtedness of such Person) on the right to
distribute such EBITDA to such Person's owners or (ii) any decision by another
Person to not distribute the available cash of such Unconsolidated Entity to the
owners of such Unconsolidated Entity, and (b) for any such Unconsolidated Entity
for which the Unconsolidated Entity Percentage is less than 20%, such Person
shall only be deemed to have received that actual sums paid by such
Unconsolidated Entity to such Person derived from Unencumbered Hotel Properties.
"Unencumbered Hotel Property" means a Hotel Property which is Unencumbered.
---------------------------
"Unsecured Indebtedness" of any Person means any Total Indebtedness of such
----------------------
Person except for any Secured Non-Recourse Indebtedness and Secured Recourse
Indebtedness of such Person.
"Unsecured Interest Coverage Ratio" means, as of the end of any Rolling
---------------------------------
Period, a ratio of (a) the Parent's Unencumbered EBITDA to (b) Parent's
Unsecured Interest Expense, for such Rolling Period.
"Unsecured Interest Expense" means, for any Person for any period, the
--------------------------
greater of (a) the total interest expense in respect of all Unsecured
Indebtedness of such Person for such Period and (b) 7.5% times the average
outstanding balance of all Unsecured Indebtedness of such Person for such
period.
-46-
Section 1.2 Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.3 Accounting Terms; Changes in GAAP.
---------------------------------
(a) All accounting terms not specifically defined in this Agreement shall
be construed in accordance with GAAP applied on a consistent basis with those
applied in the preparation of the Registration Statements.
(b) Unless otherwise indicated, all financial statements of the Borrower
and the Parent, all calculations for compliance with covenants in this
Agreement, and all calculations of any amounts to be calculated under the
definitions in Section 1.01 shall be based upon the Consolidated accounts of the
Borrower, the Parent and their respective Subsidiaries (as applicable) in
accordance with GAAP.
(c) If any change in accounting principles after June 30, 1998 required by
GAAP or the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or similar agencies results in a change in the
method of calculation of, or affects the results of such calculation of, any of
the financial covenants, standards or terms found in this Agreement, then the
parties shall enter into and diligently pursue negotiations in order to amend
such financial covenants, standards or terms so as to equitably reflect such
change, with the desired result that the criteria for evaluating the financial
condition of Borrower and its Subsidiaries (determined on a Consolidated basis)
shall be the same after such change as if such change had not been made.
Section 1.4 Classes and Types of Advances. Advances are distinguished
-----------------------------
by "Class" and "Type". The "Class" of an Advance refers to the determination
whether such Advance is a Term A Advance, a Term B Advance, a Revolving Advance,
or a Swingline Advance, each of which constitutes a Class. The "Type" of an
Advance refers to the determination whether such Advance is an LIBOR Advance or
Base Rate Advance, each of which constitutes a Type.
Section 1.5 Miscellaneous. Article, Section, Schedule and Exhibit
-------------
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
-47-
Section 1.6 Recitals. The matters set forth in the recitals at the
--------
beginning of this Agreement are agreed to by the parties to this Agreement and
incorporated into this Agreement as if set forth in their entirety herein.
Section 1.7 Amendment and Restatement. The parties hereto agree to use
-------------------------
reasonable efforts to accomplish the matters set forth in the recitals at the
beginning of this Agreement and, without limitation, agree to the following:
(a) For each Lender which has an Existing AGH Note, (i) the Borrower shall
execute incremental promissory notes (the "Incremental Notes") in such amounts
and payable to such of such Lenders that with the Existing AGH Notes payable to
such Lenders will provide for each such Lender Notes which have an aggregate
stated principal amount equal to such Lender's respective Commitments, and (ii)
the Borrower will execute a Revolving Note, a Term A Note and/or a Term B Note,
as applicable, payable to such Lender in the amount of such Lender's respective
Commitments which Note or Notes (i) will replace in its entirety the Existing
AGH Note, and, if such Lender also has an Incremental Note, consolidate such
Lender's Incremental Note with its Existing AGH Note and (ii) constitute the
Note or Notes the Borrower is obligated to deliver to such Lender as provided in
Sections 2.02(g) and 3.01.
(b) For each Lender which does not require such a consolidation of Notes,
the Borrower will deliver to such Lender the Note or Notes as provided in
Sections 2.02(g) and 3.01.
(c) Within a reasonable period of time following the Closing Date at the
Borrower's cost the Administrative Agent, together, if necessary, with Bank One,
Texas, N.A., in its capacity as administrative agent under the Existing AGH
Credit Agreement prior to its amendment and restatement by this Agreement shall
amend the Florida Liens to reflect the change in the Person acting as
Administrative Agent and all other matters reasonably requested by the Borrower
or the Administrative Agent, all in documentation reasonably acceptable to the
Administrative Agent and the Borrower.
Section 1.8 Senior Indebtedness. The Obligations and all renewals and
-------------------
extensions of the Obligations are designated as "Designated Senior Indebtedness"
under the Convertible Indebtedness Indenture and the Existing Subordinate
Indebtedness Indenture.
-48-
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.10 The Advances.
------------
(a) Revolving Advances. Each Lender severally agrees, on the terms and
------------------
conditions set forth in this Agreement, to make Revolving Advances to the
Borrower from time to time on any Business Day up to 15 days prior to the
Revolving Maturity Date in an aggregate amount not to exceed at any time
outstanding an amount equal to such Lender's Revolving Commitment less such
----
Lender's Revolving Share of the Letter of Credit Exposure at such time; provided
that the sum of (i) the aggregate outstanding principal amount of the Revolving
Advances plus (ii) the Letter of Credit Exposure plus (iii) the aggregate
---- ----
outstanding principal amount of the Swingline Advances at any time may not
exceed the aggregate Revolving Commitments at such time. Within the limits of
each Lender's Revolving Commitment, the Borrower may from time to time prepay
pursuant to Section 2.07 and reborrow under this Section 2.01(a).
(b) Term A Advances. Each Lender severally agrees, on the terms and
---------------
conditions set forth in this Agreement, to make Term A Advances to the Borrower
on August 3, 1998 in an aggregate amount not to exceed at any time such Lender's
Term A Commitment. No amount of any Term A Borrowing that has been repaid may
be reborrowed.
(c) Term B Advances. Each Lender severally agrees, on the terms and
---------------
conditions set forth in this Agreement, to make Term B Advances to the Borrower
on August 3, 1998 in an aggregate amount not to exceed at any time such Lender's
Term B Commitment. No amount of any Term B Borrowing that has been repaid may
be reborrowed.
(d) Swingline Advances. On the terms and conditions set forth in this
------------------
Agreement, the Swingline Lender agrees to from time-to-time on any Business Day
during the period from the date of this Agreement until the last Business Day up
to 15 days prior to the Swingline Maturity Date, make Swingline Advances under
the Swingline Note to the Borrower for periods of up to 10 Business Days,
bearing interest as provided in Section 2.06, and in an aggregate principal
amount outstanding at any time not to exceed the Swingline Commitment; provided
--------
that the sum of (i) the aggregate outstanding principal amount of the Revolving
Advances plus (ii) the Letter of Credit Exposure plus (iii) the aggregate
---- ----
outstanding principal amount of the Swingline Advances at any
-49-
time may not exceed the aggregate Revolving Commitments at such time; and
provided further that no Swingline Advance shall be made by the Swingline Lender
-------- -------
if the statements set forth in Section 3.02 are not true on the date of such
Swingline Advance, it being agreed by the Borrower that the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Swingline Advance shall constitute a representation and
warranty by the Borrower that on the date of such Swingline Advance such
statements are true. Subject to the other provisions hereof, the Borrower may
from time-to-time borrow, prepay (in whole or in part) and reborrow Swingline
Advances. No Swingline Advance shall be used for the purpose of funding the
payment of principal of any other Swingline Advance. Each Swingline Advance
shall be in an amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof. Within the limits of the Swingline Commitment, the Borrower may
from time to time prepay pursuant to Section 2.07 and reborrow under this
Section 2.01(d).
(i) Except as provided in the following clause (ii) below, each
request for a Swingline Advance shall be made pursuant to telephone notice
to the Swingline Lender given no later than 11:00 a.m. (Dallas, Texas time)
on the date of the proposed Swingline Advance, promptly confirmed by a
completed and executed Notice of Borrowing telecopied to the Administrative
Agent, specifying therein the requested (A) date of such Swingline Advance,
(B) amount of such Swingline Advance and (C) maturity of such Swingline
Advance (which maturity shall be no later than the earlier of the Swingline
Maturity Date and the 10th Business Days after the requested date of such
Swingline Advance). The Swingline Lender will on the date requested make
the Swingline Advance available to the Borrower as agreed between the
Swingline Lender and Borrower.
(ii) The Borrower and the Lenders agree that upon written demand by
the Swingline Lender to the Administrative Agent (which may be given at any
time and shall be deemed given if any Swingline Advance is not repaid on
the date required by this Agreement), the Administrative Agent shall give
each Lender a notice of Mandatory Revolving Borrowing, and upon receipt of
such notice, each Lender having a Revolving Commitment shall pay to the
Administrative Agent its Revolving Share of such Swingline Advance and such
payment shall be deemed to be a Base Rate Advance made pursuant to such
Lender's Revolving Commitment, whether made before or after termination of
the Revolving Commitments, acceleration of the Revolving Advances, or
otherwise, and whether or not the conditions precedent in Section 3.02 have
been satisfied at the time of such Mandatory Revolving Borrowing. The
Administrative Agent shall give each Lender notice of such Mandatory
Revolving Borrowing by 11:00 a.m. (Dallas, Texas time) on the date the
Mandatory
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Revolving Borrowing is to be made. Each Lender having a Revolving
Commitment shall, regardless of whether the conditions in Section 3.02 have
been met at the time of such Mandatory Revolving Borrowing and regardless
of whether there exists any Default or Event of Default, make its Revolving
Advance available to the Administrative Agent for the account of the
Swingline Lender in immediately available funds by 3:00 p.m. (Dallas, Texas
time) on the date requested, and the Borrower hereby irrevocably instructs
the Swingline Lender to apply the proceeds of such Mandatory Revolving
Borrowing to the payment of the outstanding Swingline Advances.
(iii) In the event that any Mandatory Revolving Borrowing cannot be
made upon the day required in the preceding clause (ii), upon written
demand by the Swingline Lender, with a copy of such demand to the
Administrative Agent, each other Lender shall purchase from the Swingline
Lender, a participating interest in each Swingline Advance in an amount
equal to such other Lender's Revolving Share of each Swingline Advance as
of the date of such purchase. Each Lender agrees to purchase its Revolving
Share of each Swingline Advance on (A) the Business Day on which demand
therefor is made by the Swingline Lender, provided notice of such demand is
given not later than 11:00 A.M. (Dallas, Texas time) on such Business Day
or (B) the first Business Day next succeeding such demand if notice of such
demand is given after such time, by making available to the Administrative
Agent for the account of the Swingline Lender in immediately available
funds by 3:00 p.m. (Dallas, Texas time) on such date, an amount equal to
such Lender's Revolving Share of the outstanding principal amount of and
interest on the Swingline Advances to be purchased by such other Lender.
The Borrower hereby agrees to each such purchase. Promptly after receipt
of such funds from the purchasing Lenders, the Administrative Agent shall
transfer such funds to the Swingline Lender. Upon any sale by the
Swingline Lender to any other Lender of a participating interest in any
Swingline Advance pursuant to this Section 2.04, the Swingline Lender
represents and warrants to such other Lender that the Swingline Lender is
the legal and beneficial owner of such interest being sold by it, free and
clear of any liens, but makes no other representation or warranty. Except
for such representation and warranty, the Swingline Lender shall have no
responsibility or liability to any other Lender with respect to the
Swingline Advances, any participation sold, this Agreement or any party
hereto, and no Lender shall have any recourse against the Swingline Lender
with respect to the Swingline Advances, any participation sold, this
Agreement or any party hereto, except that the Swingline Lender shall pay
to each Lender that purchases a participation in a Swingline Advance
pursuant to this Section 2.01(d)(iii) such Lender's ratable share of the
payments, if any, actually received by the Swingline Lender on such
Swingline Advance. Any sale of a participating interest pursuant to this
Section 2.01(d)(iii) may, at the Swingline
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Lender's option, be evidenced by a participation agreement or other
document in substantially the same form as any participation agreement or
other document customarily used by the Swingline Lender to evidence its
sale of a participating interest in a loan. If and to the extent that any
Lender shall not have so made the amount required by this Section
2.01(d)(iii) available to the Administrative Agent, such Lender agrees to
pay to the Administrative Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount was
originally due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for the account of the Swingline Lender.
(e) Extension of Revolving Maturity Date. The Borrower shall have two
------------------------------------
options, exercisable as hereinafter provided, to extend the then current
Revolving Maturity Date for an additional one-year period to the first
anniversary of the then current Revolving Maturity Date upon the completion by
the Borrower of the following conditions prior to or as of the current Revolving
Maturity Date to the satisfaction of the Administrative Agent.
(i) No Default which has not been cured or waived in writing by the
Administrative Agent as set forth in Section 9.01 shall have occurred.
(ii) The Administrative Agent shall have received no later than
ninety (90) days prior to the current Revolving Maturity Date written
notice from the Borrower that it intends to exercise its option to extend
the Revolving Maturity Date.
(iii) The Borrower shall have paid to the Administrative Agent for
the account of each Lender an extension fee for each one year extension
equal to the product of (A) one eighth of one percent (1/8%) times (B) the
aggregate amount of such Lender's Revolving Commitment as of the current
Revolving Maturity Date.
(iv) If the Borrower is obligated to repay any Advances, the
Borrower shall have repaid such Advances.
(v) The representations and warranties of the Borrower, the Parent
and the Guarantors in the Credit Documents remain true and correct in all
material respects as of the Revolving Maturity Date.
Under no circumstances may the Revolving Maturity Date be extended beyond July
31, 2003.
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Section 2.0 Method of Borrowing.
-------------------
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(a) Notice. Each Borrowing shall be made pursuant to a Notice of
------
Borrowing, given not later than 11:00 a.m. (Dallas, Texas time) (i) on the third
Business Day before the date of the proposed Borrowing, in the case of a
Borrowing consisting of LIBOR Advances, or (ii) on the Business Day before the
date of the proposed Borrowing, in the case of a Borrowing consisting of Base
Rate Advances, by the Borrower to the Administrative Agent, which shall give
each Lender prompt notice on the day of receipt of such timely Notice of
Borrowing of such proposed Borrowing by telecopier. Each Notice of Borrowing
shall be in writing or by telecopier specifying the requested (i) date of such
Borrowing, (ii) Class and Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) if such Borrowing is to be
comprised of LIBOR Advances, the Interest Period for each such Advance. The
Administrative Agent shall promptly notify each Lender who is obligated to fund
an Advance under such Notice of Borrowing of such Notice of Borrowing not later
than 5:00 p.m. (Dallas, Texas time) on the day such Notice of Borrowing is
deemed received by the Administrative Agent. In the case of a proposed
Borrowing comprised of LIBOR Advances, the Administrative Agent shall also so
notify each Lender who is obligated to fund an Advance under such Notice of
Borrowing and the Borrower of the applicable interest rate under Section
2.06(b). Each Lender shall, before 11:00 a.m. (Dallas, Texas time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at its address referred to in Section 10.02,
or such other location as the Administrative Agent may specify by notice to the
Lenders, in same day funds, such Lender's Revolving Share, Term A Share or Term
B Share, as applicable, of such Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower at its account with the Administrative Agent. Notwithstanding the
foregoing, the Borrower may for Base Rate Advances requested on August 3, 1998
only request that such Advances be made on the same day as the Notice of
Borrowing, provided that such Notice of Borrowing shall be given not later than
--------
8:00 a.m. (Dallas, Texas time) on August 3, 1998. If such Notice of Borrowing
on August 3, 1998 is delivered to the Administrative Agent by such time, (a) the
Administrative Agent will promptly notify each Lender who is obligated to fund
an Advance under such Notice of Borrowing of such Notice of Borrowing not later
than 11:00 a.m. (Dallas, Texas time) on August 3, 1998 and (b) each Lender
shall, before 2:00 p.m. (Dallas, Texas time) on August 3, 1998, make available
for the account of its Applicable Lending Office to the Administrative Agent at
its address referred to in Section 10.02, or such other location as the
Administrative Agent may specify by notice to the Lenders, in same day funds,
such Lender's Revolving Share, Term A Share or Term B Share, as applicable, of
such Borrowing.
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(b) Conversions and Continuations. In order to elect to Convert or
-----------------------------
continue Advances comprising part of the same Borrowing under this Section, the
Borrower shall deliver an irrevocable Notice of Conversion or Continuation to
the Administrative Agent at the Administrative Agent's office no later than
11:00 a.m. (Dallas, Texas time) (i) on the date which is at least three Business
Days in advance of the proposed Conversion or continuation date in the case of a
Conversion to or a continuation of a Borrowing comprised of LIBOR Advances and
(ii) on the Business Day prior to the proposed conversion date in the case of a
Conversion to a Borrowing comprised of Base Rate Advances. Each such Notice of
Conversion or Continuation shall be in writing or by telecopier, specifying (i)
the requested Conversion or continuation date (which shall be a Business Day),
(ii) the Borrowing amount, Class and Type of the Advances to be Converted or
continued, (iii) whether a Conversion or continuation is requested, and if a
Conversion, into what Type of Advances, and (iv) in the case of a Conversion to,
or a continuation of, LIBOR Advances, the requested Interest Period. Not later
than 5:00 p.m. (Dallas, Texas time) on the day such Notice of Conversion or
Continuation is deemed received by the Administrative Agent, the Administrative
Agent shall provide each Lender who has an Advance affected by such Notice of
Conversion or Continuation with a copy thereof and, in the case of a Conversion
to or a continuation of LIBOR Advances, notify each Lender who has an Advance
affected by such Notice of Conversion or Continuation and the Borrower of the
applicable interest rate under Section 2.06(b). For purposes other than the
conditions set forth in Section 3.02, the portion of Advances comprising part of
the same Borrowing that are Converted to Advances of another Type shall
constitute a new Borrowing. If the Borrower shall fail to specify an Interest
Period for a LIBOR Advance including the continuation of a LIBOR Advance, the
Borrower shall be deemed to have selected a Base Rate Advance. Under no
circumstances may the Borrower convert one Class of Borrowing into another Class
of Borrowing.
(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and
-------------------
(b) above:
(i) in the case of LIBOR Advances each Borrowing shall be in an
aggregate amount of not less than $2,000,000 or greater multiples of
$100,000;
(ii) in the case of Base Rate Advances each Borrowing shall be in an
aggregate amount of not less than $1,000,000 or greater multiples of
$100,000;
(iii) except for Borrowings for the acquisition of Future Properties
by the
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Borrower or its Subsidiary, the Borrower may not request Borrowings on more
than four days in any calendar month.
(iv) at no time shall there be more than eight Interest Periods
applicable to outstanding LIBOR Advances;
(v) the Borrower may not select LIBOR Advances for any Borrowing
to be made, Converted or continued if a Default has occurred and is
continuing;
(vi) if any Lender shall, at any time prior to the making of any
requested Borrowing comprised of LIBOR Advances, notify the Administrative
Agent that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Lender or its
LIBOR Lending Office to perform its obligations under this Agreement to
make LIBOR Advances or to fund or maintain LIBOR Advances, then such
Lender's Revolving Share, Term A Share or Term B Share, as applicable, of
such Borrowing shall be made as a Base Rate Advance, provided that such
Base Rate Advance shall be considered part of the same Borrowing and
interest on such Base Rate Advance shall be due and payable at the same
time that interest on the LIBOR Advances comprising the remainder of such
Borrowing shall be due and payable; and such Lender agrees to use
commercially reasonable efforts (consistent with its internal policies and
legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such designation would avoid the effect of
this paragraph and would not, in the reasonable judgment of such Lender, be
otherwise materially disadvantageous to such Lender;
(vii) if the Administrative Agent is unable to determine the LIBOR
for LIBOR Advances comprising any requested Borrowing, the right of the
Borrower to select LIBOR Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify
the Borrower and the Lenders that the circumstances causing such suspension
no longer exist, and each Advance comprising such Borrowing shall be a Base
Rate Advance;
(viii) if the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative Agent
that the LIBOR for LIBOR
-56-
Advances comprising such Borrowing will not adequately reflect the cost to
such Lenders of making or funding their respective LIBOR Advances, as the
case may be, for such Borrowing, the right of the Borrower to select LIBOR
Advances for such Borrowing or for any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Base Rate Advance; and
(ix) if the Borrower shall fail to select the duration or
continuation of any Interest Period for any LIBOR Advances in accordance
with the provisions contained in the definition of "Interest Period" in
Section 1.01 and paragraph (a) or (b) above, the Administrative Agent will
forthwith so notify the Borrower and the Lenders and such Advances will be
made available to the Borrower on the date of such Borrowing as Base Rate
Advances or, if an existing Advance, Converted into Base Rate Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of
-------------------
Conversion or Continuation shall be irrevocable and binding on the Borrower. In
the case of any Borrowing which the related Notice of Borrowing specifies is to
be comprised of LIBOR Advances, the Borrower shall indemnify each Lender against
any loss, out-of-pocket cost or expense incurred by such Lender as a result of
any condition precedent for Borrowing set forth in Article III not being
satisfied for any reason, including, without limitation, any loss, cost or
expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Administrative Agent Reliance. Unless the Administrative Agent shall
-----------------------------
have received notice from a Lender before the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
Revolving Share, Term A Share or Term B Share, as applicable, of the Borrowing,
the Administrative Agent may assume that such Lender has made its Revolving
Share, Term A Share or Term B Share, as applicable, of such Borrowing available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (a) of this Section 2.02 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made its Revolving Share, Term A Share or Term B Share, as applicable, of such
Borrowing available to the Administrative Agent, such Lender and the Borrower
severally agree to immediately repay to the Administrative Agent on demand such
corresponding amount, together with interest on such amount, for each day from
the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable on each such day to Advances comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for
each such day. If such Lender shall repay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding amount
so repaid shall constitute such Lender's Advance as part of such Borrowing for
purposes of this Agreement even though not made on the same day as the other
Advances comprising such Borrowing.
(f) Lender Obligations Several. The failure of any Lender to make the
--------------------------
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, to make its Advance on the date of such
Borrowing. No Lender shall be responsible for the failure of any other Lender
to make the Advance to be made by such other Lender on the date of any
Borrowing.
(g) Notes. The indebtedness of the Borrower to each Lender resulting from
-----
Revolving Advances owing to such Lender shall be evidenced by a Revolving Note
of the Borrower payable to the order of such Lender in substantially the form of
Exhibit A-1. The indebtedness of the Borrower to each Lender resulting from
Term A Advances owing to such Lender shall be evidenced by a Term A Note of the
Borrower payable to the order of such Lender in substantially the form of
Exhibit A -2. The indebtedness of the Borrower to each Lender resulting from
Term B Advances owing to such Lender shall be evidenced by a Term B Note of the
Borrower payable to the order of such Lender in substantially the form of
Exhibit A -3. The indebtedness of the Borrower to the Swingline Lender
resulting from Swingline Advances owing to the Swingline Lender shall be
evidenced by the Swingline Note.
Section 2.0 Fees.
----
(a) Commitment Fees. For the period from the Effective Date until the
---------------
Revolving Maturity Date the Borrower agrees to pay to the Administrative Agent
for the account of each Lender with a Revolving Commitment a commitment fee on
the average daily amount by which such Lender's Revolving Commitment exceeds the
sum of such Lender's outstanding Revolving Advances and Revolving Share of the
Letter of Credit Exposure at a rate per annum equal to the Applicable Margin
(computed on the actual number of days elapsed, including the first day and
excluding the last, based upon a 360-day year). Such fees shall be due and
payable quarterly in arrears (i) on the date which is 30 days following the end
of the last Business Day of each March, June, September and December and (ii) on
the Revolving Maturity Date.
(b) Letter of Credit Fees. The Borrower agrees to pay to the
---------------------
Administrative Agent for the benefit of the Lenders with a Revolving Commitment,
fees in respect of all Letters of Credit outstanding at a rate per annum equal
to the Applicable Margin (computed on the actual number of days elapsed,
including the first day and excluding the last, based upon a 360-day year) on
the average daily amount of the aggregate undrawn maximum amount of each Letter
of Credit outstanding, payable in arrears (i) on the date which is 30 days
following the last Business Day of each March, June, September and December and
(ii) on the Maturity Date. In addition, the Borrower agrees to pay to the
Issuing Bank for its own account a fee on the average daily amount of the
aggregate undrawn maximum amount of each Letter of Credit issued by such Issuing
Bank at a rate per annum equal to .0625%, such fees due and payable quarterly in
arrears (i) on the date which is 30 days following the last Business Day of each
March, June, September and December and (ii) on the Revolving Maturity Date.
(c) Administrative Agent's and Facilitators' Fees. The Borrower agrees to
---------------------------------------------
pay (i) to the Facilitators for their benefit the fees set forth in the Fee
Letter as and when the same are due and payable pursuant to the terms of the Fee
Letter, and (ii) to the Administrative Agent for its benefit the fees set forth
in the Administrative Agent Fee Letter as and when the same are due and payable
pursuant to the terms of the Administrative Agent Fee Letter.
Section 2.4 Reduction of the Commitments.
----------------------------
(a) Upon the occurrence of a Change in Control in the Parent or the
Borrower, then, in such event the Required Lenders may, at their sole option
upon written notice to the Borrower
-59-
(a "Termination Notice"), declare the obligation of each Lender to make Advances
and the obligation of the Issuing Bank to issue, increase, or extend Letters of
Credit to be terminated, whereupon the same shall forthwith terminate and the
Commitments shall reduce to zero.
(b) The Borrower may, upon at least three Business Days' prior notice to
the Administrative Agent, permanently terminate in whole or permanently reduce
ratably in part the Revolving Commitments of the Lenders; provided, however,
-------- -------
that (i) each partial reduction shall be in the aggregate amount of not less
than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) no
such reduction shall result in an overdraft status as provided in Section
2.07(c)(ii), and (iii) no such reduction shall result in the total aggregate
Revolving Commitments of the Lenders being less than $300,000,000.
Section 2.5 Repayment of Advances. The Borrower shall repay the
---------------------
outstanding principal amount of each Advance on the applicable Maturity Date;
provided that the Borrower shall repay to the Administrative Agent for the
account of the Swingline Lender the outstanding principal amount of each
Swingline Advance made by it on the maturity date specified for the applicable
Swingline Advance.
Section 2.6 Interest, Late Payment Fee. The Borrower shall pay interest
--------------------------
on the unpaid principal amount of each Advance made by each Lender from the date
of such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(a) Base Rate Advances and Swingline Advances. If such Advance is a Base
-----------------------------------------
Rate Advance or a Swingline Advance, a rate per annum (computed on the actual
number of days elapsed, including the first day and excluding the last, based on
a 365 day year) equal at all times to the lesser of (i) the Adjusted Base Rate
in effect from time to time plus the Applicable Margin and (ii) the Maximum
----
Rate, payable in arrears on the first Business Day of each calendar month and on
the date such Base Rate Advance or Swingline Advance, as applicable, shall be
paid in full, provided that during the continuance of an Event of Default, Base
--------
Rate Advances and Swingline Advances shall bear interest at a rate per annum
equal at all times to the lesser of (i) the rate required to be paid on such
Advance immediately prior to the date on which such amount becomes due plus
----
three percent (3%) and (ii) the Maximum Rate.
(b) LIBOR Advances. If such Advance is a LIBOR Advance, a rate per annum
--------------
(computed on the actual number of days elapsed, including the first day and
excluding the last, based on a 360 day year) equal at all times during the
Interest Period for such Advance to the
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lesser of (i) the LIBOR for such Interest Period plus the Applicable Margin and
----
(ii) the Maximum Rate, payable in arrears on the last day of such Interest
Period, and on the date such LIBOR Advance shall be paid in full, and, with
respect to LIBOR Advances having an Interest Period in excess of 30 days, the
first day of each calendar month during such Interest Period excluding the month
in which such LIBOR Advance shall be paid in full; provided that during the
--------
continuance of an Event of Default, LIBOR Advances shall bear interest at a rate
per annum equal at all times to the lesser of (i) the rate required to be paid
on such Advance immediately prior to the date on which such amount became due
plus three percent (3%) and (ii) the Maximum Rate.
----
(c) Usury Recapture. In the event the rate of interest chargeable under
---------------
this Agreement or the Notes at any time is greater than the Maximum Rate, the
unpaid principal amount of the Notes shall bear interest at the Maximum Rate
until the total amount of interest paid or accrued on the Notes equals the
amount of interest which would have been paid or accrued on the Notes if the
stated rates of interest set forth in this Agreement had at all times been in
effect. In the event, upon payment in full of the Notes, the total amount of
interest paid or accrued under the terms of this Agreement and the Notes is less
than the total amount of interest which would have been paid or accrued if the
rates of interest set forth in this Agreement had, at all times, been in effect,
then the Borrower shall, to the extent permitted by applicable law, pay the
Administrative Agent for the account of the Lenders an amount equal to the
difference between (i) the lesser of (A) the amount of interest which would have
been charged on the Notes if the Maximum Rate had, at all times, been in effect
and (B) the amount of interest which would have accrued on the Notes if the
rates of interest set forth in this Agreement had at all times been in effect
and (ii) the amount of interest actually paid or accrued under this Agreement on
the Notes. In the event the Lenders ever receive, collect or apply as interest
any sum in excess of the Maximum Rate, such excess amount shall, to the extent
permitted by law, be applied to the reduction of the principal balance of the
Notes, and if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrower.
(d) Other Amounts Overdue. If any amount payable under this Agreement
---------------------
other than the Advances is not paid when due and payable, including without
limitation, accrued interest and fees, then such overdue amount shall accrue
interest hereon due and payable on demand at a rate per annum equal to the
Adjusted Base Rate plus three percent (3%), from the date such amount became due
----
until the date such amount is paid in full.
(e) Late Payment Fee. Subject to the provisions of Section 10.14, if any
----------------
interest
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payable under this Agreement is not paid when due and payable (after taking into
account any applicable grace period), then the Borrower will pay to the
Administrative Agent for the account of the Lenders contemporaneously with the
payment of such past due interest a late payment fee equal to an amount equal to
the product of (i) such overdue interest times (ii) four percent (4%).
-----
Section 2.7 Prepayments.
-----------
(a) Right to Prepay. The Borrower shall have no right to prepay any
---------------
principal amount of any Advance except as provided in this Section 2.07.
(b) Optional Prepayments. The Borrower may elect to prepay any of the
--------------------
Advances, after giving by 11:00 a.m. (Dallas, Texas time) (i) in the case of
LIBOR Advances, at least three Business Days' or (ii) in case of Base Rate
Advances and Swingline Advances, at least one Business Day's prior written
notice to the Administrative Agent stating the Class or Classes to be repaid,
the proposed date and aggregate principal amount of such prepayment, and if
applicable, the relevant Interest Period for the Advances to be prepaid;
provided, however, that any such proposed prepayment of Term A Advances or Term
-------- -------
B Advances must be made equally to Term A Advances and Term B Advances and in
the inverse order of maturity for each Class. If any such notice is given, the
Borrower shall prepay Advances comprising part of the same Borrowing in whole or
ratably in part in an aggregate principal amount equal to the amount specified
in such notice, and shall also pay accrued interest to the date of such
prepayment on the principal amount prepaid and amounts, if any, required to be
paid pursuant to Section 2.08 as a result of such prepayment being made on such
date; provided, however, that each partial prepayment shall be in an aggregate
-------- -------
principal amount not less than $1,000,000 and in integral multiples of $100,000.
(c) Mandatory Prepayments.
---------------------
(i) Change of Control. On the fifth Business Day following the
-----------------
Borrower's receipt of a Termination Notice pursuant to Section 2.04(a)
hereof, the Borrower shall be required to prepay all outstanding Advances
in full and to deposit with the Administrative Agent into the Cash
Collateral Account an amount equal to the Letter of Credit Exposure.
(ii) Overdraft. On any date on which the outstanding principal
---------
amount of the Revolving Advances plus the Letter of Credit Exposure plus
---- ----
the outstanding principal amount of the Swingline Advances exceeds the
aggregate Revolving Commitments, the
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Borrower agrees to make a prepayment of the Revolving Advances in the
amount of such excess.
(iii) Repayment Event. Upon the occurrence of any Repayment Event,
---------------
the Borrower shall prepay Advances on the Business Day the Net Cash
Proceeds from such Repayment Event are received by the Borrower or the
Parent, as applicable, in an amount equal to the lesser of (A) the amount
of the outstanding Advances on such Business Day and (B) 100% of the Net
Cash Proceeds of such Repayment Event. If, in connection with an Asset
Disposition which qualifies as a Repayment Event for which the Borrower has
not used the Net Cash Proceeds to repay the Obligations, the Borrower has
failed to make an Investment or Investments in the Hospitality/Leisure-
Related Business with such Net Cash Proceeds within one year from the date
of such Asset Disposition, then the Borrower shall prepay Advances on the
first anniversary of the Business Day such Net Cash Proceeds are received
by the Borrower or the Parent, as applicable, in the amount equal to the
lesser of (A) the amount of the outstanding Advances on such first
anniversary and (B) 100% of the Net Cash Proceeds of such Repayment Event
which have not been used to make an Investment or Investments in the
Hospitality/Leisure-Related Business. Any Net Cash Proceeds utilized to
repay Advances will be applied in the following order: (a) first, to repay
the outstanding principal of Swingline Advances, (b) second, to repay the
outstanding principal of Revolving Advances, (c) third, to repay the
outstanding principal of Term A Advances in the inverse order of maturity,
and (d) fourth, to repay the outstanding principal of Term B Advances in
the inverse order of maturity.
(iv) Term A Advances. Commencing with August 1, 2001 and on each
---------------
November 1, February 1, May 1 and August 1 thereafter, the Borrower shall
repay the Term A Advances by an amount equal to $7,500,000.
(v) Term B Advances. Commencing with February 1, 1999 and on each
---------------
August 1 and February 1 thereafter, the Borrower shall repay the Term B
Advances by an amount equal to $1,000,000.
(vi) Accrued Interest. Each prepayment pursuant to this Section
----------------
2.07(c) shall be accompanied by accrued interest on the amount prepaid to
the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on such
date.
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(vii) Avoidance of Breakage Costs. In the event that the amount of
---------------------------
any mandatory prepayment of Advances under this Section 2.07(c) exceeds the
aggregate principal amount of Advances in any Class which consist of Base
Rate Advances (the amount of such excess being the "Excess Amount"), the
-------------
Borrower shall have the right, in lieu of making such prepayment in full,
to prepay such outstanding Advances which are Base Rate Advances and to
deposit an amount equal to the Excess Amount with the Administrative Agent
in the Cash Collateral Account maintained by and in the sole dominion and
control of the Administrative Agent for the ratable benefit of the Lenders.
Any amount so deposited shall be held by the Administrative Agent as
collateral for the Obligations, earn interest on behalf of the Borrower and
be applied to the prepayment of Advances which are LIBOR Advances at the
end of the current Interest Period(s) applicable thereto. On any day on
which amounts collected in the Cash Collateral Account remain on deposit in
or to the credit of the Cash Collateral Account after giving effect to the
payment made on such day pursuant to this Section 2.07(c), and the Borrower
shall have delivered to the Administrative Agent a written request or a
telephonic request (which shall be promptly confirmed in writing) prior to
11:00 am (Dallas, Texas time) that such remaining collected amounts be
invested in cash equivalents specified in such request, the Administrative
Agent shall invest such funds, to the extent the Administrative Agent is
reasonably able to do so, in such cash equivalents as are acceptable to,
and with no risk to, the Administrative Agent on an overnight basis or with
maturities such that amounts will be available to pay the Obligations
secured thereby as they become due, whether at maturity, by acceleration or
otherwise; provided, however, that any loss resulting from such investments
-------- -------
shall be charged to and be immediately payable by the Borrower on demand by
the Administrative Agent.
(d) Ratable Payments. Each payment of any Advance pursuant to this
----------------
Section 2.07 or any other provision of this Agreement shall be made in a manner
such that all Advances comprising part of the same Borrowing are paid in whole
or ratably in part.
(e) Effect of Notice. All notices given pursuant to this Section 2.07
----------------
shall be irrevocable and binding upon the Borrower.
(f) Payments with respect to Florida Liens. Notwithstanding anything in
---------------------------------------
this Agreement or any other Credit Document to the contrary, each payment of any
Advance pursuant
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to this Section 2.07 or any other provision of this Agreement shall be made in a
manner such that all Advances secured by Florida Liens shall be deemed the last
Advances repaid.
Section II.8 Breakage Costs. If (a) any payment of principal of any
--------------
LIBOR Advance is made other than on the last day of the Interest Period for such
Advance as a result of any payment pursuant to Section 2.07 or the acceleration
of the maturity of the Notes pursuant to Article VIII or otherwise; (b) any
Conversion of a LIBOR Advance is made other than on the last day of the Interest
Period for such Advance pursuant to Section 2.12 or otherwise; or (c) the
Borrower fails to make a principal or interest payment with respect to any LIBOR
Advance on the date such payment is due and payable, the Borrower shall, within
10 days of any written demand sent by any Lender to the Borrower through the
Administrative Agent, pay to the Administrative Agent for the account of such
Lender any amounts (without duplication of any other amounts payable in respect
of breakage costs) required to compensate such Lender for any additional losses,
out-of-pocket costs or expenses which it may reasonably incur as a result of
such payment or nonpayment, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
Section II.9 Increased Costs.
---------------
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(a) LIBOR Advances. If, due to either (i) the introduction of or any
--------------
change (other than any change by way of imposition or increase of reserve
requirements included in the calculation of the LIBOR) in or in the
interpretation of any law or regulation following the date of this Agreement or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) not complied
with prior to the date of this Agreement, there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining LIBOR
Advances, then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), immediately pay to the
Administrative Agent for the account of such Lender additional amounts (without
duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Lender for such increased cost; provided, however,
-------- -------
that, before making any such demand, each Lender agrees to use commercially
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of such
increased cost and detailing the calculation of such cost submitted to the
Borrower and the Administrative Agent by such Lender at the time such Lender
demands payment under this Section shall be conclusive and binding for all
purposes, absent manifest error.
(b) Capital Adequacy. If any Lender or the Issuing Bank determines in
----------------
good faith that compliance with any law or regulation or any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) implemented or effective after the date of this
Agreement affects or would affect the amount of capital required or expected to
be maintained by such Lender or the Issuing Bank and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend or the Issuing Bank's commitment to issue Letters of Credit or any
Lender's commitment to risk participate in Letters of Credit and other
commitments of this type, then, upon 30 days prior written notice by such Lender
or the Issuing Bank (with a copy of any such demand to the Administrative
Agent), the Borrower shall immediately pay to the Administrative Agent for the
account of such Lender or to the Issuing Bank, as the case may be, from time to
time as specified by such Lender or the Issuing Bank, additional amounts
(without duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Lender or the Issuing Bank, in light of such
circumstances, (i) with respect to such Lender, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment
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to lend under this Agreement or its commitment to risk participate in Letters of
Credit and (ii) with respect to the Issuing Bank, to the extent that such
Issuing Bank reasonably determines such increase in capital to be allocable to
the issuance or maintenance of the Letters of Credit. A certificate as to such
amounts and detailing the calculation of such amounts submitted to the Borrower
and the Administrative Agent by such Lender or the Issuing Bank shall be
conclusive and binding for all purposes, absent manifest error.
(c) Letters of Credit. If any change in any law or regulation or in the
-----------------
interpretation thereof by any court or administrative or Governmental Authority
charged with the administration thereof following the date of this Agreement
shall either (i) impose, modify, or deem applicable any reserve, special
deposit, or similar requirement against letters of credit issued by, or assets
held by, or deposits in or for the account of, Issuing Bank or any Lender or
(ii) impose on Issuing Bank or any Lender any other condition regarding the
provisions of this Agreement relating to the Letters of Credit or any Letter of
Credit Obligations, and the result of any event referred to in the preceding
clause (i) or (ii) shall be to increase the cost to Issuing Bank of issuing or
maintaining any Letter of Credit, or increase the cost to such Lender of its
risk participation in any Letter of Credit (which increase in cost shall be
determined by Issuing Bank's or such Lender's reasonable allocation of the
aggregate of such cost increases resulting from such event), then, upon demand
by Issuing Bank or such Lender (with a copy sent to the Administrative Agent),
as the case may be, the Borrower shall pay to the Administrative Agent for the
account of Issuing Bank or Lender, as the case may be, from time to time as
specified by Issuing Bank or such Lender, additional amounts which shall be
sufficient to compensate such Issuing Bank or such Lender for such increased
cost. Issuing Bank and each Lender agrees to use commercially reasonable efforts
(consistent with internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office for the booking of its Letters
of Credit or risk participations if the making of such designation would avoid
the effect of this paragraph and would not, in the reasonable judgment of
Issuing Bank or such Lender, be otherwise disadvantageous to Issuing Bank or
such Lender, as the case may be. A certificate as to such increased cost
incurred by Issuing Bank or such Lender, as the case may be, as a result of any
event mentioned in clause (i) or (ii) above, and detailing the calculation of
such increased costs submitted by Issuing Bank or such Lender to the Borrower
and the Administrative Agent, shall be conclusive and binding for all purposes,
absent manifest error.
Section II.10 Payments and Computations.
-------------------------
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(a) Payment Procedures. Except if otherwise set forth herein, the
------------------
Borrower shall make each payment under this Agreement and under the Notes not
later than 11:00 a.m. (Dallas, Texas time) on the day when due in Dollars to the
Administrative Agent at the location referred to in the Notes (or such other
location as the Administrative Agent shall designate in writing to the Borrower)
in same day funds. The Administrative Agent will on the same day cause to be
distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent, the
Issuing Banks, or a specific Lender pursuant to Section 2.03(b), 2.03(c),
2.06(c), 2.08, 2.09, 2.11, 2.12, or 2.13(c) but after taking into account
payments effected pursuant to Section 10.04) to the Lenders in accordance with,
in the case of a payment made in respect of a Revolving Borrowing, each Lender's
Revolving Share, in the case of a payment made in respect of Term A Borrowing,
each Lender's Term A Share, and in the case of a payment made in respect of Term
B Borrowing, each Lender's Term B Share for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender or Issuing Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement.
(b) Computations. All computations of interest based on the Adjusted Base
------------
Rate shall be made by the Administrative Agent on the basis of a year of 365
days and all computations of fees and interest based on the LIBOR and the
Federal Funds Rate shall be made by the Administrative Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day, but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent of
an interest rate shall be conclusive and binding for all purposes, absent
manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be stated to be
-------------------------
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
--------
principal of LIBOR Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Administrative Agent Reliance. Unless the Administrative Agent shall
-----------------------------
have received written notice from the Borrower prior to the date on which any
payment is due to the Lenders that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date
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and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such date an amount equal to the amount then due
such Lender. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender,
together with interest, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate for each such day.
(e) Application of Payments. Unless otherwise specified in Section 2.07
-----------------------
hereof, whenever any payment received by the Administrative Agent under this
Agreement is insufficient to pay in full all amounts then due and payable under
this Agreement and the Notes, such payment shall be distributed and applied by
the Administrative Agent and the Lenders in the following order: first, to the
-----
payment of fees and expenses due and payable to the Administrative Agent under
and in connection with this Agreement or any other Credit Document; second, to
------
the payment of all expenses due and payable under Section 2.11(c), ratably among
the Lenders in accordance with the aggregate amount of such payments owed to
each such Lender; third, to the payment of fees due and payable to the Issuing
-----
Bank pursuant to Section 2.03(b); fourth, to the payment of all other fees due
------
and payable under Section 2.03; and fifth, to the payment of the interest
-----
accrued on and the principal amount of all of the Notes and the interest accrued
on and all Letter of Credit Obligations, regardless of whether any such amount
is then due and payable, ratably among the Lenders in accordance with the
aggregate accrued interest plus the aggregate principal amount owed to such
Lender.
(f) Register. The Administrative Agent shall record in the Register the
--------
Commitment and the Advances from time to time of each Lender and each repayment
or prepayment in respect to the principal amount of such Advances of each
Lender. Any such recordation shall be conclusive and binding on the Borrower and
each Lender, absent manifest error; provided however, that failure to make any
-------- -------
such recordation, or any error in such recordation, shall not affect the
Borrower's obligations hereunder in respect of such Advances.
Section II.11 Taxes.
-----
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(a) No Deduction for Certain Taxes. Any and all payments by the Borrower
------------------------------
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, Issuing Bank, and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender, Issuing Bank, or the Administrative Agent
(as the case may be) is organized or any political subdivision of the
jurisdiction (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes") and, in
the case of each Lender and Issuing Bank, Taxes by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision of such
jurisdiction. If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable to any Lender, Issuing Bank, or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that, after making all required deductions (including deductions applicable
to additional sums payable under this Section 2.11), such Lender, Issuing Bank,
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made; provided, however,
--------
that if the Borrower's obligation to deduct or withhold Taxes is caused solely
by such Lender's, Issuing Bank's, or the Administrative Agent's failure to
provide the forms described in paragraph (e) of this Section 2.11 and such
Lender, Issuing Bank, or the Administrative Agent could have provided such
forms, no such increase shall be required; (ii) the Borrower shall make such
deductions; and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Legal Requirements.
(b) Other Taxes. In addition, the Borrower agrees to pay any present or
-----------
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Notes, or the other Credit Documents (hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower indemnifies each Lender, Issuing Bank,
---------------
and the Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
Governmental Authority on amounts payable under this Section 2.11) paid by such
Lender, Issuing Bank, or the Administrative Agent (as the case may be) and any
liability (including interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Each payment
-70-
required to be made by the Borrower in respect of this indemnification shall be
made to the Administrative Agent for the benefit of any party claiming such
indemnification within 30 days from the date the Borrower receives written
demand detailing the calculation of such amounts therefor from the
Administrative Agent on behalf of itself as Administrative Agent, Issuing Bank,
or any such Lender. If any Lender, the Administrative Agent, or Issuing Bank
receives a refund in respect of any Taxes or Other Taxes paid by the Borrower
under this paragraph (c), such Lender, the Administrative Agent, or Issuing
Bank, as the case may be, shall promptly pay to the Borrower the Borrower's
share of such refund.
(d) Evidence of Tax Payments. The Borrower will pay prior to delinquency
------------------------
all Taxes and Other Taxes payable in respect of any payment. Within 30 days
after the date of any payment of Taxes, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 10.02, the original
or a certified copy of a receipt evidencing payment of such Taxes or Other
Taxes.
(e) Foreign Lender Withholding Exemption. Each Lender and each Issuing
------------------------------------
Bank that is not incorporated under the laws of the United States of America or
a state thereof agrees that it will deliver to the Borrower and the
Administrative Agent on the date of this Agreement or upon the effectiveness of
any Assignment and Acceptance (i) if such Lender is a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, certifying in each case that such Lender is entitled to
receive payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes, (B) if
applicable, an Internal Revenue Service Form W-8 or W-9 or successor applicable
form, as the case may be, to establish an exemption from United States backup
withholding tax, and (C) any other governmental forms which are necessary or
required under an applicable tax treaty or otherwise by law to reduce or
eliminate any withholding tax, which have been reasonably requested by the
Borrower or, (ii) if such Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and intends to claim exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, a
certificate representing that such Non-U.S. Lender is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within
-71-
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
Federal withholding tax on payments of interest by the Borrower under this
Agreement and the other Credit Documents. Each Lender which delivers to the
Borrower and the Administrative Agent a Form 1001 or 4224 and/or Form W-8 or W-9
pursuant to the next preceding sentence further undertakes to deliver to the
Borrower and the Administrative Agent two further copies of Form 1001 or 4224
and/or Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower and the Administrative Agent certifying
in the case of a Form 1001 or 4224 that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes. If an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
delivery required by the preceding sentence would otherwise be required which
renders all such forms inapplicable or which would prevent any Lender from duly
completing and delivering any such letter or form with respect to it and such
Lender advises the Borrower and the Administrative Agent that it is not capable
of receiving payments without any deduction or withholding of United States
federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax, such Lender shall not be
required to deliver such forms. The Borrower shall withhold tax at the rate and
in the manner required by the laws of the United States with respect to payments
made to a Lender failing to timely provide the requisite Internal Revenue
Service forms.
Section II.12 Illegality. If any Lender shall notify the Administrative
----------
Agent and the Borrower that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Lender
or its LIBOR Lending Office to perform its obligations under this Agreement to
maintain any LIBOR Advances of such Lender then outstanding hereunder, then,
notwithstanding anything herein to the contrary, the Borrower shall, if demanded
by such Lender by notice to the Borrower and the Administrative Agent no later
than 11:00 a.m. (Dallas, Texas time), (a) if not prohibited by Legal Requirement
to maintain such LIBOR Advances for the duration of the Interest Period, on the
last day of the Interest Period for each outstanding LIBOR Advance of such
Lender or (b) if prohibited by Legal Requirement to maintain such LIBOR Advances
for the duration of the Interest Period, on the second Business Day following
its receipt
-72-
of such notice from such Lender, Convert all LIBOR Advances of such Lender then
outstanding to Base Rate Advances, and pay accrued interest on the principal
amount Converted to the date of such Conversion and amounts, if any, required to
be paid pursuant to Section 2.08 as a result of such Conversion being made on
such date. Each Lender agrees to use commercially reasonable efforts (consistent
with its internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would
avoid the effect of this paragraph and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
Section II.13 Letters of Credit.
-----------------
-73-
(a) Issuance. From time to time from the date of this Agreement until
--------
three months before the Revolving Maturity Date, at the request of the Borrower,
the Issuing Bank shall, on any Business Day and on the terms and conditions
hereinafter set forth, issue, increase, decrease, amend, or extend the
expiration date of Letters of Credit for the account of the Borrower (for its
own benefit or for the benefit of any of its Subsidiaries). Upon the Effective
Date, but subject to the limitations contained in the following sentence, each
Existing AGH Letter of Credit shall be automatically converted to a Letter of
Credit. No Letter of Credit will be issued, increased, or extended and no
Existing AGH Letter of Credit will be converted to a Letter of Credit (i) if
such issuance, increase, extension or conversion would cause the Letter of
Credit Exposure to exceed the lesser of (x) $100,000,000 or (y) an amount equal
to (A) the aggregate Revolving Commitments less (B) the sum of the aggregate
----
outstanding principal amount of the Revolving Advances, the Letter of Credit
Exposure, and the aggregate outstanding principal amount of the Swingline
Advances at such time; (ii) unless such Letter of Credit has an Expiration Date
not later than the earlier of (A) one year after the date of issuance thereof
and (B) one day prior to the Revolving Maturity Date; (iii) unless such Letter
of Credit is in form and substance acceptable to the respective Issuing Bank;
(iv) unless such Letter of Credit is a standby letter of credit not supporting
the repayment of indebtedness for borrowed money of any Person; (v) unless the
Borrower has delivered to the respective Issuing Bank the completed and executed
Letter of Credit Documents (other than the Letter of Credit) on such Issuing
Bank's standard form, which shall contain terms no more restrictive than the
terms of this Agreement; (vi) unless such Letter of Credit is governed by the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 ("UCP") or any successor
to the UCP; and (vii) unless no Default has occurred and is continuing or would
result from the issuance of such Letter of Credit. If the terms of any of the
Letter of Credit Documents referred to in the foregoing clause (v) conflicts
with the terms of this Agreement, the terms of this Agreement shall control.
(b) Participations. On the date of the issuance or increase of any Letter
--------------
of Credit on or after the Effective Date or the conversion of any Existing AGH
Letter of Credit to a Letter of Credit in accordance with provisions of the
preceding Section 2.13(a), each Issuing Bank shall be deemed to have sold to
each other Lender and each other Lender shall have been deemed to have purchased
from such Issuing Bank a participation in the Letter of Credit Exposure related
to the Letters of Credit issued by such Issuing Bank equal to such Lender's
Revolving Share at such date and such sale and purchase shall otherwise be in
accordance with the terms of this Agreement. Each Issuing Bank shall promptly
notify each such participant Lender by telex, telephone, or
-74-
telecopy of each Letter of Credit of such Issuing Bank issued, increased or
decreased, and the actual dollar amount of such Lender's participation in such
Letter of Credit. Each Lender's obligation to purchase participating interests
pursuant to this Section and to reimburse the respective Issuing Bank for such
Lender's Revolving Share of any payment under a Letter of Credit by such Issuing
Bank not reimbursed in full by the Borrower shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(i) any of the circumstances described in paragraph (d) below, (ii) the
occurrence and continuance of a Default, (iii) an adverse change in the
financial condition of the Borrower or any Guarantor, or (iv) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing, except for any such circumstance, happening or event constituting
or arising from gross negligence or willful misconduct on the part of such
Issuing Bank.
(c) Reimbursement. The Borrower shall have the right (but not the
-------------
obligation) to pay promptly on demand to each Issuing Bank in respect of each
Letter of Credit issued by such Issuing Bank an amount equal to any amount paid
by such Issuing Bank under or in respect of such Letter of Credit. In the event
any Issuing Bank makes a payment pursuant to a request for draw presented under
a Letter of Credit and such payment is not promptly reimbursed by the Borrower
upon demand, such Issuing Bank shall give notice of such payment to the
Administrative Agent and, upon receipt of such notice, the Administrative Agent
shall give notice of such payment to the Lenders, and each Lender shall promptly
reimburse such Issuing Bank for such Lender's Revolving Share of such payment,
and such reimbursement shall be deemed for all purposes of this Agreement to
constitute a Base Rate Advance to the Borrower from such Lender. If such
reimbursement is not made by any Lender to any Issuing Bank on the same day on
which such Issuing Bank shall have made payment on any such draw, such Lender
shall pay interest thereon to such Issuing Bank for each such day from the date
such payment should have been made until the date repaid at a rate per annum
equal to the Federal Funds Rate for each such day. The Borrower hereby
unconditionally and irrevocably authorizes, empowers, and directs the
Administrative Agent and the Lenders with Revolving Commitments to record and
otherwise treat each payment under a Letter of Credit not immediately reimbursed
by the Borrower as a Borrowing comprised of Base Rate Advances made by such
Lenders to the Borrower on the day of payment under such Letter of Credit and
such Lenders shall be entitled to the interest from its Base Rate Advance in
connection with such Borrowing from the day of payment under such Letter of
Credit.
(d) Obligations Unconditional. The obligations of the Borrower under this
-------------------------
Agreement
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in respect of each Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit
Documents;
(ii) any amendment or waiver of or any consent to departure from any
Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Borrower or any Lender or any other Person may have at any time
against any beneficiary or transferee of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the respective Issuing Bank or any other Person or entity, whether
in connection with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated
transaction;
(iv) any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
to the extent the respective Issuing Bank would not be liable therefor
pursuant to the following paragraph (e);
(v) payment by the respective Issuing Bank under such Letter of
Credit against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
(e) Liability of Issuing Banks. The Borrower assumes all risks of the
--------------------------
acts or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit. No Issuing Bank, nor any other
Lender, nor any of their respective officers or directors shall be liable or
responsible for:
(i) the use which may be made of any Letter of Credit or any acts
or omissions of any beneficiary or transferee in connection therewith;
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(ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by such Issuing Bank against presentation of documents
which do not comply with the terms of a Letter of Credit, including failure
of any documents to bear any reference or adequate reference to the
relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (including such Issuing Bank's own
negligence),
except that the Borrower shall have a claim against such Issuing Bank, and such
------
Issuing Bank shall be liable to, and shall promptly pay to, the Borrower, to the
extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by (A) such Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (B) such Issuing Bank's gross negligence in failing to make lawful
payment under any Letter of Credit after the presentation to it of a draft and
certificate strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing, any Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
Section II.14 Determination of Leverage Ratio. The Leverage Ratio shall
-------------------------------
be determined by the Administrative Agent, as follows:
(a) Quarterly. On the Status Reset Date the Administrative Agent shall
---------
determine the Leverage Ratio as of the last day of the immediately preceding
Fiscal Quarter upon receipt of a Compliance Certificate setting forth the
components of the Leverage Ratio as of such date.
(b) Adjustments. Following each acquisition or disposition by the Parent
-----------
or its Subsidiary of a Hotel Property or any of the Parent's or its Subsidiary's
other Investments with an Investment Amount in excess of $5,000,000 or the
incurrence by the Parent or its Subsidiary of additional Indebtedness (excluding
any Obligations) in excess of $5,000,000 (an "Adjustment Event"), and the
----------------
Administrative Agent's receipt of an Adjustment Report with respect thereto, the
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Administrative Agent shall adjust the Leverage Ratio accordingly solely for
purposes of Section 7.04 and the definition of "Repayment Event", not for the
definition of "Status."
(c) Notice of Leverage Ratio Change. Promptly following any date the
-------------------------------
Leverage Ratio is redetermined in accordance with the preceding paragraphs, the
Administrative Agent shall give notice to the Lenders and the Borrower of the
new Leverage Ratio.
Section II.15 Lender Replacement.
------------------
(a) Right to Replace. The Borrower shall have the right to replace each
----------------
Lender either (i) affected by a condition under Section 2.02(c)(vi), 2.09, 2.11,
or 2.12 for more than 90 days or (ii) that refuses to consent to a proposed
change, waiver, discharge or termination with respect to this Agreement which
has been approved by the Required Lenders as (and to the extent) provided in
Section 10.01 (each such affected or non-consenting Lender, an "Affected
Lender") in accordance with the procedures in this Section 2.15 and provided
that no reduction of the total Commitments occurs as a result thereof.
(b) Replacement Allocation.
----------------------
(i) Upon the occurrence of any condition permitting the replacement
of a Lender, the Administrative Agent in its sole discretion shall have the
right to reallocate the amount of the Commitments of the Affected Lenders
to Persons who desire to increase their Commitments, including without
limitation to Persons which are not already party to this Agreement but
which qualify as Eligible Assignees, which election shall be made by
written notice within 30 days after the date such condition occurs.
(ii) If the aggregate amount of the reallocated Commitments is less
than the Commitments of the Affected Lenders, (A) the respective
Commitments of the Lenders which have received such reallocated Commitments
shall be increased by the respective amounts of their proposed
reallocations to the extent any such Lender agrees to such increase, and
(B) the Borrower shall have the right to add additional Lenders which are
Eligible Assignees to this Agreement to replace such Affected Lenders,
which additional Lenders would have aggregate Commitments no greater than
those of the Affected Lenders minus the amounts of the Commitments already
-----
reallocated.
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(c) Procedure. Any assumptions of Commitments pursuant to this Section
---------
2.15 shall be (i) made by the purchasing Lender or Eligible Assignee and the
selling Lender entering into an Assignment and Assumption and by following the
procedures in Section 10.06 for adding a Lender. In connection with the
reallocation of the Commitments of any Lender pursuant to the foregoing
paragraph (b), each Lender with a reallocated Commitment shall purchase from the
Affected Lenders at par such Lender's ratable share of the outstanding Advances
of the Affected Lenders and assume such Lender's ratable share of the Affected
Lenders' Letter of Credit Exposure.
Section II.16 Sharing of Payments, Etc. If any Lender shall obtain any
------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) (i) on account of the Revolving Advances made by it in
excess of its Revolving Share of payments or collateral on account of the
Revolving Advances or Letter of Credit Obligations obtained by all the Lenders,
(ii) on account of the Term A Advances made by it in excess of its Term A Share
of payments or collateral on account of the Term A Advances obtained by all the
Lenders or (iii) on account of the Term B Advances made by it in excess of its
Term B Share of payments or collateral on account of the Term B Advances
obtained by all the Lenders, such Lender shall notify the Administrative Agent
and forthwith purchase from the other Lenders such participations in the
Revolving Advances, Term A Advances or Term B Advances, as applicable, made by
them or Letter of Credit Obligations held by them as shall be necessary to cause
such purchasing Lender to share the excess payment or benefits of such
collateral or proceeds ratably in accordance with the requirements of this
Agreement with each of them; provided, however, that if all or any portion of
--------
such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender's ratable
share (according to the proportion of (a) the amount of the participation sold
by such Lender to the purchasing Lender as a result of such excess payment to
(b) the total amount of such excess payment) of such recovery, together with an
amount equal to such Lender's ratable share (according to the proportion of (a)
the amount of such Lender's required repayment to the purchasing Lender to (b)
the total amount of all such required repayments to the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.16
may, to the fullest extent permitted by Legal Requirement, unless and until
rescinded as provided above, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
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ARTICLE III
CONDITIONS OF LENDING
Section III.1 Conditions Precedent to Amendment and Restatement and
-----------------------------------------------------
Additional Advances. The effectiveness of this amendment and restatement of the
-------------------
Existing AGH Credit Agreement and the obligation of each Lender to make any
Advances not already outstanding under the Existing AGH Credit Agreement and of
the Issuing Bank to issue any additional Letters of Credit are subject to the
following conditions precedent being satisfied on or prior to August 3, 1998:
(a) Documentation. The Administrative Agent shall have received
-------------
counterparts of this Agreement executed by the Borrower and the Lenders, and the
following duly executed by all the parties thereto, in form and substance
satisfactory to the Administrative Agent, and, with respect to this Agreement,
all Guaranties and the Environmental Indemnity, in sufficient copies for each
Lender:
(i) the Notes (including without limitation the Swingline Note
payable to the order of the Swingline Lender), all Guaranties, and the
Environmental Indemnity;
(ii) Pledge Agreements executed by the Borrower, the Parent and the
other Guarantors pledging to the Administrative Agent for the benefit of
the Lenders, all Collateral, together with stock certificates, stock powers
executed in blank, UCC-1 financing statements and any other documents,
agreements or instruments necessary to create an Acceptable Security
Interest in such pledged stock, limited liability interests and partnership
interests, together with any other Security Documents;
(iii) a certificate from a Responsible Officer of the Parent on
behalf of the Borrower dated as of the Effective Date stating that as of
the Effective Date (A) all representations and warranties of the Borrower
set forth in this Agreement and the Credit Documents are true and correct
in all material respects; (B) no Default has occurred and is continuing;
(C) the conditions in this Section 3.01 have been met or waived in writing;
and (D) to the best of the Borrower's knowledge there are no claims,
defenses, counterclaims or offsets against the Lenders under the Credit
Documents;
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(iv) a certificate of the Secretary or an Assistant Secretary of the
Parent on behalf of the Borrower and each corporation or limited liability
company that is either a Guarantor or a general partner of a Guarantor
dated as of the date of this Agreement certifying as of the date of this
Agreement (A) the names and true signatures of officers or authorized
representatives of the Parent and such other Persons authorized to sign the
Credit Documents to which such Person is a party in the capacity therein
indicated, (B) resolutions of the Board of Directors or the members of the
Parent and such other Persons with respect to the transactions herein
contemplated, (C) either (x) the copies of the organizational documents of
the Parent and such other Persons delivered to the Lenders are still true
and correct and have not been amended or modified since such date or (y)
copies of any modification or amendment to the organizational documents of
the Parent or any such other Persons made since such date, (D) a true and
correct copy of the partnership agreement for the Borrower and each
Guarantor which is a partnership, (E) a true and correct copy of all
partnership authorizations necessary or desirable in connection with the
transactions herein contemplated, and (F) a true and correct copy of the
Merger Agreement, the Intercompany Agreement, and all Material Credit
Documents;
(v) a certificate of the Secretary or an Assistant Secretary of AGH
REIT certifying as of the date immediately preceding the date of the Merger
(A) resolutions of the Board of Directors of such Person and the
shareholders' vote with respect to the transactions contemplated in the
Merger Agreement and the Registration Statements, and (B) the copies of the
charter and bylaws of AGH REIT and any modification or amendment to the
articles or certificate of incorporation or bylaws of AGH REIT made on or
prior to such date;
(vi) a certificate of the Secretary or an Assistant Secretary of
CapStar certifying as of the date immediately preceding the date of the
Merger (A) resolutions of the Board of Directors of such Person and the
shareholders' vote with respect to the transactions contemplated in the
Merger Agreement and the Registration Statements, and (B) the copies of the
charter and bylaws of CapStar and any modification or amendment to the
articles or certificate of incorporation or bylaws of CapStar made on or
prior to such date;
(vii) (A) one or more favorable written opinions of XxXxxxx, Diamond
& Ash, special counsel for the Borrower, the Parent, and their
Subsidiaries, in a form reasonably
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acceptable to the Administrative Agent, in each case dated as of the
Closing Date and with such changes as the Administrative Agent may approve,
(B) one or more favorable written opinions of Ballard, Spahr, Xxxxxxx &
Ingersoll, special Maryland counsel for the Parent, and their Subsidiaries,
in a form reasonably acceptable to the Administrative Agent, in each case
dated as of the Closing Date and with such changes as the Administrative
Agent may approve, and (C) such other legal opinions as the Administrative
Agent shall reasonably request, in each case dated as of the Closing Date
and with such changes as the Administrative Agent may approve;
(viii) a Compliance Certificate dated as of the Closing Date
reflecting for the financial tests covered therein the pro forma financial
performance for the Borrower for the Rolling Period ended June 30, 1998,
together with a certificate of the pro forma balance sheet of the Parent as
of the Closing Date assuming the Merger was consummated and the Existing
CapStar Indebtedness to be Repaid had been repaid, duly completed and
executed by the Chief Financial Officer or Treasurer of the Parent;
(ix) evidence reasonable satisfactory to the Administrative Agent
that the Merger and the other transactions contemplated by the Merger
Agreement and the Registration Statements have been consummated in
accordance with the terms of the Merger Agreement, all Legal Requirements
and all corporate and partnership governance requirements; and
(x) such other documents, governmental certificates, agreements,
and lien searches as the Administrative Agent may reasonably request.
(b) Representations and Warranties. The representations and warranties
------------------------------
contained in Article IV hereof, the Guaranties, and the Environmental
Indemnities shall be true and correct in all material respects.
(c) Certain Payments. The Borrower shall have paid the fees required to be
----------------
paid as of the execution of this Agreement pursuant to the Fee Letter and the
Administrative Agent Fee Letter.
(d) Security Documents. The Administrative Agent shall have received all
------------------
appropriate evidence required by the Administrative Agent in its sole discretion
necessary to determine that the
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Administrative Agent has an Acceptable Security Interest in the Collateral,
including, without limitation, lien searches conducted on the Borrower and the
Guarantors and lien releases with respect to any Collateral currently subject to
a Lien.
Section III.2 Conditions Precedent for Each Borrowing or Letter of
----------------------------------------------------
Credit. The obligation of each Lender to fund an Advance on the occasion of each
------
Borrowing (other than the Conversion or continuation of any existing Borrowing)
and of any Issuing Bank to issue or increase or extend any Letter of Credit
shall be subject to the further conditions precedent that on the date of such
Borrowing or the issuance, increase or extension of such Letter of Credit:
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing or the issuance or increase or extension of such
Letter of Credit shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing or the issuance or increase or extension of
such Letter of Credit such statements are true):
(i) the representations and warranties contained in Article IV
hereof, the Guaranties, the Environmental Indemnities and the other Credit
Documents, as such representations and warranties may change based upon
events or activities permitted by this Agreement, are correct in all
material respects on and as of the date of such Borrowing or the issuance
or increase or extension of such Letter of Credit, before and after giving
effect to such Borrowing or to the issuance or increase or extension of
such Letter of Credit and to the application of the proceeds from such
Borrowing, as though made on and as of such date; and
(ii) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom, as
evidenced by a Compliance Certificate executed and delivered by the
Borrower to the Administrative Agent dated as of the date of the Notice of
Borrowing; provided that the financial tests in such Compliance Certificate
--------
except for the Leverage Ratio do not need to be updated from the last
Compliance Certificate delivered by the Borrower; and
(b) the Administrative Agent shall have received such other approvals,
opinions or documents deemed necessary or desirable by any Lender or the
Administrative Agent as such party may reasonably request.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section IV.1 Existence; Qualification; Partners; Subsidiaries.
------------------------------------------------
(a) The Borrower is a limited partnership duly organized, validly
existing, and in good standing under the laws of Delaware and in good standing
and qualified to do business in each jurisdiction where its ownership or lease
of property or conduct of its business requires such qualification, except where
the failure to so qualify would not cause a Material Adverse Change to the
Borrower. The Borrower is the survivor by merger of AGH OP and the CapStar Hotel
LLCs. The CapStar Hotel LLCs were newly-formed Delaware limited liability
companies which were the successors of CapStar Management Company, L.P. and
CapStar Management Company II, L.P., respectively, as more particularly
described in the Registration Statements.
(b) The Parent is a corporation duly organized, validly existing, and in
good standing under the laws of Maryland and in good standing and qualified to
do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not cause a Material Adverse Change to the Parent. The Parent
owns 100% of the outstanding stock in MeriStar LP, Inc. and is the sole general
partner of the Borrower. MeriStar LP, Inc. owns at least 88% of the outstanding
partnership interests in the Borrower and is the sole limited partner of the
Borrower. The Parent has no first tier Subsidiaries except for the Borrower,
MeriStar LP, Inc., and certain Permitted Other Subsidiaries. The Parent is the
successor by merger of AGH REIT and CapStar. Prior to the Merger, AGH GP and
AGH LP were merged into AGH REIT. The Merger has been consummated in accordance
with the terms of the Merger Agreement, all Legal Requirements and all corporate
and partnership governance requirements.
(c) The address of the principal office of each of the Borrower and the
Parent is 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000.
(d) OPCO is a newly-formed corporation duly organized, validly existing,
and in good
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standing under the laws of Delaware and in good standing and qualified to do
business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not cause a Material Adverse Change to OPCO. OPCO owns
approximately 83% of the partnership interest in the OPCO OP and is the sole
general partner of OPCO OP. In connection with the Merger, CapStar Management
Company, L.P. and CapStar Management Company II, L.P. assigned to OPCO all
management agreements and participating leases to which such Persons were a
party. In connection with the Merger, OPCO OP has acquired 100% of the
outstanding partnership interests in AGH Leasing and the outstanding management
agreements of American General Hospitality, Inc.
(e) Each Subsidiary of the Borrower is a corporation, limited partnership,
general partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its jurisdiction of formation
and in good standing and qualified to do business in each jurisdiction where its
ownership or lease of property or conduct of its business requires such
qualification, except where the failure to so qualify would not cause a Material
Adverse Change to such Subsidiary. The Borrower has no Subsidiaries on the date
of this Agreement other than the Subsidiaries listed on the attached Schedule
4.01, and Schedule 4.01 lists the jurisdiction of formation, and the address of
the principal office of each such Subsidiary existing on the date of this
Agreement. As of the date of this Agreement, the Borrower owns, directly or
indirectly, at least the percentage interests in each such Subsidiary listed on
the attached Schedule 4.01.
(f) To the knowledge of the Borrower, each Approved Participating Lessee
is a limited partnership duly organized, validly existing, and in good standing
under the laws of the state of its creation and in good standing and qualified
to do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the Approved
Participating Lessee. To the knowledge of the Borrower, OPCO is duly listed on
the New York Stock Exchange, Inc.
Section IV.2 Partnership and Corporate Power. The execution, delivery,
-------------------------------
and performance by the Borrower, the Parent, and each Guarantor of the Credit
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby (a) are within such Persons' partnership,
limited liability company and corporate powers, as applicable, (b) have been
duly authorized by all necessary corporate, limited liability company and
partnership action, as applicable, (c) do not contravene (i) such Person's
certificate or articles, as the case
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may be, of incorporation or by-laws, operating agreement or partnership
agreement, as applicable, or (ii) any law or any contractual restriction binding
on or affecting any such Person, the contravention of which could reasonably be
expected to cause a Material Adverse Change, and (d) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement. At
the time of each Borrowing, such Borrowing and the use of the proceeds of such
Borrowing will be within the Borrower's partnership xxxxxx, xxxx have been duly
authorized by all necessary partnership action, (a) will not contravene (i) the
Borrower's partnership agreement or (ii) any law or any contractual restriction
binding on or affecting the Borrower, the contravention of which could
reasonably be expected to cause a Material Adverse Change, and (b) will not
result in or require the creation or imposition of any Lien prohibited by this
Agreement.
Section IV.3 Authorization and Approvals. No authorization or approval
---------------------------
or other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by the Borrower, the
Parent, or any Guarantor of the Credit Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Borrowing, no authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority will be required for such Borrowing or
the use of the proceeds of such Borrowing the absence of which could reasonably
be expected to cause a Material Adverse Change.
Section IV.4 Enforceable Obligations. This Agreement, the Notes, and
-----------------------
the other Credit Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower; each Guaranty and the other Credit
Documents to which each Guarantor and the Parent is a party have been duly
executed and delivered by such Guarantor; and the Environmental Indemnity and
Pledge Agreement have been duly executed and delivered by the respective parties
thereto. Each Credit Document is the legal, valid, and binding obligation of the
Borrower, the Parent, and each Guarantor which is a party to it enforceable
against the Borrower, the Parent, and each such Guarantor in accordance with its
terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally and by general principles of equity (whether
considered in proceeding at law or in equity).
Section IV.5 Parent Common Stock. The entire authorized capital stock
-------------------
of the Parent consists of 100,000,000 shares of Parent Common Stock of which
approximately 45,500,000
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shares of Parent Common Stock are duly and validly issued and outstanding, fully
paid and nonassessable as of consummation of the Merger. The issuance and sale
of such Parent Common Stock either (i) has been registered under applicable
federal and state securities laws or (ii) was issued pursuant to an exemption
therefrom. The Parent Common Stock is duly listed on the New York Stock
Exchange, Inc. and the Parent has timely filed all reports required to be filed
by it with the New York Stock Exchange, Inc. and the Securities and Exchange
Commission. The Parent qualifies as a REIT.
Section IV.6 Financial Statements and Registration Statements. The
------------------------------------------------
respective Consolidated balance sheets of AGH REIT and its Subsidiaries and
CapStar and its Subsidiaries, and the respective related Consolidated statements
of operations, shareholders' equity and cash flows, of the Parent and its
Subsidiaries and CapStar and its Subsidiaries contained in the Financial
Statements and the Registration Statements, and the corresponding pro forma
financial statements for the Borrower, fairly present the financial condition in
all material respects and reflects the Indebtedness of such Persons and their
respective Subsidiaries as of the dates indicated in the Financial Statements
and the Registration Statements and the respective results of the operations of
such Persons and their respective Subsidiaries for the periods indicated, and
such balance sheets and statements were prepared in accordance with GAAP,
subject to year-end adjustments. Since December 31, 1997 (assuming the Merger
had occurred on or before such date) there has been no development or event
which has had or could reasonably be expected to cause a Material Adverse
Change. The OP Adjustment amount as of June 30, 1998 is approximately
$10,300,000.
Section IV.7 True and Complete Disclosure. No representation, warranty,
----------------------------
or other statement made by the Borrower (or on behalf of the Borrower) in this
Agreement or any other Credit Document contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made as of the date of this Agreement. There is no fact known
to any Responsible Officer of the Borrower or the Parent on the date of this
Agreement that has not been disclosed to the Administrative Agent which could
reasonably be expected to cause a Material Adverse Change. All projections,
estimates, and pro forma financial information furnished by the Borrower and the
Parent or on behalf of the Borrower or the Parent were prepared on the basis of
assumptions, data, information, tests, or conditions believed to be reasonable
at the time such projections, estimates, and pro forma financial information
were furnished; it being agreed that such projections and estimates are not
guaranties of results. No representation, warranty or other statement made in
AGH REIT's or CapStar's latest 10K, the 10Q or the annual report contains any
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untrue statement of material fact or omits to state any material fact necessary
to make the statements contained therein not misleading in light of the
circumstances in which they were made as of the date same were made. Borrower
and/or Parent have made all filings required by the Exchange Act.
Section IV.8 Litigation. Except as set forth in the attached Schedule
----------
4.08, there is no pending or, to the best knowledge of the Borrower, threatened
action or proceeding affecting the Borrower, the Parent, any Approved
Participating Lessee or any of their respective Subsidiaries before any court,
Governmental Authority or arbitrator in which the amount in dispute is over
$500,000 or in Borrower's good faith judgment the anticipated loss is over
$500,000 (provided that with respect to the giving of this representation after
the date of this Agreement, the representation shall only be deemed to apply to
those matters for which Administrative Agent would have been entitled to notice
under Section 5.05(m)).
Section IV.9 Use of Proceeds.
---------------
(a) Advances. The proceeds of the Advances have been, and will be used by
--------
CapStar to repay the Existing CapStar Indebtedness to be Repaid and by the
Borrower (i) to repay the Existing AGH Lenders who are not Lenders, (ii) to
refinance other existing Indebtedness, (iii) to make investments permitted
pursuant to the provisions of Section 6.07, (iv) to finance the renovation,
repair, restoration and expansion of Hotel Properties, Capital Expenditures for
and expenditures for FF&E for any Hotel Properties in accordance with the
provisions of Section 5.06 and as permitted pursuant to the provisions of
Sections 6.07 and 6.13, (v) for general corporate purposes of the Borrower and
its Subsidiaries, and (vi) for costs incurred in connection with the Merger and
with the Parent's or any of its Subsidiary's sale or issuance of equity
securities or incurrence of Indebtedness done in compliance with this Agreement.
(b) Regulations. No proceeds of Advances will be used to purchase or
-----------
carry any margin stock in violation of Regulations T, U or X of the Federal
Reserve Board, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Federal Reserve Board).
Section IV.10 Investment Company Act. Neither the Borrower, the Parent
----------------------
nor any of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment
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company" within the meaning of the Investment Company Act of 1940, as amended.
Section IV.11 Taxes. All federal, state, local and foreign tax returns,
-----
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Parent, the Borrower, their
respective Subsidiaries, or any member of a Controlled Group have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and where the failure
to file could reasonably be expected to cause a Material Adverse Change, except
where contested in good faith and by appropriate proceedings; and all taxes and
other impositions due and payable (which are material in amount) have been
timely paid prior to the date on which any fine, penalty, interest, late charge
or loss (which are material in amount) may be added thereto for non-payment
thereof except where contested in good faith and by appropriate proceedings. As
of the date of this Agreement, neither the Parent, the Borrower nor any member
of a Controlled Group has given, or been requested to give, a waiver of the
statute of limitations relating to the payment of any federal, state, local or
foreign taxes or other impositions. None of the Property owned by the Parent,
the Borrower or any other member of a Controlled Group is Property which the
Parent, the Borrower or any member of a Controlled Group is required to be
treated as being owned by any other Person pursuant to the provisions of Section
168(f)(8) of the Code. Proper and accurate amounts have been withheld by the
Borrower and all members of each Controlled Group from their employees for all
periods to comply in all material respects with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law. Timely payment of all material sales and use taxes required by
applicable law have been made by the Parent, the Borrower and all other members
of each Controlled Group, the failure to timely pay of which could reasonably be
expected to cause a Material Adverse Change. The amounts shown on all tax
returns to be due and payable have been paid in full or adequate provision
therefor is included on the books of the appropriate member of the applicable
Controlled Group.
Section IV.12 Pension Plans. All Plans are in compliance in all material
-------------
respects with all applicable provisions of ERISA. No Termination Event has
occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. Except where the failure would not cause a Material
Adverse Change, no "accumulated funding deficiency" (as defined in Section 302
of ERISA) has occurred and there has been no excise tax imposed under Section
4971 of the Code. No Reportable Event has occurred with respect to any
Multiemployer Plan, and each Multiemployer Plan has complied with and been
administered in all material respects with
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applicable provisions of ERISA and the Code. Neither the Parent, the Borrower,
nor any member of a Controlled Group has had a complete or partial withdrawal
from any Multiemployer Plan for which there is any material withdrawal
liability. As of the most recent valuation date applicable thereto, neither the
Parent, the Borrower nor any member of a Controlled Group has received notice
that any Multiemployer Plan is insolvent or in reorganization.
Section IV.14 Condition of Hotel Property; Casualties; Condemnation.
-----------------------------------------------------
Except as disclosed in an Engineering Report, each Initial Property and any
Future Property (a) is and will continue to be in good repair, working order and
condition, normal wear and tear excepted, (b) is free of structural defects
other than those being addressed by the Borrower and for which the Borrower has
sufficient funds to address, (c) is not subject to material deferred maintenance
and (d) has and will have all building systems contained therein and all other
FF&E in good repair, working order and condition, normal wear and tear excepted.
No condemnation or other like proceedings that has had, or could reasonably be
expected to cause, a Material Adverse Change, are pending nor, to the knowledge
of the Borrower, threatened against any Property in any manner whatsoever. No
casualty has occurred to any Property that could reasonably be expected to cause
a Material Adverse Change.
Section IV.14 Insurance. The Borrower and each of its Subsidiaries carry
---------
the insurance required pursuant to the provisions of Section 5.07.
Section IV.15 No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) Except in connection with Indebtedness which is (i) either permitted
pursuant to the provisions of Section 6.02, including without limitation the
Convertible Indebtedness and the Existing Subordinate Indebtedness, or (ii)
being repaid with the proceeds of the initial Borrowing, neither the Borrower
nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement. Neither the Borrower, the Parent nor any of their respective
Subsidiaries is a party to any agreement or instrument or subject to any charter
or corporate restriction or provision of applicable law or governmental
regulation which could reasonably be expected to cause a Material Adverse
Change. Neither the Borrower, the Parent nor any of their Subsidiaries is in
default under or with respect to (i) any contract, agreement, lease or other
instrument which could reasonably be expected to cause a Material Adverse Change
or (ii) any ground lease, participating lease, franchise agreement, license
agreement or management agreement which could reasonably be expected to cause a
Material Adverse Change. Neither the Borrower, the Parent nor any of their
Subsidiaries has received any written notice of default under any ground lease,
participating
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lease, franchise agreement, license agreement or management agreement. Neither
the Borrower, the Parent nor any of their Subsidiaries has received any notice
of default under any other material contract, agreement, lease or other
instrument which is continuing and which, if not cured, could reasonably be
expected to cause a Material Adverse Change.
(b) No Default has occurred and is continuing (or with respect to the
giving of this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given).
Section IV.16 Environmental Condition.
-----------------------
(a) Except as disclosed in the Environmental Reports (or with respect to
the giving of this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given), to the
knowledge of the Borrower, the Borrower and its Subsidiaries (i) have obtained
all Environmental Permits material for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii) have
been and are in material compliance with all terms and conditions of such
Environmental Permits and with all other requirements of applicable
Environmental Laws; (iii) have not received written notice of any violation or
alleged violation of any Environmental Law or Environmental Permit; and (iv)
are not subject to any actual or contingent Environmental Claim. To the
knowledge of the Borrower (or with respect to the giving of this representation
after the date of this Agreement, as otherwise disclosed to the Administrative
Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given), the Borrower and its Subsidiaries are not
subject to any actual or contingent Environmental Claim which the Borrower
believes in good faith will involve cost or expense to the Borrower or its
Subsidiaries in excess of $1,000,000 for any single Environmental Claim, or in
excess of $10,000,000 for all such Environmental Claims in the aggregate.
(b) Except as set forth in the Environmental Reports or the surveys for
the Hotel Properties, to the knowledge of Borrower, none of the present or
previously owned or operated Property of the Borrower or of any of its present
or former Subsidiaries, wherever located, (i) has been placed on or proposed to
be placed on the National Priorities List, the Comprehensive Environmental
Response Compensation Liability Information System list, or their state or local
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analogs, or have been otherwise investigated, designated, listed, or identified
as a potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws which could
reasonably be expected to cause a Material Adverse Change; (ii) is subject to a
Lien, arising under or in connection with any Environmental Laws, that attaches
to any revenues or to any Property owned or operated by the Borrower or any of
its Subsidiaries, wherever located; (iii) has been the site of any Release, use
or storage of Hazardous Substances or Hazardous Wastes from present or past
operations except for Permitted Hazardous Substances, which Permitted Hazardous
Substances have not caused at the site or at any third-party site any condition
that has resulted in or could reasonably be expected to result in the need for
Response or (iv) none of the Improvements are constructed on land designated by
any Governmental Authority having land use jurisdiction as wetlands.
Section IV.17 Legal Requirements, Zoning, Utilities, Access. Except as
---------------------------------------------
set forth on Schedule 4.17 attached hereto, the use and operation of each Hotel
Property as a commercial hotel with related uses constitutes a legal use under
applicable zoning regulations (as the same may be modified by special use
permits or the granting of variances or "grand fathering") and complies in all
material respects with all Legal Requirements, and does not violate in any
material respect any material approvals, material restrictions of record or any
material agreement affecting any Hotel Property (or any portion thereof). The
Borrower and its Subsidiaries possess all certificates of public convenience,
authorizations, permits, licenses, patents, patent rights or licenses,
trademarks, trademark rights, trade names rights and copyrights (collectively
"Permits") required by Governmental Authority to own and operate the Hotel
Properties, except for those Permits that if not obtained would not cause a
Material Adverse Change. The Borrower and its Subsidiaries own and operate
their business in material compliance with all applicable Legal Requirements and
are otherwise in compliance with all Legal Requirements except for non-
compliance which in the aggregate would not cause a Material Adverse Change. To
the extent necessary for the full utilization of each Hotel Property in
accordance with its current use, telephone services, gas, steam, electric power,
storm sewers, sanitary sewers and water facilities and all other utility
services are available to each Hotel Property, are adequate to serve each such
Hotel Property, exist at the boundaries of the Land and are not subject to any
conditions, other than normal charges to the utility supplier, which would limit
the use of such utilities. All streets and easements necessary for the
occupancy and operation of each Hotel Property are available to the boundaries
of the Land.
Section IV.18 Existing Indebtedness. Except for the Obligations, the only
---------------------
Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries
existing as of the Effective Date
is the Unsecured Indebtedness, Secured Non-Recourse Indebtedness and Secured
Recourse Indebtedness set forth on Schedule 4.18 attached hereto. No "default"
or "event of default", however defined, has occurred and is continuing under any
such Indebtedness (or with respect to the giving of this representation after
the date of this Agreement, as otherwise disclosed to the Administrative Agent
in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section IV.9 Title; Encumbrances. With respect to the Initial
-------------------
Properties, the Borrower or any Subsidiary, as the case may be, has (i) good and
marketable fee simple title to the Real Property (other than for Real Property
subject to a ground lease, as to which it has a valid leasehold or subleasehold
interest) and (ii) good and marketable title to the Personal Property (other
than Personal Property for any Hotel Property for which the Property Owner has a
valid leasehold interest) free and clear of all Liens except Permitted
Encumbrances, and there exists no Liens or other charges against such Property
or leasehold interest or any of the real or personal, tangible or intangible,
Property of the Borrower or any Guarantor (including without limitation
statutory and other Liens of mechanics, workers, contractors, subcontractors,
suppliers, taxing authorities and others; provided that certain Capital
Expenditures have been made to the Hotel Properties prior to the Effective Date
for which the payment is not past due), except (A) Permitted Encumbrances and
(B) the Personal Property (plus any replacements thereof) owned by an Approved
Participating Lessee.
Section IV.20 Leasing Arrangements. The only material leases of Real
--------------------
Property for which either the Borrower or a Subsidiary is a lessee are the
ground leases listed on Schedule 4.20 attached hereto. The Property Owner for a
Real Property subject to a ground lease is the lessee under such ground lease
and no consent is necessary to such Person being the lessee under such ground
lease which has not already been obtained. Such ground leases are in full force
and effect and no defaults exist thereunder. The only material leases burdening
the Hotel Properties for which the lessee is entitled to participate in the
increased revenues of the Hotel Properties are the Approved Participating
Leases. The Approved Participating Leases are in full force and effect and no
defaults by the Borrower or any Subsidiary exist thereunder.
Section IV.21 Franchise Agreements. The only hotel franchise agreements
--------------------
or license agreements burdening the Initial Properties are those certain
agreements listed on Schedule 4.21 attached hereto. The Property Owner or
Approved Participating Lessee for a Hotel Property subject to a franchise or
license agreement is the licensee under such agreement and no consent
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is necessary to such Person being the licensee under such agreement or for the
consummation of the Merger and the other transactions contemplated thereby which
has not already been obtained except for those consents, if any, which are set
forth on Schedule 4.21. Such franchise and license agreements are in full force
and effect and no defaults by the Borrower or any Subsidiary exist thereunder
(or with respect to the giving of this representation after the date of this
Agreement, as otherwise disclosed to the Administrative Agent in writing after
the date of this Agreement and prior to the date such representation is deemed
given).
Section IV.22 Management Agreements. The only management agreements
---------------------
burdening the Initial Properties (excluding management agreements for parking
facilities) with Persons other than Approved Participating Lessees are those
certain management agreements listed on Schedule 4.22 attached hereto. To the
knowledge of the Borrower, the Approved Participating Lessee for a Hotel
Property subject to a management agreement is the owner under such management
agreement and no consent is necessary to such Person being the owner under such
management agreement which has not already been obtained. To the knowledge of
the Borrower, the management agreements are in full force and effect and no
material defaults by the Approved Participating Lessee exist thereunder (or with
respect to the giving of this representation after the date of this Agreement,
as otherwise disclosed to the Administrative Agent in writing after the date of
this Agreement and prior to the date such representation is deemed given).
Section IV.23 Senior Indebtedness. The Obligations and all renewals and
-------------------
extensions of the Obligations constitute "Designated Senior Indebtedness" under
the Convertible Indebtedness Indenture and the Existing Subordinate Indebtedness
Indenture.
Section IV.24 Specified Secured Indebtedness. As of the Closing Date,
------------------------------
Permitted Other Subsidiaries are incurring approximately $250,000,000 in
Specified Secured Indebtedness which Indebtedness qualifies as Secured Non-
Recourse Indebtedness permitted pursuant to the provisions of Section 6.02(b).
The documents evidencing and securing the Specified Secured Indebtedness are in
full force and effect and no material defaults by the Permitted Other
Subsidiaries party thereto exist thereunder.
ARTICLE V
AFFIRMATIVE COVENANTS
-94-
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have
any Commitment hereunder, unless the Administrative Agent shall otherwise
consent in writing, the Borrower agrees to comply with the following covenants.
Section V.1 Compliance with Laws, Etc. The Borrower will comply, and
-------------------------
cause the Parent and each of its Subsidiaries to comply, in all material
respects with all Legal Requirements.
Section V.2 Preservation of Existence; Separateness, Etc.
--------------------------------------------
(a) The Borrower will preserve and maintain, and cause each of its
Subsidiaries (as long as a Subsidiary owns assets) to preserve and maintain, its
partnership, limited liability company or corporate (as applicable) existence,
rights, franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified, and cause each such Subsidiary to qualify and
remain qualified, as a foreign partnership or corporation as applicable in each
jurisdiction in which qualification is necessary or desirable in view of its
business and operations or the ownership of its properties, and, in each case,
where failure to qualify or preserve and maintain its rights and franchises
could reasonably be expected to cause a Material Adverse Change.
(b) (i) The Parent Common Stock shall at all times be duly listed on the
New York Stock Exchange, Inc. and (ii) the Parent shall timely file all reports
required to be filed by it with the New York Stock Exchange, Inc. and the
Securities and Exchange Commission.
(c) The Borrower shall cause the Permitted Other Subsidiaries which have
Indebtedness and own a Hotel Property to, (i) maintain financial statements,
accounting records and other corporate records and other documents separate from
all non-Permitted Other Subsidiaries, (ii) maintain their own bank accounts in
their own name, separate from all non-Permitted Other Subsidiaries, (iii) pay
their own expenses and other liabilities from their own assets and incur (or
endeavor to incur) obligations to other Persons based solely upon their own
assets and creditworthiness and not upon the creditworthiness of each other or
any other Person, and (iv) file their own tax returns or, if part of a
consolidated group, join in the consolidated tax return of such group as a
separate member thereof.
(d) The Borrower shall, and shall cause the Permitted Other Subsidiaries
which have Indebtedness and own a Hotel Property to, take all actions necessary
to keep such Permitted Other
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Subsidiaries, separate from the Borrower and the Borrower's other Subsidiaries,
including, without limitation, (i) the taking of action under the direction of
the Board of Directors, members or partners, as applicable, of such Permitted
Other Subsidiaries and, if so required by the Certificate of Incorporation or
the Bylaws, operating agreement or partnership agreement, as applicable, of such
Permitted Other Subsidiaries or by any Legal Requirement, the approval or
consent of the stockholders, members or partners, as applicable, of such
Permitted Other Subsidiaries, (ii) the preparation of corporate, partnership or
limited liability company minutes for or other appropriate evidence of each
significant transaction engaged in by such Permitted Other Subsidiaries, (iii)
the observance of separate approval procedures for the adoption of resolutions
by the Board of Directors or consents by the partners, as applicable, of such
Permitted Other Subsidiaries, on the one hand, and of the Borrower and the
Borrower's other Subsidiaries, on the other hand, and (iv) preventing the cash,
cash equivalents, credit card receipts or other revenues of the Hotel Properties
owned by such Permitted Other Subsidiaries or any other assets of such Permitted
Other Subsidiaries from being commingled with the cash, cash equivalents, credit
card receipts or other revenues collected by the Borrower or the Borrower's
other Subsidiaries.
(e) The Borrower shall take all steps reasonably necessary to avoid (i)
misleading any other Person as to the identity of the entity with which such
Person is transacting business or (ii) implying that the Borrower is, directly
or indirectly, absolutely or contingently, responsible for the Indebtedness or
other obligations of the Permitted Other Subsidiaries or any other Person.
Section V.3 Payment of Taxes, Etc. The Borrower will pay and discharge,
---------------------
and cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or Property that are material in
amount, prior to the date on which penalties attach thereto and (b) all lawful
claims that are material in amount which, if unpaid, might by Legal Requirement
become a Lien upon its Property; provided, however, that neither the Borrower
-------- -------
nor any such Subsidiary shall be required to pay or discharge any such tax,
assessment, charge, levy, or claim (a) which is being contested in good faith
and by appropriate proceedings, (b) with respect to which reserves in conformity
with GAAP have been provided, (c) such charge or claim does not constitute and
is not secured by any xxxxxx Xxxx on any portion of any Hotel Property and no
portion of any Hotel Property is in jeopardy of being sold, forfeited or lost
during or as a result of such contest, (d) neither the Administrative Agent nor
any Lender could become subject to any civil fine or penalty or criminal fine or
penalty, in each case as a result of non-payment of such charge or claim and (e)
such contest does not, and could not reasonably be expected to, result in a
Material Adverse Change.
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Section V.4 Visitation Rights; Lender Meeting. At any reasonable time
---------------------------------
and from time to time and so long as any visit or inspection will not
unreasonably interfere with the Borrower's or any of its Subsidiaries'
operations, upon reasonable notice, the Borrower will, and will cause the Parent
and its Subsidiaries and those Persons operating the Hotel Properties, to,
permit the Administrative Agent and any Lender or any of its agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit and inspect at its reasonable
discretion the properties of, the Borrower, the Parent and any of their
respective Subsidiaries; to inspect such other records and documents of the
Borrower, the Parent and any of their respective Subsidiaries as shareholders of
the Parent are entitled; and to discuss the affairs, finances and accounts of
such Persons with any of their respective officers or directors. Without in any
way limiting the foregoing, the Borrower will, upon the request of the
Administrative Agent, participate in a meeting with the Administrative Agent and
the Lenders once during each calendar year to be held at the Borrower's office
in the District of Columbia or Dallas, Texas (or such other location as may be
agreed to by the Borrower and the Administrative Agent) at such time as may be
agreed to by the Borrower and the Administrative Agent.
Section V.5 Reporting Requirements. The Borrower will furnish to the
----------------------
Administrative Agent and, with respect to those items set forth in clauses (a)-
(e) and (k), each Lender:
(a) Quarterly Financials. As soon as available and in any event not later
--------------------
than 50 days after the end of each Fiscal Quarter of the Parent, the unaudited
Consolidated balance sheets of the Parent and its Subsidiaries as of the end of
such quarter and the related unaudited statements of income, shareholders'
equity and cash flows of the Parent and its Subsidiaries for such Fiscal Quarter
and the period commencing at the end of the previous year and ending with the
end of such Fiscal Quarter, and the corresponding figures as at the end of, and
for, the corresponding periods in the preceding Fiscal Year, all duly certified
with respect to such statements (subject to year-end audit adjustments) by a
Responsible Officer of the Parent as having been prepared in accordance with
GAAP, together with (i) a Compliance Certificate duly executed by a Responsible
Officer of the Parent, (ii), written notice of any anticipated material
variation to an operating budget prepared pursuant to Section 5.05(d) and (iii)
a report certified by a Responsible Officer of the Parent setting forth for each
of the Hotel Properties owned or leased by the Parent or any of its Subsidiaries
for both the Fiscal Quarter and Rolling Period just ended the revenues, the
expenses, the Net Income and the EBITDA for such Hotel Properties for such
Fiscal Quarter or Rolling Period, as applicable.
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(b) Annual Financials. As soon as available and in any event not later
-----------------
than 95 days after the end of each Fiscal Year of the Parent, a copy of the
Consolidated balance sheets of the Parent and its Subsidiaries as of the end of
such Fiscal Year and the related Consolidated statements of income,
shareholders' equity and cash flows of the Parent and its Subsidiaries for such
Fiscal Year, and the corresponding figures as at the end of, and for, the
preceding Fiscal Year, and certified by independent certified public accountants
of nationally recognized standing reasonably acceptable to the Administrative
Agent in an opinion, without qualification as to the scope, and including, if
requested by the Administrative Agent, any management letters delivered by such
accountants to the Parent in connection with such audit, together with (i) a
Compliance Certificate duly executed by a Responsible Officer of the Parent, and
(ii) the documents required in clauses (ii) and (iii) of the preceding Section
5.05(a).
(c) OPCO Financials. As soon as available and in any event not later than
---------------
50 days after the end of each Fiscal Quarter of OPCO, the unaudited Consolidated
balance sheets of OPCO and its Subsidiaries as of the end of such quarter and
the related unaudited statements of income, shareholders' equity and cash flows
of OPCO and its Subsidiaries for the period commencing at the end of the
previous year and ending with the end of such Fiscal Quarter, and the
corresponding figures as at the end of, and for, the corresponding period in the
preceding Fiscal Year, all duly certified with respect to such statements
(subject to year-end audit adjustments) by a Responsible Officer of OPCO as
having been prepared in accordance with GAAP. As soon as available and in any
event not later than 120 days after the end of each fiscal year of OPCO, as
applicable, (i) a copy of the annual audit report for such year for OPCO and its
Subsidiaries, if any, including therein audited Consolidated balance sheets of
OPCO and its Consolidated Subsidiaries as of the end of such fiscal year and the
related Consolidated statements of income, shareholders' equity and cash flows
of OPCO and its Subsidiaries for such fiscal year, and the corresponding figures
as at the end of, and for, the preceding fiscal year, in each case certified by
an independent certified public accountant reasonably acceptable to the
Administrative Agent and including, if requested by the Administrative Agent,
any management letters delivered by such accountants to OPCO in connection with
such audit.
(d) Annual Budgets. Prior to the start of each Fiscal Year, the
--------------
Consolidated annual operating budget of the Parent and its Subsidiaries for such
upcoming Fiscal Year and the Consolidated annual Capital Expenditure and FF&E
expenditure budget (stating the total of each such expenditures for each Hotel
Property) of the Parent and its Subsidiaries for such upcoming
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Fiscal Year, both in reasonable detail and duly certified by a Responsible
Officer of the Parent as the budgets presented or to be presented to the
Parent's Board of Directors for their review.
(e) Securities Law Filings. Promptly and in any event within 15 days
----------------------
after the sending or filing thereof, copies of all proxy material, reports and
other information which the Borrower, the Parent or any of their respective
Subsidiaries sends to or files with the United States Securities and Exchange
Commission or sends to all shareholders of the Parent or partners of the
Borrower.
(f) Defaults. As soon as possible and in any event within five days after
--------
the occurrence of each Default known to a Responsible Officer of the Borrower,
the Parent or any of their respective Subsidiaries, a statement of an authorized
financial officer or Responsible Officer of the Borrower setting forth the
details of such Default and the actions which the Borrower has taken and
proposes to take with respect thereto.
(g) ERISA Notices. As soon as possible and in any event (i) within 30
-------------
days after the Parent, the Borrower or any of a Controlled Group knows that any
Termination Event described in clause (a) of the definition of Termination Event
with respect to any Plan has occurred, (ii) within 10 days after the Parent, the
Borrower or any of a Controlled Group knows that any other Termination Event
with respect to any Plan has occurred, a statement of the Chief Financial
Officer of the Parent describing such Termination Event and the action, if any,
which the Parent, the Borrower or such member of such Controlled Group proposes
to take with respect thereto; (iii) within 10 days after receipt thereof by the
Parent, the Borrower or any of a Controlled Group from the PBGC, copies of each
notice received by the Parent, the Borrower or any such member of such
Controlled Group of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan; and (iv) within 10 days after receipt
thereof by the Parent, the Borrower or any member of a Controlled Group from a
Multiemployer Plan sponsor, a copy of each notice received by the Parent, the
Borrower or any member of such Controlled Group concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA.
(h) Environmental Notices. Promptly upon the knowledge of any
---------------------
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the United States Environmental Protection Agency, or any other
Governmental Authority concerning (i) violations or alleged violations of
Environmental Laws, which seeks to impose liability therefor, (ii) any action or
omission on the part of the Parent or Borrower or any of their present or former
Subsidiaries in connection with
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Hazardous Waste or Hazardous Substances which, based upon information reasonably
available to the Borrower, could reasonably be expected to cause a Material
Adverse Change or an Environmental Claim in excess of $1,000,000, (iii) any
notice of potential responsibility under CERCLA, or (iv) concerning the filing
of a Lien upon, against or in connection with the Parent, Borrower, their
present or former Subsidiaries, any of their leased or owned Property, wherever
located.
(i) Other Governmental Notices or Actions. Promptly and in any event
-------------------------------------
within five Business Days after receipt thereof by the Borrower, the Parent or
any of their respective Subsidiaries, (i) a copy of any notice, summons,
citation, or proceeding seeking to adversely modify in any material respect,
revoke, or suspend any license, permit, or other authorization from any
Governmental Authority, which action could reasonably be expected to cause a
Material Adverse Change, and (ii) any revocation or involuntary termination of
any license, permit or other authorization from any Governmental Authority,
which revocation or termination could reasonably be expected to cause a Material
Adverse Change.
(j) Reports Affecting the Leverage Ratio. On or prior to the 15th day
------------------------------------
following any Adjustment Event, an Adjustment Report with respect to such
Adjustment Event.
(k) Press Releases. Promptly and in any event within 5 days after the
--------------
sending or releasing thereof, copies of all press releases or other releases of
information to the public by the Borrower, the Parent or any of their respective
Subsidiaries or releases of information to the Parent's shareholders.
(l) Corporate Activity. Promptly following any merger or dissolution of
------------------
any Subsidiary of the Borrower which is permitted hereunder or event which would
make any of the representations in Section 4.01-4.04 untrue, notice thereof.
(m) Material Litigation. As soon as possible and in any event within five
-------------------
days of any Responsible Officer of the Borrower, the Parent or any of their
respective Subsidiaries having knowledge thereof, notice of any litigation,
claim or any other event which could reasonably be expected to cause a Material
Adverse Change.
(n) Other Information. Such other information respecting the business or
-----------------
Properties, or the condition or operations, financial or otherwise, of the
Borrower, the Parent or any of their
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respective Subsidiaries, as any Lender through the Administrative Agent may from
time to time reasonably request.
Section V.6 Maintenance of Property and Required Work. The Borrower
-----------------------------------------
will, and will cause each of its Subsidiaries to, (a) maintain their owned,
leased, or operated Property in a manner consistent for hotel properties and
related property of the same quality and character and shall keep or cause to be
kept every part thereof and its other properties in good condition and repair,
reasonable wear and tear excepted, and make all reasonably necessary repairs,
renewals or replacements thereto as may be reasonably necessary to conduct the
business of the Borrower and its Subsidiaries, (b) not renovate or expand any of
the Improvements except as permitted by Section 6.07(h), (c) not knowingly or
willfully permit the commission of waste or other injury, or the occurrence of
pollution, contamination or any other condition in, on or about any Hotel
Property, (d) substantially maintain and repair each Hotel Property as required
by any franchise agreement, license agreement, management agreement or ground
lease for such Hotel Property, and (e) commence the Required Work for any Hotel
Property by a date which would allow a reasonable period of time to complete
such work on or prior to the deadline set for such Required Work in Schedule
5.06 or otherwise agreed to by the Borrower and the Administrative Agent, (f)
after any commencement of any work for any Hotel Property diligently perform
such work (i) for the Required Work, by the required deadline and as described
in the Engineering Reports and/or the Environmental Reports referred to in
Schedule 5.06 or as otherwise described for any Future Property, (ii) in a good
and workmanlike manner and (iii) in compliance in all material respects with all
Legal Requirements. Except as may be required to maintain the Parent's status
as a REIT under the Code, any Capital Expenditures or expenditures or leases for
FF&E made for any Hotel Property shall be in the name of the Property Owner for
such Hotel Property. Within 30 days of the Closing Date, the Borrower shall
obtain or cause the applicable Property Owner or Approved Participating Lessee
for a Hotel Property to obtain from the applicable Approved Franchisor any
consent which has not already been obtained necessary to cure any default under
the license or franchise agreement for such Hotel Property arising out of the
consummation of the Merger and the other transactions contemplated thereby which
would allow such Approved Franchisor to terminate such agreement.
Section V.7 Insurance. The Borrower will maintain, and cause each of its
---------
Subsidiaries to maintain, the insurance required pursuant to Schedule 5.07.
Section V.8 Interest Rate Agreements. From the date 90 days following
------------------------
the Closing
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Date until the Term B Maturity Date, the Borrower shall cause the Parent to
obtain and thereafter maintain Interest Rate Agreements reasonably satisfactory
to the Administrative Agent, sufficient to ensure that 30% of the Parent's Total
Indebtedness, measured as of each day during such period, shall be covered by
such Interest Rate Agreements or shall have a fixed rate of interest reasonably
satisfactory to the Administrative Agent.
Section V.9 Approved Participating Leases. Upon knowledge of a material
-----------------------------
default by an Approved Participating Lessee under an Approved Participating
Lease, the Borrower will send, or will cause the Guarantor who is a party to
such Approved Participating Lease to send, a notice of such default to such
Approved Participating Lessee as provided in the document under which such
default has occurred unless in Borrower's good faith judgment such Approved
Participating Lessee is curing or has agreed to cure such default and thereafter
diligently proceeds to cure such default.
Section V.10 Use of Proceeds. The proceeds of the Advances have been,
---------------
and will be used by the Borrower for the purposes set forth in Section 4.09(a).
Section V.12. Collateral. If an Investment Grade Rating Status does not
----------
exist, then the Parent will cause (a) the Administrative Agent to have an
Acceptable Security Interest in the Collateral and (b) all material provisions
of the Security Documents to be valid and binding on the Persons executing such
Security Documents. The Administrative Agent and the Lenders agree that if an
Investment Grade Rating Status exists, then such Persons shall not exercise any
of such Persons' rights and remedies against the Collateral under the Security
Documents; provided, however, that if the Investment Grade Rating Status shall
thereafter cease to exist, then such Person shall again be entitled to exercise
all of such rights and remedies.
Section V.12 New Subsidiaries. If an Investment Grade Rating Status does
----------------
not exist, then within 30 days after either (a) the date that any Subsidiary of
the Parent that was not a Material Subsidiary becomes a Material Subsidiary, or
(b) the purchase by the Parent or any of its Subsidiaries of the capital stock,
membership interests or partnership interests of any Person, which purchase
results in such Person becoming a Material Subsidiary the Parent shall, in each
case, cause (i) such Material Subsidiary to execute and deliver to the
Administrative Agent either (A) a Guaranty, an Environmental Indemnity and a
Pledge Agreement or (B) an Accession Agreement, (ii) any of the Borrower and any
Guarantor who is a direct owner of the capital stock, membership interests or
partnership interests of such Material Subsidiary to execute and deliver to the
Administrative Agent a Pledge Agreement, if necessary, and such other documents
as are necessary
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to create an Acceptable Security Interest in the stock, limited liability
interests or partnership interests, as applicable, in the Material Subsidiary
owned by such Person (and such other Security Documents as the Administrative
Agent may reasonably request) and (iii) the Persons who are party to the
documents delivered pursuant to the provisions of this Section 5.11 to provide
such evidence of authority to enter into such documents as the Administrative
Agent may reasonably request.
Section V.13 Year 2000 Compatibility. Take good faith actions necessary
-----------------------
to attempt to assure that from and after January 1, 2000 the computer-based
systems of the Borrower, the Parent, each Approved Participating Lessee, each
major contractor of the Borrower and their respective Subsidiaries are able to
operate and effectively process data that includes dates on and after January 1,
2000; provided that the Borrower shall not be obligated to assure that software
of an Approved Franchisor in connection with such Approved Franchisor'
reservation system so comply. At the request of the Administrative Agent, the
Borrower shall provide to the Administrative Agent assurance reasonably
acceptable to the Administrative Agent of compliance with the requirements of
this Section 5.13.
Section V.14 Excluded Foreign Subsidiaries. Notwithstanding the other
-----------------------------
provisions of this Agreement or the other Credit Documents to the contrary, as
long as no Event of Default exists, to the extent that any such action would
cause the Parent, the Borrower or any of their Subsidiaries any increase in
taxes (a) no Excluded Foreign Subsidiary must execute the Guaranty, the Pledge
Agreement, or the Environmental Indemnity or otherwise act as an obligor or
guarantor of any of the Obligations and (b) neither the Borrower, nor any
Guarantor who is a direct owner of the capital stock, membership interests or
partnership interests of any Excluded Foreign Subsidiary must pledge such
ownership interest to secure the Obligations.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have
any Commitment, the Borrower agrees, unless the Administrative Agent shall
otherwise consent in writing, to comply with the following covenants.
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Section V1.1 Liens, Etc. The Borrower, the Parent and their respective
----------
Subsidiaries (except for or with respect to Permitted Other Subsidiaries) will
not create, assume, incur or suffer to exist, any Lien on or in respect of any
of its Property whether now owned or hereafter acquired, or assign any right to
receive income, except that the Borrower and its Subsidiaries may create, incur,
assume or suffer to exist Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on Property
of the Borrower or any Guarantor to the extent not required to be paid pursuant
to Sections 5.03;
(c) imposed by law (such as landlords', carriers', warehousemen's and
mechanics' liens or otherwise arising from litigation) (i) which are being
contested in good faith and by appropriate proceedings, (ii) with respect to
which reserves in conformity with GAAP have been provided, (iii) which have not
resulted in any Hotel Property being in jeopardy of being sold, forfeited or
lost during or as a result of such contest, (iv) neither the Administrative
Agent nor any Lender could become subject to any civil fine or penalty or
criminal fine or penalty, in each case as a result of non-payment of such charge
or claim and (v) such contest does not, and could not reasonably be expected to,
result in a Material Adverse Change, provided that the Borrower does not have to
--------
comply with clauses (i) and (ii) if the Borrower has caused a title company to
insure over such Lien in a manner reasonably satisfactory to the Administrative
Agent;
(d) on leased personal property to secure solely the lease obligations
associated with such property;
(e) securing Secured Recourse Indebtedness and Secured Non-Recourse
Indebtedness permitted pursuant to the provisions of Section 6.02;
(f) under the Permitted Non-Voting Stock Mortgages;
(g) on Permitted Timeshare Receivables securing Permitted Timeshare
Indebtedness; and
(h) on Borrower's or its Subsidiary's interest, if any, in a Hotel
Property disposed of by the Borrower or its Subsidiary to incur Permitted
Sale/Leaseback Indebtedness which secures such Permitted Sale/Leaseback
Indebtedness.
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Section VI.2 Indebtedness. The Borrower, the Parent and their respective
------------
Subsidiaries will not incur or permit to exist any Indebtedness other than the
Obligations and the following:
(a) Unsecured Indebtedness in an amount that does not cause a breach at
any time of the covenants contained in Article VII;
(b) Secured Recourse Indebtedness and Secured Non-Recourse Indebtedness
(excluding the Obligations) incurred by Permitted Other Subsidiaries (and
possibly guaranteed by the Parent) to the extent:
(i) the amount thereof does not cause a breach at any time of the
covenants contained in Article VII;
(ii) the Secured Recourse Indebtedness secured by a Hotel Property
does not exceed 65% of the Market Value of such Hotel Property (or with
respect to Secured Recourse Indebtedness which is secured by more than one
Hotel Property, such Secured Recourse Indebtedness does not exceed 65% of
the aggregate Market Value of all Hotel Properties which secure such
Secured Recourse Indebtedness which do not also secure other Indebtedness)
and all Secured Recourse Indebtedness in the aggregate secured by Hotel
Properties does not exceed 65% of the aggregate Market Value of such Hotel
Properties;
(iii) except for Permitted Sale/Leaseback Indebtedness and Permitted
Timeshare Indebtedness, the Secured Non-Recourse Indebtedness secured by a
Hotel Property located in the United States does not exceed 70% of the
Market Value of such Hotel Property (or with respect to Secured Non-
Recourse Indebtedness which is secured by more than one Hotel Property,
such Secured Non-Recourse Indebtedness does not exceed 70% of the aggregate
Market Value of all Hotel Properties which secure such Secured Recourse
Indebtedness which do not also secure other Indebtedness) and all Secured
Non-Recourse Indebtedness in the aggregate secured by Hotel Properties
located in the United States does not exceed 70% of the aggregate Market
Value of such Hotel Properties; and
(iv) the Secured Non-Recourse Indebtedness secured by a Hotel
Property located outside the United States does not exceed 65% of the
Market Value of such Hotel Property
-105-
(or with respect to Secured Non-Recourse Indebtedness which is secured by
more than one Hotel Property located outside the United States, such
Secured Non-Recourse Indebtedness does not exceed 65% of the aggregate
Market Value of all Hotel Properties which secure such Secured Recourse
Indebtedness which do not also secure other Indebtedness) and all Secured
Non-Recourse Indebtedness in the aggregate secured by Hotel Properties
located outside the United States does not exceed the lesser of (A) 65% of
the aggregate Market Value of such Hotel Properties or (B) $100,000,000;
provided that for purposes of this Section 6.02(b) the Borrower shall not
--------
be deemed to be in default of this Section 6.02(b) solely because of a
decrease in the Market Value of a Hotel Property after the date of
incurrence of the Indebtedness secured by such Hotel Property if the
Borrower was not in default of this Section 6.02(b) at the time of
incurrence of such Indebtedness;
(c) Permitted Sale/Leaseback Indebtedness;
(d) Permitted Timeshare Indebtedness;
(e) Capital Leases for Personal Property;
(f) Interest Rate Agreements; provided that (i) such agreements shall be
unsecured except as provided in Section 10.17 and the Pledge Agreement, (ii) the
dollar amount of indebtedness subject to such agreements and the indebtedness
subject to Interest Rate Agreements in the aggregate shall not exceed the sum of
the amount of the Revolving Commitments and the amount of the other Indebtedness
of the Borrower or its Affiliates which bears interest at a variable rate, and
(iii) the agreements shall be at such interest rates and otherwise in form and
substance reasonably acceptable to the Administrative Agent.
(g) Any of the following Indebtedness incurred by the Parent or the
Borrower:
(i) guaranties in connection with the Indebtedness secured by a
Hotel Property or interest in a Person owning a Hotel Property of (A) if
the Hotel Property is subject to a ground lease, the payment of rent and
performance of obligations under such ground lease, (B) real estate taxes
relating to such Hotel Property, (C) capital reserves required under such
Indebtedness, and (D) after a default under such Indebtedness, the rent
under the applicable Approved Participating Lease will be applied to such
Indebtedness;
-106-
(ii) customary indemnities for acts of malfeasance, misappropriation
and misconduct and an environmental indemnity for the lender under
Indebtedness permitted under this Agreement;
(iii) customary indemnities for acts of malfeasance, misappropriation
and misconduct by the Permitted Other Subsidiaries and environmental
indemnities, all for the benefit of the lenders of other Permitted Other
Subsidiary Indebtedness in connection with such Indebtedness; and
(iv) guaranties of franchise and license agreements.
(h) extensions, renewals and refinancing of any of the Indebtedness
specified in paragraphs (b) - (g) above so long as the principal amount of such
Indebtedness is not thereby increased.
Section VI.3 Agreements Restricting Distributions From Subsidiaries. The
------------------------------------------------------
Borrower will not, nor will it permit any of its Subsidiaries (other than
Permitted Other Subsidiaries) to, enter into any agreement (other than a Credit
Document) which limits distributions to or any advance by any of the Borrower's
Subsidiaries to the Borrower.
Section VI.4 Restricted Payments. Neither the Parent, the Borrower, nor
-------------------
any of their respective Subsidiaries, will make any Restricted Payment, except
that:
(a) provided no Default has occurred and is continuing or would result
therefrom, the Parent may in any Fiscal Quarter, based on the immediately
preceding Rolling Period, make cash payments to its shareholders (including in
connection with the repurchase of Stock or Stock Equivalents) which with the
previous such cash payments in the three immediately preceding Fiscal Quarters
are not in excess of the greater of (i) the lesser of (A) ninety percent (90%)
of the Funds From Operations of the Parent during such Rolling Period or (B) one
hundred percent (100%) of Free Cash Flow of the Parent during such Rolling
Period and (ii) the amount required for the Parent to maintain its status as a
REIT;
(b) provided no Default has occurred and is continuing or would result
therefrom, the Borrower shall be entitled to make cash distributions to its
partners including the Parent;
-107-
(c) a Subsidiary of the Borrower may make a Restricted Payment to the
Borrower,
(d) the limited partners of the Borrower shall be entitled to exchange
limited partnership interests in the Borrower for the Parent's stock, and
Highgate Hotels and its Affiliates shall be entitled to exchange limited
partnership interests in the Borrower which in the aggregate do not exceed
$10,000,000 in market value for cash in accordance with the existing agreements
currently in effect between such Persons and the Borrower and its Subsidiaries;
and
(e) the Borrower shall be entitled to issue limited partnership interests
in the Borrower in exchange for ownership interests in Subsidiaries and
Unconsolidated Entities which own a Future Property to the extent such
Investment is permitted pursuant to the provisions of Section 6.07.
Section VI.5 Fundamental Changes; Asset Dispositions. Neither the
---------------------------------------
Parent, the Borrower, nor any of their respective Subsidiaries (other than the
Permitted Other Subsidiaries) will, (a) merge or consolidate with or into any
other Person, unless (i) a Guarantor is merged into the Borrower and the
Borrower is the surviving Person or a Subsidiary (other than a Permitted Other
Subsidiary which has Indebtedness other than the Obligations) is merged into any
Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other
than the Obligations), and (ii) immediately after giving effect to any such
proposed transaction no Default would exist; (b) sell, transfer, or otherwise
dispose of all or any of such Person's material property except for a Permitted
Asset Disposition, a transfer to a Permitted Other Subsidiary to the extent such
property acts as collateral for Secured Recourse Indebtedness or Secured Non-
Recourse Indebtedness permitted pursuant to the provisions of Section 6.02, or
dispositions or replacements of personal property in the ordinary course of
business, provided that the Borrower and its Subsidiaries shall not sell or
transfer FF&E to OPCO or OPCO's Subsidiaries which in the aggregate has a fair
market value in excess of $5,000,000; (c) enter into, as lessor, a lease (other
than an Approved Participating Lease or a lease which qualifies as a Permitted
Asset Disposition) of all or substantially all of any Hotel Property with any
Person without the consent of the Administrative Agent; (d) sell or otherwise
dispose of any material shares of capital stock, membership interests or
partnership interests of any Subsidiary (except for a Permitted Other Subsidiary
or a sale which qualifies as a Permitted Asset Disposition); (e) except for
sales of ownership interests permitted under this Agreement and the issuance of
limited partnership interests in the Borrower in exchange for ownership
interests in Subsidiaries and Unconsolidated Entities to the extent permitted
pursuant to the provisions of Section 6.04, materially alter the corporate,
capital or legal structure of any such Person (except for a Permitted Other
Subsidiary); (f) enter into any forward sales of the
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Parent Common Stock or limited partnership interests in the Borrower; (g)
include any hotel room owned by the Borrower, its Subsidiary or its
Unconsolidated Entity in a timeshare program except in connection with a
Permitted Timeshare Conversion; (h) liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution) provided that nothing herein shall
prohibit the Borrower from dissolving any Subsidiary which has no assets on the
date of dissolution or (i) materially alter the character of their respective
businesses from that conducted as of the date of this Agreement or otherwise
engage in any material business activity outside of the Hospitality/Leisure-
Related Business.
Section VI.6 Personal Property Leases. For any Hotel Property, the
------------------------
Borrower will not, and will not permit any of its Subsidiaries to enter into
leases of Personal Property except in the ordinary course of business.
Section VI.7 Investments, Loans, Future Properties. Neither the Parent
-------------------------------------
nor the Borrower shall, or shall permit any of their respective Subsidiaries to,
acquire by purchase or otherwise all or substantially all the business, property
or fixed assets of any Person or any Hotel Property, make or permit to exist any
loans, advances or capital contributions to, or make any Investments in
(including without limitation, loans and advances to, and other Investments in,
Subsidiaries or Unconsolidated Entities), or purchase or commit to purchase any
evidences of indebtedness of, stock or other securities, partnership interests,
member interests or other interests in any Person, except the following
(provided that after giving effect thereto there shall exist no Default):
(a) the purchase of Liquid Investments with any Person which qualifies as
an Eligible Assignee;
(b) trade and customer accounts receivable (including in connection with
the sale of used FF&E) which are for goods furnished or services rendered in the
ordinary course of business and are payable in accordance with customary trade
terms, and receivables purchased in connection with the acquisition of a Hotel
Property;
(c) a Future Property or a Subsidiary or Unconsolidated Entity which owns
a Future Property for which the Borrower has provided the Administrative Agent
the Property Information for such Future Property at least 10 days prior to the
date of acquisition of such Future Property which Property Information does not
reflect any material Environmental or structural problems with such Future
Property, or if such Property Information does reflect a material Environmental
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or structural problem, then the Borrower and the Administrative Agent shall have
agreed upon the Required Work to correct or remediate such problem;
(d) Investments in unimproved land that either (i) is under development
for operation of a Hotel Property or with respect to which such Hotel Property
development is planned to commence within twelve months of the acquisition of
such land or (ii) does not qualify under the preceding clause (i) and does not
in the aggregate then have an Investment Amount which exceeds $100,000,000;
(e) Stock or Stock Equivalents (i) received in settlement of liabilities
created in the ordinary course of business, and (ii) additional Stock or Stock
Equivalents of publicly-traded Unconsolidated Entities engaged in the
Hospitality/Leisure-Related Business which in the aggregate do not then have an
Investment Amount which exceeds $100,000,000;
(f) Stock, Stock Equivalents, and other Investments in Unconsolidated
Entities engaged in the Hospitality/Leisure-Related Business which are not
publicly-traded Persons, and Permitted Non-Voting Stock Investments for
Permitted Non-Voting Stock Companies engaged in the Hospitality/Leisure-Related
Business, provided that (i) the aggregate of all such Stock, Stock Equivalents,
Investments and Permitted Non-Voting Stock Investments shall not exceed
$250,000,000 in the aggregate without the approval of the Required Lenders and
(ii) the aggregate of all such Permitted Non-Voting Stock Investments shall not
exceed $125,000,000 in the aggregate without the approval of the Required
Lenders;
(g) Indebtedness of a Person to the Borrower or to a Subsidiary of the
Borrower that is secured by a Lien on one or more Hotel Properties owned by such
Person, which Hotel Properties (i) were previously owned by the Borrower or a
Subsidiary of the Borrower or (ii) the Borrower reasonably expects to acquire
(through trustee's sale, foreclosure, deed in lieu of foreclosure or otherwise),
provided, however, that the aggregate amount of all Investments permitted under
-------- -------
this clause (g) shall not at any time exceed $200,000,000, excluding for
purposes of such calculation the current Indebtedness owed the Borrower from its
Subsidiaries which respectively own the Atlanta, Georgia Westin and the
Cathedral City, California DoubleTree Hotel;
(h) Investments in Hotel Properties which on the date tested are deemed
Development Properties which do not have construction or development budgets
which in the aggregate then exceed $200,000,000;
-110-
(i) a loan to OPCO which has an aggregate principal amount which does not
exceed the Maximum OPCO Loan Amount and provides for an interest rate during any
Fiscal Quarter equal to or greater than the anticipated average interest rate
for outstanding Advances in such Fiscal Quarter based upon the Leverage Ratio in
effect at the commencement of such Fiscal Quarter;
(j) Permitted Timeshare Receivables;
(k) any Indebtedness of a Guarantor to the Borrower, or vice-versa,
provided such Indebtedness is subordinate to the Obligations in a manner
reasonably acceptable to the Administrative Agent; and
(l) other assets owned in the ordinary course of owning the Parent's and
the Parent's Subsidiaries' Hotel Properties and Hospitality/Leisure-Related
Business.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their
respective Subsidiaries shall make an Investment which would (a) cause the
Parent Properties in the aggregate to violate in any way the Parent Property
Requirements without the Administrative Agent's written consent, (b) if the
Parent Deemed Investment Amount for Unconsolidated Entities was added to
Investment Amounts for Parent Properties in determining whether the Parent
Property Requirements had been met, cause the Parent Properties in the aggregate
to violate in any material way the Parent Property Requirements without the
Administrative Agent's written consent, (c) individually, and not on a portfolio
basis, be in excess of $75,000,000 without the written consent of the
Administrative Agent or in excess of $100,000,000 without the written consent of
the Required Lenders, provided that, subject to the other terms and conditions
--------
of this Agreement, the Lenders consent to the acquisition by the Borrower or its
Subsidiary of the South Seas Portfolio, (d) cause a Default, or (e) cause or
result in the Borrower or the Parent failing to comply with any of the financial
covenants contained herein.
Section VI.8 Affiliate Transactions. Except for the Intercompany
----------------------
Agreement, the Approved Participating Lease Agreements, certain liquor license
agreements, and the transactions described in Section 6.07(i), the Borrower will
not, and will not permit any of its Subsidiaries to, make, directly or
indirectly: (a) any transfer, sale, lease, assignment or other disposal of any
assets to any Affiliate of the Borrower which is not a Guarantor or any purchase
or acquisition of assets from any such Affiliate except for sales of new
Personal Property (i) which in any calendar year
-111-
do not exceed $1,000,000 in the aggregate and (ii) for which the sales price is
the actual cost to the party selling; or (b) any arrangement or other
transaction directly or indirectly with or for the benefit of any such Affiliate
(including without limitation, guaranties and assumptions of obligations of an
Affiliate), other than those matters set forth in either of the foregoing
clauses (a) or (b) which are in the ordinary course of business and at market
rates.
Section VI.9 Sale and Leaseback. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, enter into any arrangement with any Person,
whereby in contemporaneous transactions the Borrower or such Subsidiary sells
essentially all of its right, title and interest in a material asset and the
Borrower or such Subsidiary acquires or leases back the right to use such
property except in connection with the incurrence of Permitted Sale/Leaseback
Indebtedness.
Section VI.10 Sale or Discount of Receivables. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable.
Section VI.11 No Further Negative Pledges. Neither the Borrower, nor the
---------------------------
Parent, nor their respective Subsidiaries shall enter into or suffer to exist
any agreement (other than this Agreement and the Credit Documents) (a)
prohibiting the creation or assumption of any Lien upon the Properties of the
Parent, the Borrower or any of their respective Subsidiaries (except for the
Permitted Other Subsidiaries), whether now owned or hereafter acquired, or (b)
requiring an obligation to be secured if some other obligation is or becomes
secured.
Section VI.12 Material Documents. The Borrower will not, nor will it
------------------
permit any of its Subsidiaries to without the Required Lender's written consent
(a) amend the Borrower's partnership agreement in any material respect, (b)
admit a new general partner to the Borrower, or (c) enter into any termination,
material modification or amendment of any of the following:
(i) the Intercompany Agreement; or
(ii) the Merger Agreement.
The Borrower will not, nor will it permit any of its Subsidiaries to without the
written consent of two out of the three Arrangers amend or terminate (except in
connection with a Permitted Asset Disposition) an Approved Participating Lease
if the net affect of all such amendments and
-112-
terminations of Approved Participating Leases is reasonably expected to decrease
the expected rentals under all of the Approved Participating Leases taken as a
whole by more than 10% of the pro forma rentals for 1997 set forth in the
Registration Statements, taking into account acquisitions and dispositions after
the Closing Date. The Borrower will not, nor will it permit any of its
Subsidiaries to without the written consent of the Super Required Lenders amend
or terminate (except in connection with a Permitted Asset Disposition) an
Approved Participating Lease if the net affect of all such amendments and
terminations of Approved Participating Leases is reasonably expected to either
(a) cause the Borrower to violate a covenant in Article VII or (b) cause the
expected rentals under all of the Approved Participating Leases taken as a whole
to decrease by more than 20% of the pro forma rentals for 1997 set forth in the
Registration Statements, taking into account acquisitions and dispositions after
the Closing Date.
Any termination, modification or amendment prohibited under this Section 6.12
without the required written consent shall, to the extent permitted by
applicable law, be void and of no force and effect.
Section 6.13 Limitations on Development, Construction, Renovation and
--------------------------------------------------------
Purchase of Hotel Properties. Neither the Parent nor the Borrower shall or
----------------------------
shall permit any of their respective Subsidiaries to (a) engage in the
development, construction or expansion of any Hotel Properties except for
Development Properties permitted by the provisions of Section 6.07 or (b) enter
into any agreements to purchase Hotel Properties or other assets, unless with
respect to such purchase the Parent, the Borrower or such Subsidiary (as
applicable) at all times has available sources of capital equal to pay in full
the cost of the purchase of such Hotel Properties or other assets (to the extent
that the payment of such cost of purchase constitutes a recourse obligation of
the Parent, the Borrower or its Subsidiary), which available sources of capital
may include Advances to the extent that the Borrower may borrow the same for the
purposes required or other Indebtedness permitted by the terms of this
Agreement.
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have
any Commitment hereunder,
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unless the Required Lenders shall otherwise consent in writing, the Borrower
agrees to comply and cause the Parent and the Parent's Subsidiaries to comply
with the following covenants.
Section 7.1 Interest Coverage Ratio. The Parent shall maintain at the
-----------------------
end of each Rolling Period (a) for the Rolling Periods ending on September 30,
1998 through March 31, 1999, an Interest Coverage Ratio of not less than 2.20 to
1.0 and (b) for any Rolling Period thereafter, an Interest Coverage Ratio of not
less than 2.50 to 1.0.
Section 7.2 Fixed Charge Coverage Ratio. The Parent shall maintain at
---------------------------
the end of each Rolling Period (a) for the Rolling Periods ending on September
30, 1998 through March 31, 1999, a Fixed Charge Coverage Ratio of not less than
1.85 to 1.0 and (b) for any Rolling Period thereafter, a Fixed Charge Coverage
Ratio of not less than 2.00 to 1.0.
Section 7.3 Maintenance of Net Worth. The Parent shall at all times
------------------------
maintain an Adjusted Net Worth of not less than the Minimum Tangible Net Worth.
Section 7.4 Leverage Ratio. The Parent shall not on any date permit the
--------------
Leverage Ratio to exceed (a) prior to July 1, 1999, 5.5 to 1.0, (b) from July 1,
1999 through June 30, 2000, 5.0 to 1.0, and (c) on and after July 1, 2000, 4.5
to 1.0.
Section 7.5 Limitations on Secured Indebtedness. The Parent shall not
-----------------------------------
on any date permit the sum of the Secured Non-Recourse Indebtedness and Secured
Recourse Indebtedness of the Parent and its Subsidiaries on a Consolidated basis
(excluding the Obligations), to be secured by Liens on Hotel Properties or other
Investments which for the Rolling Period immediately preceding such date (a) for
any date prior to July 1, 1999, produced 40% or more of the EBITDA of the Parent
and its Subsidiaries on a Consolidated basis and (b) for any date on or after
July 1, 1999, produced 30% or more of the EBITDA of the Parent and its
Subsidiaries on a Consolidated basis. The Parent shall not on any date permit
the Secured Indebtedness Ratio to exceed (a) prior to July 1, 1999, 2.75 to 1.0,
and (b) on and after July 1, 1999, 2.5 to 1.0.
Section 7.6 Limitations on Secured Recourse Indebtedness. The Parent
--------------------------------------------
shall not on any date permit the Secured Recourse Indebtedness of the Parent and
its Subsidiaries on a Consolidated basis (excluding the Obligations), to be
secured by Liens on Hotel Properties or other Investments which for the Rolling
Period immediately preceding such date produced 20% or more of the EBITDA of the
Parent and its Subsidiaries on a Consolidated basis.
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Section 7.7 Unsecured Interest Coverage Ratio. The Parent shall
---------------------------------
maintain at the end of each Rolling Period for the Rolling Periods ending on the
dates indicated on the following chart an Unsecured Interest Coverage Ratio of
not less than the amount set forth next to such dates:
Ending Date of Rolling Period Unsecured Interest Coverage Ratio
---------------------------------- ---------------------------------
September 30, 1998 through June 30, 1999 1.50 to 1.0
September 30, 1999 through June 30, 2000 1.75 to 1.0
September 30, 2000 through June 30, 2001 2.00 to 1.0
September 30, 2001 through June 30, 2002 2.25 to 1.0
For any Rolling Period thereafter 2.50 to 1.0
Section 7.8 Permitted Non-Voting Stock Company Adjustment. If the
---------------------------------------------
Parent or any of its Subsidiaries have a Permitted Non-Voting Stock Investment,
then to the extent not already included in the EBITDA of the Parent and its
Subsidiaries the lesser of (a) the dividends and interest received by the Parent
or any of its Subsidiaries from a Permitted Non-Voting Stock Company and (b) the
EBITDA of the Hotel Properties owned or leased by such Permitted Non-Voting
Stock Company shall be included in EBITDA for purposes of the financial
covenants in this Article VII.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1 Events of Default. The occurrence of any of the following
-----------------
events shall constitute an "Event of Default" under any Credit Document:
(a) Principal or Letter of Credit Obligation Payment. The Borrower or any
------------------------------------------------
Guarantor shall fail to pay any principal of any Note or any Letter of Credit
Obligation when the same becomes due and payable as set forth in this Agreement;
(b) Interest or Other Obligation Payment. The Borrower or any Guarantor
------------------------------------
shall fail to pay any interest on any Note or any fee or other amount payable
hereunder or under any other
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Credit Document when the same becomes due and payable as set forth in this
Agreement, provided however that the Borrower and the Guarantors will have a
grace period of five days after the payments covered by this Section 8.01(b)
becomes due and payable for the first two defaults of such Persons collectively
under this Section 8.01(b) in every calendar year;
(c) Representation and Warranties. Any representation or warranty made or
-----------------------------
deemed to be made (i) by the Borrower in this Agreement or in any other Credit
Document, (ii) by the Borrower (or any of its officers) in connection with this
Agreement or any other Credit Document, or (iii) by any Subsidiary in any Credit
Document shall prove to have been incorrect in any material respect when made or
deemed to be made;
(d) Covenant Breaches. (i) The Borrower shall fail to perform or observe
-----------------
any covenant contained in Section 5.02, Article VI or Article VII of this
Agreement or the Borrower shall fail to perform or observe, or shall fail to
cause any Guarantor to perform or observe any covenant in any Credit Document
beyond any notice and/or cure period for such default expressly provided in such
Credit Document or (ii) the Borrower or any Guarantor shall fail to perform or
observe any term or covenant set forth in any Credit Document which is not
covered by clause (i) above or any other provision of this Section 8.01, in each
case if such failure shall remain unremedied for 30 days after the earlier of
the date written notice of such default shall have been given to the Borrower or
such Guarantor by the Administrative Agent or any Lender or the date a
Responsible Officer of the Borrower or any Guarantor has actual knowledge of
such default, unless such default in this clause (ii) cannot be cured in such 30
day period and the Borrower is diligently proceeding to cure such default, in
which event the cure period shall be extended to 90 days;
(e) Cross-Defaults.
--------------
(i) with respect to (A) any Secured Non-Recourse Indebtedness which
is outstanding in a principal amount of at least $20,000,000 individually
or when aggregated with all such Secured Non-Recourse Indebtedness of the
Borrower, the Parent or any of their respective Subsidiaries or (B) any
other Indebtedness (but excluding Indebtedness evidenced by the Notes)
which is outstanding in a principal amount of at least $5,000,000
individually or when aggregated with all such Indebtedness of the Borrower,
the Parent or any of their respective Subsidiaries any of the following:
(1) any such Indebtedness shall be declared to be due and
payable, or
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required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof,
(2) the Borrower, the Parent or any of their respective
Subsidiaries shall fail to pay any principal of or premium or interest
of any of such Indebtedness (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or
(3) any other event shall occur or condition shall exist under
any agreement or instrument relating to such Indebtedness, and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is
to permit the holders of such Indebtedness to accelerate the maturity
of such Indebtedness;
(f) Insolvency. The Borrower, the Parent, or any of their respective
----------
Subsidiaries shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower, the Parent, or any of their respective
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against the Borrower, the Parent, or any of their
respective Subsidiaries, either such proceeding shall remain undismissed for a
period of 60 days or any of the actions sought in such proceeding shall occur;
or the Borrower, the Parent, or any of their respective Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
paragraph (f);
(g) Judgments. Any judgment or order for the payment of money in excess of
---------
$5,000,000 (reduced for purposes of this paragraph for the amount in respect of
such judgment or order that a reputable insurer has acknowledged being payable
any valid and enforceable insurance policy) shall be rendered against the
Borrower, the Parent or any of their respective Subsidiaries which, within 30
days from the date such judgment is entered, shall not have been discharged or
execution thereof stayed pending appeal;
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(h) ERISA. (i) Any Person shall engage in any "prohibited transaction" (as
-----
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Plan for
purposes of Title IV of ERISA, unless such Reportable Event, proceedings or
appointment are being contested by the Parent or the Borrower in good faith and
by appropriate proceedings, (iv) any Plan shall terminate for purposes of Title
IV of ERISA, (v) the Parent, the Borrower or any member of a Controlled Group
shall incur any liability in connection with a withdrawal from a Multiemployer
Plan or the insolvency (within the meaning of Section 4245 of ERISA) or
reorganization (within the meaning of Section 4241 of ERISA) of a Multiemployer
Plan, unless such liability is being contested by the Parent or the Borrower in
good faith and by appropriate proceedings, or (vi) any other event or condition
shall occur or exist, with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could subject the Borrower or any Guarantor to any tax,
penalty or other liabilities in the aggregate exceeding $10,000,000;
(i) Guaranty. Any provision of any Guaranty except a Supplemental Guaranty
--------
shall for any reason cease to be valid and binding on any Guarantor or any
Guarantor shall so state in writing;
(j) Environmental Indemnity. Any Environmental Indemnity shall for any
-----------------------
reason cease to be valid and binding on any Person party thereto or any such
Person shall so state in writing;
(k) OPCO. Either (i) a Change of Control occurs for OPCO without the
----
written consent of the Borrower (which shall not be given without the consent of
the Required Lenders) or (ii) OPCO shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the OPCO or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
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entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against OPCO or any of its Subsidiaries,
either such proceeding shall remain undismissed for a period of 60 days or any
of the actions sought in such proceeding shall occur; or OPCO or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this paragraph (k);
(l) Parent's REIT Status. There shall be a determination from the
--------------------
applicable Governmental Authority from which no appeal can be taken that the
Parent's tax status as a REIT has been lost;
(m) Parent Common Stock; Repayment Event The Parent at any time hereafter
------------------------------------
fails to (i) cause the Parent Common Stock to be duly listed on the New York
Stock Exchange, Inc. and (ii) file timely all reports required to be filed by
the Parent with the New York Stock Exchange, Inc. and the Securities and
Exchange Commission and, with respect to a failure under clause (ii), such
failure remains uncured on the date which is the earlier of (A) the date 30 days
following the initial occurrence of such failure and (B) the date specified by
the New York Stock Exchange, Inc. or the Securities and Exchange Commission as
the date such failure needs to be cured by. Upon the receipt by the Parent of
any Net Cash Proceeds from a Repayment Event, (a) the Parent fails to
immediately make a capital contribution or advance to the Borrower or a
Subsidiary of the Borrower in the aggregate amount of such Net Cash Proceeds or
(b) the Borrower fails to apply such Net Cash Proceeds in accordance with this
Agreement either (i) to repay any outstanding principal of the Notes, and
accrued and unpaid interest thereon and other amounts payable by the Borrower in
respect thereof, or (ii) to make Investments permitted by this Agreement; or
(n) Change in Management or Control. Any of the following occur without
-------------------------------
the written consent of the Required Lenders: (a) a Change of Control occurs for
either the Parent or the Borrower; (b) the Parent owns less than 100% of the
legal or beneficial interest in MeriStar LP, Inc.; (c) the Parent, MeriStar LP,
Inc. and any wholly-owned Subsidiary of the Parent collectively owns less than
70% of the legal or beneficial interest in the Borrower; or (d) the Parent shall
cease to employ either Xxxx X. Xxxxxxxx or Xxxxxx X. Xxxxx as the chairman and
chief executive officer of the Parent and, within 180 days following such
occurrence for any reason, another person acceptable to the Required Lenders in
their sole discretion is not employed as the chairman and chief executive
officer of the Parent.
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Section 8.2 Optional Acceleration of Maturity; Other Actions. If any
------------------------------------------------
Event of Default (other than an Event of Default pursuant to paragraph (f) of
Section 8.01) shall have occurred and be continuing, then, and in any such
event,
(a) the Administrative Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances and the obligation of each Issuing
Bank to issue, increase, or extend Letters of Credit to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
Notes, all interest thereon, the Letter of Credit Obligations, and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Notes, all such interest, all such Letter of Credit Obligations and all such
amounts shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind (including, without
limitation, any notice of intent to accelerate or notice of acceleration), all
of which are hereby expressly waived by the Borrower,
(b) the Borrower shall, on demand of the Administrative Agent at the
request or with the consent of the Required Lenders, deposit into the Cash
Collateral Account an amount of cash equal to the Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations are
not otherwise paid at such time, and
(c) the Administrative Agent shall at the request of, or may with the
consent of, the Required Lenders proceed to enforce its rights and remedies
under the Credit Documents for the ratable benefit of the Lenders by appropriate
proceedings.
Section 8.3 Automatic Acceleration of Maturity. If any Event of Default
----------------------------------
pursuant to paragraph (f) of Section 8.01 shall occur,
(a) the obligation of each Lender to make Advances and the obligation of
each Issuing Bank to issue, increase, or extend Letters of Credit shall
immediately and automatically be terminated and the Notes, all interest on the
Notes, all Letter of Credit Obligations, and all other amounts payable under
this Agreement shall immediately and automatically become and be due and payable
in full, without presentment, demand, protest or any notice of any kind
(including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower and
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(b) to the extent permitted by law or court order, the Borrower shall
deposit with the Administrative Agent into the Cash Collateral Account an amount
of cash equal to the outstanding Letter of Credit Exposure as security for the
Obligations to the extent the Letter of Credit Obligations are not otherwise
paid at such time.
Section 8.4 Cash Collateral Account.
-----------------------
(a) Pledge. The Borrower hereby pledges, and grants to the Administrative
------
Agent for the benefit of the Lenders, a security interest in all funds held in
the Cash Collateral Account maintained with Societe Generale, New York Branch
from time to time, but under the control of the Administrative Agent, and all
proceeds thereof, as security for the payment of the Obligations, including
without limitation all Letter of Credit Obligations owing to any Issuing Bank or
any other Lender due and to become due from the Borrower to any Issuing Bank or
any other Lender under this Agreement in connection with the Letters of Credit
and the Borrower agrees to execute all cash management or cash collateral
agreements and UCC-1 Financing Statements requested by the Administrative Agent
as needed or desirable for the Administrative Agent to have a perfected first
lien security interest in the Cash Collateral Account.
(b) Application against Letter of Credit Obligations. The Administrative
------------------------------------------------
Agent may, at any time or from time to time apply funds then held in the Cash
Collateral Account to the payment of any Letter of Credit Obligations owing to
any Issuing Bank, in such order as the Administrative Agent may elect, as shall
have become or shall become due and payable by the Borrower to any Issuing Bank
under this Agreement in connection with the Letters of Credit.
(c) Duty of Care. The Administrative Agent shall cause Societe Generale,
------------
New York Branch to exercise reasonable care in the custody and preservation of
any funds held in the Cash Collateral Account and Societe Generale, New York
Branch shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which Societe Generale, New York
Branch accords its own property, it being understood that neither Societe
Generale, New York Branch, nor the Administrative Agent shall have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.
Section 8.5 Swingline Advances and Commitment. If any Event of Default
---------------------------------
shall have occurred and be continuing, then, and in any such event, the
Swingline Lender may by notice to Borrower, cancel the Swingline Commitment
(whereupon the Swingline Commitment shall be
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deemed to be immediately canceled) and/or declare all Swingline Advances and all
unpaid accrued interest thereon to be immediately due and payable (whereupon all
Swingline Advances and all such interest shall be immediately due and payable).
Section 8.6 Non-exclusivity of Remedies. No remedy conferred upon the
---------------------------
Administrative Agent or the Lenders is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 8.7 Right of Set-off. Upon (a) the occurrence and during the
----------------
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 8.02 to authorize the
Administrative Agent to declare the Notes and any other amount payable hereunder
due and payable pursuant to the provisions of Section 8.02 or the automatic
acceleration of the Notes and all amounts payable under this Agreement pursuant
to Section 8.03, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement, the Note held by
such Lender, and the other Credit Documents, irrespective of whether or not such
Lender shall have made any demand under this Agreement, such Note, or such other
Credit Documents, and although such obligations may be unmatured. Each Lender
agrees to promptly notify the Borrower after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section are in addition to any other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
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ARTICLE IX
AGENCY AND ISSUING BANK PROVISIONS
Section 9.1 Authorization and Action. Each Lender hereby appoints and
------------------------
authorizes the Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers under this Agreement and the other
Credit Documents as are delegated to the Administrative Agent by the terms
hereof and of the other Credit Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders or Super
Required Lenders, as applicable, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the Administrative
--------
Agent shall not be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this Agreement, any other
Credit Document, or applicable law. The functions of the Administrative Agent
are administerial in nature and in no event shall the Administrative Agent have
a fiduciary or trustee relation in respect of any Lender by reason of this
Agreement or any other Credit Document. Within 5 Business Days of the
Administrative Agent receiving actual notice (without any duty to investigate)
of a Default, the Administrative Agent will provide written notice of such
Default to the Lenders.
Section 9.2 Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken (including such
Person's own negligence) by it or them under or in connection with this
Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
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in or in connection with this Agreement or the other Credit Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit Document on the part of the Parent, the Borrower or their Subsidiaries or
to inspect the property (including the books and records) of the Borrower or its
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Credit Document; and (f) shall incur no liability under
or in respect of this Agreement or any other Credit Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) reasonably believed by it to be genuine
and signed or sent by the proper party or parties.
Section 9.3 Each Agent and Its Affiliates. With respect to its
-----------------------------
Commitment, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not an
Administrative Agent. The term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any of its Subsidiaries, and any Person
who may do business with or own securities of the Borrower or any such
Subsidiary, all as if the Administrative Agent were not an Administrative Agent
hereunder and without any duty to account therefor to the Lenders.
Section 9.4 Lender Credit Decision. Each Lender acknowledges that it
----------------------
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Section 4.06
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative 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
credit decisions in taking or not taking action under this Agreement.
Section 9.5 Indemnification. The Lenders severally agree to indemnify
---------------
the Administrative Agent, the Arrangers, the Syndication Agent, each
Documentation Agent and each Issuing Bank (to the extent not reimbursed by the
Borrower), according to their respective Pro Rata Shares from and against any
and all liabilities, obligations, losses, damages, penalties,
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actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against such
Person in any way relating to or arising out of this Agreement or any action
taken or omitted by such Person under this Agreement or any other Credit
Document (including such Person's own negligence), provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its Pro Rata Share of any out-of-pocket expenses (including
counsel fees) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Credit Document, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.
Section 9.6 Successor Agent and Issuing Banks. The Administrative
---------------------------------
Agent, any Arranger or any Issuing Bank may resign at any time by giving written
notice thereof to the Lenders and the Borrower and may be removed at any time
with cause by the Required Lenders upon receipt of written notice from the
Required Lenders to such effect. Upon receipt of notice of any such resignation
or removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent, Arranger or Issuing Bank. If no successor Administrative
Agent, Arranger or Issuing Bank shall have been so appointed, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's, Arranger's or Issuing Bank's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, Arranger or
Issuing Bank, then the retiring Administrative Agent, Arranger or Issuing Bank
may, on behalf of the Lenders and the Borrower, appoint a successor
Administrative Agent, Arranger or Issuing Bank, which shall be a commercial bank
meeting the financial requirements of an Eligible Assignee and, to the extent
that a Lender is willing to act in such capacity, a Lender. Upon the acceptance
of any appointment as Administrative Agent, Arranger or Issuing Bank by a
successor Administrative Agent or Issuing Bank, such successor Administrative
Agent, Arranger or Issuing Bank shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, Arranger or Issuing Bank, and the retiring Administrative
Agent, Arranger or Issuing Bank shall be discharged from its duties and
obligations under this Agreement and the other Credit Documents, except that the
retiring Issuing Bank shall remain an Issuing Bank with respect to any Letters
of Credit issued by such Issuing Bank and outstanding on the effective date of
its resignation or removal and the provisions
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affecting such Issuing Bank with respect to such Letters of Credit shall inure
to the benefit of the retiring Issuing Bank until the termination of all such
Letters of Credit. After any retiring Administrative Agent's, Arranger's or
Issuing Bank's resignation or removal hereunder as Administrative Agent,
Arranger or Issuing Bank, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was such
Administrative Agent, Arranger or Issuing Bank under this Agreement and the
other Credit Documents.
Section 9.7 Arrangers, Syndication Agent and Documentation Agents.
-----------------------------------------------------
Bankers Trust Company shall be named an Arranger and a Syndication Agent under
the Credit Documents; Xxxxxx Commercial Paper Inc. shall be named an Arranger
and a Documentation Agent under the Credit Documents; and Xxxxx Fargo Bank,
National Association shall be named a Documentation Agent under the Credit
Documents, but such Persons in such capacities shall have no right or duty to
act as agent on behalf of the Lenders except that the Arrangers will have the
limited right to consent or decline to consent to certain matters set forth in
the definition of "Approved Participating Lessee" and in Section 6.12. Societe
Generale, Southwest Agency shall be named Arranger and Administrative Agent
under the Credit Documents, but as the Arranger shall have no right or duty to
act as agent on behalf of the Lenders in such capacity except that as Arranger
will have the limited right to consent or decline to consent to certain matters
set forth in the definition of "Approved Participating Lessee" and in Section
6.12; provided that the provisions of this sentence shall in no way effect
Societe Generale, Southwest Agency's rights or duties as Administrative Agent on
behalf of the Lenders.
ARTICLE X
MISCELLANEOUS
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Section 10.1 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent, as specified in the particular provisions of the Credit Documents, and
the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
--------
however, that no amendment shall increase the Commitment of any Lender without
the written consent of such Lender, and no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders whose Commitments or Advances
are directly modified thereby, do any of the following: (a) increase the
aggregate Commitments of the Lenders (for which all Lenders' Commitments shall
be deemed directly modified thereby; provided that no consent except for the
unanimous consent of the Lenders holding Revolving Commitments and Advances
shall be needed to increase the total Revolving Commitments by up to
$200,000,000 in the aggregate for all such increases), (b) reduce the principal
of, or interest on, the Notes or any fees or other amounts payable hereunder or
under any other Credit Document or otherwise release the Borrower from any
Obligations, (c) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable here under, (d)
amend this Section 10.01, (e) amend the definition of "Required Lenders" or
"Super Required Lenders", (f) release the Parent from its obligations under the
Guaranty (for which all Lenders' Advances shall be deemed directly modified
thereby), or (g) except as provided in Section 5.11, release all or
substantially all of the Collateral; and provided, further, that no amendment,
-----------------
waiver or consent shall, unless in writing and signed by the Administrative
Agent, or any Issuing Bank in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent or such
Issuing Bank, as the case may be, under this Agreement or any other Credit
Document. In addition, (a) the definition of "Revolver Required Lenders" cannot
be amended without the unanimous written consent of all Lenders holding
Revolving Commitments, (b) the definition of "Term A Required Lenders" cannot be
amended without the unanimous written consent of all Lenders holding Term A
Commitments and (c) the definition of "Term B Required Lenders" cannot be
amended without the unanimous written consent of all Lenders holding Term B
Commitments. In addition, no amendment, waiver or consent shall, unless in
writing and signed by the Swingline Lender, amend, modify or waive any provision
pertaining to the Swingline Lender, Swingline Commitment or the Swingline
Advances, or otherwise affect any right or duty of the Swingline Lender. In
addition, none of the following decisions shall be made without the written
consent of the Super Required Lenders:
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(a) release any Guarantor except the Parent from its obligations under
any of the Guaranties, provided that the Administrative Agent can (i)
release any Supplemental Guarantor from its obligations under any of the
Supplemental Guaranties, (ii) if no Default then exists, release any
Subsidiary of the Borrower which no longer is a Property Owner of a Hotel
Property or no longer owns any assets and (iii) release a Guarantor
pursuant to the provisions of Section 10.12;
(b) any determination to make a Borrowing after the occurrence and
during the continuance of an Event of Default;
(c) any waiver or any amendment to the financial covenants contained
in Article VII of this Agreement or any definitions used therein;
(d) any amendment of any of the definitions that are used in the
definition of "Leverage Ratio;" and
(e) any amendment of any other provision of a Credit Document which
expressly requires the consent of the Super Required Lenders.
In addition, none of the following decisions shall be made without the written
consent of the Required Lenders:
(a) release any Person from its obligations under any of the
Environmental Indemnities;
(b) release any Collateral from its Lien securing the Obligations
except in connection with a Permitted Asset Disposition;
(c) increases the maximum duration of Interest Periods permitted under
this Agreement;
(d) any material waiver or modification of the covenants contained in
Article V or Article VI;
(e) any amendment, supplement or modification to, or waiver of, the
provisions of Section 8.01 of this Agreement;
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(f) any determination to send notice to the Borrower of, or otherwise
declare, an Event of Default pursuant to Section 8.01 of this Agreement;
(g) any determination to accelerate the Obligations pursuant to
Section 8.02 of this Agreement;
(h) any exercise of remedies under any Credit Document;
(i) any material decision regarding the operation, maintenance, sale
or other disposition of any Property after the foreclosure upon such
Property, provided that Administrative Agent shall be able to take any
action it determines necessary to preserve or maintain any such Property
and provided further that if the Required Lenders cannot agree on the sale
or disposition of such Property, the Administrative Agent shall not sell or
dispose of such Property, but shall continue to hold such Property for the
benefit of the Lenders;
(j) any waiver for more than 45 days of, or any material amendment to,
the reporting requirements set forth in clauses (a)-(d) of Section 5.05 of
this Agreement;
(k) any other material waiver or modification of the Credit
Documents.; and
(l) any amendment of any other provision of a Credit Document which
expressly requires the consent of the Required Lenders.
Any amendment to a covenant of the Parent or any of its Subsidiaries or
amendment to a definition shall require the Borrower's written consent.
If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement which requires unanimous
consent of the Lenders or of a Class of the Lenders, the consent of the Super
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrower shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described below, to replace each such non-consenting
Lender or Lenders with one or more Eligible Assignees pursuant to Section 2.15
so long as at the time of such replacement, each such Eligible Assignee consents
to the proposed change, waiver, discharge or termination, provided further, that
----------------
in any event the Borrower shall not have the right to replace a Lender solely as
a result of the exercise of
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such Lender's rights (and the withholding of any required consent by such
Lender) to increase any of such Lender's Commitments.
Section 10.2 Notices, Etc. All notices and other communications shall be
------------
in writing (including telecopy or telex) and mailed, telecopied, telexed, hand
delivered or delivered by a nationally recognized overnight courier, if to the
Borrower, at its address at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000, Attn: Mr. Xxxx Xxxxx; if to any Lender at its Domestic Lending
Office specified opposite its name on Schedule 10.02; if to the Administrative
Agent, at its address at 4900 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx,
Xxxxx 00000, Attention: Xxxxxx X. Day, Director (telecopy: (000) 000-0000;
telephone: (000) 000-0000); or, as to each party, at such other address or
teletransmission number as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall, when mailed,
telecopied, telexed or hand delivered or delivered by overnight courier, be
effective three days after deposited in the mails, when telecopy transmission is
completed, when confirmed by telex answer-back or when delivered, respectively,
except that notices and communications to the Administrative Agent pursuant to
Article II or Article IX shall not be effective until received by the
Administrative Agent.
Section 10.3 No Waiver; Remedies. No failure on the part of any Lender,
-------------------
any Agent, or any Issuing Bank to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
this Agreement and the other Credit Documents are cumulative and not exclusive
of any remedies provided by law.
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Section 10.4 Costs and Expenses. The Borrower agrees to pay on demand
------------------
all out-of-pocket costs and expenses of the Administrative Agent in connection
with the preparation, execution, delivery, due diligence, administration,
modification and amendment of this Agreement, the Notes and the other Credit
Documents and syndication (syndication costs shall not exceed $5,000 per
Eligible Assignee) of the Obligations including, without limitation, (a) the
reasonable fees and out-of-pocket expenses of Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
counsel for the Administrative Agent, and (b) all reasonable out-of-pocket costs
and expenses, if any, of the Administrative Agent, each Issuing Bank, and each
Lender (including, without limitation, reasonable counsel fees and expenses of
the Administrative Agent, such Issuing Bank, and each Lender) in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement and the other Credit Documents, and (d) to the extent not
included in the foregoing, the costs of any local counsel, travel expenses,
Engineering Reports, Environmental Reports, mortgage and intangible taxes (if
any), and any title or Uniform Commercial Code search costs, any insurance
consultant costs and other costs usual and customary in connection with a credit
facility of this type.
Section 10.5 Binding Effect. This Agreement shall become effective when
--------------
it shall have been executed by the Borrower and the Administrative Agent, and
when the Administrative Agent shall have, as to each Lender, either received a
counterpart hereof executed by such Lender or been notified by such Lender that
such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, each Issuing Bank, and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or delegate its duties
under this Agreement or any interest in this Agreement without the prior written
consent of each Lender.
Section 10.6 Lender Assignments and Participations.
-------------------------------------
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(a) Assignments. Any Lender may assign to one or more banks or other
-----------
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, the Notes held by it, and the participation interest in
the Letter of Credit Obligations held by it); provided, however, that (i) each
-------- -------
such assignment shall be of a constant, and not a varying, percentage of all of
such Lender's rights and obligations under this Agreement for a particular Class
and shall involve a ratable assignment of such Lender's Commitment and Advances
for a particular Class, (ii) the amount of the resulting Commitments and
Advances of the assigning Lender (unless it is assigning all its Commitments and
Advances) and the assignee Lender pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 in total (provided that with respect
to assignments of Term B Advances by an Approved Fund to a Related Fund only,
the amount of the resulting Term B Advances for the assigning Approved Fund and
the assignee Related Fund may be for less than $5,000,000 if (A) the amount of
the resulting Term B Advances for the assigning Approved Fund and the assignee
Related Fund are not less than $1,000,000, (B) the amount of the aggregate
resulting Term B Advances for the assigning Approved Fund and its Related Funds
are not less than $5,000,000 and (C) such Approved Fund and all of its Related
Funds shall only be entitled collectively to one notice for all purposes under
the Credit Documents), shall in no event be less than $1,000,000 for each Class
assigned and shall be an integral multiple of $1,000,000, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with the Notes subject to such assignment, (v) the Administrative Agent (and the
case of assignments of all or a portion of a Lender's Revolving Commitments and
Revolving Advances, the Issuing Bank for each Letter of Credit issued after the
date of this Agreement and the Swingline Lender) shall consent to such
assignment, which consent shall not be unreasonably withheld or delayed, and
(vi) each Eligible Assignee (other than an Eligible Assignee which is an
Affiliate of the assigning Lender) shall pay to the Administrative Agent a
$2,500 administrative fee ; provided that, in the case of contemporaneous
--------
assignments by a Lender to more than one Related Fund (which Related Funds are
not then Lenders hereunder), only a single $2,500 such fee shall be payable for
all such contemporaneous assignments. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least three Business Days after
the execution thereof or earlier such earlier date as agreed to by the
Administrative Agent, (A) the assignee thereunder shall be a party hereto for
all purposes and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations
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of a Lender hereunder and (B) such Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
Notwithstanding anything herein to the contrary, (i) any Lender may assign or
pledge, as collateral or otherwise, any of its rights under the Credit Documents
to any Federal Reserve Bank and (ii) any Lender that is an Approved Fund or
Related Fund may, without the consent of the Administrative Agent or the
Borrower, pledge all or any portion of its Advances and Notes to any trustee
for, or any other representative of, holders of obligations owed, or securities
issued, by such Approved Fund or Related Fund, as security for such obligations
or securities; provided that (A) any foreclosure or similar action by such
--------
trustee or representative shall be subject to the provisions of this Section
10.06(a) concerning assignments, including without limitation the requirement
that any assignee of such Notes and Advances must qualify as an Eligible
Assignee and (B) such Lender shall not require such trustee's or
representative's consent to any matter under this Agreement, except (1) for a
change in the principal amount of any Note which has been so pledged, reductions
in fees or interest, or extending the Maturity Date except as permitted in this
Agreement or (2) as otherwise consented to by the Administrative Agent.
(b) Term of Assignments. By executing and delivering an Assignment and
-------------------
Acceptance, the Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
Guarantors or the performance or observance by the Borrower or the Guarantors of
any of their obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Sections 4.06 and 5.05, if applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative Agent,
such Lender or any other Lender and based on such documents and information as
it shall deem appropriate at the time,
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continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(c) The Register. The Administrative Agent shall maintain at its address
------------
referred to in Section 10.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent, the Swingline
Lender, the Issuing Banks, and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance executed
----------
by a Lender and an Eligible Assignee, together with the Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of the attached
Exhibit C, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes, a new Note
or Notes payable to the order of such Eligible Assignee in amount equal to,
respectively, the Commitments and the outstanding Advances assumed by it
pursuant to such Assignment and Acceptance, and if the assigning Lender has
retained any Commitments hereunder, a new Note or Notes payable to the order of
such Lender in an amount equal to, respectively, the Commitments and the
outstanding Advances retained by it hereunder. Such new Note or Notes shall be
dated the date of the original Notes executed pursuant to this Agreement and
shall otherwise be in substantially the form of the attached Exhibits X-0, X-0,
or A-3, as applicable.
(e) Participations. Each Lender may sell participations to one or more
--------------
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including,
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without limitation, all or a portion of its Commitments, the Advances owing to
it, its participation interest in the Letter of Credit Obligations, and the
Notes held by it); provided, however, that (i) such Lender's obligations under
-------- -------
this Agreement (including, without limitation, its Commitments to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Notes for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent, and the Issuing
Banks and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and (v) such Lender shall not require the participant's consent to
any matter under this Agreement, except for change in the principal amount of
any Note in which the participant has an interest, reductions in fees or
interest, or extending the Maturity Date except as permitted in this Agreement.
The Borrower hereby agrees that participants shall have the same rights under
Sections 2.08, 2.09, 2.11(c), and 10.07 hereof as the Lender to the extent of
their respective participations.
(f) Confidentiality. Each Lender agrees to preserve the confidentiality of
---------------
any confidential information relating to the Parent, the Borrower and their
respective Subsidiaries received by Lender; provided that each Lender may
furnish any such confidential information in the possession of such Lender from
time to time to (i) assignees and participants (including prospective assignees
and participants), (ii) its regulators, the National Association of Insurance
Commissioners, governmental authorities and any self-governing organization to
which is a member, (iii) any direct or indirect contractual counterparty to such
Lender in swap agreements or such contractual counterparty's professional
advisor and (iv) the Related Funds, Affiliates, directors, partners, officers,
employees of such Person or its Affiliates or Related Funds; provided that,
--------
prior to any such disclosure, such Person shall agree to preserve the
confidentiality of any confidential information relating to the Borrower and its
Subsidiaries received by it from or on behalf of such Lender.
Section 10.7 Indemnification. The Borrower shall indemnify the
---------------
Administrative Agent, the Arrangers, the Syndication Agent, each Documentation
Agent, the Lenders (including any lender which was a Lender hereunder prior to
any full assignment of its Commitment), the Swingline Lender, the Issuing Banks,
and each affiliate thereof and their respective directors, officers, employees,
trustees, advisors, and agents from, and discharge, release, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from
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(i) any actual or proposed use by the Borrower or any Affiliate of the Borrower
of the proceeds of any Advance, (ii) any breach by the Borrower or any Guarantor
of any provision of this Agreement or any other Credit Document, (iii) any
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to the foregoing, or (iv) any
Environmental Claim or requirement of Environmental Laws concerning or relating
to the present or previously-owned or operated properties, or the operations or
business, of the Borrower or any of its Subsidiaries, and the Borrower shall
reimburse the Administrative Agent, the Arrangers, the Syndication Agent, each
Documentation Agent, each Issuing Bank, the Swingline Lender, and each Lender,
and each affiliate thereof and their respective directors, officers, employees
and agents, upon demand for any reasonable out-of-pocket expenses (including
legal fees) incurred in connection with any such investigation, litigation or
other proceeding; and expressly including any such losses, liabilities, claims,
damages, or expense incurred by reason of the Person being indemnified's own
negligence, but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified.
Section 10.8 Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 10.9 Survival of Representations, Indemnifications, etc. All
--------------------------------------------------
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Borrower in connection herewith shall survive the execution
and delivery of this Agreement and the Credit Documents, the making of the
Advances and any investigation made by or on behalf of the Lenders, none of
which investigations shall diminish any Lender's right to rely on such
representations and warranties. All obligations of the Borrower provided for in
Sections 2.08, 2.09, 2.11(c), 9.05 and 10.07 shall survive any termination of
this Agreement and repayment in full of the Obligations.
Section 10.10 Severability. In case one or more provisions of this
------------
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
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Section 10.11 Florida Liens. The Lenders and the Administrative Agent
-------------
agree that the Administrative Agent will release the Florida Liens or deposit
releases of the Florida Liens with any Person designated by the Borrower within
5 Business Days of written request by the Borrower which the Borrower can make
in its sole and absolute discretion. In addition, if no Default then exists, the
Lenders and the Administrative Agent agree to cooperate with the Borrower in
connection with a written request by the Borrower to assign all or a portion of
the Florida Liens to another Person. Without limitation of the foregoing, (a)
the Lenders and the Administrative Agent agree to sell without recourse a
portion of the Revolving Notes to the Person directed by the Borrower in
connection with such an assignment, (b) the Lenders and the Administrative Agent
agree to temporarily reduce the Lenders' respective Revolving Commitments Pro
Rata by the portion of the Revolving Notes sold, (c) the Lenders, the
Administrative Agent and the Borrower agree to cause the portion of the
Revolving Notes sold to be converted into term notes which are independent of
this Credit Agreement, (d) the Lenders, the Administrative Agent and the
Borrower agree to immediately thereafter cause the Lenders' respective Revolving
Commitments to be increased to the amounts which existed prior to such
assignment, and (e) the Lenders, the Administrative Agent and the Borrower agree
to execute such documents as are necessary or desirable to accomplish the
foregoing, all in form and substance reasonably acceptable to the Administrative
Agent and the Borrower.
Section 10.12 Release of Guarantors. The Borrower can request that the
---------------------
Administrative Agent release a Guarantor (except the Parent) from such
Guarantor's obligations under the Guaranty, the Environmental Indemnity, and the
Pledge Agreement and release all interests in the Guarantor that are pledged to
the Administrative Agent pursuant to the Pledge Agreement, and the
Administrative Agent shall execute such releases if (a) such Guarantor is going
to incur Indebtedness permitted pursuant to the provisions of Section 6.02(b) of
this Agreement and such Indebtedness is to be secured by substantially all of
the assets of such Guarantor, (b) the Borrower provides the Administrative Agent
with 5 days prior written notice of the Borrower's request for such releases,
together with evidence reasonably satisfactory to the Administrative Agent that
the Borrower will be in compliance with the provisions of Section 6.02 of this
Agreement following the incurrence of such Indebtedness by such Guarantor, and
(c) no monetary Default or Event of Default exists under the Credit Documents
and no Default or Event of Default would occur in connection with such release
or the incurrence of such Indebtedness by such Guarantor.
Section 10.13 Supplemental Guaranties. The Borrower has requested and the
-----------------------
Lenders have agreed that any partner of the Borrower or any partner of any
Subsidiary of the Borrower
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except the Parent or any Guarantor may execute a Supplemental Guaranty. However,
the execution of or release of any Supplemental Guaranty shall not be construed
as a release or modification of any obligation of a Guarantor under a Guaranty
or Environmental Indemnity.
Section 10.14 Usury Not Intended. It is the intent of the Borrower and
------------------
each Lender in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Lender
including such applicable laws of the State of New York and the United States of
America from time to time in effect. In furtherance thereof, the Lenders and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Lender receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrower). In the event that the maturity of the Notes is accelerated by
reason of any election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
applicable Notes (or, if the applicable Notes shall have been paid in full,
refunded to the Borrower). In determining whether or not the interest paid or
payable under any specific contingencies exceeds the Maximum Rate, the Borrower
and the Lenders shall to the maximum extent permitted under applicable law
amortize, prorate, allocate and spread in equal parts during the period of the
full stated term of the Notes all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations. The provisions of this Section shall control
over all other provisions of this Agreement or the other Credit Documents which
may be in apparent conflict herewith.
Section 10.15 GOVERNING LAW. THIS AGREEMENT AND THE OTHER
-------------
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CREDIT DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED, AND ANY DISPUTE
BETWEEN THE BORROWER, ANY AGENT, ANY LENDER, OR ANY INDEMNITEE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK; PROVIDED THAT THE
PERFECTION OF THE LIENS OF THE ADMINISTRATIVE AGENT ON THE COLLATERAL AND THE
EXERCISE OF REMEDIES AGAINST THE COLLATERAL SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE APPLICABLE JURISDICTION.
SECTION 10.16 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
-------------------------------------------------------
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
---------------------- --------------
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
--------------
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT ANY AGENT, ANY LENDER
-------------------
OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER THE
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BORROWER OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH
PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS
IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
--------------
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
------------------
PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS,
PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY
ANY AGENT OR THE LENDERS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE
DEEMED TO LIMIT THE ABILITY OF ANY AGENT OR THE LENDERS TO SERVE ANY SUCH WRITS,
PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE
BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
----- ---
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
----------
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY
JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
--------------------
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY
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COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
--------------
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
-----------------
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 10.16, WITH ITS COUNSEL.
-------------
Section 10.17 Lender Interest Rate Agreements. As more fully set forth in
-------------------------------
the Guaranty and the Pledge Agreement, if any Lender enters into an Interest
Rate Agreement with the Borrower or the Parent, the obligations of such Person
to such Lender under such Interest Rate Agreement shall (a) be pari passu with
the Obligations and (b) be secured by the Collateral pursuant to the Pledge
Agreement.
Section 10.18 Knowledge of Borrower. For purposes of this Agreement,
---------------------
"knowledge of the Borrower" means the actual knowledge of any of the executive
officers and all other Responsible Officers of the Parent.
Section 10.19 Lenders Not in Control. None of the covenants or other
----------------------
provisions contained in the Credit Documents shall or shall be deemed to, give
the Lenders the rights or power to exercise control over the affairs and/or
management of the Borrower, any of its Subsidiaries or any Guarantor, the power
of the Lenders being limited to the right to exercise the remedies provided in
the Credit Documents; provided, however, that if any Lender becomes the owner of
any stock, or other equity interest in, any Person whether through foreclosure
or otherwise, such Lender shall be entitled (subject to requirements of law) to
exercise such legal rights as it may have by being owner of such stock, or other
equity interest in, such Person.
Section 10.20 Headings Descriptive. The headings of the several Sections
--------------------
and paragraphs of the Agreement are inserted for convenience only and shall not
in any way affect the meaning
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or construction of any provision of this Agreement.
Section 10.21 Time is of the Essence. Time is of the essence under the
----------------------
Credit Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE OF SECOND AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT]
EXECUTED as of the date first referenced above.
BORROWER:
--------
MERISTAR HOSPITALITY OPERATING
PARTNERSHIP, L.P.
By: MeriStar Hospitality Corporation, its
general partner
By:___________________________________
Name:_________________________________
Title:________________________________
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[SIGNATURE PAGE OF SECOND AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT]
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Arranger and Administrative
Agent
________________________________________________
By:_____________________________________________
Title:__________________________________________
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[SIGNATURE PAGE OF SECOND AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT]
BANKERS TRUST COMPANY, individually and as
Arranger and Syndication Agent
_____________________________________________
By:__________________________________________
Title:_______________________________________
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[SIGNATURE PAGE OF SECOND AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT]
XXXXXX COMMERCIAL PAPER INC.,
individually and as Arranger and Documentation
Agent
_____________________________________________
By:__________________________________________
Title:_______________________________________
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[SIGNATURE PAGE OF SECOND AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT]
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
individually and as Documentation Agent
_____________________________________________
By:__________________________________________
Title:_______________________________________
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