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EXHIBIT 10.14
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FOURTH AMENDED AND RESTATED
REVOLVING CREDIT
AGREEMENT
DATED AS OF JANUARY 7, 2000
AMONG
RFS PARTNERSHIP, L.P.,
AS BORROWER,
RFS HOTEL INVESTORS, INC.,
AS GUARANTOR,
BANC OF AMERICA SECURITIES LLC,
AS LEAD ARRANGER,
BANK OF AMERICA, N.A.,
AS AGENT AND LENDER, AND
THE SEVERAL OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 3
ARTICLE II - THE CREDIT 22
2.1 Assignment and Assumption; Conversion; Commitment Increase. 22
2.2 Final Principal Payment. 24
2.3 Ratable Loans. 24
2.4 Collateral. 24
2.5 Unused Credit Fee. 25
2.6 Commitment Fee; Other Fees. 25
2.7 Minimum Amount of Each Advance. 26
2.8 Optional Principal Payments. 26
2.9 Manner of Borrowing and Method of Selecting Types and
Interest Periods for New Advances; Borrowing Base;
Lender Obligations. 26
2.10 Conversion and Continuation of Outstanding Advances. 27
2.11 Changes in Interest Rate, Etc. 28
2.12 Rates Applicable After Default; Late Fee. 30
2.13 Method of Payment. 30
2.14 Increase in Aggregate Commitment. 31
2.15 Notes; Telephonic Notices. 31
2.16 Interest Payment Dates; Interest and Fee Basis. 32
2.17 Notification of Advances, Interest Rates and Prepayments. 32
2.18 Lending Installations. 32
2.19 Non-Receipt of Funds By the Agent. 32
2.20 Withholding Tax Exemption. 33
2.21 Voluntary Reduction of Aggregate Commitment Amount. 33
2.22 Usury. 34
2.23 Application of Moneys Received by the Agent. 34
ARTICLE III - THE LETTER OF CREDIT SUBFACILITY 35
3.1 Obligation to Issue. 35
3.2 Types and Amounts. 35
3.3 Conditions. 36
3.4 Procedure for Issuance of Facility Letters of Credit. 36
3.5 Reimbursement Obligations, Duties of Issuing Bank. 38
3.6 Participation. 39
3.7 Payment of Reimbursement Obligations. 40
3.8 Compensation for Facility Letters of Credit. 41
3.9 Letter of Credit Collateral Account. 42
ARTICLE IV - CHANGE IN CIRCUMSTANCES 42
4.1 Yield Protection. 42
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4.2 Changes in Capital Adequacy Regulations. 43
4.3 Funding Indemnification. 43
4.4 Lender Statements, Survival of Indemnity. 43
4.5 Limitation on the Borrower's Liability. 44
ARTICLE V - CONDITIONS PRECEDENT 44
5.1 Conditions to Closing. 44
5.2 Conditions to Each Advance, Issuance of Facility Letter of
Credit and Continuation/Conversion. 45
5.3 Conditions to Secured Collateral Pool. 46
5.4 Conditions to Negative Collateral Pool. 51
ARTICLE VI - REPRESENTATIONS AND WARRANTIES 54
6.1 Existence. 54
6.2 Authorization and Validity. 54
6.3 No Conflict; Government Consent. 54
6.4 Financial Statements; Material Adverse Change. 55
6.5 Taxes. 55
6.6 Litigation and Contingent Obligations. 55
6.7 Subsidiaries. 55
6.8 ERISA. 56
6.9 Accuracy of Information. 56
6.10 Regulation U. 57
6.11 Material Agreements. 57
6.12 Compliance With Laws. 57
6.13 Ownership of Collateral Pool Properties. 57
6.14 Investment Company Act. 57
6.15 Public Utility Holding Company Act. 57
6.16 Solvency. 57
6.17 Insurance. 58
6.18 NYSE and REIT Status. 59
6.19 Environmental Matters. 59
6.20 Licenses, Etc. 60
6.21 Judgments. 60
6.22 Lessee; Property Manager. 61
6.23 Updated Schedules. 61
6.24 Collateral Pool Properties. 61
ARTICLE VII - COVENANTS 63
7.1 Financial Reporting. 63
7.2 Use of Proceeds. 66
7.3 Notice of Default. 66
7.4 Conduct of Business. 66
7.5 Taxes. 67
7.6 Insurance. 67
7.7 Compliance with Laws. 67
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7.8 Maintenance of Collateral Pool Properties. 67
7.9 Inspection. 68
7.10 Maintenance of Status. 68
7.11 Distributions. 68
7.12 Merger; Sale of Assets. 69
7.13 Release of Mortgages or Negative Pledge Agreements. 69
7.14 Liens. 69
7.15 Affiliates. 70
7.16 Interest Rate Hedging. 70
7.17 Consolidated Net Worth. 70
7.18 Additional Financial Covenants. 71
7.19 Environmental Matters. 72
7.20 Negative Pledge Agreements. 76
7.21 Manager. 77
7.22 Acceleration Notice. 77
7.23 Additional Covenants. 77
7.24 Calculation of Financial Covenants Upon Property Breaches. 77
7.25 Leases. 77
7.26 Franchises. 77
ARTICLE VIII - DEFAULTS 77
ARTICLE IX - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 80
9.1 Acceleration. 80
9.2 Amendments, Waivers, Decisions. 81
9.3 Preservation of Rights. 82
ARTICLE X - GENERAL PROVISIONS 82
10.1 Survival of Representations. 82
10.2 Governmental Regulation. 82
10.3 Taxes. 82
10.4 Headings. 83
10.5 Entire Agreement. 83
10.6 Several Obligations; Benefits of This Agreement. 83
10.7 Expenses; Indemnification. 83
10.8 Numbers of Documents. 84
10.9 Accounting. 84
10.10 Severability of Provisions. 84
10.11 Nonliability of Lenders, Arranger, Agent. 84
10.12 Publicity. 84
10.13 Brokers. 84
10.14 Confidentiality. 84
10.15 Appraisals. 85
10.16 CHOICE OF LAW. 85
10.17 CONSENT TO JURISDICTION. 85
10.18 WAIVER OF JURY TRIAL. 85
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10.19 MANDATORY ARBITRATION. 85
10.20 Year 2000 Problem. 87
ARTICLE XI - THE AGENT AND AGREEMENTS AMONG LENDERS 87
11.1 Appointment. 87
11.2 Powers. 87
11.3 General Immunity. 87
11.4 No Responsibility for Loans, Recitals, Etc. 88
11.5 Action on Instructions of Lenders. 88
11.6 Employment of Agents and Counsel. 88
11.7 Reliance on Documents, Counsel. 88
11.8 Agent's Reimbursement and Indemnification. 88
11.9 Rights as a Lender. 89
11.10 Lender Credit Decision; Non-Reliance on Agents
and Other Lenders. 89
11.11 Resignation of Agent; Removal of Agent; Successor Agent. 90
11.12 Notice of Defaults. 90
11.13 Requests for Approval. 91
11.14 Copies of Documents. 91
11.15 Defaulting Lenders. 91
ARTICLE XII - RATABLE PAYMENTS 92
ARTICLE XIII - BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS 92
13.1 Successors and Assigns. 92
13.2 Participations. 93
13.3 Assignments. 93
13.4 Dissemination of Information. 94
13.5 Tax Treatment. 95
13.6 Possession of Loan Documents and Register. 95
ARTICLE XIV - NOTICES 95
14.1 Giving Notice. 95
14.2 Change of Address. 95
14.3 Accounts. 95
ARTICLE XV - COUNTERPARTS 96
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EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Opinion
Exhibit C Form of Compliance Certificate
Exhibit D Assignment Agreement
Exhibit E Loan/Credit Related Money Transfer Instruction
Exhibit F Minimum Specifications for Environmental Investigations
Exhibit G Secured Collateral Pool
Exhibit H Negative Collateral Pool
Exhibit I-1 Borrowing Notice
Exhibit I-2 Conversion/Continuation Notice
Exhibit I-3 Letter of Credit Request
Exhibit J Commitment Amounts and Percentages
SCHEDULES
Schedule 1 Subsidiaries and Investment Affiliates
Schedule 2 Indebtedness and Liens
Schedule 3 Plans and Multiemployer Plans
Schedule 4 Environmental Disclosures
Schedule 5 Noncompliance with Laws
Schedule 6 Litigation and Investigations
Schedule 7 Contingent Obligations
Schedule 8 Indebtedness Defaults
Schedule 9 Lessees and Managers other than RFS, Inc.
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FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Fourth Amended and Restated Revolving Credit Agreement, dated as
of January 7, 2000 is among RFS PARTNERSHIP, L.P., a Tennessee limited
partnership (the "Borrower"), RFS HOTEL INVESTORS, INC., a Tennessee corporation
(the "Guarantor"), the several banks, financial institutions and other entities
from time to time parties to this Agreement (collectively, the "Lenders"), and
BANK OF AMERICA, N.A., a national banking association, (the "Agent").
RECITALS
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning, operating, leasing, managing, financing and selling Hotel
Properties (as defined herein).
B. The Guarantor is the sole general partner of the Borrower and the
Guarantor is qualified as a real estate investment trust with its common stock
listed on the New York Stock Exchange.
C. Boatmen's Bank of Tennessee ("BBOT") has heretofore made loans
available to the Guarantor, formerly as borrower, in the maximum aggregate
principal amount of $75,000,000 (hereinafter as modified and/or increased called
the "Facility"), as set forth in that certain First Amended Revolving Credit and
Term Loan Agreement dated as of February 20, 1996, as modified by that certain
First Modification of First Amended Revolving Credit and Term Loan Agreement and
of Related Documents dated as of May 19, 1996 (collectively the "BBOT Loan
Agreement").
D. BBOT has heretofore transferred undivided participation interests in
the Facility (the "Participations") to SouthTrust Bank of Georgia, N.A., First
Tennessee Bank National Association, and First National Bank of Commerce, New
Orleans (collectively the "Participating Lenders"), pursuant to the terms of
that certain First Amended Participation Agreement dated as of May 29, 1996 (the
"Participation Agreement").
E. By Amended and Restated Revolving Credit and Term Loan Agreement
dated as of July 30, 1997 (the "Restated Loan Agreement"), the Borrower became
the borrower and assumed the obligations of the Guarantor, formerly as the
borrower, relating to the Facility set forth in the BBOT Loan Agreement, the
Participations were converted into a single direct multiple-lender line of
credit, and the Facility was increased to the maximum aggregate principal amount
of $175,000,000.
F. In connection with the Restated Loan Agreement, BBOT assigned all of
its right, title and interest in and to the Facility, the BBOT Loan Agreement,
the Participation Agreement and the other Loan Documents (as herein defined) to
NationsBank which then, together with the Participating Lenders, terminated the
Participation Agreement and assigned to the Participating Lenders an undivided
interest in and to the Facility. NationsBank also placed of record in each
jurisdiction where a Mortgage was already of record an assignment, modification
and assumption agreement, assigning its rights therein to the Agent as agent for
the Lenders, modifying such
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Mortgage to reflect the increase in the Facility and extension of the Facility
Termination Date, and reflecting the assumption of the Obligations by the
Borrower, and including certain other matters.
G. Contemporaneously with the termination of the Participation
Agreement, NationsBank and the Participating Lenders assigned to the remaining
Lenders such portions of the Commitment existing under the BBOT Loan Agreement
as were necessary to properly distribute to all Lenders their proper pro rata
shares of the Commitment existing under the BBOT Loan Agreement, followed
contemporaneously by an increase in the Facility and Commitment as set forth in
the Restated Loan Agreement and the appointment of NationsBank as the Agent for
the Lenders pursuant to the terms thereof. NationsBanc Capital Markets, Inc.
("NCMI"), subsequently known as NationsBanc Xxxxxxxxxx Securities LLC ("NMS")
and now known as Banc of America Securities, LLC ("BAS"), arranged the increase
in the Facility requested by the Borrower and the Guarantor from $75,000,000 to
$175,000,000, and NCMI and NationsBank coordinated the closing of such increase.
H. By Second Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of October 1, 1997, made and entered into by and among the
Borrower, the Guarantor, the Lenders party thereto and the Agent (the "Second
Restated Loan Agreement"), the parties modified the Restated Loan Agreement to
adjust the interest rate options therein, to add certain additional financial
covenants and delete or modify certain existing financial covenants, and to
include certain other modifications.
I. By First Amendment to Second Amended and Restated Revolving Credit
and Term Loan Agreement dated as of June 4, 1998, made and entered into by and
among the Borrower, the Guarantor, the Lenders party thereto and the Agent (the
"First Amendment to Second Restated Loan Agreement"), the parties modified the
Second Restated Loan Agreement to increase the Facility to the maximum aggregate
principal amount of $190,000,000, to modify certain existing financial
covenants, and to include certain other modifications, all to be effective from
the date thereof through and including December 31, 1998.
J. By Second Amendment to Second Amended and Restated Revolving Credit
and Term Loan Agreement dated as of June 30, 1998, made and entered into by and
among the Borrower, the Guarantor, the Lenders party thereto and the Agent (the
"Second Amendment to Second Restated Loan Agreement"; the Second Restated Loan
Agreement, as modified by the First Amendment to Second Restated Loan Agreement
and the Second Amendment to Second Restated Loan Agreement, being hereinafter
referred to as the "Amended Second Restated Loan Agreement"), the parties
modified and added certain definitions.
K. By letter dated November 6, 1998 (the "Waiver Letter"), Agent, on
behalf of the Required Lenders, waived any defaults arising due to breaches of
Section 7.18(d) of the Amended Second Restated Loan Agreement through December
31, 1998.
L. By Third Amended and Restated Revolving Credit Agreement, dated as
of December 22, 1998, made and entered into by and among the Borrower, the
Guarantor, the Lenders party thereto and the Agent (the "Third Restated Loan
Agreement"), the parties modified the
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Amended Second Restated Loan Agreement to decrease the Facility to the maximum
aggregate principal amount of $100,000,000 in exchange for the release of
certain Collateral Pool Property, to modify certain existing financial
covenants, and to include certain other modifications.
M. By First Amendment to Third Amended and Restated Revolving Credit
Agreement dated as of June 30, 1998, made and entered into by and among the
Borrower, the Guarantor, the Lenders party thereto and the Agent (the "First
Amendment to Third Restated Loan Agreement"; the Third Restated Loan Agreement,
as modified by the First Amendment to Third Restated Loan Agreement, being
hereinafter referred to as the "Amended Third Restated Loan Agreement"), the
parties modified certain provisions.
N. The Borrower has asked that the Amended Third Restated Loan
Agreement be further modified to increase the Facility to the aggregate
principal amount of $130,000,000.00, to permit the possible future increase in
the Facility to $140,000,000 and to modify certain existing financial covenants.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Adjusted Cash Flow" means the lesser of (i) lease payments for the
trailing twelve (12) months less real estate taxes for the latest available
year, property insurance and the Capital Expenditure Reserve Amount or (ii)
Property Operating Income (as defined herein, but before deducting real estate
taxes, insurance, any capital expenditures and any management fee) for the
trailing twelve (12) months less real estate taxes for the latest available
year, property insurance, the Capital Expenditure Reserve Amount and a
management fee equal to four percent (4%) of trailing twelve (12) month gross
room revenues.
"Adjusted EBITDA" means EBITDA less the Capital Expenditure Reserve
Amount. Wherever in this Agreement such term is used (except in Section
7.18(c)), it is understood that for any Completed Development Hotel or any Hotel
Property owned by the Borrower for less than twelve (12) months, historical
EBITDA for the period of the Borrower's ownership will be used to calculate
Adjusted EBITDA, unless the Borrower requests in writing at least fifteen (15)
Business Days prior to the date such calculation is to be made that the Borrower
prefers to use projected EBITDA for such Hotel Property. Approval of such a
request will be at the Agent's sole discretion.
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"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower or a Qualified
Borrower of the same Type and, in the case of LIBOR Advances, for the same
Interest Period, including Reimbursement Obligations.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank of America, N.A. in its capacity as agent for the
Lenders pursuant to Article XI, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article XI.
"Aggregate Commitment", or "Aggregate Commitment Amount" means the
aggregate of (i) the Commitments of all the Lenders, which initially shall be
$130,000,000, plus (ii) the aggregate amount of all Increased Commitments
effected pursuant to Section 2.14 hereof; which aggregate amount is subject to
the Borrower's right to reduce the Aggregate Commitment pursuant to Section 2.21
and which aggregate amount shall otherwise only be increased with the consent of
all Lenders.
"Agreement" means this Fourth Amended and Restated Revolving Credit
Agreement, as it may be amended or modified and in effect from time to time.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances and the then existing Facility Letter of Credit
Obligations.
"Amended Second Restated Loan Agreement" is defined in the recitals to
this Agreement.
"Amended Third Restated Loan Agreement" is defined in the recitals to
this Agreement.
"Applicable Advance Rate" means the applicable percentage (as it may
change from time to time upon the agreement of the Borrower and the Lenders) of
either Cost or Implied Value used to calculate the Borrowing Base which for
Hotel Properties in the Secured Collateral Pool is 50%, and for Hotel Properties
in the Negative Collateral Pool is 40%.
"Applicable Cap Rate" means 11.5% initially, may be reviewed from time
to time by the Lenders and shall be subject to adjustment by the Required
Lenders in their sole discretion based upon market conditions for comparable
property types upon thirty (30) days' written notice to Borrower. In no event
shall the Applicable Cap Rate be adjusted more than one (1) time in any trailing
twelve (12) month rolling period.
"Applicable Laws" is defined in Section 6.24(c).
"Arranger" means BAS.
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"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment" is defined in Section 13.3.
"Assignments of Rents and Leases" means the assigning of all rents,
leases, issues and profits from Hotel Properties in the Secured Collateral Pool
as part of the Collateral for the Obligations including, without limitation, the
Leases.
"Authorized Officer" means with respect to any Person, any of the
president, executive vice president, chief operating officer, chief financial
officer or treasurer, general partner, or chief manager acting singly on behalf
of such Person, who has been duly authorized to execute any document and to act
on behalf of such Person.
"BAS" means Banc of America Securities LLC, formerly known as
NationsBanc Xxxxxxxxxx Securities LLC.
"BBOT" means Boatmen's Bank of Tennessee.
"BBOT Loan Agreement" means that certain First Amended Revolving Credit
and Term Loan Agreement dated as of February 20, 1996, as modified by that
certain First Modification of First Amended Revolving Credit and Term Loan
Agreement and of Related Documents dated as of May 19, 1996, all entered into by
and between BBOT, the Borrower, and the Guarantor.
"BBOT Note" means that certain Replacement Master Revolving Line of
Credit Promissory Note dated May 29, 1996 in the principal amount of $75,000,000
evidencing the Facility prior to the date hereof, and which BBOT Note was
replaced by the Notes, as hereinafter defined.
"Bank of America" means Bank of America, N.A., in its individual
capacity, and its successors.
"Borrower" means RFS Partnership, L.P., and its successors and
permitted assigns.
"Borrowing Base" means the amount of the Aggregate Commitment available
to the Borrower hereunder, which amount is the sum of (a) for each Collateral
Pool Property owned or open for less than four (4) fiscal quarters, the
Applicable Advance Rate times the Cost, plus (b) for each Collateral Pool
Property owned or open for four (4) fiscal quarters or more, the Applicable
Advance Rate times the Implied Value of the Collateral Pool Property. However,
the aggregate Borrowing Base attributable to Completed Development Hotels in the
Secured Collateral Pool cannot exceed 15%. Further, the aggregate Borrowing Base
attributable to Completed Development Hotels in the Negative Collateral Pool
cannot exceed 15% of the aggregate Borrowing Base attributable to all Negative
Collateral Pool properties.
"Borrowing Date" means a date on which an Advance is made hereunder.
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"Borrowing Notice" is defined in Section 2.9.
"Break-up Fee" means a sum equal to the aggregate of any loss, cost,
liability or expense incurred by the Lenders, or any of them, as a result of the
prepayment of the Obligations, or portion thereof, whether due to acceleration
or in due course in connection with conversions to or from a LIBOR Loan
including, without limitation, any loss in obtaining, liquidating or employing
funds from third parties, and any loss of yield, as determined by any Lender, on
a present value basis, in its judgment reasonably exercised; but the Break-up
Fee shall in no event be less than zero.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Dallas, Texas for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Dallas, Texas for the conduct of substantially all of their commercial
lending activities.
"Capital Expenditure Reserve Amount" means, for any period, 4% of the
trailing twelve (12) month gross revenues.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalents" means, as of any date, (i) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than one year
from such date, (ii) time deposits and certificates of deposit having maturities
of not more than one year from such date and issued by any domestic commercial
bank having (A) senior long-term unsecured debt rated at least A or the
equivalent thereof by S&P or A2 or the equivalent thereof by Moody's and (B)
capital and surplus in excess of $100,000,000, (iii) commercial paper rated at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by
Moody's and in either case maturing within 120 days from such date; and (iv)
shares of any money market mutual fund rated at least AAA or the equivalent
thereof by S&P or at least AAA or the equivalent thereof by Moody's.
"Change" is defined in Section 4.2.
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"Closing Date" means January 7, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all property of every type and kind which now or
hereafter secures the Obligations, including, without limitation, the Hotel
Properties in the Secured and Negative Collateral Pools, the Leases and the
Consolidated Lease (including all rents, leases, issues and profits resulting
therefrom or relating thereto), the Letter of Credit Collateral Account, and all
real and personal property described in the Security Documents.
"Collateral Pool" means all Hotel Properties included in the Secured
Collateral Pool and the Negative Collateral Pool.
"Collateral Pool Property" means any Hotel Property in the Collateral
Pool.
"Commitment" means the commitment to lend the maximum principal amount
available under the Facility and, for each Lender, the obligation of such Lender
to make Loans not exceeding the amount set forth in Exhibit J or as set forth in
any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 13.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
"Commitment Fee" means the sum so described and payable in accordance
with Section 2.6.
"Completed Development Hotels" means Hotel Properties open less than
twelve (12) months.
"Condemnation" is defined in Section 8.9.
"Consolidated Lease" means that certain Consolidated Amended Lease
Agreement dated as of February 27, 1996, by and between the Borrower, as lessor,
and RFS, Inc., as lessee, as the same may have been, or may hereafter be,
modified, amended or restated.
"Consolidated Lease Estoppel" means that certain Consolidated Lease
Estoppel, Subordination, Attornment and Non-Disturbance Agreement dated February
26, 1996, entered into by and between the Borrower, the Guarantor, RFS, Inc.,
and BBOT.
"Consolidated Net Worth" means, as of any date of determination, an
amount equal to (a) Total Assets as of such date minus (b) Total Liabilities as
of such date minus (c) GAAP minority interest as of such date (not including
minority interests attributable to operating partnerships).
"Consolidated Total Indebtedness" means, as of any date of
determination, all Indebtedness of the Borrower, the Guarantor, any Qualified
Borrowers and any of their Subsidiaries, determined
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on a consolidated basis, such consolidation to be in accordance with GAAP, after
eliminating intercompany items.
"Controlled Group" means all members of a controlled group of
corporations, partnerships (including joint ventures), limited liability
companies and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, the Guarantor, Qualified
Borrowers, or any of their Subsidiaries are treated as a single employer under
Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Cost" means for any Hotel Property the purchase price of such Hotel
Property plus the cost of any capital improvements performed by the Borrower
which the Agent has agreed to accept as part of the Cost of such Hotel Property.
For purposes of the Collateral Pool Properties existing as of the Closing Date,
"Cost" shall mean the amount set forth beside each Hotel Property listed on
Exhibits G or H attached hereto.
"Debt Service" means, for any trailing twelve (12) month period, (a)
Interest Expense for such period plus (b) the aggregate amount of regularly
scheduled principal payments of Indebtedness (excluding balloon payments)
required to be made during such period by the Borrower, the Guarantor, any
Qualified Borrower or any of their Subsidiaries plus (c) a percentage of all
such regularly scheduled principal payments required to be made during such
period by any Investment Affiliate on Indebtedness taken into account in
calculating Interest Expense, equal to the greater of (x) the percentage of the
principal amount of such Indebtedness for which the Borrower, the Guarantor, or
any Qualified Borrower, or any Subsidiary is liable and (y) the percentage
ownership interest in such Investment Affiliate held by the Borrower, the
Guarantor and any Subsidiaries, in the aggregate, without duplication.
"Default" means an event of default described in Article VIII.
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of 5 Business Days after written
notice from the Agent; provided that if such Lender cures such failure or
refusal, such Lender shall cease to be a Defaulting Lender.
"Distribution" means, with respect to Guarantor: the declaration or
payment of any dividend or distribution on or in respect of any shares of any
class of Capital Stock or beneficial interest in Guarantor, other than dividends
or distributions payable solely in equity securities of Guarantor; the purchase,
redemption, exchange or other retirement of any shares of any class of Capital
Stock or beneficial interest of Guarantor, directly or indirectly through a
Subsidiary of Guarantor or otherwise; the return of capital by Guarantor to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of Capital Stock or beneficial interest of Guarantor. With respect
to the Borrower, Distribution means the declaration or payment of any
distribution of cash
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or cash flow to the partners of the Borrower, the return of capital by the
Borrower to its partners, or any other distribution on or in respect of any
partnership interests in the Borrower.
"EBITDA" means income before extraordinary items (but after the impact
of minority interests and reduced to eliminate any income from Investment
Affiliates), as reported by the Borrower, the Guarantor and their Subsidiaries
on a trailing twelve (12) month consolidated basis in accordance with GAAP, plus
Interest Expense, depreciation, amortization and income tax (if any) expense
plus a percentage of such income (adjusted as described above) of any Investment
Affiliate equal to the allocable economic interest in such Investment Affiliate
held by the Borrower, the Guarantor and any Subsidiaries, in the aggregate
(provided that no item of income or expense shall be included more than once in
such calculation even if it falls within more than one of the foregoing
categories). The policies and procedures prescribed by SAB 101 will be utilized
in the calculation of EBITDA.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) a financial institution or other entity that is an "accredited investor" (as
defined in Rule 501 under the Securities Act of 1933, as amended) having (i)
total assets of at least $10,000,000,000, (ii) a long-term unsecured debt rating
of at least Baa1 by Moody's and BBB+ by Standard & Poor's and (iii) an office in
the United States; or (d) any other Person approved by the Agent.
"Environmental Claim" means any investigative, enforcement, cleanup,
removal, containment, remedial or other private or governmental or regulatory
action at any time threatened, instituted or completed pursuant to any
applicable Environmental Requirement, against the Borrower, the Guarantor, any
Qualified Borrower or any Subsidiary, or against or with respect to any Hotel
Properties or any condition, use or activity on any of the Hotel Properties
(including any such action against the Agent or the Lenders), and any claim at
any time threatened or made by any person against the Borrower, the Guarantor,
any Qualified Borrower or any Subsidiary, or against or with respect to any of
the Hotel Properties or any condition, use or activity on any of the Hotel
Properties (including any such claim against Agent or the Lenders), relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or in any way arising in connection with any Hazardous Material or any
Environmental Requirement.
"Environmental Law" means any federal, state or local law, statute,
ordinance, code, rule, regulation, license, authorization, decision, order,
injunction, decree, or rule of common law, and any judicial interpretation of
any of the foregoing, which pertains to health, safety, any Hazardous Material,
or the environment (including but not limited to ground or air or water or noise
pollution or contamination, and underground or above ground tanks) and shall
include without limitation, the Solid Waste Disposal Act, 42 U.S.C. '6901 et
seq.; the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. '9601 et seq. ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"); the Hazardous Materials
Transportation Act, 49 U.S.C. '1801 et seq.; the Federal Water Pollution
Control Act, 33 U.S.C. '1251 et seq.; the Clean Air Act, 42 U.S.C. '7401 et
seq.; the Toxic Substances Control Act, 15 U.S.C. '2601 et seq.; the Safe
Drinking Water Act, 42 U.S.C. '300f et seq.; any applicable state air quality
Act; any applicable state underground storage tank act; any applicable Water
Quality Control Act; any applicable Comprehensive Solid Waste Management Act;
any applicable Oil or Hazardous
9
16
Material Spill or Release Act; any applicable Hazardous Waste Management Act;
any applicable Hazardous Site Response Act, and any other state or federal
environmental statutes, and all rules, regulations, orders and decrees now or
hereafter promulgated under any of the foregoing, as any of the foregoing now
exist or may be changed or amended or come into effect in the future.
"Environmental Requirement" means any Environmental Law, agreement or
restriction (including but not limited to any condition or requirement imposed
by any insurance or surety company), as the same now exists or may be changed or
amended or come into effect in the future, which pertains to health, safety, any
Hazardous Material, or the environment, including but not limited to ground or
air or water or noise pollution or contamination, and underground or aboveground
tanks.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Facility" is defined in Recital C.
"Facility Letter of Credit" means a Letter of Credit issued hereunder.
"Facility Letter of Credit Fee" is defined in Section 3.8 (a).
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, without
duplication, of the Borrower, the Guarantor or any Qualified Borrower with
respect to Facility Letters of Credit, including the aggregate undrawn
face-amount of the then outstanding Facility Letters of Credit, but not
including Reimbursement Obligations.
"Facility Termination Date" means July 30, 2003, or such earlier date
on which the principal balance of the Facility and all other sums due in
connection with the Facility shall be due as a result of the acceleration of the
Facility.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Dallas,
Texas Time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" means that certain letter of even date with this Agreement
from Agent and Arranger to Borrower which sets forth the agreement with respect
to certain fees payable to Agent and Arranger.
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17
"First Amendment to Second Restated Loan Agreement" is defined in the
recitals to this Agreement.
"First Amendment to Third Restated Loan Agreement" is defined in the
recitals to this Agreement.
"Funds Available for Distribution" or "FAD" means, with respect to the
Borrower, the Guarantor and their respective Subsidiaries for any fiscal period,
an amount equal to Funds From Operations plus non-real estate depreciation and
the amortization of deferred financing costs for such period less (a) the
Capital Expenditure Reserve Amount for such Person for such period, and (b) the
aggregate amount of scheduled principal payments on the Consolidated Total
Indebtedness of such Person (excluding optional prepayments and scheduled
principal payments in respect of any such Indebtedness which is payable in a
single installment at final maturity) required to be made during such period.
"Funds From Operations" or "FFO" means, as to any period, an amount
equal to (a) income (loss) from operations of the Borrower, the Guarantor and
their respective Subsidiaries for such period, excluding gain (loss) from debt
restructuring and sale of Hotel Properties, plus (b) depreciation and
amortization of real estate assets, plus (minus) (c) to the extent not included
in clause (a) above, gain (loss) on the sales of outparcels made in the ordinary
course of business, and after adjustments for Investment Affiliates, determined
in each case on a combined basis in accordance with GAAP. Adjustments for
Investment Affiliates will be calculated to reflect funds from operations on the
same basis.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied in a manner consistent
with that used in preparing the financial statements referred to in Section 7.1.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any quasi-governmental agency exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any Letter of Credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter-indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2), to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase any property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
11
18
or (iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the absence of any such stated amount
or stated liability, the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower, the Guarantor or any Subsidiary in good
faith.
"Guarantor" means RFS Hotel Investors, Inc.
"Hazardous Material" means any substance, whether solid, liquid or
gaseous, which is listed, defined or regulated as a "hazardous substance",
"hazardous waste" or "solid waste", or otherwise classified as hazardous or
toxic, in or pursuant to any Environmental Requirement; or which is or contains
asbestos, radon, any polychlorinated biphenyl, urea formaldehyde foam
insulation, explosive or radioactive material, or motor fuel or other petroleum
hydrocarbons; or which causes or poses a threat to cause a contamination or
nuisance on any real property or any adjacent real property or a hazard to the
environment or to the health or safety of persons on any real property.
"Hotel Property" or "Hotel Properties" means any parcel of real
property owned by the Borrower, the Guarantor, or any Subsidiary, Investment
Affiliate, Qualified Borrower or Joint Venture, on which parcel is either
located a hotel, or on which construction of a hotel has commenced.
"Implied Debt Service" means twelve (12) times the monthly payment
required to fully amortize the Allocated Facility Amount using a constant
calculated based upon (a) a fixed rate of interest equal to an amount which is
2.25% per annum above the most recent monthly average of the daily yields on all
outstanding United States Treasury Securities adjusted to a constant maturity of
seven (7) years, as most recently published by the Federal Reserve Board in
Federal Reserve Statistical Release Document H.15(519), Selected Interest Rates,
and such rate then rounded upwards to the nearest .125% and (b) a twenty (20)
year amortization schedule; provided however, that in no event shall the
constant used for such calculation be less than nine percent (9%).
"Implied Value" means for any Hotel Property an amount arrived at based
upon that Hotel Property's Adjusted Cash Flow, divided by the Applicable Cap
Rate.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money which is outstanding
according to GAAP, (b) all obligations of such Person for the deferred purchase
price of property or services, (c) any other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar instrument, (d) all
Capitalized Lease Obligations, (e) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (f) all Guarantee
Obligations of such Person (excluding in any calculation of consolidated
indebtedness of the Borrower and the Guarantor, Guarantee Obligations of the
Borrower or the Guarantor in respect of primary obligations of any Qualified
Borrower or any
12
19
Subsidiary), (g) all reimbursement obligations of such Person for Letters of
Credit and other contingent liabilities, (h) all liabilities secured by any Lien
(other than Liens for taxes not yet due and payable) on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (i) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes receivable
sold by such Person or any of its Subsidiaries, (j) if such Person is the
Borrower or the Guarantor, such Person's pro rata share of debt in Investment
Affiliates and any loans where such Person is liable as a general partner, (k)
the greater of (i) the Borrower's, the Guarantor's and all Subsidiaries'
recourse interest in an Investment Affiliate's debt that is not consolidated
with the Borrower's, the Guarantor's or any Subsidiaries' financial statements,
or (ii) pro rata interest in all debt owed by an Investment Affiliate which is
either recourse or non-recourse to the Borrower, or the Guarantor, or any
Subsidiary, as applicable, that is not consolidated with the Borrower's, the
Guarantor's or any Subsidiaries' financial statements, (l) any pre-sale
obligations of such Person relating to the purchase of any real or personal
property, (m) Total Liabilities, (n) any amounts payable under any interest rate
protection product (to the extent permitted by the Loan Documents and without
implying consent thereto), (o) any other amounts considered debt by rating
agencies and (p) any forward equity commitments.
"Interest Expense" means all interest expense of the Borrower, the
Guarantor and any Qualified Borrower and their Subsidiaries determined in
accordance with GAAP plus (i) capitalized interest not covered by an interest
reserve from a loan facility, plus (ii) the allocable portion (based on
liability) of any accrued or paid interest incurred on any obligation for which
the Borrower, the Guarantor, any Qualified Borrower or any Subsidiary is wholly
or partially liable under repayment, interest carry, or performance guarantees,
or other relevant liabilities (excluding amoritized fees which are classified as
interest), plus (iii) the greater of (x) allocable percentage of any accrued or
paid interest incurred on any Indebtedness of any Investment Affiliate, whether
recourse or non-recourse, equal to the applicable economic interest in such
Investment Affiliate held by the Borrower, the Guarantor and any Subsidiaries,
in the aggregate, or (y) the amount of all interest expense on all recourse
Indebtedness the Borrower, the Guarantor, any Qualified Borrower, and/or their
Subsidiaries, have in any Investment Affiliate, provided that no expense shall
be included more than once in such calculation even if it falls within more than
one of the foregoing categories.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business and other than advances to, or deposits with,
contractors and suppliers in the ordinary course of business), extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or contribution of
capital by such Person to any other Person or any investment in, or purchase or
other acquisition of, the stock, partnership interests, notes, debentures or
other securities of any other Person made by such Person.
"Investment Affiliate" means any Person in which the Borrower, the
Guarantor or any Qualified Borrower, or any Subsidiary, directly or indirectly,
have an ownership interest, including, without limitation, Joint Ventures, whose
financial results are not consolidated under GAAP with their financial results
on their consolidated financial statements.
"Issuance Date" is defined in Section 3.4(a)(2).
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"Issuance Notice" is defined in Section 3.4(c).
"Issuing Bank" means, with respect to each Facility Letter of Credit,
any Lender which issues such Facility Letter of Credit. The initial Issuing Bank
shall be Bank of America.
"Joint Venture" means any joint venture partnership in which the
Borrower, the Guarantor, any Qualified Borrower or any Subsidiary is a joint
venture partner.
"Lease or Leases" means any lease or all leases of any or all of the
Collateral Pool Properties, with the Borrower as the lessor and with either RFS,
Inc., as the lessee (including, without limitation, the Consolidated Lease), or
with any other Person as the lessee approved by the Required Lenders.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement, their respective permitted successors and assigns and any
other lending institutions that subsequently become parties to this Agreement.
"Lending Installation" means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
"Lessee" means RFS, Inc., a Tennessee corporation, or any other Person
approved by the Required Lenders, now or hereafter party to any of the Leases as
the tenant or lessee thereunder.
"Letter of Credit" means a letter of credit of a Person which is issued
upon the application of such Person or upon which such Person is an account
party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
"Letter of Credit Request" is defined in Section 3.4(a).
"Leverage Ratio" means the ratio of Consolidated Total Indebtedness
divided by the Total Asset Value.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Basis.
"LIBOR Basis" means a per annum rate of interest (rounded upwards, if
necessary, to the nearest whole one-sixteenth of 1%) determined pursuant to the
following formula:
LIBOR Rate
----------------------------
LIBOR Basis = 100% - LIBOR Reserve Percentage
PLUS the number of basis points set forth beside the Leverage Ratio applicable
at any given time (as determined by Agent based upon the most recent compliance
certificate delivered to Agent in
14
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accordance with Section 7.1(e) hereof or otherwise and effective as of the date
of receipt of such certificate if such certificate is accepted by Agent) in the
following grid after adjustment for insurance costs and other appropriate
regulatory costs and adjustments (other than reserve requirements):
----------------------------------------------------------------------
LEVERAGE RATIO BASIS POINTS
----------------------------------------------------------------------
<25% 150.0
----------------------------------------------------------------------
$25% and <35% 165.0
----------------------------------------------------------------------
$35% and <40% 175.0
----------------------------------------------------------------------
$40% and <45% 200.0
$45% 225.0
----------------------------------------------------------------------
"LIBOR Interest Period" means, with respect to any LIBOR Advance, a
period from the date on which the LIBOR Basis shall become effective as to such
LIBOR Advance to thirty (30), sixty (60), ninety (90), or one hundred eighty
(180) days thereafter, subject however to the following:
(i) if any LIBOR Interest Period would otherwise end on a day which is
not a Business Day, that LIBOR Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such LIBOR Interest Period into another calendar month, in which event such
LIBOR Interest Period shall end on the immediately preceding Business Day; and
(ii) any LIBOR Interest Period which begins on the last Business Day of
a calendar month (or on a day for which there is no corresponding day in the
calendar month at the end of such LIBOR Interest Period) shall, subject to
clause (iii) below, end on the last Business Day of a calendar month; and
(iii) No LIBOR Interest Period shall extend beyond the Facility
Termination Date.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Basis.
"LIBOR Rate" means for any LIBOR Advance for any LIBOR Interest Period
therefor, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such LIBOR Interest Period for a term comparable to such LIBOR Interest
Period. If for any reason such rate is not available, the term "LIBOR Rate"
shall mean, for any LIBOR Advance for any LIBOR Interest Period therefor, the
rate per annum appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such LIBOR Interest Period for a
term comparable to such LIBOR Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
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"LIBOR Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of LIBOR Advances is determined), whether or not any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. LIBOR Advances shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to any Lender. The LIBOR Basis shall be adjusted automatically on and as of
the effective date of any change in the LIBOR Reserve Percentage.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement but excluding the leasehold interest of a lessee in a lease that is
not a Capitalized Lease).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Mortgages, the
Negative Pledge Agreements, the Fee Letter and any guaranty, reaffirmation of
guaranty, environmental indemnity agreement, or other document executed and
delivered by the Borrower, the Guarantor, any Qualified Borrower, any Investment
Affiliate, or any of their Subsidiaries, from time to time and evidencing,
securing, guaranteeing or relating to the payment or performance of the
Obligations, as any of the foregoing may be amended, modified, restated,
renewed, extended or reaffirmed from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Hotel Property, results of operations or financial condition of the
Borrower, the Guarantor, any Qualified Borrower or any of their Subsidiaries
taken as a whole or (ii) the ability of the Borrower or the Guarantor to perform
their obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the remedies or material rights
of the Agent or the Lenders thereunder.
"Maximum Amount" means the maximum nonusurious aggregate amount of all
interest permitted by such state or states whose laws are held by any court of
competent jurisdiction to govern the interest rate provisions of the Facility or
the federal laws of the United States applicable to the transaction, whichever
laws allow the greater interest, as such laws now exist or may hereafter be
changed or amended or come into effect in the future.
"Maximum Rate" means the maximum nonusurious rate of interest per annum
permitted by such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of the Facility, or the
federal laws of the United States applicable to the transaction,
16
23
whichever laws allow the greater interest, as such laws now exist or may
hereafter be changed or amended or come into effect in the future. The Maximum
Rate shall be applied by taking into account all amounts characterized by
applicable law as interest on the Obligations, so that the aggregate of all
interest does not exceed the Maximum Amount.
"Mortgage" means any deed of trust, deed to secure debt or mortgage
encumbering a Hotel Property which secures the Obligations.
"Multiemployer Plan" means a Plan to which more than one employer is
obligated to make contributions, and which is maintained pursuant to one or more
collective bargaining agreements to which the Borrower or any member of the
Controlled Group is a party.
"NMS" means NationsBanc Xxxxxxxxxx Securities LLC.
"NationsBank" means NationsBank, N.A., in its individual capacity,
and its successors.
"Bank of America Prime Rate" means, on any day, the rate of interest
per annum then most recently established by Bank of America as its "prime rate".
Any such rate is a general reference rate of interest, may not be related to any
other rate, and may not be the lowest or best rate actually charged by Bank of
America to any customer or a favored rate, and may not correspond with future
increases or decreases in interest rates charged by other lenders or market
rates in general.
"Negative Collateral Pool" means a specified group of Hotel Properties
not encumbered by Mortgages encumbering Hotel Properties that have been accepted
by the Lenders into the Collateral Pool but which the Borrower or other Person
owning any such Hotel Property has agreed not to encumber, transfer, pledge,
assign, mortgage or otherwise hypothecate in any manner.
"Negative Pledge Agreement" means a written agreement executed by the
Borrower or any other Person which owns a Hotel Property wherein the Borrower or
such Person agrees not to encumber, transfer, pledge, assign, mortgage or
otherwise hypothecate such Hotel Property in any manner.
"Non-Conforming Investments" is defined in Section 7.4.
"Note" or "Notes" means the renewal promissory note or notes, in
substantially the form of Exhibit A attached to this Agreement, duly executed by
the Borrower as of the Closing Date and payable to the order of each Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note(s).
"Notice of Assignment" is defined in Section 13.3.2.
"Obligations" means all indebtedness and obligations of the Borrower
arising under or relating to, this Agreement, the Notes, the Mortgages, as well
as under all other Loan Documents including, without limitation, all unpaid
principal of and accrued and unpaid interest on the Notes, the Facility Letter
of Credit Obligations and all accrued and unpaid fees and all expenses,
17
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reimbursements, indemnities and other obligations (including, without
limitation, Reimbursement Obligations) of the Borrower or if and to the extent
applicable, any Qualified Borrower to the Lenders or to any Lender, the Agent,
or any indemnified party hereunder arising under the Loan Documents.
"Participating Lenders" means all financial institutions named in the
Participation Agreement to whom BBOT transferred an undivided participation in
the Facility.
"Participations" means the interests of the Participating Lenders in
the Facility.
"Participation Agreement" means that certain First Amended
Participation Agreement dated as of May 29, 1996, entered into by and between
BBOT and the other Participating Lenders.
"Participants" is defined in Section 13.2.1.
"Payment Date" means, with respect to the payment of interest accrued
on any Prime Advance or any LIBOR Advance, the first Business Day of each
calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means for each Lender the percentage of the Aggregate
Commitment allocated to such Lender as set forth in Exhibit J.
"Perimeter Note" means that certain promissory note dated December 15,
1989, in the original principal amount of $6,000,000 secured by a Mortgage
encumbering a Hotel Property in Xxxxxx County, Georgia.
"Permitted Liens" are defined in Section 7.14.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust, limited liability company or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Prime Advance" means an Advance which bears interest at the Prime
Rate.
"Prime Loan" means a Loan which bears interest at the Prime Rate.
"Prime Rate" means, for any day, a rate per annum equal to the greater
of (i) the Bank of America Prime Rate for such day plus the number of basis
points set forth beside the Leverage Ratio applicable at any given time (as
determined by Agent based upon the most recent compliance certificate delivered
to Agent in accordance with Section 7.1(e) hereof or otherwise and effective as
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25
of the date of receipt of such certificate if such certificate is accepted by
Agent) in the grid set forth below, in each case changing when and as the Bank
of America Prime Rate changes, or (ii) the Federal Funds Effective Rate for such
day plus 50 basis points, in each case changing when and as the Federal Funds
Effective Rate changes:
---------------------------------------------------------------------
LEVERAGE RATIO BASIS POINTS
---------------------------------------------------------------------
<25% 0.0
---------------------------------------------------------------------
$25% and <35% 0.0
---------------------------------------------------------------------
$35% and <40% 25.0
---------------------------------------------------------------------
$40% and <45% 50.0
$45% 75.0
---------------------------------------------------------------------
"Property Breach" is defined in Section 7.24.
"Property Operating Income" means, with respect to any Hotel Property
owned by the Borrower, the Guarantor, any Qualified Borrower, any Subsidiary or
any Investment Affiliate, for any period, earnings from rental operations
(computed in accordance with GAAP but without deduction for reserves)
attributable to such Hotel Property plus depreciation, amortization and interest
expense for such period, and, if such period is less than a year, adjusted by
straight lining various ordinary operating expenses which are payable less
frequently than once during every such period (e.g. real estate taxes and
insurance).
"Purchaser" is defined in Section 13.3.l.
"Qualified Borrower" means any entity, other than the Borrower, in
which the Borrower or the Guarantor owns an interest, the Indebtedness of which
entity is guaranteed by the Borrower or the Guarantor, and with respect to which
the Borrower or the Guarantor has provided to the Agent an unconditional
guaranty of payment satisfactory in form and substance to the Agent, as well as
such notes, opinions, financial statements, organizational and authorization
documents, security or collateral documents and other documents as the Agent may
require in order for such entity to be able to receive an Advance under the
Facility.
"Qualified Lender" means a financial institution with assets over
$5,000,000,000 that is generally in the business of making loans comparable to
the Loans made under the Facility and that maintains an office in the United
States.
"Register" is defined in Section 13.6.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
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"Reimbursement Obligations" means at any time, the aggregate of the
Obligations of the Borrower and any Qualified Borrowers to the Lenders, the
Issuing Bank and the Agent in respect of all unreimbursed payments or
disbursements made by the Lenders, the Issuing Bank and the Agent under or in
respect of the Facility Letters of Credit.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66
2/3 % of the Aggregate Commitment (not held by Defaulting Lenders who are not
entitled to vote) or, if the Aggregate Commitment has been terminated, Lenders
in the aggregate holding at least 66 2/3 % of the aggregate unpaid principal
amount of the outstanding Advances and Facility Letter of Credit Obligations
(not held by Defaulting Lenders who are not entitled to vote).
"Restated Loan Agreement" is defined in the recitals to this Agreement.
"SAB 101" means Staff Accounting Bulletin No. 101 of the Securities and
Exchange Commission issued December 3, 1999.
"Second Amendment to Second Restated Loan Agreement" is defined in the
recitals to this Agreement.
"Second Restated Loan Agreement" is defined in the recitals to this
Agreement.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Collateral Pool" means a specified group of Hotel Properties
encumbered by Mortgages which have been accepted by the Lenders into the
Collateral Pool to secure the Obligations.
"Security Documents" means all Loan Documents executed by or on behalf
of the Borrower, the Guarantor, any Subsidiary, any Qualified Borrower, or any
Investment Affiliate which pledge, mortgage, encumber or constitute a lien upon
any of their real or personal property as part of the Collateral, including,
without limitation the Mortgages and the Assignments of Rents and Leases, any
UCC financing statements, and all supporting documents relating thereto,
including, without limitation, title insurance policies, surveys, appraisals,
and environmental surveys or reports.
"Senior Loans" is defined in Section 11.15.
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"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" means a corporation, partnership or other entity of which
shares of stock or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by the Borrower, the
Guarantor, or any Qualified Borrower and provided such corporation, partnership
or other entity is consolidated with the Borrower, the Guarantor, or any such
Qualified Borrower for financial reporting purposes under GAAP.
"Third Restated Loan Agreement" is defined in the recitals to this
Agreement.
"Total Assets" means all GAAP assets of the Borrower, the Guarantor,
any Qualified Borrowers and any of their Subsidiaries.
"Total Asset Value" means the sum of (a) for each open Hotel Property
owned or open for less than four (4) fiscal quarters, whether or not such Hotel
Property is included in the Collateral Pool, 100% of the Cost of the Hotel
Property plus (b) for each open Hotel Property owned or open for four (4) fiscal
quarters or more, whether or not such Hotel Property is included in the
Collateral Pool, the Implied Value of the Hotel Property, plus (c) 100% of cash
and Cash Equivalents in accordance with GAAP.
"Total Liabilities" means all GAAP liabilities (not inclusive of GAAP
minority interest or GAAP deferred/unearned revenue liability arising solely
from the application of the policies and procedures prescribed by SAB 101) of
the Borrower, the Guarantor, any Qualified Borrowers and any of their
Subsidiaries.
"Total Property Operating Income" means the sum of (i) Property
Operating Income for each Hotel Property owned (including leaseholds) by the
Borrower and its Subsidiaries and any Qualified Borrower, and (ii) (without
redundancy) the Borrower's pro rata share (based on percentage interest in
operating income) of Property Operating Income from any Hotel Property owned
(including leaseholds) by the Guarantor, and any Qualified Borrowers or
Investment Affiliates.
"Transferee" is defined in Section 13.4.
"Type" means, with respect to any Advance, its nature as a Prime
Advance or a LIBOR Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
determined under Section 4001(a)(18)(A)
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of ERISA exceeds the fair market value of all such Plan assets allocable to such
benefits determined as of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unused Credit Fee" means the fee payable by the Borrower to the Agent
for the benefit of the Lenders as set out in Section 2.5.
"Value" means the Implied Value for Secured Collateral Pool properties
owned or open for more than four (4) fiscal quarters, and means the Cost of
Hotel Properties in the Secured Collateral Pool owned or open for less than four
(4) fiscal quarters. However, the aggregate Value attributable to Completed
Development Hotels in the Secured Collateral Pool cannot exceed 15% of the
aggregate Value attributable to all Hotel Properties in the Secured Collateral
Pool.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization of which 100% of the ownership interests having
ordinary voting power and at least 95% of all other classes of ownership
interest shall at the time be so owned or controlled by such Person.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
ARTICLE II
THE CREDIT
II.1 Assignment and Assumption; Conversion; Commitment Increase.
II.1.1 Assignment and Assumption. Pursuant to the Restated
Loan Agreement, as the same was subsequently amended and restated and
is being further amended and restated hereby, the Guarantor has
heretofore transferred and assigned to the Borrower, and the Borrower
has heretofore assumed, in the place and stead of the Guarantor, all
indebtedness and obligations relating to or arising out of the BBOT
Note and the BBOT Loan Agreement and all other documents relating
thereto. The Guarantor has, effective as of July 30, 1997, executed a
guaranty agreement in form and content acceptable to the Lenders
guaranteeing the Obligations.
II.1.2 Conversion. BBOT has, by separate assignment executed
July 30, 1997, assigned to NationsBank all its right, title and
interest in and to the Facility, the BBOT Loan Agreement, the
Participation Agreement and the other Loan Documents. Pursuant to the
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Restated Loan Agreement, as the same was subsequently amended and
restated and is being further amended and restated hereby, the
Participation Agreement was terminated by NationsBank, as
successor-in-interest to BBOT, and the Participating Lenders, and
NationsBank assigned to the Participating Lenders their respective pro
rata portions of the Commitment existing under the BBOT Loan Agreement.
If deemed necessary by the Agent in connection with the termination of
the Participations, all Lenders other than the Participating Lenders
have heretofore agreed to pay to Bank of America, as
successor-in-interest to NationsBank, upon demand their respective pro
rata shares of all outstanding Advances existing on or after the date
of termination of the Participations. It is understood and agreed that
the Participations have heretofore been converted into direct
obligations to lend, and the Participating Lenders have assumed their
respective pro rata portions of the Commitment to make Advances and
their respective pro rata portions of all other obligations of Bank of
America, as successor-in-interest to NationsBank, which, in turn, was
successor-in-interest to BBOT, under or in regards to the Facility as
heretofore set forth in the BBOT Loan Agreement, as the same was
amended and restated by the Restated Loan Agreement, by the Amended
Second Restated Loan Agreement, and by the Amended Third Restated Loan
Agreement, and as the same is being amended and restated hereby, and as
such Commitment was increased as set forth in the Restated Loan
Agreement, as amended and restated by the Amended Second Restated Loan
Agreement, by the Amended Third Restated Loan Agreement, and as the
same is being amended and restated hereby. Likewise, Bank of America
and the Participating Lenders have heretofore assigned to the remaining
Lenders such portions of the Commitment existing under the BBOT Loan
Agreement as necessary to properly distribute to all Lenders their
proper pro rata shares of the Commitment existing under the BBOT Loan
Agreement in accordance and consistent with their respective
Percentages of the Aggregate Commitment allocated to the Lenders, as
set forth opposite their signatures in the Restated Loan Agreement as
the same was amended and restated by the Amended Second Restated Loan
Agreement, and by the Amended Third Restated Loan Agreement.
Bank of America and, to the extent of any interest they may
have had, the Participating Lenders, have heretofore assigned to the
Agent as the agent for the Lenders pursuant to the terms of Article XI
of the Restated Loan Agreement, the Amended Second Restated Loan
Agreement and the Amended Third Restated Loan Agreement as the same is
being amended and restated hereby, all of their right, title and
interest in and to the Obligations, the Collateral and the other Loan
Documents, and directed the Agent to place of record in each
jurisdiction where a Mortgage appears of record an appropriate
assignment and modification agreement reflecting the transfer of such
Mortgage and related Loan Documents from Bank of America to the Agent,
as agent for the Lenders.
It is also understood and agreed that the assignments by Bank
of America and the Participating Lenders of an undivided interest in
the Facility were outright and absolute assignments, and not the sale
or transfer of a participation interest, and were not intended to
constitute a refinance of the Facility.
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II.1.3 Commitment; Notes. The Facility has heretofore been
increased from $75,000,000, as set forth in the BBOT Loan Agreement, to
$175,000,000, as set forth in the Restated Loan Agreement and to
$190,000,000, as set forth in the First Amendment to Second Restated
Loan Agreement and reduced to $100,000,000.00 as set forth in the Third
Restated Loan Agreement. The Facility is contemporaneously herewith
being increased to $130,000,000.00, subject to the possible increase to
$140,000,000 pursuant to Section 2.14. From and including the Closing
Date and prior to the Facility Termination Date, each Lender hereby
agrees and reaffirms its Commitment, subject to the terms and
conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate for each
Lender at any one time outstanding the amount of such Lender's
Commitment (as set forth in Exhibit J) minus such Lender's Percentage
of Facility Letter of Credit Obligations and Reimbursement Obligations.
Subject to the terms of this Agreement, the Borrower may borrow, repay
and reborrow at any time prior to the Facility Termination Date. The
Commitments of each Lender to lend under this Agreement shall expire on
the Facility Termination Date. In connection with the increased
Facility, the Borrower has contemporaneously herewith executed and
delivered to each Lender a Note in the amount of each Lender's
Commitment, which Notes collectively replace, renew and restate the
BBOT Note and modify the Aggregate Commitment Amount evidenced thereby.
II.2 Final Principal Payment. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
II.3 Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. The Advances may be
Prime Advances, LIBOR Advances, or a combination thereof, selected by the
Borrower in accordance with Sections 2.9 and 2.10.
II.4 Collateral.
(a) The Collateral shall consist primarily of
cross-collateralized and cross-defaulted first priority
Mortgages encumbering Hotel Properties in the Secured
Collateral Pool, and by Negative Pledge Agreements restricting
the transfer, pledge or other hypothecation of Hotel
Properties in the Negative Collateral Pool, both of which
groups of Hotel Properties form the Collateral Pool or
Collateral Pool Properties, and are listed on Exhibits G and H
respectively attached hereto, with the franchise and
franchisor for each such Hotel Property identified thereon
which have been approved by the Lenders. Each Collateral Pool
Property must be domestic, that is, located in the lower
forty-eight (48) continental United States of America, must be
subject to a current franchise agreement (with no defaults
thereunder) approved by the Lenders with a franchisor that is
acceptable to the Lenders, must be unencumbered with only such
exceptions as have been approved by the Lenders, must be open
for business and fully operational, and must otherwise be in
compliance with the applicable provisions of Article V hereof.
Notwithstanding the foregoing, all Collateral Pool Properties
must be wholly owned directly by either the Borrower or the
Guarantor and not by any Joint Ventures or wholly owned
Subsidiary of the
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Borrower or the Guarantor, and no Hotel Properties owned by
Joint Ventures or wholly owned Subsidiaries of the Borrower or
the Guarantor may be included in the Collateral Pool.
(b) The Mortgages encumbering the Hotel Properties
presently in the Secured Collateral Pool which have heretofore
secured the Facility evidenced by the BBOT Note, pursuant to
the terms of the BBOT Loan Agreement, as amended and restated
by the Restated Loan Agreement, the Amended Second Restated
Loan Agreement and the Amended Third Restated Loan Agreement,
which is being amended and restated hereby, have heretofore
been assigned to the Agent as a continuing part of the
Collateral, subject to being reviewed by and acceptable to the
Lenders in accordance with the conditions precedent set forth
in Article V, Section 5.1, hereof. In the event at any time
the Lenders determine that any item required by the applicable
provisions of Article V hereof, whether for existing or future
Collateral Pool Properties, is not available, or has not been
provided, or is not acceptable, such item may, in the Lenders'
sole discretion, either be waived, or, in the alternative,
such Hotel Property for which the item has not been provided
or is unacceptable may be removed from the Collateral Pool, in
which event the Borrowing Base shall be adjusted accordingly
to reflect the removal of such Hotel Property. In the
alternative, the Borrower may substitute another Hotel
Property for the one so removed, provided such Hotel Property
is acceptable to the Lenders, and all conditions precedent to
the inclusion of such Hotel Property in the Collateral Pool
have been complied with, including, without limitation, the
conditions of either Section 5.3 or 5.4, as applicable. Any
such Hotel Property so removed from the Collateral Pool shall
upon the written request from the Borrower be released by the
Agent from the lien of any Mortgage, or from the restrictions
of any Negative Pledge Agreement, provided there is then
existing no Default or Unmatured Default then existing
hereunder, and provided all provisions of Section 7.13 hereof
have been complied with.
II.5 Unused Credit Fee. The Borrower has heretofore agreed and hereby
agrees to pay to the Agent for the account of each Lender the Unused Credit Fee
from the Closing Date to and including the Facility Termination Date, calculated
at the rate of 0.18% per annum on the actual daily unborrowed portion of such
Lender's Commitment (which is equal to the difference between (a) such Lender's
Commitment on such day and (b) the then outstanding Loans owed to such Lender
plus the Lender's Percentage of any outstanding and undrawn Facility Letters of
Credit) payable quarterly in arrears on the first day of each calendar quarter
beginning January 1, 1999 and on the Facility Termination Date; provided,
however, that the Unused Credit Fee shall be calculated at the reduced rate of
0.125% per annum on the actual daily unborrowed portion of such Lender's
Commitment for any day on which the principal balance of all outstanding and
unpaid Loans held by such Lender plus its Percentage of outstanding and undrawn
Facility Letters of Credit is greater than 50% of such Lender's Commitment.
Notwithstanding the foregoing, all accrued Unused Credit Fees shall be payable
on the effective date of any termination of the obligations of the Lenders to
make Loans hereunder.
II.6 Commitment Fee; Other Fees.
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II.6.1 Commitment Fee. The Borrower has contemporaneously
herewith paid to the Agent for the account of each Lender the
Commitment Fee in the amount of $800,000 which is the total of (a)
1.00% of the $30,000,000 of increase in the Facility pursuant to this
Agreement, and (b) 0.50% of the existing $100,000,000 of the Facility.
The Commitment Fee is fully earned, due and payable upon the execution
of this Agreement.
II.6.2 Other Fees. The Borrower agrees to pay all other fees
payable to the Agent and/or the Arranger for their own accounts or for
the account of the Lenders pursuant to the terms hereof and/or the Fee
Letter.
II.7 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), and each Prime Advance shall be in the minimum amount of $1,000,000
(and in multiples of $100,000 if in excess thereof), provided, however, that any
Prime Advance may be in the amount of the unused Aggregate Commitment.
II.8 Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium (subject to reimbursement, upon demand, of the
Lenders' Break-up Fee and all other breakage and re-deployment costs in the case
of prepayment of LIBOR Advances), all or any part of outstanding Prime Advances
or LIBOR Advances, upon two (2) Business Days' prior notice to the Agent and
each such prepayment shall be in a minimum amount of $50,000.00 or in multiples
thereof, provided that a LIBOR Advance may not be paid prior to the last day of
the applicable LIBOR Interest Period unless Borrower pays the Break-up Fee.
II.9 Manner of Borrowing and Method of Selecting Types and Interest
Periods for New Advances; Borrowing Base; Lender Obligations.
II.9.1 Manner of Borrowing and Method of Selecting Types and
Interest Periods for New Advances. The Borrower shall select the Type
of Advance and, in the case of each LIBOR Advance, the LIBOR Interest
Period applicable to each Advance from time to time. The Borrower shall
give the Agent irrevocable notice substantially in the form of Exhibit
I-1 attached hereto (a "Borrowing Notice") (i) not later than 1:00 p.m.
(Dallas, Texas Time) at least one, (1) Business Day before the
Borrowing Date of each Prime Advance, and (ii) not later than 1:00 p.m.
(Dallas, Texas Time) at least three (3) Business Days before the
Borrowing Date for each LIBOR Advance, specifying:
(a) the Borrowing Date, which shall be a Business
Day, of such Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each LIBOR Advance, the LIBOR
Interest Period applicable thereto.
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II.9.2 Borrowing Base. Availability under the Facility shall
be determined according to the Borrowing Base. In no event shall the
Borrower be entitled hereunder to Advances or Facility Letters of
Credit which would cause the Allocated Facility Amount at any time
under the Loans to exceed the lesser of (i) the Borrowing Base or (ii)
the Aggregate Commitment Amount. Furthermore, any Collateral Pool
Property whose operating franchise license is canceled shall be
immediately deducted from the Borrowing Base until such time as a
franchise reasonably acceptable to the Lenders is obtained with respect
to such Collateral Pool Property. In the alternative, the Borrower may
substitute another Hotel Property for the one whose franchise license
has been canceled, provided such Hotel Property is acceptable to the
Lenders and all conditions precedent to the inclusion of such Hotel
Property in the Collateral Pool have been complied with, including
without limitation, the conditions of either Sections 5.3 or 5.4, as
applicable. In such event, upon the substitution of such Hotel
Property, upon the written request from the Borrower, the Hotel
Property deducted from the Borrowing Base calculation shall be released
by the Agent from the lien of any Mortgage, or from the restrictions of
any Negative Pledge Agreement, provided there is no Default or
Unmatured Default then existing hereunder, and provided all provisions
of Section 7.13 hereof have been complied with.
II.9.3 Lender Obligations. Not later than 12:00 noon (Dallas,
Texas Time) (as to each Lender other than Xxxxx Fargo Bank which shall
provide its Federal Reference Number and time not later than 12:30 p.m.
(Dallas, Texas Time)) on each Borrowing Date, each Lender shall make
available its Loan or Loans, in funds immediately available in Dallas,
Texas to the Agent at the account specified pursuant to Article XIV.
The Lenders shall not be obligated to match fund their LIBOR Advances.
The Agent will promptly make the funds so received from the Lenders
available to the Borrower from the Agent's aforesaid account. No LIBOR
Interest Period may end after the Facility Termination Date and, unless
all of the Lenders otherwise agree in writing, in no event may there be
more than five (5) different LIBOR Interest Periods for LIBOR Advances
outstanding at any one time.
II.10 Conversion and Continuation of Outstanding Advances. Prime
Advances shall continue as Prime Advances unless and until such Prime Advances
are converted into LIBOR Advances. Each LIBOR Advance shall continue as a LIBOR
Advance until the end of the then applicable LIBOR Interest Period therefor, at
which time such LIBOR Advance shall be automatically converted into a Prime
Advance unless the Borrower shall have given the Agent a Conversion/Continuation
Notice requesting that, at the end of such LIBOR Interest Period, such LIBOR
Advance shall continue as a LIBOR Advance for the same or another LIBOR Interest
Period. The Borrower may elect from time to time to convert all or any part of
an Advance of any Type into any other Type of Advance; provided that any
conversion of any LIBOR Advance (whether due to acceleration or otherwise) shall
be made on, and only on, the last day of the Interest Period applicable thereto
unless the Borrower pays the applicable Break-up Fee, to be paid on the same
Business Day as the conversion occurs. The Borrower shall give the Agent
irrevocable notice substantially in the form of Exhibit I-2 attached hereto (a
"Conversion/Continuation Notice") of each conversion of an Advance not later
than 1:00 p.m. (Dallas, Texas Time) at least one Business Day, in the case of a
conversion into a Prime Advance, or three Business Days, in the case of a
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into or continuation of a LIBOR Advance, prior to the date of the requested
conversion or continuation, specifying:
(a) the requested date which shall be a Business Day,
of such conversion or continuation;
(b) the aggregate amount and Type of the Advance
which is to be converted or continued; and
(c) the amount and Type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the case
of a conversion into or continuation of a LIBOR Advance, the
duration of the LIBOR Interest Period applicable thereto.
II.11 Changes in Interest Rate, Etc. Each Prime Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a LIBOR Advance
into a Prime Advance pursuant to Section 2.10 to but excluding the date it is
paid or is converted into a LIBOR Advance pursuant to Section 2.10 hereof, at a
rate per annum equal to the Prime Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Prime Advance will take
effect simultaneously with each change in the Prime Rate. Each LIBOR Advance
shall bear interest from and including the first day of the LIBOR Interest
Period applicable thereto to (but not including) the last day of such LIBOR
Interest Period at the LIBOR Basis determined as applicable to such LIBOR
Advance.
If, on or prior to the first day of any LIBOR Interest Period,
(a) the Agent shall have reasonably determined (which
determination shall be conclusive and binding) that by reason
of circumstances affecting the London interbank market or
other Eurodollar market, as applicable, adequate and
reasonable means do not exist for ascertaining the LIBOR
Basis, or
(b) the Agent shall have reasonably determined (which
determination shall be conclusive and binding) that the LIBOR
Basis will not adequately and fairly reflect the cost to the
Lenders of such LIBOR Advance for such LIBOR Interest Period,
then the Agent shall forthwith give notice thereof to the Borrower, whereupon
until the Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Lenders to allow new LIBOR
Advances shall be suspended.
If, after the date of this Agreement, the adoption of any applicable
law, rule or regulations, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or the Lenders with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for the Lenders to make,
maintain or fund LIBOR Loans, the Agent shall forthwith give notice thereof to
the Borrower, whereupon until the Agent notifies the
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Borrower that the circumstances giving rise to such suspension no longer exist,
the obligation of the Lenders to allow LIBOR Advances shall be suspended. If the
Agent shall determine that the Lenders may not lawfully continue to maintain any
outstanding LIBOR Loans to maturity and shall so specify in such notice, such
LIBOR Loans shall be immediately converted to a borrowing at the Prime Rate.
If, after the date of this Agreement, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or the Lenders with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a) shall subject the Lenders to any tax, duty or
other direct charge with respect to the LIBOR Loans or this
Agreement or shall change the basis of taxation of payments to
the Lenders of the principal of or interest on LIBOR Loans or
any other amounts due under this Agreement in respect to LIBOR
Loans or the Lenders' obligations to allow LIBOR Advances
(except for changes in the rate of tax on the overall net
income of any Lender imposed by the jurisdiction in which any
Lender's principal executive office is located); or
(b) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System, but excluding with
respect to any LIBOR Loan any such requirement included in an
applicable LIBOR Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by,
any Lender or shall impose on any Lender or the interbank
market for Eurodollar deposits and other condition affecting
LIBOR Loans, this Agreement or the obligation of any Lender to
allow LIBOR Advances;
and the result of any of the foregoing is to increase the cost to any Lender of
allowing or maintaining LIBOR Loans or to reduce the amount of any sum received
or receivable by any Lender under this Agreement with respect thereto, by an
amount deemed by the Agent, in its good faith judgment, to be material, then,
within fifteen (15) days after demand by the Agent, the Borrower shall pay to
the Agent for the benefit of the Lenders such additional amount or amounts as
will compensate the Lenders for such increased cost or reduction. The Agent will
promptly notify the Borrower of any event of which it has knowledge, occurring
after the date hereof, which will entitle the Lenders to compensation pursuant
to this paragraph. A certificate of the Agent claiming compensation under this
paragraph, setting forth the additional amount or amounts to be paid to it
hereunder, and explaining in reasonable detail the estimates, data and
calculations of such amount, shall be conclusive and binding in the absence of
manifest error. In determining such amount, the Agent may use any reasonable
averaging and attribution methods. In lieu of paying the compensation to the
Lenders described in this paragraph, the Borrower may elect, promptly upon
receiving notice from the Agent of the event entitling the Lenders to such
compensation, to have any LIBOR Loan converted to a Prime Advance, subject to
the Borrower's payment of any Break-up Fee due as a result of such conversion.
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II.12 Rates Applicable After Default; Late Fee. Notwithstanding
anything to the contrary contained in Sections 2.9 or 2.10, during the
continuance of a Default or Unmatured Default, the Agent may, at the option of
the Required Lenders, by written notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 9.2 requiring unanimous consent of the Lenders to changes in interest
rates), declare that no Advance may be made as, converted into or continued
beyond its current term as a LIBOR Advance. During the continuance of a Default,
the Agent may, at the option of the Required Lenders, by prior written notice to
the Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (a) each LIBOR Advance shall
bear interest for the applicable LIBOR Interest Period at a rate per annum equal
to the lesser of (i) the rate otherwise applicable to such LIBOR Interest Period
plus 4% per annum or (ii) the Maximum Rate, until such Default shall have been
cured and (b) each Prime Advance shall bear interest at a rate per annum equal
to the lesser of (i) the Prime Rate otherwise applicable to the Prime Advance
plus 4% per annum or (ii) the Maximum Rate until such Default shall have been
cured; provided that such rates shall become applicable automatically without
notice to the Borrower if a Default occurs under Section 8.7 or Section 8.8.
If any principal or interest is not paid when due, the Borrower shall
pay, on demand, a late charge of $.04 for each dollar of each installment which
becomes past due for a period exceeding ten (10) days to help defray the added
expense incurred in handling said delinquent installment, provided that in the
event any such late charge should be determined by a court of competent
jurisdiction to constitute interest, in no event shall such interest be due or
payable in excess of the Maximum Rate.
II.13 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's account specified pursuant to
Article XIV, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by 1:00 p.m. (Dallas, Texas Time) on the
date when due and shall be applied ratably by the Agent among the Lenders. Any
payment received after 1:00 p.m. shall be processed as of the next Business Day.
Each payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds that
the Agent received at its account specified pursuant to Article XIV or at any
Lending Installation specified in a notice received by the Agent from such
Lender promptly. If any payment received by the Agent is not delivered to a
Lender by the closing of business on the same Business Day as received by the
Agent (with respect to payments received by 1:00 p.m., Dallas, Texas Time) or
the next Business Day (with respect to payments received after 1:00 p.m.,
Dallas, Texas Time), such Lender shall receive from the Agent interest at the
Federal Funds Effective Rate on the payment. The Agent is hereby authorized to
charge the specific account of the Borrower, if any, maintained with Bank of
America for such purpose, for each payment of principal, interest and fees as it
becomes due hereunder. The Borrower shall not have any liability to any Lender
for the failure of the Agent to promptly deliver funds to any such Lender and
shall be deemed to have made all such payments on the date the respective
payment is made by the Borrower to the Agent provided that it is received by the
Agent no later than the time specified in this Section 2.13.
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II.14 Increase in Aggregate Commitment. (a) Subsequent to the Execution
Date, the Borrower may, on one or more occasions, upon at least 10 days' notice
to the Agent (which shall promptly provide a copy of such notice to the
Lenders), propose to increase the Aggregate Commitment by an amount not to
exceed $10,000,000 in the aggregate of all such increases pursuant to this
Section 2.14 (that is, the Aggregate Commitment shall not exceed $140,000,000)
(the amount of any such increase, the "Increased Commitments"). In such notice,
the Borrower shall designate one or more banks or other financial institutions
(which may be, but need not be, one or more of the existing Lenders) which at
the time agree to (i) in the case of any such bank or other financial
institution that is an existing Lender, increase its Commitment and (ii) in the
case of any other such bank or other financial institution (an "Additional
Lender"), become a party to this Agreement. No bank or other financial
institution may become an Additional Lender unless it would qualify as an
Eligible Assignee for the purposes of Article XIII hereof. The sum of the
increases in the Commitments of the existing Lenders pursuant to this subsection
(a) plus the Commitments of the Additional Lenders shall not in the aggregate
exceed the unsubscribed amount of the Increased Commitments. No existing Lender
shall be required to increase its Commitments in connection with an increase in
the amount of the Aggregate Commitment pursuant to this Section 2.14.
Notwithstanding the foregoing, the Aggregate Commitment shall not be increased
during the last twelve (12) months prior to the Facility Termination Date.
(b) An increase in the amount of the Aggregate Commitment
pursuant to this Section 2.14 shall become effective upon the receipt by the
Agent of an agreement in form and substance satisfactory to the Agent signed by
the Borrower, by the Guarantors, by each Additional Lender and by each other
Lender whose Commitment is to be increased, setting forth the new Commitments of
such Lenders and setting forth the agreement of each Additional Lender to become
a party to this Agreement and to be bound by all the terms and provisions
hereof, together with such evidence of appropriate corporate authorization on
the part of the Borrowers with respect to the Increased Commitments (including
authorization of payment to the Lenders, Agent or Arranger of any costs or fees
which may be incurred under Section 2.6 hereof in connection with reallocation
of outstanding loans) as the Agent may reasonably request. Upon receipt by the
Agent of a fully executed agreement in accordance with this Section 2.14(b),
Agent shall prepare a replacement Exhibit J reflecting the correct Percentage
and Commitment for each existing Lender and Additional Lender, which replacement
Exhibit J shall be delivered by Agent to each existing Lender and Additional
Lender and shall constitute Exhibit J to this Agreement for all purposes.
II.15 Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Borrower's obligations under such Note. Each Lender's books
and records, including without limitation, the information, if any, recorded by
the Lender on the schedule attached to its Note, shall be deemed to be prima
facie correct absent manifest error. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be an
Authorized Officer. The Borrower agrees to deliver promptly to the Agent a
written confirmation signed by an Authorized Officer of each telephonic notice.
If the written confirmation differs in any
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material respect from the action taken by the Agent and the Lenders, the records
of the Agent and the Lenders shall govern absent manifest error.
II.16 Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Advance shall be payable on each Payment Date, commencing with the first
such date to occur after the date hereof, and at the Facility Termination Date,
whether by acceleration or otherwise. Interest accrued on each LIBOR Advance
shall not be payable on any date on which the LIBOR Advance is prepaid (provided
that nothing herein shall authorize a prepayment which is not otherwise
permitted hereunder), or converted to another LIBOR Advance or to a Prime
Advance, as the case may be, but shall be payable on the next Payment Date.
Interest, Unused Credit Fees and Facility Letter of Credit Fees shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to 1:00 p.m. (Dallas,
Texas Time) at the place of payment, unless such Advance is repaid on the date
that it was made. If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
II.17 Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof (but in no event later than the close of business
(Dallas, Texas Time) one Business Day prior to the proposed Borrowing Date for a
Prime Advance or the close of business three Business Days prior to the proposed
Borrowing Date for a LIBOR Advance) the Agent will notify each Lender in writing
by facsimile of the contents of each Borrowing Notice, Conversion/Continuation
Notice, and prepayment notice received by it hereunder. The Agent will notify
each Lender and the Borrower of the interest rate applicable to each LIBOR
Advance promptly upon determination of such interest rate and will give each
Lender and the Borrower prompt notice of each change in the Prime Rate.
II.18 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
II.19 Non-Receipt of Funds By the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (a) in the case of a Lender, the
proceeds of a Loan or (b) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
the Borrower has not in fact made such payment to the Agent, the recipient of
such payment shall, on demand by the Agent, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Effective Rate for such day. If a Lender has not in
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fact made such payment to the Agent, the Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate per annum equal to the Federal Funds Effective Rate for such date. If
such Lender does not make such payment upon the Agent's demand therefor, the
Agent shall promptly notify the Borrower, and the Borrower shall immediately pay
such amount to the Agent together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Agent until the date the Agent recovers such amount at the rate applicable
to the relevant Loan. Nothing in this Section 2.19 shall be deemed to relieve
any Lender from its obligation to fulfill any portion of its Commitment
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
No Lender shall be responsible for any default by any other Lender in
its obligation to make Loans hereunder, and each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its Commitment hereunder.
II.20 Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Borrower and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes and an
Internal Revenue Service Form W-8 or W-9 or applicable successor form, as the
case may be, to establish an exemption from United States backup withholding
tax. Each Lender which so delivers a Form 1001 or 4224 and Form W-8 or W-9
further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such Form (or a successor form) on or before the date that
such form expires (currently, three successive calendar years for Form 1001 and
one calendar year for Form 4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most recent forms so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, in each case certifying that such Lender
is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes and is exempt
from backup withholding, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the Borrower
and the Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax or is not exempt from backup
withholding tax.
II.21 Voluntary Reduction of Aggregate Commitment Amount. Upon at least
five (5) Business Days' prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Agent, the Borrower shall have the right,
without premium or penalty, to permanently reduce the Aggregate Commitment
provided that (a) the Borrower may not reduce the Aggregate Commitment below the
Allocated Facility Amount at the time of such requested reduction, (b) any
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such partial reduction shall be in the minimum aggregate amount of U.S.
$5,000,000 or any integral multiple of $5,000,000 in excess thereof and (c) the
Borrower may not reduce the Aggregate Commitment to an amount less than
$50,000,000. Any reduction of the Aggregate Commitment shall be applied pro rata
to each Lender's Commitment. In addition, upon any such reduction, the Agent
shall release such Hotel Properties from the Collateral Pool as are requested by
the Borrower in writing, provided such Hotel Properties released are acceptable
to the Lenders in their sole discretion, and provided the Borrower complies with
Section 7.13 hereof and that all covenants and terms of this Agreement remain in
compliance after such release.
II.22 Usury. The Borrower, the Lenders, the Agent and all other parties
to the Loan Documents intend to conform to and contract in strict compliance
with applicable usury law from time to time in effect. All agreements between
the Borrower and the Lenders (or any other party liable with respect to any of
the Obligations) are hereby limited by the provisions of this Section which
shall override and control all such agreements, whether now existing or
hereafter arising. In no way, nor in any event or contingency (including but not
limited to prepayment, default, demand for payment, or acceleration of the
maturity of any Obligation), shall the interest taken, reserved, contracted for,
charged, chargeable, or received under this Agreement, a Note, any of the other
Loan Documents, or otherwise, exceed the Maximum Rate. If, from any possible
construction of any document, interest would otherwise be payable in excess of
the Maximum Amount, any such construction shall be subject to the provisions of
this Section and such document shall ipso facto be automatically reformed and
the interest payable shall be automatically reduced to the Maximum Amount,
without the necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as interest
under applicable law and which would apart from this provision be in excess of
the Maximum Amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Obligations in the inverse order of its maturity
and not to the payment of interest, or be refunded to the Borrower or the other
payor thereof, at the election of such Lender in its sole discretion or as
required by applicable law. The right to accelerate maturity of a Note or any
other Indebtedness does not include the right to accelerate any interest which
has not otherwise accrued on the date of such acceleration, and the Lenders do
not intend to charge or receive any unearned interest in the event of
acceleration. All interest paid or agreed to be paid to the Lenders shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full stated term (including any renewal or extension) of
such Indebtedness such that such interest does not exceed the Maximum Amount. As
used in this Section, the term "applicable law" shall mean the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern or the federal laws of the United States applicable to this transaction,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
II.23 Application of Moneys Received by the Agent. All moneys collected
or received by the Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(a) to the payment of all reasonable costs (including
without limitation all costs payable to any Lender of which
the Agent has been notified) incurred in the
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collection of such moneys of which the Agent shall have given
notice to the Borrower;
(b) to the reimbursement of any yield protection due
to the Lenders in accordance with Section 4.1;
(c) to the payment of any fee due to the Issuing Bank
pursuant to Section 3.8(b), to the Lenders pursuant to Section
3.8(a) in connection with the issuance of a Facility Letter of
Credit, to the payment of the Commitment Fee to the Lenders,
to the payment of the Unused Credit Fee to the Lenders, if any
of the same are then due, in accordance with their
Percentages, and to the payment of the Agent's Fee to the
Agent if then due;
(d) (i) in case the entire unpaid principal of the
Loan shall not have become due and payable, the whole amount
received as interest and Facility Letter of Credit Fee then
due to the Lenders (other than a Defaulting Lender) as their
respective Percentages appear or (ii) in case the entire
unpaid principal of the Loan shall have become due and
payable, as a result of a Default or otherwise, to the payment
of the whole amount then due and payable on the Loan for
principal, together with interest thereon at the Default Rate
or the interest rate, as applicable, to the Lenders (other
than a Defaulting Lender) as their respective Percentages
appear until paid in full; and
(e) to the payment of any sums due to each Defaulting
Lender as their respective Percentages appear (provided that
the Agent shall have the right to set-off against such sums
any amounts due from such Defaulting Lender).
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
III.1 Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of the Borrower, one or more Facility Letters of Credit in accordance
with this Article III, from time to time during the period ending thirty (30)
days prior to the Facility Termination Date.
III.2 Types and Amounts. The Issuing Bank shall not, except with the
prior written consent of all Lenders:
(a) issue any Facility Letter of Credit if the
aggregate maximum amount then available for drawing under
Letters of Credit issued by such Issuing Bank, after
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giving effect to the Facility Letter of Credit requested
hereunder, shall exceed any limit imposed by law or regulation
upon such Issuing Bank provided, in such event, the Borrower
shall have the right to select (with the approval of the
alternate Issuing Bank but not the other Lenders) an alternate
Issuing Bank which shall be one of the Lenders;
(b) issue any Facility Letter of Credit if, after
giving effect thereto, the aggregate Facility Letter of Credit
Obligations would exceed $10,000,000 or the Allocated Facility
Amount would exceed the Aggregate Commitment;
(c) issue any Facility Letter of Credit having an
expiration date, or containing automatic extension provisions
to extend such date, to a date which is less than thirty (30)
days preceding the Facility Termination Date; or
(d) issue any Facility Letter of Credit having an
expiration date which is more than fifteen (15) months after
the date of its issuance.
III.3 Conditions. In addition to being subject to the satisfaction of
the conditions contained in Section 5.2 hereof, the obligation of the Issuing
Bank to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(a) the Borrower shall have delivered to the Issuing
Bank at such times and in such manner as the Issuing Bank may
reasonably prescribe such documents and materials as may be
reasonably required pursuant to the terms of the proposed
Facility Letter of Credit (it being understood that if any
inconsistency exists between such documents and the Loan
Documents, the terms of the Loan Documents shall control) and
the proposed Facility Letter of Credit shall be reasonably
satisfactory to the Issuing Bank as to form and content;
(b) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or governmental authority
shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing the requested Facility Letter of Credit and
no law, rule or regulation applicable to the Issuing Bank and
no request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over
the Issuing Bank shall prohibit or request that the Issuing
Bank refrain from the issuance of Letters of Credit generally
or the issuance of the requested Facility Letter of Credit in
particular, provided, in such event, the Borrower shall have
the right to select an alternate Issuing Bank which shall be
one of the Lenders;
(c) there shall not exist any Default or Unmatured
Default; and
(d) the Borrower shall have paid those portions of
the Facility Letter of Credit Fee referred to in Section 3.8
hereof that are due on the Issuance Date.
III.4 Procedure for Issuance of Facility Letters of Credit.
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(a) The Borrower shall give the Issuing Bank and the
Agent at least five (5) Business Days' prior written notice of
any requested issuance of a Facility Letter of Credit under
this Agreement substantially in the form of Exhibit I-3
attached hereto (a "Letter of Credit Request") (except that,
in lieu of such written notice, the Borrower may give the
Issuing Bank and the Agent telephonic notice of such request
if confirmed in writing by delivery to the Issuing Bank and
the Agent (i) by the close of business on such day (A) of a
telecopy of the written notice required hereunder which has
been signed by an Authorized Officer, or (B) of a telex
containing all information required to be contained in such
written notice and (ii) promptly (but in no event later than
the requested date of issuance) of the written notice required
hereunder containing the original signature of an Authorized
Officer); such notice shall specify:
(1) the stated amount of the Facility
Letter of Credit requested (which
stated amount shall not be less than
$50,000);
(2) the effective date (which day shall
be a Business Day) of issuance of
such requested Facility Letter of
Credit (the "Issuance Date");
(3) the date on which such requested
Facility Letter of Credit is to
expire which date (exclusive of
automatic extension periods so long
as the Facility Letter of Credit
gives the Issuing Bank the right to
issue a notice that the expiration
date will not be extended) shall be
a Business Day and shall in no event
be later than the earlier of fifteen
months after the Issuance Date and
thirty (30) days prior to the
Facility Termination Date;
(4) the purpose for which such Facility
Letter of Credit is to be issued
(such purpose shall comply with the
requirements of Section 7.2);
(5) the Person for whose benefit the
requested Facility Letter of Credit
is to be issued; and
(6) any special language required to be
included in the Facility Letter of
Credit.
At the time such request is made, the Borrower shall also
provide the Agent and the Issuing Bank with a copy of the
specific form, if any, of the Facility Letter of Credit that
the Borrower is requesting be issued, which shall be subject
to the reasonable approval of the Issuing Bank and the Agent.
Such notice, to be effective, must be received by such Issuing
Bank and the Agent not later than 2:00 p.m. (Dallas, Texas
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Time) on the last Business Day on which notice can be given
under this Section 3.4(a). The Agent shall promptly but in no
event later than three (3) Business Days prior to the Issuance
Date give a copy of the Letter of Credit Request to the other
Lenders. The Borrower shall also deliver to the Agent and the
Issuing Bank the compliance certificate required in Section
5.2 together with each Letter of Credit Request.
(b) Subject to the terms and conditions of this
Article III and provided that the applicable conditions set
forth in Section 5.2 hereof have been satisfied, such Issuing
Bank shall, on the Issuance Date, issue a Facility Letter of
Credit on behalf of the Borrower in accordance with the Letter
of Credit Request and the Issuing Bank's usual and customary
business practices unless the Issuing Bank has actually
received (i) written notice from the Borrower specifically
revoking the Letter of Credit Request with respect to such
Facility Letter of Credit, or (ii) written or telephonic
notice from the Agent stating that the issuance of such
Facility Letter of Credit would violate Section 3.2.
(c) The Issuing Bank shall give the Agent and the
Borrower written or telex notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of a
Facility Letter of Credit (the "Issuance Notice") and the
Agent shall promptly give a copy of the Issuance Notice to the
other Lenders.
(d) The Issuing Bank shall not extend or amend any
Facility Letter of Credit (other than an automatic extension)
unless the requirements of this Section 3.4 are met as though
a new Facility Letter of Credit was being requested and
issued.
(e) The Issuing Bank shall give the Agent written or
telex notice, or telephonic notice confirmed promptly
thereafter in writing, of any extension or amendment of a
Facility Letter of Credit and the Agent shall promptly give a
copy of such notice to the Lenders.
III.5 Reimbursement Obligations, Duties of Issuing Bank.
(a) The Issuing Bank shall promptly notify the
Borrower and the Agent of any draw under a Facility Letter of
Credit, and the Agent shall promptly notify the other Lenders
that such draw has occurred. Any such draw shall constitute an
Advance of the Facility in the amount of the Reimbursement
Obligation with respect to such Facility Letter of Credit and
shall bear interest from the date of the relevant drawing(s)
under the pertinent Facility Letter of Credit at the Prime
Rate until instructed otherwise by the Borrower in accordance
with Section 2.10 hereof; provided that if any Default or an
Unmatured Default involving the payment of money exists at the
time of any such drawing(s), then the Borrower shall reimburse
the Issuing Bank for drawings under a Facility Letter of
Credit issued by the Issuing Bank no later than the next
succeeding Business Day after the payment by the Issuing
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Bank and until repaid such Reimbursement Obligation shall bear
interest from the date funded at the Default Rate.
(b) Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Facility Letter
of Credit, if taken or omitted in the absence of willful
misconduct or gross negligence, shall not put the Issuing Bank
under any resulting liability to the Borrower or any Lender
or, provided that such Issuing Bank has complied with the
procedures specified in Section 3.4, relieve a Lender of its
obligations hereunder to the Issuing Bank. In determining
whether to pay under any Facility Letter of Credit, the
Issuing Bank shall have no obligation relative to the Lenders
other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been
delivered in compliance, and that they appear to comply on
their face, with the requirements of such Letter of Credit.
III.6 Participation.
(a) Immediately upon issuance by the Issuing Bank of
any Facility Letter of Credit in accordance with the
procedures set forth in Section 3.4, each Lender shall be
deemed to have irrevocably and unconditionally purchased and
received from the Issuing Bank, without recourse,
representation or warranty, an undivided interest and
participation equal to such Lender's Percentage in such
Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto) and any
security therefor or guaranty pertaining thereto. Each
Lender's obligation to make further Loans to the Borrower
(other than any payments such Lender is required to make under
subparagraph (b) below) or issue any Facility Letters of
Credit on behalf of the Borrower shall be reduced by such
Lender's Percentage of the undrawn portion of each Facility
Letter of Credit outstanding, as well as any outstanding
Reimbursement Obligations.
(b) In the event that the Issuing Bank makes any
payment under any Facility Letter of Credit and the Borrower
shall not have repaid such amount to the Issuing Bank pursuant
to Section 3.7 hereof, the Issuing Bank shall promptly notify
the Agent, which shall promptly notify each Lender of the
same, and each Lender shall within one (1) Business Day
unconditionally pay to the Agent for the account of the
Issuing Bank the amount of such Lender's Percentage of the
unreimbursed amount of such payment, and the Agent shall
promptly pay such amount to the Issuing Bank. Notwithstanding
the foregoing, unless the Borrower shall notify the Agent of
the Borrower's intent to repay the Reimbursement Obligation on
the date of the related drawing under any Facility Letter of
Credit, such Reimbursement Obligation shall simultaneously
with such drawing be converted to and become a Prime Loan as
set forth in Section 2.10. The failure of any Lender to make
available to the Agent for the account of any Issuing Bank its
Percentage of the unreimbursed amount of any such payment
shall not relieve any other Lender of its obligation hereunder
to make available to the Agent for the account of such Issuing
Bank its Percentage of the unreimbursed amount of any payment
on the date such payment is to be made, but
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no Lender shall be responsible for the failure of any other
Lender to make available to the Agent its Percentage of the
unreimbursed amount of any payment on the date such payment is
to be made. Any Lender which fails to make any payment
required pursuant to this Section 3.6(b) shall be deemed to be
a Defaulting Lender hereunder.
(c) If the Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon,
the Issuing Bank shall promptly pay to the Agent and the Agent
shall promptly pay to each Lender which has funded its
participating interest therein, in immediately available
funds, an amount equal to such Lender's Percentage thereof.
(d) Upon the request of the Agent or any Lender, an
Issuing Bank shall furnish to the Agent or such Lender copies
of any Facility Letter of Credit to which that Issuing Bank is
party and such other documentation as may reasonably be
requested by the Agent or such Lender.
(e) The obligations of a Lender to make payments to
the Agent for the account of each Issuing Bank with respect to
a Facility Letter of Credit shall be absolute, unconditional
and irrevocable, not subject to any counterclaim, set-off,
qualification or exception whatsoever other than a failure of
any such Issuing Bank to comply with the terms of this
Agreement relating to the issuance of such Facility Letter of
Credit and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances.
III.7 Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Agent for the
account of each Issuing Bank the amount of all Advances for
Reimbursement Obligations, interest and other amounts payable
to such Issuing Bank under or in connection with any Facility
Letter of Credit when due irrespective of any claim, set-off,
defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person, under all
circumstances, including without limitation any of the
following circumstances:
(i) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff,
defense or other right which the Borrower may have at
any time against a beneficiary named in a Facility
Letter of Credit or any transferee of any Facility
Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing
Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Facility Letter
of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying
transactions between the Borrower and the beneficiary
named in any Facility Letter of Credit);
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(iii) any draft, certificate or any other
document presented under the Facility Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect of any statement therein
being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any
security for the performance or observance of any of
the terms of any of the Loan Documents; or
(v) the occurrence of any Default or
Unmatured Default.
(b) In the event any payment by the Borrower received
by the Issuing Bank or the Agent with respect to a Facility
Letter of Credit and distributed by the Agent to the Lenders
on account of their participations is thereafter set aside,
avoided or recovered from the Agent or the Issuing Bank in
connection with any receivership, liquidation, reorganization
or bankruptcy proceeding, each Lender which received such
distribution shall, upon demand by the Agent, contribute such
Lender's Percentage of the amount set aside, avoided or
recovered together with interest at the rate required to be
paid by the Issuing Bank or the Agent upon the amount required
to be repaid by the Issuing Bank or the Agent.
III.8 Compensation for Facility Letters of Credit.
(a) The Borrower shall pay to the Agent, for the
ratable account of the Lenders, based upon the Lenders'
respective Percentages, a per annum fee (the "Facility Letter
of Credit Fee") with respect to each Facility Letter of Credit
that is equal to 1.50% of the face amount of the Facility
Letter of Credit of which .25% of the face amount shall be
paid to the Issuing Bank on the Issuance Date as set forth in
Section 3.8 (b) hereof. The balance of the Facility Letter of
Credit Fee (1.25%) relating to any Facility Letter of Credit
shall be due and payable in advance in equal installments
(except for the first payment which may be a partial payment
based on the proportionate share of the quarter then
remaining) commencing on the first day of January, 1999, for
any Facility Letter of Credit then outstanding, and continuing
on the first day of the months of April, July, October and
January, each year thereafter, and, to the extent any such
fees are then due and unpaid, on the Facility Termination Date
such unpaid fees shall be due and payable in full. The Agent
shall promptly remit such balance of the Facility Letter of
Credit Fees, when paid, to the Lenders (including the Issuing
Bank) in accordance with their respective Percentages thereof.
The Borrower shall not have any liability to any Lender for
the failure of the Agent to promptly deliver funds to any such
Lender and shall be deemed to have made all such payments on
the date the respective payment is made by the Borrower to the
Agent, provided such payment is received by the time specified
in Section 2.16 hereof.
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(b) The Issuing Bank shall receive solely for its own
account the aforesaid issuance fee of .25% of the face amount
of each Facility Letter of Credit, payable by the Borrower on
the Issuance Date for each such Facility Letter of Credit. The
Issuing Bank shall also be entitled to receive its reasonable
out-of-pocket costs and the Issuing Bank's standard charges of
issuing, amending and servicing Facility Letters of Credit and
processing draws thereunder.
III.9 Letter of Credit Collateral Account. The Borrower hereby agrees
that it will, if required pursuant to the terms of a Facility Letter of Credit
or Section 9.1, maintain a special collateral account (the "Letter of Credit
Collateral Account") at the Agent's office at the address specified pursuant to
Section 14.1, in the name of the Borrower but under the sole dominion and
control of the Agent, for the benefit of the Lenders, and in which the Borrower
shall have no interest other than as set forth in Section 9.1. Such Letter of
Credit Collateral Account shall be funded to the extent required by Section 9.1.
In addition to the foregoing, the Borrower hereby grants to the Agent, for the
benefit of the Lenders, a properly perfected security interest in and to the
Letter of Credit Collateral Account, any funds that may hereafter be on deposit
in such account and the proceeds thereof. The Borrower agrees to execute a
security agreement and such other documents as the Agent may require in
connection therewith.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
IV.1 Yield Protection. If, after the date hereof, any law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(a) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or
from payments due from the Borrower (excluding federal, state
and local income, franchise or similar taxes on the overall
income of any Lender or applicable Lending Installation), or
changes the basis of taxation of payments to any Lender in
respect of its loans, Facility Letters of Credit or other
amounts due it hereunder, or
(b) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to LIBOR Advances), or
(c) imposes any other condition the result of which
is to increase the cost to any Lender or any applicable
Lending Installation of making, funding or maintaining loans
or reduces any amount receivable by any Lender or any
applicable Lending
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Installation in connection with loans, or requires any Lender
or any applicable Lending Installation to make any payment
calculated by reference to the amount of loans held, Letters
of Credit issued or participated in, or interest received by
it, by an amount reasonably deemed material by such Lender
then,
(d) within fifteen (15) days of written demand by
such Lender pursuant to Section 4.4, the Borrower shall pay
such Lender that portion of such increased expense incurred or
reduction in an amount received which such Lender determines
is attributable to making, funding and maintaining its Loans
and its Commitment.
IV.2 Changes in Capital Adequacy Regulations. If the amount of capital
required or expected to be maintained by each Lender, the Lending Installations
of the Lenders or the corporations controlling the Lenders (as the case may be)
is increased as a result of a Change (as hereinafter defined), then, within
fifteen days of written demand by such Lender pursuant to Section 4.4, the
Borrower shall pay each such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion on such increased capital which
such Lender determines is attributable to this Agreement, its Loans, its
interest in the Facility Letters of Credit, or its obligation to make Loans
hereunder or participate in or issue Facility Letters of Credit (after taking
into account such Lender's policies as to capital adequacy). "Change" means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, rule, regulation, policy,
guideline, interpretation, or directive of any Governmental Authority having
jurisdiction after the date of this Agreement which affects the amount of
capital required or reasonably expected to be maintained by each of the Lenders
or the Lending Installations, or the corporations controlling such Lenders, (as
the case may be). "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
IV.3 Funding Indemnification. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the applicable LIBOR Interest Period,
whether because of acceleration, prepayment or otherwise, or a LIBOR Advance is
not made on the date specified by the Borrower for any reason, the Borrower will
pay to the Agent for the benefit of the applicable Lenders the Break-up Fee upon
the Borrower's receipt of the written notice pursuant to Section 4.5.
IV.4 Lender Statements, Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Loans and shall take other measures in its discretion to
reduce any liability of the Borrower to such Lender under Sections 4.1 and 4.2
or to avoid the unavailability of a Type of a LIBOR Advance under Section 2.11,
so long as such designation or other measure is not disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Agent and to the Borrower as to the amount due, if any, under Sections 4.1, 4.2
or 4.3. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be
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final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a LIBOR
Loan shall be calculated as though each Lender funded its LIBOR Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the LIBOR Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement shall be payable on demand after receipt by
the Borrower of the written statement. The obligations of the Borrower under
Sections 4.1, 4.2 and 4.3 shall survive payment of the Obligations and
termination of this Agreement for a period of one year.
IV.5 Limitation on the Borrower's Liability. The Borrower shall not be
obligated to compensate any Lender pursuant to Sections 4.1, 4.2 or 4.3 for any
amounts attributable to a period more than one year prior to such Lender's
written notice under Section 4.4 of its intention to seek compensation under
Sections 4.1, 4.2 or 4.3.
ARTICLE V
CONDITIONS PRECEDENT
V.1 Conditions to Closing. This Agreement shall not be effective unless
and until (a) the Borrower shall have paid all fees then due and payable to the
Lenders, the Agent and the Arranger hereunder, and (b) the Borrower shall have
furnished to the Agent, in form and substance satisfactory to the Lenders and
their counsel and with sufficient copies for the Lenders, the following:
(a) The duly executed originals of the Loan
Documents, (all of which must have been reviewed by and
acceptable to the Agent) including this Agreement;
(b) Certified copies of the articles of
incorporation, limited partnership certificate, limited
liability company agreement or other organizational document
of the Borrower, the Guarantor, each Subsidiary and each
Qualified Borrower, to the extent applicable, with all
amendments and certified by the appropriate governmental
officer of the state of organization as of a recent date, but
only to the extent of any changes or additions thereto since
June 4, 1998;
(c) Certificates of good standing for the Borrower,
the Guarantor, each Subsidiary and each Qualified Borrower
certified by the appropriate governmental officer of the state
of organization, and foreign qualification certificates for
the Borrower and the Guarantor, certified by the appropriate
governmental officer, for each jurisdiction where any assets
are located and each other jurisdiction where the failure to
so qualify or be licensed (if required) would have a Material
Adverse Effect;
(d) Copies, certified by an officer of the Borrower,
the Guarantor, each Subsidiary and each Qualified Borrower, as
applicable, of each of the foregoing
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Persons' respective by-laws, partnership agreement, operating
agreement or similar document, to the extent applicable,
together with all amendments thereto, but only to the extent
of any changes or additions thereto since June 4, 1998;
(e) An incumbency certificate, executed by an
Authorized Officer of the Borrower, which shall identify by
name and title and bear the signature of the Persons
authorized to sign the Loan Documents and to make borrowings
hereunder on behalf of the Borrower, upon which certificate
the Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower;
(f) Copies, certified by the Secretary or Assistant
Secretary, of the Guarantor's (as the sole general partner of
the Borrower) Board of Directors' resolutions (and resolutions
of other bodies, if any are deemed necessary by counsel for
any Lender) authorizing on behalf of the Borrower as its sole
general partner the Advances provided for herein and the
execution, delivery and performance of the Loan Documents to
be executed and delivered by the Borrower hereunder;
(g) A written opinion of the Borrower's and the
Guarantor's counsel, addressed to the Lenders in substantially
the form of Exhibit B hereto;
(h) A certificate, signed by an officer of the
Guarantor, as the sole general partner of the Borrower,
stating that on the Closing Date no Default or Unmatured
Default has occurred and is continuing and that all
representations and warranties of the Borrower contained
herein are true and correct as of the Closing Date as and to
the extent set forth herein and that the Borrower is in
compliance with all covenants, terms and conditions of this
Agreement and the other Loan Documents;
(i) A pro forma compliance certificate in the form
attached hereto as Exhibit C;
(j) Evidence that all parties whose consent is
required for the Borrower to execute the Loan Documents have
provided such consents;
(k) Current UCC-11, judgment and tax lien searches
acceptable to the Agent; and;
(l) A title search or abstract for each property
within the Secured Collateral Pool and the Negative Collateral
Pool as of the Closing Date, and a commitment to endorse each
mortgage title policy for each property within the Secured
Collateral Pool as of the Closing Date, marked in a manner
satisfactory to Agent and in conformity with the requirements
of Section 5.3(j) hereof.
V.2 Conditions to Each Advance, Issuance of Facility Letter of Credit
and Continuation/Conversion. The following conditions must be satisfied as a
condition precedent to
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the making of an Advance, the issuance of a Facility Letter of Credit, or the
continuation of a LIBOR Advance or conversion of an existing Advance into a
LIBOR Advance:
(a) There exists no Default or Unmatured Default;
(b) The representations and warranties contained in
Article VI are true and correct as of such Borrowing Date,
Issuance Date, or date of conversion and/or continuation as
and to the extent set forth therein, except to the extent any
such representation or warranty is stated to relate solely to
an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date and
except for Property Breaches, in which case the compliance
certificate shall contain a calculation of the financial
covenants with and without including the Hotel Property with
respect to which there is a Property Breach and demonstrate
compliance with such covenants both with and without inclusion
of such Hotel Property;
(c) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders and
their counsel;
(d) Written money transfer instructions, in
substantially the form of Exhibit E hereto, addressed to the
Agent and signed by an Authorized Officer, together with such
other related money transfer authorizations as the Agent may
have reasonably requested; and
(e) Such approvals, opinions and documents pertaining
to any Advance requested by or on behalf of a Qualified
Borrower as the Agent may require have been provided.
Each Borrowing Notice, Letter of Credit Request, and
Conversion/Continuation Notice shall constitute a representation and warranty by
the Borrower that the conditions contained in Sections 5.2(a) and (b) have been
satisfied.
V.3 Conditions to Secured Collateral Pool. No Hotel Property may
henceforth be included in the Secured Collateral Pool until the Agent has
received, with respect to each such Hotel Property, each of the following
documents or information, which documents and information shall in all respects
be acceptable in form and substance to the Agent and the Lenders and their
counsel:
(a) Security Documents. Such Security Documents as
the Agent shall require including, without limitation, a
Mortgage in recordable form duly executed by the Borrower in
form and content acceptable to the Agent and its counsel and
giving the Agent a first priority lien on said Hotel Property
subject only to those easements or encumbrances consented to
in writing by the Agent ("Permitted Exceptions").
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(b) Security Agreements. Security Agreements duly
executed by the Borrower, granting to the Agent a first
priority security interest in all furniture, furnishings,
equipment, fixtures, supplies, inventory, accounts, licenses,
franchise agreements, general intangibles and other personal
property of every kind and description used in connection with
the ownership, operation and or management of each such Hotel
Property, together with (i) acknowledgment copies of financing
statements (UCC-1's) duly filed under the Uniform Commercial
Code of all jurisdictions necessary or, in the opinion of the
Agent, desirable to perfect the security interests created by
the Security Agreements; and (ii) certified copies of requests
for information (form UCC-11's) identifying all of the
financing statements on file with respect to the Borrower, the
Guarantor, any Qualified Borrower and the Lessee, as
applicable, indicating that no party claims an interest in any
of the personal property composing part of the Collateral. At
the Agent's option, the Security Agreements may be contained
in the Mortgages.
(c) Evidence of Due Authorization of Security
Documents and Corporate or Partnership Good Standing.
Certified copies of all partnership or corporate action, as
applicable, taken by each party executing a Mortgage, Security
Agreement, Assignments of Rents and Leases, UCC-1 financing
statements, and all other Loan Documents and other
instruments, certificates or agreements required by the Agent,
including resolutions of its board of directors or appropriate
partnership action, as applicable, authorizing the execution,
delivery and performance of the Security Documents and
evidence of the good standing of each party to each of the
Security Documents under their respective state's organization
and any other state the Agent deems necessary or appropriate.
(d) Assignments of Rents and Leases. The Assignment
of Rents and Leases with respect to each such Hotel Property
duly executed by the Borrower, which assignments may be
contained in the Mortgages at the Agent's option.
(e) Franchise Agreements. Copies of the franchise
agreement under which each such Hotel Property will be
operated, a copy of the franchisor's most recent inspection
report, and, unless waived by the Agent, a letter from each
franchisor agreeing to give notices to the Agent of any
defaults by the franchisee.
(f) Leases. Copies of each Lease and any service
agreements relating to each such Hotel Property, all of which
shall be acceptable in form and content to the Agent.
(g) Subordinations. Subordination agreement(s) duly
executed by the Lessee under the Leases subordinating the
Leases to the Mortgages.
(h) Management Agreements. Copy of any management
agreement for any Hotel Property subject to a management
agreement providing for management by a company satisfactory
to the Agent, and an assignment to the Agent of any such
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management agreement, as well as the subordination thereof and
management fees thereunder to the Mortgage for the subject
Hotel Property, and the consent of the manager thereto, all in
form and content acceptable to the Agent and its counsel.
(i) Surveys. An ALTA (or its equivalent acceptable to
the Agent) as-built survey of each such Hotel Property from a
licensed surveyor acceptable to the Agent, the Agent's counsel
and the title insurance company. The survey must be sufficient
in form and content so that the title insurance company will
issue an ALTA mortgagee's title insurance policy in which the
standard boundary, encroachment and survey exceptions have
been deleted. The survey for any Secured Collateral Pool
Property acquired by the Borrower after the date hereof must
be dated within ninety (90) days prior to the issuance of the
title policy and be certified to the Agent and the title
insurance company in form acceptable to the Agent. The survey
must show all easements or restrictions reflected as
exceptions in the title insurance policies and must not show
any matters affecting a particular Hotel Property which is
objectionable to the Agent. The survey shall indicate whether
any part of the particular Hotel Property is located within a
flood plain area.
(j) Title Insurance Policies. A mortgagee title
insurance policy with respect to each such Hotel Property in
an amount equal to 45% of the Value as of the date the
applicable Hotel Property is accepted into the Collateral
Pool, naming the Agent as the insured party, showing no liens
against such Hotel Property except for the Mortgage and
reflecting fee simple title to the Hotel Property in the
Borrower, subject to no exceptions except for Permitted
Exceptions. Such policy shall be issued by a title insurance
company acceptable to the Agent, and shall contain affirmative
coverage as to survey matters, and such other affirmative
coverage or endorsements (including, without limitation,
so-called tie-in endorsement or equivalent thereof acceptable
to the Agent) as may be reasonably required by the Agent.
(k) Environmental Audits. A hazardous materials
report site assessment for each such Hotel Property, performed
and issued by a nationally recognized environmental audit
firm, or as otherwise mutually agreed upon by the Borrower and
the Agent, addressed to the Agent as a party entitled to rely
thereon, dated not more than six (6) months prior to the date
the applicable Hotel Property is accepted into the Collateral
Pool, in compliance with the requirements of Exhibit F and
reflecting no indication of adverse environmental conditions
at the subject Hotel Property, including, without limitation,
asbestos, and including a certification that the Hotel
Property is not located on, and has not disturbed, a protected
wetlands area.
(l) Physical Inspections. A report of an independent
inspecting engineering firm satisfactory to the Agent as to
the physical condition of each such Hotel Property reflecting
a condition of such Hotel Property acceptable to the Agent and
the independent satisfaction of the Agent with the physical
condition of the Hotel Property pursuant to the on-site
inspection of officers of the Agent, for which
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inspections such officers shall be permitted access to the
Hotel Property during reasonable hours. All out of pocket
expenses incurred by the Agent in connection with such
inspections shall be payable on demand by the Borrower.
(m) Certificates of Insurance. Each of (i) a current
certificate of insurance as to the insurance maintained by the
Borrower on such Hotel Property (including flood insurance if
necessary) from the insurer or an independent insurance broker
dated as of the date of determination, identifying insurers,
types of insurance, insurance limits, and policy terms (which
certificate may evidence inclusion of such Hotel Property
under a "blanket" policy maintained by the Borrower); (ii)
certified copies of all policies evidencing such insurance (or
certificates therefor signed by the insurer or an agent
authorized to bind the insurer); and (iii) such further
information and certificates from the Borrower, its insurers
and insurance brokers as the Agent may request.
(n) Appraisals. Any existing appraisal of each such
Hotel Property which the Borrower may have access to. (Upon
any Default or Unmatured Default the Agent may order an
appraisal on any or all Collateral Pool Properties at the
Borrower's expense prepared by an MAI appraiser acceptable to
the Agent).
(o) Environmental Indemnity. An Environmental
Indemnity Agreement in form and content satisfactory to the
Agent and its counsel, executed by the Borrower, with respect
to each such Hotel Property.
(p) Opinion of Counsel. The favorable opinion of
counsel for the Borrower qualified to practice in the State in
which the Hotel Property is located, addressed to Agent as to
the enforceability against the Borrower of the Security
Documents, as applicable, and all other documents to be
delivered by such entities and, with respect to the Borrower,
specifically opining as to the existence and sufficiency of
consideration for the Security Documents to be signed by it,
each such opinion letter to be in form and content acceptable
to the Agent, and opining as to such other matters as the
Agent may request.
(q) Independent Market Study. An independent market
study acceptable to the Agent on each such Hotel Property.
(r) Certificate of Occupancy; As Built Plans and
Specifications. To the extent available or obtainable, a copy
of the certificate of occupancy for such Hotel Property, or
other evidence satisfactory to the Agent that no certificate
of occupancy is necessary to the use and occupation thereof,
together with a copy of as-built plans and specifications for
such Hotel Property, showing all improvements thereon to the
fullest extent available to the Borrower or in the Borrower's
possession.
(s) Zoning Compliance. A zoning letter or certificate
from the appropriate local official (or other evidence
satisfactory to the Agent) confirming that the use of
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the Hotel Property is in compliance with zoning regulations or
is an otherwise permitted use, and other evidence reasonably
satisfactory to the Agent that in case of casualty the
improvements could be rebuilt in substantially the manner
existing prior to such casualty.
(t) Permit Assurances. Evidence by the Borrower or
the Borrower's agents or representatives reasonably
satisfactory to the Agent that all activities being conducted
on such Hotel Property which require federal, state or local
licenses or permits have been duly licensed and that such
licenses or permits are in full force and effect.
(u) Operating Statements. Operating statements for
such Hotel Property in form acceptable to the Agent covering
each of the last twelve (12) consecutive calendar months (or,
if twelve (12) calendar months have not passed since
completion of construction of such Hotel Property, an
operating statement for each quarter since such completion)
ending immediately prior to the addition of such Hotel
Property to the Secured Collateral Pool; provided, however,
that if twelve (12) calendar months have not passed since the
Borrower acquired title to the Hotel Property, such operating
statements for periods prior to the Borrower's ownership as
are in the Borrower's possession or reasonably obtainable by
the Borrower.
(v) Doing Business Opinion or Title Endorsement. For
Hotel Properties located in such states as the Agent may
designate, either (i) an opinion, dated the date of the
inclusion of each such Hotel Property in the Secured
Collateral Pool, of legal counsel acceptable to the Agent
qualified to practice in the state in which such Hotel
Property is located, or (ii) a doing-business endorsement to
the title insurance policy required by Section 5.3 (j) hereof,
each to the effect that neither the Agent nor any Lender shall
be required to qualify to do business in such state or any
political subdivision thereof or to become liable to pay any
taxes in such state or any political subdivision thereof
solely on account of the receipt of the security title or lien
on such Hotel Property securing the Obligations, such opinion
or endorsement to be satisfactory to the Agent, subject to
practices customary in such state with respect to the scope
and substance of such opinion or endorsement.
(w) Photographs. Photographs of the Hotel Property,
and a listing of amenities.
(x) Legal Description. A legal description of the
Hotel Property.
(y) Site Plan. A site plan.
(z) Location Map. A location map with the Hotel
Property clearly identified thereon.
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(aa) Borrowing Base. The Cost and Implied Value for
each Hotel Property from which the Borrowing Base can be
determined.
(bb) Pro forma Compliance Certificate. A pro forma
compliance certificate in the form attached hereto as
Exhibit C.
(cc) Other Documents. Such other approvals, opinions,
information or documents as the Agent may request, it being
understood that all Hotel Properties now or hereafter being
considered for inclusion in the Secured Collateral Pool must
be acceptable to the Lenders.
If at any time the Agent reasonably determines, in its sole discretion,
that a Hotel Property should be removed from the Secured Collateral Pool,
whether due to environmental concerns which have changed or become known since
the date of inclusion in the Secured Collateral Pool, casualty or otherwise, the
Agent shall so notify the Borrower in writing and such Hotel Property shall
thereafter no longer be considered part of the Secured Collateral Pool, nor
included in the calculation of the Borrowing Base. Any such Hotel Property so
removed from the Secured Collateral Pool shall upon written request from the
Borrower be released by the Agent from the lien of any Mortgage provided there
is then existing no Default or Unmatured Default hereunder and the provisions of
Section 7.13 hereof have been complied with. In addition, the Borrower may
substitute another Hotel Property for the one removed from the Secured
Collateral Pool provided such new Hotel Property is acceptable to the Lenders
and all conditions precedent to the inclusion of such Hotel Property in the
Secured Collateral Pool have been complied with including, without limitation,
the provisions of Section 7.13 hereof.
V.4 Conditions to Negative Collateral Pool. No Hotel Property may be
included in the Negative Collateral Pool until the Agent has received, with
respect to each such Hotel Property, each of the following documents or
information, which documents and information shall in all respects be acceptable
in form and substance to the Agent and the Lenders and their counsel:
(a) Negative Pledge. The Negative Pledge Agreement.
(b) UCC Searches. Certified copies of requests for
information (form UCC-11) identifying all of the financing
statements on file with respect to the Borrower, the
Guarantor, any Qualified Borrower and the Lessee, as
applicable, indicating that no Person claims an interest in
any of the personal property belonging to the Borrower and
located on or at the Hotel Property.
(c) Evidence of Due Authorization and Corporate or
Partnership Good Standing. Certified copies of all partnership
or corporate action, as applicable, taken by each party
executing a Negative Pledge Agreement, and all other Loan
Documents and other instruments, certificates or agreements
required by the Agent, including resolutions of its board of
directors or appropriate partnership action, as applicable,
authorizing the execution, delivery and performance of the
Negative Pledge Agreement and evidence of the good standing of
each party to each Negative Pledge
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Agreement under their respective state's organization and any
other state the Agent deems necessary or appropriate.
(d) Franchise Agreements. Copies of the franchise
agreement under which each such Hotel Property will be
operated, a copy of the franchisor's most recent inspection
report, and, unless waived by the Agent, a letter from each
franchisor agreeing to give notices to the Agent of any
defaults by the franchisee.
(e) Leases. Copies of each Lease and any service
agreements relating to each such Hotel Property all of which
shall be acceptable in form and content to the Agent.
(f) Management Agreements. Copy of any management
agreement for any Hotel Property subject to a management
agreement providing for management by a company satisfactory
to the Agent, and an assignment to the Agent of any such
management agreement, all in form and content acceptable to
the Agent and its counsel.
(g) Title Insurance Policies; Updated Searches.
Copies of any owner's title insurance policy with respect to
each such Hotel Property showing no liens encumbering such
Hotel Property and reflecting fee simple title to the Hotel
Property in the Borrower, subject to no exceptions except for
Permitted Exceptions. The Borrower shall also provide updated
title searches or abstracts sufficient to allow the Agent to
determine the Hotel Property is unencumbered as of the date
hereof.
(h) Environmental Audits. Any existing hazardous
materials report site assessment for each such Hotel Property,
reflecting no indication of adverse environmental conditions
at the subject Hotel Property, including, without limitation,
asbestos, and including a certification that the Hotel
Property is not located on, and has not disturbed, a protected
wetlands area.
(i) Physical Inspections. Any existing report of an
inspecting engineering firm as to the physical condition of
each such Hotel Property reflecting a condition of such Hotel
Property acceptable to the Agent and the independent
satisfaction of the Agent with the physical condition of the
Hotel Property pursuant to the on-site inspection of officers
of the Agent, for which inspections such officers shall be
permitted access to the Hotel Property during reasonable
hours. All out of pocket expenses incurred by the Agent in
connection with such inspections shall be payable on demand by
the Borrower.
(j) Appraisals. Any existing appraisal of each such
Hotel Property which the Borrower may have access to. (Upon
any Default or Unmatured Default the Agent may order an
appraisal on any or all Collateral Pool Properties at the
Borrower's expense prepared by an MAI appraiser acceptable to
the Agent).
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(k) Environmental Indemnity. An Environmental
Indemnity Agreement in form and content satisfactory to the
Agent and its counsel, executed by the Borrower, with respect
to each such Hotel Property.
(l) Operating Statements. Operating statements for
such Hotel Property acceptable to the Agent covering each of
the last twelve (12) consecutive calendar months (or, if
twelve (12) calendar months have not passed since completion
of construction of such Hotel Property, an operating statement
for each quarter since such completion) ending immediately
prior to the addition of such Hotel Property to the Negative
Collateral Pool; provided, however, that if twelve (12)
calendar months have not passed since the Borrower acquired
title to the Hotel Property, such operating statements for
periods prior to the Borrower's ownership as are in the
Borrower's possession or reasonably obtainable by the
Borrower.
(m) Photographs. Photographs of the Hotel Property,
and a listing of amenities.
(n) Legal Description. A legal description of the
Hotel Property.
(o) Site Plan. A site plan.
(p) Location Map. A location map with the Hotel
Property clearly identified thereon.
(q) Independent Market Study. An independent market
study acceptable to the Agent.
(r) Borrowing Base. The Cost and Implied Value for
each Hotel Property from which the Borrowing Base can be
determined.
(s) Pro forma Compliance Certificate. A pro forma
compliance certificate in the form attached hereto as
Exhibit C.
(t) Other Documents. Such other approvals, opinions,
information or documents as the Agent may request.
If at any time the Agent reasonably determines, in its sole discretion,
that a Hotel Property should be removed from the Negative Collateral Pool,
whether due to environmental concerns which have changed or become known since
the date of inclusion in the Negative Collateral Pool, casualty or otherwise,
the Agent shall so notify the Borrower in writing and such Hotel Property shall
thereafter no longer be considered part of the Negative Collateral Pool, nor
included in the calculation of the Borrowing Base. Any such Hotel Property so
removed from the Negative Collateral Pool shall upon written request from the
Borrower be released from the Negative Pledge Agreement applicable thereto
provided there is then existing no Default or Unmatured Default hereunder, and
the provisions of Section 7.13 hereof have been complied with. In addition, the
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Borrower may substitute another Hotel Property for the one removed from the
Negative Collateral Pool provided such Hotel Property is acceptable to the
Lenders and all conditions precedent to the inclusion of such Hotel Property in
the Negative Collateral Pool have been complied with.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower and the Guarantor represent and warrant to the Lenders
that as of the date hereof, and as of each Borrowing Date, Issuance Date and
each conversion and/or continuation (except as otherwise disclosed to and
approved by the Required Lenders):
VI.1 Existence. They are duly organized, validly existing and in good
standing under the laws of the State of Tennessee, with their principal places
of business in Memphis, Tennessee, and are duly qualified as a foreign
partnership or corporation (as applicable), properly licensed (if required), in
good standing and have all requisite authority to conduct their business in each
jurisdiction in which either owns Hotel Properties and, except where the failure
to be so qualified or to obtain such authority would not have a Material Adverse
Effect, in each other jurisdiction in which their business is conducted. Each of
their Subsidiaries, Qualified Borrowers and Investment Affiliates is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite authority to conduct its
business in each jurisdiction in which it owns Hotel Property, and except where
the failure to be so qualified or to obtain such authority would not have a
Material Adverse Effect, in each other jurisdiction in which it conducts
business.
VI.2 Authorization and Validity. They have the power and authority and
legal right to execute and deliver the Loan Documents and to perform their
respective obligations thereunder. The execution and delivery by them of the
Loan Documents and the performance of their obligations thereunder have been
duly authorized by proper proceedings, and the Loan Documents constitute legal,
valid and binding obligations of the Borrower and the Guarantor enforceable
against them in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
VI.3 No Conflict; Government Consent. Neither the execution and
delivery by them of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate in
any material respect any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on, respectively, the Borrower, the
Guarantor or any of their Subsidiaries or Qualified Borrowers or any of such
entities' articles of incorporation, by-laws, certificates of limited
partnership, partnership agreements or operating agreements, as the case may be,
or the provisions of any indenture, declaration of trust, instrument or
agreement to which any entity is a party or is subject, or by which it, or its
Hotel Property, is bound, or conflict with or constitute a default thereunder,
or result in the creation or imposition of any Lien in, of or on the Hotel
Property of such entity pursuant to the terms of any such indenture,
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instrument or agreement. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents.
VI.4 Financial Statements; Material Adverse Change. The most recent
consolidated financial statements of the Borrower, the Guarantor and their
Subsidiaries delivered to the Lenders prior to the date that this representation
is made were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present the consolidated financial condition
and operations of the Borrower, the Guarantor and their Subsidiaries at such
date and the consolidated results of their operations for the period then ended.
Since the date of such financial statements, there has been no change in the
business, property, results of operations or financial condition of the
Borrower, the Guarantor or their Subsidiaries which have or could be reasonably
expected to have a Material Adverse Effect.
VI.5 Taxes. The Borrower, the Guarantor and their Subsidiaries, and any
Qualified Borrowers, have filed all United States federal tax returns and all
other tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by,
respectively, the Borrower, the Guarantor, any of their Subsidiaries or any
Qualified Borrowers, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. No tax liens have
been filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower, the Guarantor and
their Subsidiaries, and to the Borrower's and the Guarantor's collective
knowledge, their Qualified Borrowers in respect of any taxes or other
governmental charges are adequate.
VI.6 Litigation and Contingent Obligations. Except as set forth on
Schedule 6, there is no litigation, arbitration, governmental investigation or
proceeding pending or, to the knowledge of any of the Guarantor's officers,
threatened, in a writing received by the Borrower, the Guarantor, a Subsidiary,
or a Qualified Borrower, against or affecting the Borrower , the Guarantor or
any of their Subsidiaries, Qualified Borrowers or Investment Affiliates which,
if adversely determined, would have a Material Adverse Effect. Except as
disclosed on Schedule 7, they have no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
7.1, which would have or could be reasonably expected to have a Material Adverse
Effect.
VI.7 Subsidiaries. Schedule 1 hereto contains an accurate list of all
of the presently existing Subsidiaries and Investment Affiliates of the Borrower
and the Guarantor, setting forth their respective jurisdictions of formation,
the percentage of their respective Capital Stock owned by them or their
Subsidiaries, properties owned and a description of its business and with
respect to Investment Affiliates, whether such Investment Affiliate constitutes
a Qualified Borrower. All of the issued and outstanding shares of Capital Stock
of such Subsidiaries and, to the Borrower's and the Guarantor's collective
knowledge, such Investment Affiliates have been duly authorized and issued and
are fully paid and non-assessable.
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VI.8 ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither the Borrower nor the Guarantor,
nor any other member of the Controlled Group has incurred any withdrawal
liability to Multiemployer Plans in excess of $250,000 in the aggregate. If
withdrawals from all Multiemployer Plans occurred, the liability would not
exceed $250,000. Each Plan and, to the Borrower's and the Guarantor's collective
knowledge, each Multiemployer Plan, complies in all material respects with all
applicable requirements of law and regulations and the Borrower, the Guarantor
and all members of the Controlled Group have complied in all material respects
with ERISA and the Code with respect to each Plan. No Reportable Event has
occurred with respect to any Plan, neither the Borrower nor the Guarantor nor
any other member of the Controlled Group has withdrawn from any Plan or
Multiemployer Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan or, to the Borrower's or the Guarantor's
collective knowledge, Multiemployer Plan. Neither the Borrower nor the Guarantor
nor any member of the Controlled Group has any Plans or is a party to any
collective bargaining agreements other than those listed on Schedule 3. There is
no accumulated funding deficiency (as defined in Section 412 of the Code or
Section 302 of ERISA) outstanding which could reasonably be expected to have a
Material Adverse Effect, there is no lien outstanding under Section 412 of the
Code or Section 302 of ERISA with respect to assets of the Borrower or the
Guarantor or any member of the Controlled Group and no requirement to provide
security under Section 401(a)(29) of the Code or Section 307 of ERISA has been
or is reasonably expected to be imposed on assets of the Borrower, the Guarantor
or any member of the Controlled Group. No liability to the PBGC or the Internal
Revenue Service with respect to any Plan or Multiemployer Plan or trust related
thereto has been or is reasonably expected to be incurred by the Borrower or the
Guarantor or any member of the Controlled Group which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor the
Guarantor nor any member of the Controlled Group has any contingent liability
with respect to any post-retirement benefits under any "welfare plan" (as
defined in Section 3(l) of ERISA) nor withdrawal liability or exit fee or charge
with respect to any such post-retirement benefits under any welfare plan which
could reasonably be expected to have a Material Adverse Effect. Throughout the
term of the Loan, the Borrower and the Guarantor are not and neither will be an
"employee benefit plan" as defined in Section 3(32) of ERISA or a "governmental
plan" within the meaning of Section 3(3) of ERISA, none of the assets of the
Borrower or the Guarantor will constitute "plan assets" of one or more plans for
purposes of Title I of ERISA, and neither the Borrower nor the Guarantor will be
subject to state statutes applicable to Borrower or the Guarantor regulating
investments and fiduciary obligations with respect to governmental plans.
VI.9 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the Borrower, the Guarantor or
any of their Subsidiaries or any Investment Affiliates, or Qualified Borrowers,
to the Agent or any Lender for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Borrower, the Guarantor
or any of their Subsidiaries, any Investment Affiliates or Qualified Borrowers
to the Agent or any Lender will be, true and accurate (taken as a whole) on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time. There are no facts, events or conditions
directly and specifically affecting the Borrower, the Guarantor, their
Subsidiaries or any Investment Affiliate or
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Qualified Borrower known to the Borrower or the Guarantor and not disclosed to
the Agent or not disclosed in the information furnished by or on behalf of the
Borrower, the Guarantor, their Subsidiaries or any Investment Affiliates or
Qualified Borrowers, which, in the aggregate, have or could be reasonably
expected to have a Material Adverse Effect.
VI.10 Regulation U. They do not hold any margin stock (as defined in
Regulation U).
VI.11 Material Agreements. Neither they nor any Subsidiary or
Investment Affiliate or Qualified Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (i) any agreement to which it is a party, which default could have
a Material Adverse Effect, or (ii) except as disclosed on Schedule 8 any
agreement or instrument evidencing or governing Indebtedness.
VI.12 Compliance With Laws. Except as set forth in Schedule 5 they and
their Subsidiaries and any Investment Affiliates and Qualified Borrowers have
complied in all material respects, to their collective knowledge, with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Hotel Property except where such non-compliance would not have
a Material Adverse Effect. Except as disclosed on Schedule 5, neither the
Borrower, the Guarantor, any Subsidiary, nor any Investment Affiliate nor any
Qualified Borrower, has received any written notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local environmental, health and safety statutes
and regulations or the subject of any federal or state remedial action
responding to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could have a Material
Adverse Effect.
VI.13 Ownership of Collateral Pool Properties. On the date of this
Agreement, the Borrower will have good title, free of all Liens other than
Permitted Liens, to all of the Collateral Pool Properties as identified on
Exhibits G and H.
VI.14 Investment Company Act. Neither Borrower, the Guarantor nor any
Subsidiary or any Investment Affiliate or Qualified Borrower is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
VI.15 Public Utility Holding Company Act. Neither Borrower, the
Guarantor nor any Subsidiary or any Investment Affiliate or Qualified Borrower
is a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
VI.16 Solvency.
(a) Immediately after the Closing Date and
immediately following the making of each Loan and after giving
effect to the application of the proceeds of such
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Loans, (a) the fair value of the assets of the Borrower, the
Guarantor and their Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower, the
Guarantor and their Subsidiaries on a consolidated basis; (b)
the present fair saleable value of all property of the
Borrower, the Guarantor and their Subsidiaries on a
consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Borrower, the
Guarantors and their Subsidiaries on a consolidated basis on
their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute
and matured; (c) the Borrower, the Guarantor and their
Subsidiaries on a consolidated basis will be able to pay their
debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and
(d) the Borrower, the Guarantor and their Subsidiaries on a
consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged
as such businesses are now conducted and are proposed to be
conducted after the date hereof.
(b) They do not intend to, or to permit any of their
Subsidiaries, Investment Affiliates or Qualified Borrowers to
incur debts beyond their ability to pay such debts as they
mature, taking into account the timing of and amounts of cash
to be received by them or any such Subsidiary and the timing
of the amounts of cash to be payable on or in respect of their
Indebtedness or the Indebtedness of any such Subsidiary.
VI.17 Insurance. While any of the Obligations remain outstanding the
Borrower shall procure and maintain or shall cause to be procured and maintained
continuously in effect, policies of insurance in form and amounts and issued by
companies, associations or organizations licensed to do business in the states
in which the Collateral Pool Properties are located, with a Best's Rating of no
less than A, XII and otherwise satisfactory to the Agent covering such
casualties, risk, perils, liabilities and other hazards reasonably required by
the Agent. All original policies, or certificates thereof, and endorsements and
renewals thereof shall be delivered to and retained by the Agent unless the
Agent waives this requirement in writing. All policies shall expressly protect
or recognize the Lenders' interests as required by the Agent. Without limiting
the generality of the foregoing, the Borrower shall provide or cause to be
provided the following types of insurance coverage:
(a) Until repayment and/or fulfillment of the
Obligations: (i) property insurance on a "special causes of
loss" replacement cost basis (or fire, extended coverage and
difference in conditions basis) including flood, earthquake
and sinkhole coverages in amount equal to the replacement cost
of the Collateral Pool Properties, naming the Agent as
mortgagee and loss/payee under a standard form mortgagee
clause; (ii) Comprehensive General Liability Insurance
(including contractual liability, owners and contractors
protective coverages, products & completed operations,
personal & advertising injury liability, fire damage, legal
liability and alienated premises coverage) and Comprehensive
Auto Liability Insurance in a minimum amount of $20,000,000
per each occurrence; (iii) Statutory Workers' Compensation and
Employer's Liability Insurance in the minimum amounts of
$1,000,000 each accident, $1,000,000 each employee-disease,
$1,000,000 policy
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limit-disease; and (iv) Rent loss insurance against loss of
income by reason of any hazard covered under the insurance
required under this subparagraph (a) in an amount sufficient
to avoid any co-insurance penalty, but in any event for not
less than two (2) years gross receipts from all sources of
income from the Collateral Pool Properties.
(b) Such additional insurance as may be reasonably
required by the Agent from time to time in the event that any
of the Collateral Pool Properties are exposed to hazards and
risks with respect to which the Agent deems the existing
insurance inadequate to properly protect its interests.
All policies of insurance shall have attached thereto a lender's loss
payable endorsement for the benefit of the Agent as loss payee, in form
satisfactory to the Agent. The Borrower shall furnish the Agent with a certified
copy of an original or a certificate of insurance of all policies of insurance
required. All policies or certificates, as the case may be, of insurance shall
set forth the coverage, the limits of liability, the name of the carrier, the
policy number, the Bests' Rating of the carrier and the period of coverage. In
addition, all policies of insurance required under the terms hereof shall (i)
contain an endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy, notwithstanding any act or
negligence of the Borrower or any party holding under the Borrower which might
otherwise result in a forfeiture of said insurance and the further agreement of
the insurer waiving all rights of setoff, counterclaim or deductions against the
Borrower, (ii) indemnify the Agent against losses due to its sole or
contributory negligence. At least twenty (20) days prior to the expiration of
each required policy, the Borrower shall deliver to the Agent evidence of the
renewal or replacement of such policy, continuing such insurance in their form
as required by this agreement. All such policies shall contain a provision that
notwithstanding any contrary agreement between the Borrower and the applicable
insurance company, such policies will not be canceled, allowed to lapse without
renewal, surrendered or amended (which provision shall include any reduction in
the scope or limits of coverage) without at least thirty (30) days prior written
notice to the Agent.
VI.18 NYSE and REIT Status. The Guarantor's common stock is listed on
the New York Stock Exchange and there is no proceeding pending to delist said
stock, and the Guarantor is qualified as a real estate investment trust and
currently is in compliance with all applicable provisions of the Code.
VI.19 Environmental Matters. Except as disclosed in Schedule 4, after
due inquiry and investigation in accordance with good commercial or customary
practices, without regard to whether the Agent or the Lenders have or hereafter
obtain any knowledge or report of the environmental condition of any of the
Collateral Pool Properties, each of the following representations and warranties
is true and correct except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) During the period of the Borrower's, and/or the
Guarantor's, ownership of the Collateral Pool Properties, the
Collateral Pool Properties have not been used
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for industrial or manufacturing purposes, for landfill,
dumping or other waste disposal activities or operations, for
generation, storage, use, sale, treatment, processing,
recycling or disposal of any Hazardous Material in violation
of any applicable Environmental Requirement, for underground
or aboveground storage tanks, or for any other use that could
give rise to the release of any Hazardous Material on any of
the Collateral Pool Properties; to the best of their
knowledge, no such use of any of the Collateral Pool
Properties occurred at any time prior to the period of their
ownership; and to the best of their knowledge, no such use on
any adjacent property occurred at any time prior to the date
hereof;
(b) to the best of their knowledge, there is no
Hazardous Material, storage tank (or similar vessel) whether
underground or otherwise, sump or well currently on any of the
Collateral Pool Properties;
(c) they have received no notice and have no
knowledge of any Environmental Claim regarding any of the
Collateral Pool Properties or any adjacent property;
(d) the present conditions, uses and activities on
the Collateral Pool Properties do not violate any
Environmental Requirement and the uses of the Collateral Pool
Properties which Borrower (and each tenant and subtenant, if
any) makes and intends to make of the Properties comply and
will comply with all applicable Environmental Requirements;
and neither they, nor to their knowledge, any tenant or
subtenant, has obtained or is required to obtain any permit or
other authorization to construct, occupy, operate, use or
conduct any activity on any of the Collateral Pool Properties
by reason of any Environmental Requirement;
(e) None of the Collateral Pool Properties appear on
the National Priorities List or any other list or database of
hotels maintained by any local, state or federal agency or
department showing Collateral Pool Properties which are known
to contain or which are suspected of containing a Hazardous
Material; and
(f) They have never applied for and been denied
environmental impairment liability insurance coverage relating
to any of the Collateral Pool Properties.
VI.20 Licenses, Etc. The Borrower, the Guarantor, their Subsidiaries,
and any Qualified Borrowers or Investment Affiliates have obtained and hold in
full force and effect, all material trademarks, trade names, copyrights,
licenses, permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights consents and approvals which are
necessary for the operation of the Collateral Pool Properties.
VI.21 Judgments. There are no judgments, decrees, or orders of any kind
against the Borrower, the Guarantor, their Subsidiaries, any Qualified Borrowers
or any Investment Affiliates unpaid of record which would have a Material
Adverse Effect.
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VI.22 Lessee; Property Manager. Except as set forth on Schedule 9, as
of the date hereof, the Lessee and manager of each Collateral Pool Property is
RFS, Inc.
VI.23 Updated Schedules. The Borrower will, at the Agent's request,
update any or all of the Schedule(s) to this Agreement by delivery to the Agent
of such revised Schedule(s) and, from and after the date of delivery of such
updated Schedule(s) to the Agent, and its approval by the Required Lenders, the
representations and warranties of the Borrower hereunder shall be deemed to
reflect such revised Schedule, provided, however, in no event may the Borrower
cure any Default hereunder by substituting a revised Schedule for one that was
incorrect when submitted.
VI.24 Collateral Pool Properties. Exhibits G and H hereto contain a
complete and accurate list of Hotel Properties in the Secured Collateral Pool
and in the Negative Collateral Pool as of the Closing Date, and as supplemented
from time to time. With respect to each such Collateral Pool Property, the
Borrower hereby represents and warrants as follows except to the extent
disclosed in writing to the Lenders and approved by the Required Lenders (which
approval shall not be unreasonably withheld):
(a) No portion of any improvement on each Collateral
Pool Property is located in an area identified by the
Secretary of Housing and Urban Development or any successor
thereto as an area having special flood hazards pursuant to
the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or,
if located within any such area, the Borrower has obtained and
will maintain the insurance prescribed in Section 6.17 hereof.
(b) The Borrower, or the Lessee, has obtained all
material certificates, licenses and other approvals,
governmental and otherwise, necessary for the operation of
each Collateral Pool Property and the conduct of its business
and all required zoning, building code, land use,
environmental and other similar permits or approvals which it
is required to maintain, all of which are in full force and
effect as of the date hereof and not subject to revocation,
suspension, forfeiture or modification.
(c) To the Borrower's knowledge, each Collateral Pool
Property and the present use and occupancy thereof are in
material compliance with all applicable zoning ordinances
(without reliance upon adjoining or other properties),
building codes, land use and Environmental Laws, laws relating
to the disabled including, but not limited to, the Americans
with Disabilities Act to the extent applicable, and other
similar laws ("Applicable Laws").
(d) Each Collateral Pool Property is served by all
utilities required for the current or contemplated use
thereof. All utility service is provided by public utilities
and each Collateral Pool Property has accepted or is equipped
to accept such utility service.
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(e) All public roads and streets necessary for
service of and access to each Collateral Pool Property for the
current or contemplated use thereof have been completed, are
serviceable and all-weather and are physically and legally
open for use by the public.
(f) Each Collateral Pool Property is served by public
water and sewer systems or, if any Collateral Pool Property is
not serviced by a public water and sewer system, such
alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise
complies in all material respects with, all Applicable Laws
with respect to such alternate systems.
(g) The Borrower is not aware of any latent or patent
structural or other significant deficiency of any Collateral
Pool Property. Each Collateral Pool Property is free of damage
and waste that would materially and adversely affect the value
thereof, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. Each Collateral
Pool Property is free from damage caused by fire or other
casualty. There is no pending or, to the actual knowledge of
Borrower threatened condemnation proceedings affecting any
Collateral Pool Property, or any part thereof.
(h) To the Borrower's knowledge, all liquid and solid
waste disposal, septic and sewer systems located on any
Collateral Pool Property are in a good and safe condition and
repair and to the Borrower's knowledge, in compliance with all
Applicable Laws with respect to such systems.
(i) All improvements on each Collateral Pool Property
lie within the boundaries and building restrictions of the
legal description of record of each Collateral Pool Property,
no such improvements encroach upon easements benefitting any
Collateral Pool Property other than encroachments that do not
materially adversely affect the use or occupancy thereof, and
no improvements on adjoining properties encroach upon any
Collateral Pool Property or easements benefitting any
Collateral Pool Property other than encroachments that do not
materially adversely affect the use or occupancy thereof. All
amenities, access routes or other items that materially
benefit each Collateral Pool Property are under direct control
of the Borrower, constitute permanent easements that benefit
all or part of each Collateral Pool Property or are public
property, and each Collateral Pool Property, by virtue of such
easements or otherwise, is contiguous to a physically open,
dedicated all weather public street, and has the necessary
permits for ingress and egress.
(j) There are no delinquent taxes, ground rents,
water charges, sewer rents, assessments, insurance premiums,
leasehold payments, or other outstanding charges affecting any
Collateral Pool Property except to the extent such items are
being contested in good faith and as to which adequate
reserves have been provided.
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(k) Each Collateral Pool Property is assessed for
real estate tax purposes as one or more wholly independent tax
lot or lots, separate from any adjoining land or improvements
not constituting a part of such lot or lots, and no other land
or improvements is assessed and taxed together with any
Collateral Pool Property or any portion thereof.
(l) Each Collateral Pool Property is operated in
compliance with a franchise agreement entered into with a
franchise chain approved by the Lenders, and the Borrower is
not in default under any of the terms thereof.
(m) A breach of any of the representations and
warranties contained in this Section 6.24 with respect to a
Collateral Pool Property shall disqualify, unless otherwise
approved by the Required Lenders, such Collateral Pool
Property from being in the Collateral Pool but shall not
constitute a Default (unless the elimination of such
Collateral Pool Property from the Collateral Pool results in a
Default under one of the other provisions of this Agreement).
ARTICLE VII
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
VII.1 Financial Reporting. The Borrower and the Guarantor will
maintain, for themselves and each Subsidiary, and shall cause each Qualified
Borrower and Investment Affiliate to maintain, a system of accounting
established and administered in accordance with GAAP, and shall furnish to the
Lenders:
(a) As soon as available, but in any event not later
than forty-five (45) days after the close of each fiscal
quarter, for the Borrower and the Guarantor an unaudited
consolidated balance sheet as of the close of each such period
and the related unaudited consolidated statements of income
and retained earnings and of cash flows of the Borrower, the
Guarantor and their Subsidiaries for such period and the
portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for
the previous year, including, without limitation, a list of
all contingent liabilities, all certified by the Borrower's
and the Guarantor's chief Authorized Officers, and, for the
Guarantor, as soon as available, but in any event not later
than ninety (90) days after the close of each fiscal year,
similar audited financial statements prepared by a public
accounting firm acceptable to the Agent;
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(b) As soon as available, but in any event not later
than forty-five (45) days after the close of each fiscal
quarter, for the Borrower, the Guarantor and their
Subsidiaries, related reports in form and substance
satisfactory to the Lenders, all certified by the Borrower's
and the Guarantor's chief financial officers or chief
accounting officers, including a statement of Funds From
Operations, Adjusted EBITDA, a listing of capital expenditures
(in the level of detail as disclosed in the Borrower's most
recent Form 10Q), a report listing and describing all
Collateral Pool Properties included in either the Secured or
Negative Collateral Pools, including, without limitation, each
Collateral Pool Property's name, franchise affiliations,
lessee name and address, Adjusted Cash Flow, Borrowing Base,
Cost, Property Operating Income, Adjusted EBITDA, lease
payments, real estate taxes, calculation of the Capital
Expenditure Reserve Amount, management fees, occupancy rates,
square footage, date acquired or completed, and such other
information as may be requested to evaluate the quarterly
compliance certificate delivered as provided below;
(c) As soon as publicly available but in no event
later than the date such reports are to be filed with the
Securities Exchange Commission, copies of all Form 0XXx, 0XXx,
8Ks, and any other annual, quarterly, monthly or other
reports, copies of all registration statements and any other
public information which the Borrower, the Guarantor or any of
their Subsidiaries files with the Securities Exchange
Commission and to the extent any of such reports contains
information required under the other subsections of this
Section 7.1, the information need not be furnished separately
under the other subsections;
(d) As soon as available, but in any event not later
than ninety (90) days after the close of each fiscal year of
the Borrower, the Guarantor and their Subsidiaries, reports in
form and substance satisfactory to the Lenders, certified by
their respective Authorized Officers containing Property
Operating Income for each Collateral Pool Property;
(e) Not later than forty-five (45) days after the end
of each of the first three fiscal quarters, and not later than
ninety (90) days after the end of the fiscal year, a
compliance certificate in substantially the form of Exhibit C
hereto signed by the Borrower's and the Guarantor's Authorized
Officers confirming that the Borrower and the Guarantor are in
compliance with all of the covenants of the Loan Documents,
showing the calculations and computations necessary to
determine compliance with the financial covenants contained in
this Agreement (including such schedules and backup
information as may be necessary to demonstrate such
compliance) and stating that to such officer's best knowledge,
no other Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and
status thereof;
(f) As soon as possible and in any event within ten
(10) Business Days after the Borrower or the Guarantor knows
that any Reportable Event has occurred with respect to any
Plan, a statement, signed by their chief Authorized Officers,
describing
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said Reportable Event and within twenty (20) days after such
Reportable Event, a statement signed by such Authorized
Officers describing the action which they propose to take with
respect thereto; and within ten (10) Business Days of receipt,
any notice from the Internal Revenue Service, PBGC or
Department of Labor with respect to a Plan regarding any
excise tax, proposed termination of a Plan, prohibited
transaction or fiduciary violation under ERISA or the Code
which could result in any liability to the Borrower or the
Guarantor or any member of the Controlled Group in excess of
$100,000; and within ten (10) Business Days of filing, any
Form 5500 filed by the Borrower or the Guarantor with respect
to a Plan, or any member of the Controlled Group which
includes a qualified accountant's opinion;
(g) As soon as possible and in any event within
thirty (30) days after receipt by the Borrower or the
Guarantor, a copy of (i) any notice or claim to the effect
that the Borrower or the Guarantor or any of their
Subsidiaries or Qualified Borrowers or Investment Affiliates
is or may be liable to any Person as a result of the release
by such entity, or any of its Subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any
federal, state or local environmental, health or safety law or
regulation by the Borrower, the Guarantor or any of their
Subsidiaries or Qualified Borrowers or Investment Affiliates,
which, in either case, could be reasonably likely to have a
Material Adverse Effect;
(h) Promptly upon the furnishing thereof to the
partners of the Borrowers or shareholders of the Guarantor,
copies of all financial statements, reports and proxy
statements so furnished;
(i) Promptly upon the distribution thereof to the
press or the public, copies of all press releases;
(j) As soon as possible, and in any event within ten
(10) days after the Borrower or the Guarantor knows of any
fire or other casualty or any pending or threatened
condemnation or eminent domain proceeding with respect to all
or any portion of any Collateral Pool Property, a statement
signed by the Authorized Officer of the Borrower or the
Guarantor, describing such fire, casualty or condemnation and
the action the Borrower intends to take with respect thereto;
(k) Promptly upon the giving of any notices of
default under any of the Leases, copies of all such notices;
(l) Not later than forty-five (45) days after the end
of each quarter, an unaudited financial statement for each
Qualified Borrower that is not a Subsidiary and has received
an Advance (including, without limitation, a balance sheet,
income statement, statement of sources and uses of funds and
listing of contingent liabilities), certified by an Authorized
Officer;
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(m) As soon as possible and in any event within
thirty (30) days prior to the commencement of each calendar
year, the Borrower shall supply a detailed capital expenditure
budget for that calendar year for each Collateral Pool
Property, all in form and detail acceptable to the Required
Lenders; and
(n) Such other information (including, without
limitation, financial statements for the Borrower or the
Guarantor and non-financial information) as the Agent or any
Lender may from time to time reasonably request.
VII.2 Use of Proceeds. (a) The Borrower will use the proceeds of the
Advances and the Facility Letters of Credit for the general business purposes of
the Borrower, including working capital needs, closing costs, and interim or
other financing for acquisitions of new Hotel Properties, construction of new
Hotel Properties or capital improvements or renovations of existing improvements
on Hotel Properties, and to repay outstanding Indebtedness; and (b) the Borrower
will not, nor will it permit any Qualified Borrower or any Subsidiary to, use
any of the proceeds of the Advances (i) to purchase or carry any "margin stock"
(as defined in Regulation U) or (ii) to fund any tender offer for all or
substantially all of another Person's outstanding Capital Stock registered with
the Securities and Exchange Commission under the Securities Act of 1933, unless
such Person shall have consented to such tender offer prior to its commencement
and the Required Lenders shall have consented to such use of the proceeds of
such Advance.
VII.3 Notice of Default. The Borrower and the Guarantor will give, and
will cause each of their Subsidiaries and each Qualified Borrower to give,
prompt notice in writing to the Lenders of the occurrence of any Default or
Unmatured Default and of any other development, financial or otherwise, which
could be reasonably likely to have a Material Adverse Effect.
VII.4 Conduct of Business. The Borrower and the Guarantor will do, and
will cause each of their Subsidiaries and Qualified Borrowers to do, all things
necessary to remain duly incorporated and/or duly qualified, validly existing
and in good standing as a real estate investment trust, corporation, general
partnership, limited liability company or limited partnership, as the case may
be, in its jurisdiction of incorporation/formation. The Borrower will maintain
all requisite authority to conduct its business in each jurisdiction in which
the Collateral Pool Properties are located and, except where the failure to be
so qualified would not have a Material Adverse Effect, in each jurisdiction
required to carry on and conduct its businesses in substantially the same manner
as it is presently conducted, and, specifically, neither the Borrower nor the
Guarantor nor their Subsidiaries nor any Qualified Borrowers will undertake, or
be allowed to undertake, any business other than the acquisition, development,
ownership, management, operation and leasing of Hotel Properties and ancillary
businesses specifically related thereto, except that the Borrower, the Guarantor
and their Subsidiaries and any Qualified Borrowers may invest in the following
assets or property ("Non-Conforming Investments"), subject to such limitations
as are hereinafter set forth:
(a) unimproved land;
(b) other non-income producing property holdings
(excluding cash and Cash Equivalents that are hereby deemed
conforming) and income producing properties
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other than Hotel Properties or other investments not
considered the Borrower's primary course of business;
(c) stock holdings (excluding stock holdings in
Subsidiaries and Investment Affiliates engaged in the
Borrower's primary course of business that are hereby deemed
conforming);
(d) mortgages; and
(e) Joint Ventures and partnerships (excluding those
investments in Investment Affiliates engaged in the Borrower's
primary course of business that are hereby deemed conforming).
The total investment (i.e. amounts actually expended as of such date)
in Non-Conforming Investments in the aggregate shall never exceed 15% of Total
Assets. The total aggregate amount of all budgeted costs (whether or not
actually expended) for Hotel Properties under development shall never exceed 10%
of Total Assets. The total investment in the aggregate by the Borrower in Joint
Ventures, partnerships and other Investment Affiliates engaged in the Borrower's
primary course of business that are hereby deemed conforming shall never exceed
15% of Total Assets.
VII.5 Taxes. The Borrower and the Guarantor will pay, and will cause
each of their Subsidiaries and Qualified Borrowers to pay, when due all taxes,
assessments and governmental charges and levies upon them of their income,
profits or properties, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside.
VII.6 Insurance.
(a) The Borrower and the Guarantor will, and will
cause each of their Subsidiaries and Qualified Borrowers to,
maintain with financially sound and reputable insurance
companies insurance on all its Collateral Pool Properties in
such amounts and covering such risks as is consistent with
sound business practice and in compliance with the
representation in Section 6.17, and the Borrower will furnish
to the Agent or any Lender upon request full information as to
the insurance carried.
(b) The Borrower will promptly notify the Agent if
there has been a termination of any insurance policy or a
material change in coverage or of the credit rating of the
insurer providing such coverage.
VII.7 Compliance with Laws. The Borrower and the Guarantor will, and
will cause each of their Subsidiaries and Qualified Borrowers to, be in material
compliance, with all laws, rules and regulations and with all final orders,
writs, judgments, injunctions, decrees or awards to which they may be subject.
VII.8 Maintenance of Collateral Pool Properties. The Borrower and the
Guarantor will, and will cause each of their Subsidiaries, Qualified Borrowers,
and the Lessee to, do all things necessary to maintain, preserve, protect and
keep the Collateral Pool Properties in good repair, working order and
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condition, and make all necessary and proper repairs, renewals and replacements
so that their businesses carried on in connection therewith may be properly
conducted at all times.
VII.9 Inspection. Upon reasonable notice, the Borrower and the
Guarantor will, and will cause each of their Subsidiaries and Qualified
Borrowers and the Lessees to, permit the Lenders, by their respective
representatives and agents, to inspect any of the Hotel Properties, books and
financial records of the Borrower and the Guarantor and each of their
Subsidiaries and Qualified Borrowers and the Lessee, to examine and make copies
of the books of accounts and other financial records of the Borrower and the
Guarantor and each of their Subsidiaries, Qualified Borrowers and the Lessee,
and to discuss the affairs, finances and accounts of the Borrower and the
Guarantor and each of their Subsidiaries, Qualified Borrowers and lessees of
Hotel Properties, and to be advised as to the same by, their respective officers
at such reasonable times during normal business hours and reasonable intervals
as the Lenders may reasonably designate.
VII.10 Maintenance of Status. The Guarantor shall at all times (a)
maintain the listing of its common stock on the New York Stock Exchange and not
take any action that results in a proceeding to delist such stock, and (b)
maintain its status as a real estate investment trust in compliance with all
applicable provisions of the Code.
VII.11 Distributions.
(a) The Guarantor shall not pay any Distribution
which for any four (4) successive quarters is in excess of (i)
ninety-five percent (95%) of its Funds From Operations for
such fiscal quarters, or (ii) one hundred percent (100%) of
its Funds Available for Distribution for such fiscal quarters;
provided that the limitation contained in this Section 7.11(a)
shall not preclude the Guarantor from making Distributions in
an amount equal to the minimum distributions required under
the Code to maintain the REIT status of Guarantor, as
evidenced by a certification of the principal financial or
accounting officer of the Guarantor containing calculations in
detail reasonably satisfactory in form and substance to the
Agent.
(b) Notwithstanding Section 7.11(a), the Guarantor
shall be permitted to pay a Distribution of Net Proceeds from
Sale of Assets (as hereinafter defined). For purposes of this
Section 7.11(b), the term "Net Proceeds from Sale of Assets"
shall mean the gross proceeds from the sale, conveyance or
other disposition of a Hotel Property minus either (i) 50% if
the Hotel Property was in the Secured Collateral Pool or (ii)
40% if the Hotel Property was in the Negative Collateral Pool.
(c) In the event that there is a continuing Default
under Section 8.1 or Section 8.2, or there is a continuing
Default under Section 8.3 relating to a breach of any of the
covenants contained in Sections 7.4, 7.17 and 7.18, the
Guarantor shall make no Distribution other than Distributions
in an amount equal to the minimum distributions required under
the Code to maintain the REIT status of Guarantor, as
evidenced by a certification of the principal financial or
accounting officer of the Guarantor containing calculations in
detail reasonably satisfactory in form and substance to the
Agent.
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VII.12 Merger; Sale of Assets. The Borrower and Guarantor will not, nor
will they permit any of their Subsidiaries or Qualified Borrowers to, enter into
any merger, consolidation, reorganization or liquidation or transfer or
otherwise dispose of all or a portion of their property except for (a) such
transactions that occur between Wholly-Owned Subsidiaries, (b) transactions
where the Borrower or the Guarantor is the surviving entity and there is no
change in business conducted or loss of an investment grade rating on such
entity's long-term unsecured debt and no other Default results from such
transaction, or (c) transactions that are approved in advance in writing by the
Lenders.
VII.13 Release of Mortgages or Negative Pledge Agreements. In addition
to any other specific provisions herein allowing the release of a Mortgage or a
Negative Pledge Agreement, provided there is no Default or Unmatured Default
hereunder, the Borrower may by written request to the Agent obtain a release of
a Mortgage or a Negative Pledge Agreement encumbering or affecting any
Collateral Pool Property if such Hotel Property is either being (i) sold by the
Borrower under an arms-length contract to a Person which is not also the
Guarantor, a Subsidiary of the Borrower or the Guarantor, or a Qualified
Borrower, (ii) is being included by the Borrower in a securitization offering,
or (iii) is being removed from the Collateral Pool due to other reasons as set
forth in this Agreement, provided that in any such event at least one (1) of the
following provisions is satisfied:
(a) the Borrower provides a substitute Hotel Property
acceptable to the Lenders and complies with all conditions
precedent herein to the inclusion of such Hotel Property in
the Collateral Pool, or
(b) the outstanding principal balance of the Facility
is reduced in an amount satisfactory to the Lenders and
availability under the Facility is reduced by an equivalent
sum on a pro rata basis.
In addition to the foregoing, in order to obtain a release of any Mortgage or
Negative Pledge Agreements, whether due to the sale of a Collateral Pool
Property, or otherwise, all covenants must still be met as evidenced by a pro
forma compliance certificate in the form attached hereto as Exhibit "C".
Notwithstanding the foregoing, or any other provision herein to the contrary,
the Agent shall be under no obligation to release any Mortgage or Negative
Pledge Agreement if the mix of the remaining Collateral Pool Property types is
not acceptable to the Required Lenders, in their sole but reasonable discretion.
VII.14 Liens. The Borrower and the Guarantor will not, nor will they
permit any of their Subsidiaries or Qualified Borrowers to, create, incur, or
suffer to exist any Lien in, of or on their Collateral Pool Properties, except:
(a) Liens for taxes, assessments or governmental
charges or levies on their Collateral Pool Properties if the
same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and
by appropriate proceedings and for which adequate reserves
shall have been set aside on their books;
(b) Liens which arise by operation of law, such as
carriers', warehousemen's, landlords', materialmen and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than thirty
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(30) days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves
shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation;
(d) Utility easements, building restrictions, zoning
restrictions, easements and such other encumbrances or charges
against real property as are of a nature generally existing
with respect to properties of a similar character and which do
not in any material way affect the marketability of the same
or interfere with the use thereof in their businesses;
(e) Liens of any Subsidiary, Qualified Borrower or
Investment Affiliate in favor of the Borrower;
(f) Liens existing on the date hereof and described
in Schedule 2 hereto; and
(g) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result
in a violation of any of the provisions of this Agreement.
Liens permitted pursuant to this Section 7.14 shall be deemed to be
"Permitted Liens".
VII.15 Affiliates. The Borrower and the Guarantor will not, nor will
they permit any of their Subsidiaries or any Qualified Borrowers or Investment
Affiliates to, enter into any transaction (including, without limitation, the
purchase or sale of any Hotel Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of their business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, Qualified
Borrower or Investment Affiliate than they would obtain in a comparable
arms-length transaction.
VII.16 Interest Rate Hedging. The Borrower and the Guarantor will not
enter into or remain liable upon, nor will they permit any Subsidiary, Qualified
Borrower or Investment Affiliate to enter into or remain liable upon, any
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options unless such
agreement, device or arrangement was entered into by the Borrower, a Subsidiary,
a Qualified Borrower or Investment Affiliate in the ordinary course of its
business for the purpose of hedging interest rate risk to any of them.
VII.17 Consolidated Net Worth. The Borrower, the Guarantor and their
Subsidiaries, as of the last day of any fiscal quarter, shall maintain a
Consolidated Net Worth of not less than the sum of (a) $345,500,000 plus (b)
eighty-five percent (85%) of the net cash proceeds received by the Guarantor
(net of customary related fees and expenses) in connection with any offering of
stock in the Guarantor after March 31, 1999.
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VII.18 Additional Financial Covenants. The Borrower and the Guarantor
and all Subsidiaries shall at all times comply with the following additional
financial covenants:
(a) Debt Coverage Ratios.
(i) Minimum Collateral Pool Debt Coverage
Ratio. The Borrower, the Guarantor, and their
Subsidiaries shall maintain a minimum debt coverage
ratio on the Collateral Pool Properties of at least
2:00:1.00 at all times. This ratio shall be
calculated by dividing Adjusted Cash Flow from the
Collateral Pool Properties by Implied Debt Service.
(ii) Minimum Corporate Debt Coverage Ratio.
The Borrower, the Guarantor and their Subsidiaries
shall maintain a minimum consolidated corporate debt
coverage ratio of 2.25:1.00 at all times. This ratio
shall be calculated by dividing Adjusted EBITDA by
the total Debt Service on Consolidated Total
Indebtedness.
(iii) Special Cure for Debt Coverage Ratio
Defaults. For purposes of determining compliance with
the debt coverage ratio covenants set forth above in
Section 7.18(a)(i) and (ii), upon any Default under
said covenants, and upon the Borrower's written
request to the Agent given no later than two (2)
Business Days after such Default occurs, the Borrower
shall be allowed ninety (90) days from the original
date the Default occurred, to cure such Default
before the Agent and/or the Lenders can exercise
their remedies. If during this time period the
Default is not cured, but the ratio is improved from
the previous quarter by at least 50% of the previous
report's short fall expressed as a percent (i.e., if
the ratio was 92% of the requirement, the ratio must
have improved to at least 96% of the required ratio),
the Borrower may have a second consecutive ninety
(90) day cure period upon written request to the
Agent given no later than two (2) Business Days after
the end of the first ninety (90) day time period. The
first and second cure periods will not be provided to
the Borrower if the Default results from a debt
coverage ratio which is less than 90% of the required
covenant, or if any other Default exists at either
time.
(iv) Minimum Corporate Fixed Charge Ratio.
The Borrower, the Guarantor and their Subsidiaries
shall maintain a minimum consolidated fixed charge
ratio of 2.00:1.00 at all times. This ratio shall be
calculated by dividing Adjusted EBITDA by the sum of
(i) Debt Service on Consolidated Total Indebtedness
plus (ii) preferred dividends paid during such
trailing twelve (12) month period.
(b) Minimum Interest Coverage. The Borrower, the
Guarantor and their Subsidiaries shall maintain a minimum
interest coverage on Consolidated Total Indebtedness of at
least 2.75:1.00. This ratio shall be measured quarterly, using
a trailing twelve (12) month rolling average for the
immediately preceding twelve (12)
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month period, and shall be calculated by dividing Adjusted
EBITDA by Interest Expense.
(c) Total Indebtedness Limitation. Consolidated Total
Indebtedness shall not exceed at any time 4.5 times the
trailing four (4) quarter Adjusted EBITDA.
(d) Total Liabilities Limitation. Total Liabilities
of the Borrower, the Guarantor and their Subsidiaries shall
not exceed at any time fifty percent (50%) of the sum of the
Borrower's, the Guarantor's and their Subsidiaries' Total
Liabilities and Consolidated Net Worth.
(e) Limit on Additional Indebtedness. Neither the
Borrower nor the Guarantor, nor any Qualified Borrower or any
of their Subsidiaries may incur any additional Indebtedness
after the Closing Date in excess of $15,000,000 without the
prior written approval of all Lenders, which any Lender may
grant or withhold in its sole discretion. The restriction set
forth in the preceding sentence of this Section 7.18(f) shall
not apply with respect to non-recourse secured Indebtedness so
long as no Default or Unmatured Default exists hereunder.
(f) Borrowing Base. At no time shall the Allocated
Facility Amount exceed the Borrowing Base.
(g) Leverage Ratio. At no time shall the Leverage
Ratio exceed 45%. Nothing contained in the definitions of
LIBOR Basis or Prime Rate shall be deemed to modify this
covenant.
VII.19 Environmental Matters.
VII.19.1 Violation. The Borrower and the Guarantor will not
cause, commit, permit or allow to continue (i) any violation of any
Environmental Requirement (a) by the Borrower or (b) by or with respect
to any of the Collateral Pool Properties or any use of or condition or
activity on any of the Collateral Pool Properties, or (ii) the
attachment of any environmental lien to any of the Collateral Pool
Properties. The Borrower will not place, install, dispose of or
release, or cause, permit, or allow the placing, installation,
disposal, spilling, leaking, dumping or release of, any Hazardous
Material or storage tank (or similar vessel) on any of the Hotel
Properties and will keep the Hotel Properties free of Hazardous
Material. Notwithstanding the foregoing provisions of this Section
7.19, the Borrower shall not be in default hereunder should the
Borrower or the Lessee store minimal quantities of substances on any of
the Hotel Properties which technically could be considered Hazardous
Material, provided that: such substances are of a type and are held
only in a quantity normally used in connection with the construction,
occupancy or operation of comparable buildings (such as cleaning
fluids, and supplies normally used in the day to day operation of
business offices), such substances are being held, stored and used in
complete and strict compliance with all applicable Environmental
Requirements, and the indemnity in Section 7.19.5 of this Agreement
shall always apply to such substances, and it shall be and continue to
be the responsibility of the Borrower to take, or cause any tenant to
take, all remedial actions required under and in
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accordance with Section 7.19.4 of this Agreement in the event of any
unlawful release of any such substance.
VII.19.2 Notice to the Lenders. The Borrower shall promptly
deliver to the Agent a copy of each report pertaining to the Collateral
Pool Properties or to the Borrower prepared by or on behalf of the
Borrower pursuant to any Environmental Requirement. The Borrower shall
immediately advise the Agent in writing of any Environmental Claim or
of the discovery of any Hazardous Material on any of the Hotel
Properties, as soon as the Borrower first obtains knowledge thereof,
including a full description of the nature and extent of the
Environmental Claim and/or Hazardous Material and all relevant
circumstances.
VII.19.3 Site Assessments and Information. If the Agent or any
Lender shall ever have reason to believe that any Hazardous Material
affects any of the Hotel Properties, or if any Environmental Claim is
made or threatened, or if a default shall have occurred under the Loan
Documents, or upon the occurrence of the Transition Date (defined
below) if requested by the Agent, the Borrower will at its expense
provide to the Agent from time to time, in each case within thirty (30)
days after the Agent's request, an Environmental Assessment (defined
below) made after the date of the Agent's request. As used in this
Agreement, the term "Environmental Assessment" means a report
(including all drafts thereof) of an environmental investigation and
analysis of the subject Collateral Pool Property of such scope
(including but not limited to the taking of soil borings and air and
groundwater samples and other above and below ground testing) as the
Agent may request, by a consulting firm acceptable to Agent and made in
accordance with Agent's established guidelines. The Borrower will
cooperate with each consulting firm making any such Environmental
Assessment and will supply to the consulting firm, from time to time
and promptly on request, all information available to the Borrower to
facilitate the completion of the Environmental Assessment. If the
Borrower fails to furnish the Agent within ten (10) days after the
Agent's request with a copy of an agreement with an acceptable
environmental consulting firm to provide such Environmental Assessment
to be made at the Borrower's expense and risk, the Agent and its
designees are hereby granted access to the Hotel Properties at any time
or times, upon reasonable notice (which may be written or oral), and a
license which is coupled with an interest and irrevocable, to make or
cause to be made such Environmental Assessments. The Agent may disclose
to interested parties any information the Agent ever has about the
environmental condition or compliance of the Hotel Property, but shall
be under no duty to disclose any such information except as may be
required by law. The Agent shall be under no duty to make any
Environmental Assessment of any of the Hotel Properties, and in no
event shall any such Environmental Assessment by Agent be or give rise
to a representation that any Hazardous Materials is or is not present
on the subject Hotel Property, or that there has been or shall be
compliance with any Environmental Requirement, nor shall the Borrower
or any other person be entitled to rely on any Environmental Assessment
made by the Agent or at the Agent's request. The Agent and the Lenders
owe no duty of care to protect the Borrower or any other person
against, or to inform them of, any Hazardous Material or other adverse
condition affecting any of the Collateral Pool Properties.
VII.19.4 Remedial Actions.
(a) If any Hazardous Material is discovered on any of
the Collateral Pool Properties at any time and regardless of
the cause, (i) the Borrower shall promptly at the
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Borrower's sole risk and expense remove, treat, and dispose of
the Hazardous Material in compliance with all applicable
Environmental Requirements and solely under the Borrower's
name (or if removal is prohibited by any Environmental
Requirement, take whatever action is required by any
Environmental Requirement), in addition to taking such other
action as is necessary to have the full use and benefit of the
subject Collateral Pool Property as contemplated by the Loan
Documents, and provide the Agent with satisfactory evidence
thereof; and (ii) if requested by the Agent, provide to the
Agent within thirty (30) days of the Agent's request a bond,
letter of credit or other financial assurance evidencing to
the Agent's satisfaction that all necessary funds are readily
available to pay the costs and expenses of the actions
required by clause (i) preceding and to discharge any
assessments or liens established against the subject
Collateral Pool Property as a result of the presence of the
Hazardous Material on the Collateral Pool Property. Within
fifteen (15) days after completion of such remedial actions,
Borrower shall obtain and deliver to the Agent an
Environmental Assessment of the Hotel Property made after such
completion and confirming to the Agent's satisfaction that all
required remedial action as stated above has been taken and
successfully completed and that there is no evidence or
suspicion of any contamination or risk of contamination on the
subject Hotel Property or any adjacent property, or of
violation of any Environmental Requirement, with respect to
any such Hazardous Material.
(b) The Agent may, but shall never be obligated to,
remove or cause the removal of any Hazardous Material from any
of the Collateral Pool Properties (or if removal is prohibited
by any Environmental Requirement, take or cause the taking of
such other action as is required by any Environmental
Requirement) if the Borrower fails to promptly commence such
remedial actions following discovery and thereafter diligently
prosecute the same to the satisfaction of the Agent (without
limitation of the Agent's rights to declare a default under
any of the Loan Documents and to exercise all rights and
remedies available by reason thereof); and the Agent and its
designees are hereby granted access to the Collateral Pool
Properties at any time or times, upon reasonable notice (which
may be written or oral), and a license which is coupled with
an interest and irrevocable, to remove or cause such removal
or to take or cause the taking of any such other action.
VII.19.5 Indemnity.
(a) The Borrower, the Guarantor and their
Subsidiaries hereby agree to protect, indemnify and hold (i)
the Agent, the Arranger and the Lenders; (ii) any persons or
entities owned or controlled by, owning or controlling, or
under common control or affiliated with the Agent or the
Lenders; (iii) any participants in the Facility; (iv) the
directors, officers, partners, employees and agents of the
Lenders and/or such persons or entities; and (v) the heirs,
personal representatives, successors and assigns of each of
the foregoing persons or entities (each an "Indemnified
Party") harmless from and against, and, if and to the extent
paid, reimburse them on demand for, any and all Environmental
Damages (as hereinafter defined). Without limitation, the
foregoing indemnity shall apply to each Indemnified Party with
respect to Environmental Damages which in whole or in part are
caused by or arise out of the negligence of such (and/or any
other) Indemnified Party. However, such indemnity shall not
apply to a particular
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Indemnified Party to the extent that the subject of the
indemnification is caused by or arises out of the gross
negligence or willful misconduct of that particular
Indemnified Party. Upon demand by the Agent, the Borrower
shall diligently defend any Environmental Claim which affects
any of the Collateral Pool Properties or is made or commenced
against any of the Agent or the Lenders, whether alone or
together with the Borrower or any other person, all at the
Borrower's own cost and expense and by counsel to be approved
by the Agent in the exercise of its reasonable judgment. In
the alternative, at any time the Agent or any Lender may elect
to conduct its own defense through counsel selected by the
Agent or such Lender and at the cost and expense of the
Borrower.
(b) As used in this Agreement, the term
"Environmental Damages" means all claims, demands, liabilities
(including strict liability), losses, damages (including
consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including fees, costs
and expenses of attorneys, consultants, contractors, experts
and laboratories), of any and every kind or character,
contingent or otherwise, matured or unmatured, known or
unknown, foreseeable or unforeseeable, made, incurred,
suffered, brought, or imposed at any time and from time to
time, whether before or after the Transition Date (as
hereinafter defined) and arising in whole or in part from:
(i) The presence of any Hazardous Material
on any of the Collateral Pool Properties, or any
escape, seepage, leakage, spillage, emission,
release, discharge or disposal of any Hazardous
Material on or from any of the Collateral Pool
Properties, or the migration or release or threatened
migration or release of any Hazardous Material to,
from or through any of the Collateral Pool
Properties, on or before the Transition Date; or
(ii) any act, omission, event or
circumstance existing or occurring in connection with
the handling, treatment, containment, removal,
storage, decontamination, clean-up, transport or
disposal of any Hazardous Material which is at any
time on or before the Transition Date present on any
of the Hotel Properties; or
(iii) the breach of any representation,
warranty, covenant or agreement contained in this
Agreement because of any event or condition occurring
or existing on or before the Transition Date; or
(iv) any violation on or before the
Transition Date, of any Environmental Requirement in
effect on or before the Transition Date, regardless
of whether any act, omission, event or circumstance
giving rise to the violation constituted a violation
at the time of the occurrence or inception of such
act, omission, event or circumstance; or
(v) any Environmental Claim, or the filing
or imposition of any environmental lien against any
of the Collateral Pool Properties, because of,
resulting from, in connection with, or arising out of
any of the matters referred
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to in subparagraphs (i) through (iv) preceding; and
regardless of whether any of the foregoing was caused
by the Borrower or the Lessee, or a prior owner of
any of the Collateral Pool Properties or its tenant
or subtenant, or any third party, including but not
limited to (a) injury or damage to any person,
property or natural resource occurring on or off of
any of the Collateral Pool Properties, including but
not limited to the cost of demolition and rebuilding
of any improvements on real property; (b) the
investigation or remediation of any such Hazardous
Material or violation of Environmental Requirement,
including but not limited to the preparation of any
feasibility studies or reports and the performance of
any cleanup, remediation, removal, response,
abatement, containment, closure, restoration,
monitoring or similar work required by any
Environmental Requirement or necessary to have full
use and benefit of the subject Collateral Pool
Property as contemplated by the Loan Documents
(including any of the same in connection with any
foreclosure action or transfer in lieu thereof); (c)
all liability to pay or indemnify any person or
governmental authority for costs expended in
connection with any of the foregoing; (d) the
investigation and defense of any claim, whether or
not such claim is ultimately defeated; and (e) the
settlement of any claim or judgment.
(c) As used in this Agreement, the term "Transition
Date" means the earlier of the following two dates: (i) the
date on which the Obligations have been paid and performed in
full and the Mortgages have been released; or (ii) the date on
which the liens of the Mortgages are fully and finally
foreclosed or a conveyance by deed in lieu of such foreclosure
is fully and finally effective and possession of the
Collateral Pool Properties has been given to and accepted by
the purchaser or grantee free of occupancy and claims to
occupancy by the Borrower and the Borrower's heirs, devisees,
representatives, successors and assigns; provided that, if
such payment, performance, release, foreclosure or conveyance
is challenged, in bankruptcy proceedings or otherwise, the
Transition Date shall be deemed not to have occurred until
such challenge is validly released, dismissed with prejudice
or otherwise barred by law from further assertion.
(d) The indemnification agreements contained in this
Section 7.19 are not secured by the Collateral.
VII.20 Negative Pledge Agreements. The Borrower, the Guarantor and
their Subsidiaries agree that throughout the Facility, they shall not transfer,
assign, mortgage, hypothecate, grant or agree to a negative pledge or otherwise
encumber any of the Hotel Properties, whether or not such Hotel Properties are
to be included in the Collateral Pool, or any other asset or property of the
Borrower, the Guarantor or their Subsidiaries except to the extent permitted in
Section 7.18(f), in any event subject to the provisions of Section 7.13, if
applicable. The Borrower further agrees to execute Negative Pledge Agreements
for all Hotel Properties in the Negative Collateral Pool, such agreements to be
in recordable form such that they can be recorded by the Agent in the proper
land records office for the state and county where each such Collateral Pool
Property is located. The effectiveness of the Negative Pledge Agreements shall
not in any way be conditioned upon the recordation of such recordable
instruments.
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VII.21 Manager. The Collateral Pool Properties shall at all times be
managed by RFS, Inc. or another Person approved in writing by the Required
Lenders, it being understood that any other manager identified on Schedule 9 is
acceptable to the Lenders.
VII.22 Acceleration Notice. Borrower agrees that it shall, within ten
(10) days after receipt of written notice that any Indebtedness aggregating
$5,000,000 or more of the Borrower, the Guarantor, any Qualified Borrower or any
Subsidiary or Investment Affiliate has been accelerated, provide written notice
to the Agent of such acceleration.
VII.23 Additional Covenants. The Borrower and the Guarantor will not
engage in or willingly permit any illegal activities at any Collateral Pool
Property.
VII.24 Calculation of Financial Covenants Upon Property Breaches. In
the event of a breach of a representation or warranty under Article VI or of a
covenant under Sections 7.5, 7.6, 7.7, 7.8, 7.14, 7.19, 7.20, 7.21 or 7.23, or
in the event of the occurrence of any other event which has a Material Adverse
Effect on the operation of any Collateral Pool Property (collectively a
"Property Breach"), or if there are environmental disclosures concerning a
Collateral Pool Property contained in Schedule 4, such Hotel Property shall be
excluded from the Borrowing Base, and the Borrower shall be required to
demonstrate financial covenant compliance under applicable provisions of Article
VII both with and without the affected Collateral Pool Property for as long as
such breach or condition shall exist. At the Borrower's option, upon written
notice and request to the Agent, the Borrower may substitute another Hotel
Property for the Hotel Property excluded, provided such new Hotel Property is
acceptable to the Lenders and all conditions precedent to the inclusion of such
Hotel Property in the Collateral Pool, as well as the release of a Hotel
Property therefrom, have been complied with. Furthermore, upon such substitution
the Borrower may obtain the release of such Hotel Property excluded from the
Borrowing Base from the lien of any Mortgage or from the restrictions of any
Negative Pledge Agreement only if no Default or Unmatured Default then exists
hereunder and all provisions of Section 7.13 hereof have been complied with.
VII.25 Leases. The Borrower will duly perform all obligations as
landlord under the Leases and shall not amend any of the Leases in any material
manner without the Agent's prior written consent, which consent will not be
unreasonably withheld.
VII.26 Franchises. The Borrower shall comply, and shall take all
reasonable and necessary steps to ensure that the Lessee complies, with all
requirements of all franchise agreements affecting the use and operation of the
Collateral Pool Properties, and shall promptly notify the Agent within ten (10)
days of the Borrower learning of any default or alleged default under any such
franchise agreement(s), or of any change therein which could have a Material
Adverse Effect.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
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VIII.1 Nonpayment of any principal payment on any Note within five (5)
Business Days of the Borrower's receipt of written notice from the Agent,
provided, however, once such written notice has been given, whether or not such
payment is made, no further written notice will be required in that same
calendar year for any subsequent nonpayment of principal on any Note in order
for such nonpayment to constitute a Default.
VIII.2 Nonpayment of (a) interest upon any Note, any Commitment Fee,
Facility Letter of Credit Fee, Unused Credit Fee, or other fee under any of the
Loan Documents within five (5) Business Days after the same becomes due or (b)
any other payment Obligation under any of the Loan Documents within five (5)
Business Days of the Borrower's receipt of written notice from the Agent
provided, however, once such written notice has been given, whether or not such
payment is made, no further written notice will be required in that same
calendar year for any subsequent nonpayment of another payment Obligation in
order for such nonpayment under this Section 8.2 (b) to constitute a Default.
VIII.3 The breach of any of the terms or provisions of Sections 7.1(c),
(d) and (e), 7.2(b), 7.6, 7.10, 7.11, 7.12, 7.13, 7.14, 7.16, 7.17, 7.18, 7.19,
7.20, or 7.21, or a breach of any of the terms or provisions of Section 7.1
(other than as set forth above) which remains uncured for ten (10) Business Days
after the Borrower's receipt of written notice from the Agent, provided,
however, in the event such breach of Section 7.18 results from an adjustment by
the Required Lenders in the Applicable Cap Rate, such breach shall not
constitute a Default hereunder if within six (6) months from the date of such
adjustment in the Applicable Cap Rate, the Borrower either reduces the Allocated
Facility Amount to a sum equal to or less than the Borrowing Base (in which case
the Aggregate Commitment Amount of the Facility shall be presumably reduced
unless the Lenders otherwise agree), or provides additional Collateral
satisfactory to the Lenders necessary to restore compliance.
VIII.4 Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement (other than Section 6.24 and a
Property Breach unless such breach causes a Default under another provision of
this Article VIII), any Loan, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.
VIII.5 The breach of any of the other terms or provisions of this
Agreement which is not remedied within thirty (30) days, or ninety (90) days for
a breach which is curable but cannot be cured within thirty (30) days but is
being diligently cured, after the receipt of written notice from the Agent.
VIII.6 Any default by the Borrower, the Guarantor, any Qualified
Borrower or any Investment Affiliate (to the extent the Indebtedness is recourse
to such Person), or any of their Subsidiaries (after applicable cure periods)
under any other loan documents relating to any of such Persons in connection
with any Indebtedness other than the Obligations aggregating in excess of
$50,000,000.
VIII.7 The Borrower, the Guarantor, any Qualified Borrower or any
Investment Affiliate that is not a Subsidiary (a) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization,
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arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (e) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 8.7, (f) fail to
contest in good faith any appointment or proceeding described in Section 8.8, or
(g) not pay, or admit in writing its inability to pay, its debts generally as
they become due.
VIII.8 A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower, the Guarantor, any Qualified Borrower or
any Investment Affiliate that is not a Subsidiary, or any Subsidiary or any
portion of its property, or a proceeding described in Section 8.7(d) shall be
instituted against any of them and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of sixty (60)
consecutive days.
VIII.9 Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Hotel Properties of the Borrower, the
Guarantor, any Qualified Borrower or any Investment Affiliates or any
Subsidiaries which, when taken together with all other of their property so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a substantial (as determined in the Agent's reasonable discretion)
portion of their property.
VIII.10 The Borrower, the Guarantor, any Qualified Borrower or
Investment Affiliate or any Subsidiaries shall fail within sixty (60) days to
pay, bond or otherwise discharge any judgments or orders for the payment of
money in an amount which, when added to all other judgments or orders
outstanding against any of them would exceed $10,000,000 in the aggregate, which
have not been stayed on appeal or otherwise appropriately contested in good
faith, unless the liability is insured against and the insurer has not
challenged coverage of such liability.
VIII.11 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan, the PBGC or other
party that it has incurred withdrawal liability or is in default of payments to
such Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any other
member of the Controlled Group as withdrawal liability (determined as of the
date of such notification) or amounts in default, exceeds $250,000 or requires
payments exceeding $100,000 per annum.
VIII.12 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan or the PBGC or other
party that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such reorganization
or termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $250,000 per year.
VIII.13 (a) A Reportable Event shall occur with respect to a Plan, or
(b) any Plan shall incur an accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, or fail
to make a required installment payment on or before the due date under
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Section 412 of the Code or Section 302 of ERISA, or (c) the Borrower or a member
of the Controlled Group shall have engaged in a nonexempt prohibited transaction
under Section 4975 of the Code or Section 406 of ERISA, or (d) the Borrower or
any member of the Controlled Group shall fail to pay when due an amount which it
shall have become liable to pay to the PBGC, or any Plan, any Multiemployer
Plan, or (e) Borrower or any member of the Controlled Group shall have received
a notice from the PBGC of its intention to terminate a Plan or to appoint a
trustee to administer a Plan, or Multiemployer Plan, or a condition exists by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
a Plan must be terminated, or (f) any other event or condition shall occur or
exist with respect to any employee benefit plan (as defined in Section 3(3) of
ERISA) or Plan or any Multiemployer Plan, which could reasonably be expected to
subject the Borrower or any member of the Controlled Group to any tax, penalty
or other liability or the imposition of any lien or security interest on the
Borrower or any member of the Controlled Group, provided, however, that any
event or circumstance in Section 8.13(a) through (f) shall only be an Event of
Default if it would result in liability to Borrower in excess of $250,000 per
year; or (g) the assets of the Borrower or the Guarantor become or are deemed to
be assets of an employee benefit plan (as defined in Section 3(3) of ERISA or a
plan as defined in Section 4975 of the Code). No Default under this Section 8.13
shall be deemed to have been or be waived or corrected because of any disclosure
by the Borrower.
VIII.14 Failure to remediate within the time period required by law or
governmental order, (or within a reasonable time in light of the nature of the
problem if no specific time period is so established), environmental problems in
violation of applicable law (a) related to Collateral Pool Properties of the
Borrower, the Guarantor, any Qualified Borrower or any Investment Affiliates or
any Subsidiaries if the affected Collateral Pool Properties have an aggregate
book value in excess of $10,000,000 or (b) where the estimated cost of
remediation is in the aggregate in excess of $500,000, in each case after all
administrative hearings and appeals have been concluded.
VIII.15 The occurrence of any default under any Loan Document other
than this Agreement or the breach of any of the terms or provisions of any Loan
Document other than this Agreement, which default or breach continues beyond any
period of grace therein provided.
VIII.16 Xxxxxx Xxxxxxx ceases to be active in the day-to-day management
and operation of the Borrower and the Guarantor and a successor to Xx. Xxxxxxx
approved by the Required Lenders is not appointed within four (4) months of Xx.
Xxxxxxx'x departure, demise or physical or mental incapacitation.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
IX.1 Acceleration. If any Default described in Sections 8.7 or 8.8
occurs with respect to the Borrower, the Guarantor, any Qualified Borrower or
any Subsidiary or Investment Affiliate, the obligations of the Lenders to make
Loans and of the Issuing Bank to issue Facility Letters of Credit hereunder
shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Agent or any
Lender. If any other Default (other than a Property Breach unless such breach
causes a Default under any other provision of Article VIII) occurs
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and is continuing, the Required Lenders may terminate or suspend the obligations
of the Lenders to make Loans hereunder, and to issue Facility Letters of Credit,
or declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, upon written notice to the
Borrower.
In addition to the foregoing, following the occurrence and during the
continuance of a Default and so long as any Facility Letter of Credit has not
been fully drawn and has not been canceled or expired by its terms, upon demand
by the Agent the Borrower shall establish and deposit in the Letter of Credit
Collateral Account cash in an amount equal to the aggregate undrawn face amount
of all outstanding Facility Letters of Credit and all fees and other amounts due
or which may become due with respect thereto. The Borrower shall have no control
over funds in the Letter of Credit Collateral Account, which funds will be
invested by the Agent from time to time at its discretion in certificates of
deposit of Bank of America having a maturity not exceeding thirty (30) days.
Such funds shall be promptly applied by the Agent to reimburse any Issuing Bank
for drafts drawn from time to time under the Facility Letters of Credit,
provided, however, interest accrued on such funds shall remain in the Letter of
Credit Collateral Account to be used for reimbursement as set forth above. Such
funds, if any, remaining in the Letter of Credit Collateral Account following
the payment of all Obligations in full shall, unless Agent is otherwise directed
by a court of competent jurisdiction, be promptly paid over to the Borrower.
If, within forty-five (45) days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders to make Loans
hereunder or to issue Facility letters of Credit as a result of any Default
(other than any Default as described in Sections 8.7 or 8.8 with respect to the
Borrower) and before any judgment or decree for the payment of the Obligations
shall have been obtained or entered, the Required Lenders (in their sole
discretion) may direct the Agent by notice to the Borrower, to rescind and annul
such acceleration and/or termination.
IX.2 Amendments, Waivers, Decisions. Subject to the provisions of this
Article IX, the Required Lenders (or the Agent with the consent or direction in
writing of the Required Lenders) and the Borrower may waive or amend any terms
or conditions of this Agreement and enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder,
releasing any Mortgages or Negative Pledge Agreements except as provided in
Section 7.13 hereof, or waiving any Default hereunder; provided, however, that
no such supplemental agreement shall, without the consent of all Lenders:
(a) Extend the Facility Termination Date or forgive
all or any portion of the principal amount of any Loan or
accrued interest thereon or the Commitment Fee, or any other
fees, reduce the applicable margin or spread on the underlying
interest rate options applicable to the various Types of
Advances except as provided in the applicable interest rate
grids based upon the Leverage Ratio, or otherwise modify or
add to such interest rate options, or extend the time of
payment of any of the Obligations.
(b) Reduce the percentage specified in the definition
of Required Lenders or change any provision that currently
requires an approval from the Required Lenders, all Lenders or
the specific Lender affected, to approval by a different
standard.
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(c) Increase the amount of the Aggregate Commitment.
(d) Permit the Borrower to assign its rights under
this Agreement.
(e) Amend Sections 2.2, 2.3, 3.4(a), 3.8(a), 7.4,
7.11, 7.18, 13.2, 13.3 or this Section 9.2.
(f) Release or limit the liability of Borrower, the
Guarantor, or any Qualified Borrower with respect to the
Obligations.
(g) Add any Hotel Property to the Collateral Pool.
(h) Amend or modify the definition of, or provisions
for the calculation of, the Borrowing Base.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment increasing
the Commitment of any Lender shall be effective without the written consent of
such Lender.
IX.3 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X
GENERAL PROVISIONS
X.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
X.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
X.3 Taxes. Any taxes (excluding federal, state and local income or
franchise or other similar taxes on the overall net income of any Lender) or
other similar assessments or charges made by any
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governmental or revenue authority in respect of the Loan Documents shall be paid
by the Borrower, together with interest and penalties, if any.
X.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
X.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Guarantor, the Agent, and the Lenders
and supersede all prior commitments, agreements and understandings among the
Borrower, the Guarantor, the Agent, and the Lenders relating to the subject
matter thereof, except for the agreement of the Borrower to pay certain fees to
the Agent and the agreement of the Agent to pay certain fees to the Lenders.
X.6 Several Obligations; Benefits of This Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
X.7 Expenses; Indemnification. The Borrower and the Guarantor shall
reimburse upon demand the Arranger, the Agent, and each Lender for any costs,
and reasonable out-of-pocket expenses (including, without limitation, all
reasonable fees for consultants and reasonable fees and expenses for attorneys
for the Arranger, the Agent and each Lender) in connection with the preparation,
negotiation, execution, delivery, amendment or modification of the Loan
Documents, as well as any syndication or assignment of any of their rights under
the Loan Documents as set forth in Section 13.3 hereof. The Borrower and the
Guarantor also agree to reimburse upon demand the Arranger, the Agent, and the
Lenders for any costs, internal charges and reasonable out-of-pocket expenses
(including, without limitation, appraisal expenses and all reasonable fees and
expenses for attorneys for the Arranger, the Agent and the Lenders) paid or
incurred by the Arranger or the Agent (whether in its capacity as arranger, or,
in the case of Bank of America, in its capacity as the Agent) or any Lender in
connection with the collection and enforcement of the Loan Documents (including,
without limitation, any workout). The Borrower and the Guarantor further agree
to indemnify and hold harmless the Agent, the Arranger and each Lender and their
directors, officers, employees, agents, attorneys and Affiliates against all
losses, claims, damages, penalties, judgments, liabilities and reasonable
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not such entity is a party thereto) which any of
them may pay or incur arising out of or relating to this Agreement, the other
Loan Documents, the Hotel Properties, the transactions contemplated hereby or
the direct or indirect application or proposed application of the proceeds of
any Loan hereunder, other than liability arising from the gross negligence or
willful misconduct of the party being indemnified. The obligations of the
Borrower and the Guarantor under this Section 10.7 shall survive the Facility
Termination Date and continue for the benefit of the Agent, the Arranger, each
Lender, and all of their respective agents, representatives, employees,
officers, directors, and partners at all times after the Borrower's acceptance
of the Commitment (whether or not any expenses were incurred before or after the
execution of the Commitment Letter by the Borrower) as evidenced by its
execution of the Commitment Letter.
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X.8 Numbers of Documents. All financial statements, notices, closing
documents, press releases, compliance certificates and requests hereunder shall
be furnished to the Agent with sufficient counterparts so that the Agent may
furnish one to each of the Lenders.
X.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the Borrower, the Guarantor and all their Subsidiaries.
X.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
X.11 Nonliability of Lenders, Arranger, Agent. The relationship between
the Borrower, on the one hand, and the Lenders, the Arranger and the Agent on
the other, shall be solely that of borrower and lender. Neither the Agent, the
Arranger nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations. Neither the
Arranger nor the Agent shall have any responsibilities to the Borrower or
Lenders under this Agreement except to the extent, if any, expressly set forth
herein.
X.12 Publicity. Each Lender and the Arranger shall have the right to do
a tombstone publicizing the transaction contemplated hereby upon the consent of
the Borrower which shall not be unreasonably withheld.
X.13 Brokers. The Borrower and the Agent each hereby represent and
warrant that no brokers or finders were used in connection with procuring the
financing contemplated hereby and the Borrower hereby agrees to indemnify and
save the Agent and each Lender harmless from and against any and all
liabilities, losses, costs and expenses (including attorneys' fees or court
costs) suffered or incurred by the Agent or any Lender as a result of any claim
or assertion by any party claiming by, through or under the Borrower, the
Guarantor, any Qualified Borrower, any Investment Affiliate or any of their
Subsidiaries that it is entitled to compensation in connection with the
financing contemplated hereby.
X.14 Confidentiality. With respect to the financial statements and
other information delivered pursuant to Section 7.1, and any other information
obtained by any Lender or any assignee of any Lender pursuant to this Section
10.14 or otherwise, each Lender and each assignee of any Lender agree that, to
the extent that such information therein contained has not theretofore otherwise
been disclosed in such a manner as to render such information no longer
confidential, such Lender and such assignee will employ reasonable procedures
reasonably designed to maintain the confidential nature of the information
therein contained; provided that anything herein contained to the contrary
notwithstanding, any Lender or its assignee may disclose or disseminate such
information to: (a) its employees, agents, attorneys accountants, and the
Arranger who would ordinarily have access to such information in the normal
course of the performance of their duties; (b) such third parties as such Lender
may deem reasonably necessary in connection with or in response to (i)
compliance with any law, ordinance or governmental order, regulation, rule,
policy, subpoena, investigation, regulatory authority request or
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requests, or (ii) any order, decree, judgment, subpoena, notice of discovery or
similar ruling or pleading issued, filed, served or purported on its face to be
issued, filed or served by or under authority of any court, tribunal,
arbitration board of any governmental or industry agency, commission, authority,
board or similar entity or in connection with any proceeding, case or matter
pending (or on its face purported to be pending) before any court, tribunal,
arbitration board or any governmental agency, commission, authority, board or
similar entity; and (c) any prospective assignee of or Participant in such
Lender's interest, provided such prospective assignee or Participant agrees in
writing to be bound by these provisions.
X.15 Appraisals. Upon any Default or Unmatured Default hereunder, the
Agent may order new or updated appraisals on any Collateral Pool Properties
selected by the Agent. Such appraisals shall be at the Borrower's expense and
the Borrower shall fully cooperate with the Agent to facilitate the preparation
of such appraisals.
X.16 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF TENNESSEE, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
X.17 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TENNESSEE
STATE COURT SITTING IN MEMPHIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN, SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN MEMPHIS, TENNESSEE.
X.18 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
X.19 MANDATORY ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE
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FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE
RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF
ENDISPUTE, INC., DOING BUSINESS AS J.A.M.S./ENDISPUTE ("J.A.M.S."), AS AMENDED
FROM TIME TO TIME, AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(a) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN THE CITY OF DALLAS, TEXAS AND ADMINISTERED BY J.A.M.S. WHO
WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION
HEARINGS WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY,
UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL SIXTY
(60) DAYS.
(b) RESERVATIONS OF RIGHTS. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED TO (i) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR RESPONSE AND
ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (ii) BE A WAIVER
BY THE LENDERS OF THE PROTECTION AFFORDED TO THEM BY 12 U.S.C.
SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii)
LIMIT THE RIGHT OF ANY LENDER (A) TO EXERCISE SELF HELP
REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF OR THE
APPOINTMENT OF A RECEIVER. THE LENDERS MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO
THIS AGREEMENT. AT THE LENDER'S OPTION, FORECLOSURE UNDER A
MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE FOLLOWING: THE
EXERCISE OF A POWER OF SALE UNDER THE MORTGAGE, OR BY JUDICIAL
SALE UNDER THE MORTGAGE, OR BY JUDICIAL FORECLOSURE. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF
ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
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NO PROVISION IN THE LOAN DOCUMENTS REGARDING SUBMISSION TO JURISDICTION AND/OR
VENUE IN ANY COURT IS INTENDED OR SHALL BE CONSTRUED TO BE IN DEROGATION OF THE
PROVISIONS IN ANY LOAN DOCUMENT FOR ARBITRATION OF ANY CONTROVERSY OR CLAIM.
X.20 Year 2000 Problem. Borrower hereby represents and warrants to the
Agent and the Lenders that Borrower has (i) initiated a review and assessment of
all areas within its and each of its Affiliates' business and operations
(including those affected by suppliers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by Borrower or any of its Affiliates (or its suppliers and
vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
that timetable. Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its Affiliates' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have a Material Adverse Effect.
Borrower will promptly notify the Agent in the event that Borrower discovers or
determines that any computer application (including those of its suppliers and
vendors) that is material to its or any of its Affiliates' business and
operations will not be Year 2000 compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
ARTICLE XI
THE AGENT AND AGREEMENTS AMONG LENDERS
XI.1 Appointment. Subject to the provisions of Section 11.11, Bank of
America is hereby appointed as the Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent to act as the
agent of such Lender. The Agent agrees to act as such upon the express
conditions contained in this Article XI. The Agent shall not have a fiduciary
relationship in respect of the Borrower or any Lender by reason of this
Agreement. The Agent agrees to administer this Facility in the same manner as it
administers similar facilities for its own account.
XI.2 Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
XI.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
for its or their own gross negligence or willful misconduct and except for any
liability of the Agent for breach of an express agreement made by the Agent
herein to take or not take actions based on the approval or direction of a
requisite number of Lenders.
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XI.4 No Responsibility for Loans, Recitals, Etc. Neither the Agent nor
any of its directors, officers, agents, employees, attorneys-in-fact or
Affiliates shall be responsible for or have any duty to ascertain, inquire into,
or verify (a) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (b) the performance or observance
of any of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article V, except receipt of items required to be delivered to the
Agent; (d) the validity, effectiveness, enforceability, collectibility,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith (provided that the Agent shall be
obligated to furnish copies of the Loan Documents to the Lenders); or (e) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the Agent at
such time, but is voluntarily furnished by the Borrower to the Agent in its
individual capacity.
XI.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders unless such action or inaction requires the consent of all the
Lenders or an individual Lender not included in the direction of the Required
Lenders pursuant to this Agreement, and such instructions and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
XI.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, attorneys and attorneys-in-fact and so long as it exercises
reasonable care in the selection of such parties, the Agent shall not be
answerable to the Lenders, except as to money or securities received by it or
its authorized agents, due solely to the default, negligence or misconduct of
any such parties. The Agent shall be entitled to advice of counsel concerning
all matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
XI.7 Reliance on Documents, Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
XI.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent (in its capacity as Agent but not as Lender)
ratably in proportion to their respective Commitments (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents including reasonable out-of pocket
expenses in connection with the preparation, execution and delivery of the Loan
Documents, (ii) for any other reasonable out-of-pocket expenses incurred by the
Agent on behalf of the Lenders, in connection with the administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and
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nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby, or the enforcement of any of the terms thereof or of any such other
documents, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Agent or an action relating to a dispute which is solely between the Agent and
one or more Lenders in which the other Lender prevails, or an action taken or
not taken by Agent contrary to the express requirements contained herein
pertaining to the requisite number of lenders required to approve or direct
certain actions. The obligations of the Lenders under this Section 11.8 shall
survive payment of the Obligations and termination of this Agreement.
XI.9 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers and the same duties and obligations
hereunder and under any other Loan Document as any Lender and may exercise the
same as though it were not the Agent, and the term "Lender" or "Lenders" shall,
at any time when the Agent is a Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower, the Guarantor or any of their
Subsidiaries in which the Borrower, the Guarantor or such Subsidiary is not
restricted hereby from engaging with any other Person.
XI.10 Lender Credit Decision; Non-Reliance on Agents and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, BAS, nor any of their
officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Agent, BAS or any Affiliate thereof hereinafter taken, including any review
of the affairs of the Borrower, the Guarantor, any Qualified Borrower,
Investment Affiliate, or Subsidiary, shall be deemed to constitute any
representation or warranty by the Agent or BAS to any Lender. Each Lender
represents to the Agent and BAS that it has, independently and without reliance
upon the Agent or BAS or any other Lender, or any of their respective officers,
directors, employees, agents, attorneys, attorneys-in-fact, or Affiliates, and
based on such documents and information as it has deemed appropriate made its
own credit analysis, appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects and credit
worthiness of the Borrower, the Guarantor, any Qualified Borrower, Investment
Affiliate, or Subsidiary and made its own decision to make its loans hereunder
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent, BAS or any other lender or
any of their respective officers, directors, employees, agents, attorneys,
attorneys-in-fact or Affiliates, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals, and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the Guarantor, any Qualified
Borrower, Investment Affiliate, or Subsidiary. The Agent shall promptly provide
to the Lenders copies of all notices of Default, copies of all financial
statements, certificates and other information pursuant to Section 11.14. Except
for such notices, reports and other documents expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent and BAS shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower, the Guarantor, any
Qualified Borrower, Investment Affiliate or Subsidiary, which may come
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into the possession of the Agent, BAS or any of their officers, directors,
employees, agents, attorneys, attorneys-in-fact or Affiliates.
XI.11 Resignation of Agent; Removal of Agent; Successor Agent.
(a) Resignation of Agent. The Agent may resign at any
time by giving prior written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent. Any such successor Agent
shall be either a Lender or a commercial bank organized under
the laws of the United States of America or any state thereof
and have total assets of at least $25,000,000,000 (as shown on
its most recently published statement of condition) and whose
debt obligations (or whose parent's debt obligations) are
rated not less than Baa1 by Xxxxx'x or BBB+ by Standard &
Poor's, and is generally in the business of making loans
comparable to the Loans made under this Facility. If the
successor Agent is a subsidiary of a bank, total assets and
rating requirement shall apply only to the parent bank. In the
event that the retiring Agent, after becoming entitled to
appoint a successor Agent as set forth above, does not appoint
a successor agent within sixty (60) days after the retiring
Agent giving notice of resignation, the Lenders shall perform
all the duties of the Agent hereunder and the Borrower shall
make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed
to be appointed hereunder until such successor Agent has
accepted the appointment.
(b) Removal of Agent. The Lenders may remove the
Agent as the Agent hereunder and appoint a successor Agent
upon not less than thirty (30) days' prior written notice
signed by Lenders whose Commitment Percentages equal 66 2/3%
of the Aggregate Commitment exclusive of the Agent's
Commitment, if the Agent is grossly negligent or is guilty of
willful misconduct in the performance of its duties hereunder,
as determined in the reasonable discretion of the Lenders
signing the foregoing written notice.
(c) Successor Agents. Upon the acceptance of any
appointment as Agent under this Agreement by a successor
Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent upon written
notice thereof to the Borrower, and the retiring Agent shall
be discharged from its duties and obligations under this
Agreement excepting with respect to its willful misconduct or
gross negligence occurring prior to its discharge. After any
retiring Agent's resignation or removal under this Agreement
as Agent, the provisions of this Article 11 shall continue in
effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
XI.12 Notice of Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder (other than a Default resulting from the nonpayment of any principal,
interest or fees due hereunder) unless the Agent has received notice from
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a Lender or another Person referring to a Loan Document describing such Default
or Unmatured Default and stating that such notice is a "notice of default." In
the event the Agent receives such a notice, the Agent shall give notice thereof
to the Lenders within one (1) Business Day of the Agent's receipt thereof. The
Agent shall take such action with respect to such Default or Unmatured Default
as shall be reasonably directed by the Required Lenders. Each Lender shall give
the Agent written notice of any Default or Unmatured Default within one (1)
Business Day of such Lender's knowledge of a Default or Unmatured Default.
XI.13 Requests for Approval. If the Agent requests in writing the
consent or approval of a Lender, unless otherwise provided herein or in any
other Loan Document, such Lender shall respond and either approve or disapprove
definitively in writing to the Agent within ten (10) Business Days (or sooner if
such notice specifies a shorter period, but in no event less than five (5)
Business Days for responses based on the Agent's good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Agent, and within fifteen (15) Business Days of the
written request from the Agent and the receipt of all documents and information
required by Sections 5.3 and 5.4, as applicable, when considering new Hotel
Properties for inclusion in the Collateral Pool. If the Lender does not so
respond, that Lender shall be deemed to have approved the request. Upon request,
the Agent shall notify the Lenders which Lenders, if any, failed to respond to a
request for approval.
XI.14 Copies of Documents. The Agent shall promptly deliver to each of
the Lenders copies of all notices of Default and other formal notices sent or
received and according to Section 14 of this agreement. The Agent shall deliver
to Lenders within fifteen (15) Business Days following receipt, copies of all
financial statements and certificates except to the extent such items are
required to be furnished directly to the Lenders by the Borrower hereunder.
Within fifteen (15) Business Days after a request by a Lender to the Agent for
other documents previously furnished to the Agent by the Borrower, the Agent
shall provide copies of such documents to such Lender except where this
Agreement obligates the Agent to provide copies in a shorter period of time.
XI.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Required Lenders, each affected Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender. If a Defaulting Lender has failed to fund its
Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its Percentage (such principal, interest and fees being referred to
as "Senior Loans" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the Agent
to the other Lenders in accordance with their respective Percentages
(recalculated for the purposes hereof to exclude the Defaulting Lender) until
all Senior Loans have been paid in full. At that point, the "Defaulting Lender"
shall no longer be deemed a Defaulting Lender. After the Senior Loans have been
paid in full equitable adjustments will be made in connection with future
payments by the Borrower to the extent a portion of the Senior Loans had been
repaid with amounts that otherwise would have been distributed to a Defaulting
Lender but for the operation of this Section 11.15. This provision governs only
the relationship among the Agent, each
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Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of the Borrower to repay all Loans in accordance with the terms of
this Agreement. The provisions of this section shall apply and be effective
regardless of whether a Default occurs and is continuing, and notwithstanding
(i) any other provision of this Agreement to the contrary, (ii) any instruction
of the Borrower as to its desired application of payments or (iii) the
suspension of such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of the Required Lenders or all Lenders.
ARTICLE XII
RATABLE PAYMENTS
If any Lender has payment made to it upon its Loans (other than
payments received pursuant to Sections 4.1, 4.2 or 4.4) in a greater proportion
than that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders so that
after such purchase each Lender will hold its ratable proportion of Loans. If
any Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to their Loans. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XIII
BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS
XIII.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Guarantor and the Lenders and their successors and permitted assigns, except
that (i) the Borrower and the Guarantor shall not have the right to assign their
rights or obligations under the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with Section 13.3. Notwithstanding clause (ii)
of this Section 13.1, any Lender may at any time, without the consent of the
Borrower, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank or to an Affiliate; provided, however, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 13.3 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
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XIII.2 Participations.
XIII.2.1 Permitted Participants; Effect. Any Lender, in the
ordinary course of its business and in accordance with applicable law,
at any time, may sell participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such under the Loan Documents. Any Person to whom
such a participating interest is sold is a "Participant." In the event
of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
XIII.2.2 Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with respect
to any Loan or Commitment in which such Participant has an interest
which forgives principal, interest or fees or reduces the interest rate
or fees payable with respect to any such Loan or Commitment or
postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment or
releases any guarantor of any such Loan or releases any substantial
portion of collateral, if any, securing such Loan.
XIII.3 Assignments.
XIII.3.1 Permitted Assignments. In addition to the assignments
permitted in Section 13.1 hereof, any Lender may, in the ordinary
course of its business, with the prior written consent of the Agent,
which consent shall not be unreasonably withheld, and in accordance
with applicable law, at any time, assign all or any portion of its
rights and obligations under the Loan Documents pursuant to an
assignment agreement substantially in the form of Exhibit D, to one or
more Eligible Assignees, provided that (a) any such assignment shall be
in a minimum aggregate amount of $10,000,000 of such Lender's
Commitment, and in integral multiples of $1,000,000 above such amount
(or the remaining amount of the Commitment held by such Lender), (b)
each such assignment shall be of a constant, not varying, percentage of
all of the assigning Lender's rights and obligations under the
Commitment being assigned, and (c) any Lender wishing to assign all or
a portion of its Commitment who has received a bona fide offer to
purchase all or a portion of its Commitment must first offer to assign
such Commitment, or portion thereof, for the same sum as set forth in
said offer, by written notice to all other Lenders, followed by ten
(10) Business Days during which time any other Lender may by written
notice to the assigning Lender as well as the Agent exercise its right
of first refusal to purchase such Commitment, or portion thereof. In
the event more than one (1) Lender exercises such right, the amount of
the Commitment to be assigned shall be divided equally among such
Lenders, with the payment of funds due from each such purchasing Lender
to be made within five (5) Business Days of the date of such written
notice from the end of the ten (10) day right of first refusal period.
Any Lender considering an assignment of all or a portion of its
Commitment is hereby authorized to disseminate any information it now
has or hereafter obtains pertaining to the Facility, including, without
limitation, any of the Loan Documents and any credit or other
information on the Borrower and the Guarantor, and any
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Subsidiaries, Qualified Borrowers or Investment Affiliates, to any such
assignee, or prospective assignee, affiliates of the Agent or the
Lenders, including, without limitation, BAS, any regulatory body having
jurisdiction over the Agent or the Lenders, and to any other Persons as
necessary or appropriate in the Agent's or the Lenders' reasonable
judgment. Unless such Lender assigns its entire interest, it must
maintain a minimum Commitment of $10,000,000 (exclusive of any portion
of its Commitment in which it has sold a participation interest, other
than participations where such Lender retains full voting control).
Notwithstanding the foregoing provisions, any assignment by a Lender to
another Lender, or an Affiliate thereof, or an Affiliate of the
assigning Lender shall not be subject to (i) the $10,000,000 minimum
assignment amount , (ii) the requirement to first offer to assign such
Commitment, or portion thereof, to all other Lenders, or (iii) the fee
in Section 13.3.2(b) hereof, and, further, such assignment shall
release the transferor Lender from its obligations hereunder. If the
Aggregate Commitment is reduced, the references to $10,000,000
contained in this Section 13.3.1 shall be reduced proportionately. Any
Person to whom such rights and obligations are assigned is a
"Purchaser." Such assignment shall be substantially in the form of
Exhibit D hereto or in such other form as may be agreed to by the
parties thereto (the "Assignment"). So long as no Default or Unmatured
Default exists hereunder, in no event shall Bank of America's
Commitment amount be reduced below the largest Commitment amount for
any of the other Lenders.
XIII.3.2 Effect; Effective Date. Upon (a) delivery to the
Agent and the Borrower of a notice of assignment, substantially in the
form attached as Exhibit I to Exhibit D hereto (a "Notice of
Assignment"), together with any consents required by Section 13.3.1,
and (b) payment of a $3,500 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that none
of the consideration used to make the purchase of the Commitment and
Loans under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Agent shall be
required to release Bank of America with respect to the percentage of
the Aggregate Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
13.3.2, the transferor Lender, Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender, if applicable, and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Commitment, as adjusted pursuant to
such assignment.
XIII.4 Dissemination of Information. The Borrower and the Guarantor
authorize each Lender to disclose to the Arranger and to any Participant or
Purchaser, or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Borrower, the Guarantor and their Subsidiaries, provided that such
Transferees agree to maintain the confidentiality of any information that is
confidential in the manner set forth in Section 10.14.
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XIII.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.20.
XIII.6 Possession of Loan Documents and Register. The Agent shall keep
and maintain complete and accurate files and records of all matters pertaining
to the Loan. Upon reasonable prior notice to the Agent by any Lender, other than
any privileged attorney/client information or documentation or other internal
information or documentation deemed by the Agent to be privileged or proprietary
in nature, the Agent will make available to such Lender and their
representatives and agents, the files and records relating to the Facility for
inspection and copying at their expense during normal business hours. The Agent
shall also maintain at its address specified pursuant to Article XIV, a copy of
each Assignment delivered to and accepted by it and a listing of the names and
addresses of the Lenders, the amount of each Lender's Commitment and Percentage
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agent, and the
Lenders may treat each person or entity whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by the Borrower or any Lender during normal
business hours upon reasonable prior notice to the Agent.
ARTICLE XIV
NOTICES
XIV.1 Giving Notice. Except as otherwise permitted by Section 2.15 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answer back confirmed in the case of telexes).
XIV.2 Change of Address. The Borrower, the Guarantor, the Arranger, the
Agent and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
XIV.3 Accounts. The Agent shall deliver to each Lender and the
Borrower, and each Lender shall deliver to the Agent wiring instructions
containing account information for purposes of the payment of sums due under
this Agreement.
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ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Guarantor, the Arranger, the Agent and the Lenders and each party has notified
the Agent by telex or telephone, that it has taken such action.
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IN WITNESS WHEREOF, the Borrower, the Guarantor, the Arranger, the Agent and the
Lenders have executed this Agreement as of the date first above written.
The "Borrower"
RFS PARTNERSHIP, L.P.
By: RFS Hotel Investors, Inc.
Its General Partner
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: 901/000-0000
Facsimile: 901/818-5260
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
The "Guarantor"
RFS HOTEL INVESTORS, INC.,
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: 901/000-0000
Facsimile: 901/818-5260
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
BANK OF AMERICA, N.A.
Individually and as Agent
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: D. Xxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
SOUTHTRUST BANK, N.A.
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
000 X. Xxxxxxxxx Xx., 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
First Tennessee Bank National Association
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PNC BANK, NATIONAL ASSOCIATION
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
000 0xx Xxxxxx
X0-XXXX-00-0
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
XXXXX FARGO BANK
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address:
0000 Xxxxx Xxxxx Xx.
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AMSOUTH BANK
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notice Address
0000 0xx Xxx. Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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EXHIBIT A
NOTE
FORM OF NOTE
$________________ January___, 2000
RFS Partnership, L.P., a Tennessee limited partnership (the
"Borrower"), promises to pay to the order of _______________ (the "Lender") the
principal sum ______________________ Dollars ($_____________), in immediately
available funds at the main office of Bank of America, N.A. in Dallas, Texas,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement (as hereinafter defined). The Borrower
shall pay the remaining unpaid principal of and accrued and unpaid interest on
this Loan in full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record in accordance
with its usual practice, the date and amount of each Loan and the date and
amount of each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Fourth Amended and Restated Revolving Credit Agreement
among the Borrower, Bank of America, N.A., individually as a Lender and as
Agent, Banc of America Securities LLC, and the other Lenders named therein,
dated as of the date hereof (the "Agreement"), to which Agreement reference is
hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
If there is an Unmatured Default or Default under the Agreement or any
other Loan Document and Agent exercises the remedies provided under the
Agreement and/or any of the Loan Documents for the Lenders, then in addition to
all amounts recoverable by the Agent and the Lenders under such documents, the
Agent and the Lenders shall be entitled to receive on demand reasonable
attorneys fees and expenses incurred by Agent and the Lenders in connection with
the exercise of such remedies.
The Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note,
and any and all lack of diligence or delays in collection or enforcement of this
Note, and expressly agree that this Note, or any payment hereunder, may be
extended from time to time, and expressly consent to the release of any party
liable for the obligation secured by this Note, the release of any of the
security for this Note, the acceptance of any other security therefor, or any
other indulgence or forbearance whatsoever, all without notice to any party and
without affecting the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Tennessee.
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IN WITNESS WHEREOF, the Borrower has executed this Note under seal as
of the date first written above.
RFS PARTNERSHIP, L.P.
By: RFS Hotel Investors, Inc.
Its General Partner
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
[CORPORATE SEAL]
Notice Address:
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
2
000
XXXXXXX X
XXXX XX XXXXXXX
______________, 19_____
The Agent and
the Lenders who are parties to
Credit Agreement described below
Gentlemen/Ladies:
We are counsel for RFS Partnership, L.P. (the "Borrower"), and have
represented the Borrower in connection with its execution and delivery of that
certain Fourth Amended and Restated Revolving Credit Agreement among the
Borrower, Bank of America, N.A., individually and as Agent, Banc of America
Securities LLC and the Lenders named therein, providing for Advances in an
aggregate principal amount not exceeding $130,000,000 at any one time
outstanding and dated as of _______________ (the "Agreement"). All capitalized
terms used in this opinion and not otherwise defined shall have the meanings
attributed to them in the Agreement.
We have examined the Borrower's Partnership Agreement and Covenants as
well as the Guarantor's articles of incorporation, by-laws, and resolutions, the
Loan Documents and such other matters of fact and law which we deem necessary in
order to render this opinion. Based upon the foregoing, it is our opinion that:
1. The Borrower and the Guarantor and each of their Subsidiaries and
each Qualified Borrower are either duly incorporated corporations or duly
qualified and formed limited partnerships, validly existing and in good standing
under the laws of their states of incorporation or formation, and they each have
all requisite authority and power to enter into, and perform the obligations
under, the Loan Documents and to conduct business in each jurisdiction in which
they conduct business.
2. The execution and delivery of the Loan Documents by the Borrower and
the Guarantor and the performance by them of their respective obligations under
the Loan Documents have been duly authorized by all necessary corporate action
and/or proceedings on their part and will not:
(a) require any consent of the Borrower's limited partners or
the Guarantor's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or the Guarantor or
any of their Subsidiaries or the Borrower's, the Guarantor's or any
Subsidiary's articles of incorporation, by-laws, certificate of limited
partnership, partnership agreement, or any indenture, instrument or
agreement binding upon the Borrower or the Guarantor or any of their
Subsidiaries,
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(c) result in, or require, the creation or imposition of any
Lien pursuant to the provisions of any indenture, instrument or
agreement binding upon the Borrower or the Guarantor or any of their
Subsidiaries
3. The Loan Documents have been duly executed and delivered by the
Borrower and the Guarantor and constitute their legal, valid and binding
obligations enforceable in accordance with their respective terms except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable remedies are
sought.
4. There is no litigation or proceeding against the Borrower or the
Guarantor or any of their Subsidiaries which, if adversely determined, could
have a Material Adverse Effect.
5. No approval, authorization, consent, adjudication or order of, or
registration or filing with, any governmental authority, which has not been
obtained or made by the Borrower or the Guarantor or any of their Subsidiaries,
is required to be obtained or made by the Borrower or the Guarantor or any of
their Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the payment
by the Borrower of the Guarantor of their obligations under the Loan Documents.
6. The Loan does not violate the usury laws or laws regulating the use
or forbearance of money of Tennessee and the operation of any term of the
Agreement or Loan Documents, including, without limitation, the terms regarding
late charges and default interest rate or the lawful exercise of any right
thereunder, shall not render the Agreement or Loan Documents unenforceable, in
whole or in part, or subject to any right of rescission. set-off, counterclaim
or defense.
7. The Guarantor qualifies as a real estate investment trust in
accordance with all applicable requirements of the Internal Revenue Code.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
-----------------------------------------
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EXHIBIT C
COMPLIANCE CERTIFICATE
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EXHIBIT D
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
______________________ (the "Assignor") and _______________________ (the
"Assignee") is dated as of ______________, 19___. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to that certain
Fourth Amended and Restated Revolving Credit Agreement (which, as it may be
amended, modified, renewed or extended from time to time is herein called the
"Credit Agreement") described in Item I of Schedule 1 attached hereto ("Schedule
1"). Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, without recourse and without representation or warranty, express
or implied, except as expressly set forth herein, and the Assignee hereby
purchases and assumes from the Assignor, an interest in and to the Assignor's
rights and obligations under the Credit Agreement and the other Loan Documents,
such that after giving effect to such assignment the Assignee shall have
purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement and the other Loan Documents. The aggregate
Commitment (or Loans, if the applicable Commitment has been terminated)
purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or, if any Assignor is other than Bank of America two (2) Business Days (or
such shorter period agreed to by the Agent) after a Notice of Assignment
substantially in the form of Exhibit "I" attached hereto has been delivered to
the Agent. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under Section 4
hereof are not made on the proposed Effective Date, unless otherwise agreed to
in writing by Assignor and Assignee. The Assignor will notify the Assignee of
the proposed Effective Date no later than the Business Day prior to the proposed
Effective Date. As of the Effective Date, (i) the Assignee shall have the rights
and obligations of a Lender under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an
amount equal to the principal amount of the portion of all Prime Loans assigned
to the Assignee hereunder and (ii) with respect to each LIBOR Loan
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made by the Assignor and assigned to the Assignee hereunder which is outstanding
on the Effective Date, (a) on the last day of the Interest Period therefor or
(b) on such earlier date agreed to by the Assignor and the Assignee or (c) on
the date on which any such LIBOR Loan either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing clauses (a),
(b) or (c) being hereinafter referred to as the "LIBOR Due Date"), the Assignee
shall pay the Assignor an amount equal to the principal amount of the portion of
such LIBOR Loan assigned to the Assignee which is outstanding on the LIBOR Due
Date. If the Assignor and the Assignee agree that the applicable LIBOR Due Date
for such LIBOR Loan shall be the Effective Date, they shall agree, solely for
purposes of dividing interest paid by the Borrower on such LIBOR Loan, to an
alternate interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the related
Interest Period (the "Agreed Interest Rate") and any interest received by the
Assignee in excess of the Agreed Interest Rate, with respect to such LIBOR Loan
for such period, shall be remitted to the Assignor. In the event a prepayment of
any LIBOR Loan which is existing on the Effective Date and assigned by the
Assignor to the Assignee hereunder occurs after the Effective Date but before
the applicable LIBOR Due Date, the Assignee shall remit to the Assignor any
excess of the funding indemnification amount paid by the Borrower under Section
3.4 of the Credit Agreement as well as an account of such prepayment with
respect to the portion of such LIBOR Loan assigned to the Assignee hereunder
over the amount which would have been paid if such prepayment amount were
calculated based on the Agreed Interest Rate and only covered the portion of the
Interest Period after the Effective Date. The Assignee will promptly remit to
the Assignor (i) the portion of any principal payments assigned hereunder and
received from the Agent with respect to any LIBOR Loan prior to its LIBOR Due
Date and (ii) any amounts of interest on Loans and fees received from the Agent
which relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date, in the case of Prime Loans or fees, or the
LIBOR Due Date, in the case of LIBOR Loans, and not previously paid by the
Assignee to the Assignor. In the event that either party hereto receives any
payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
5. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or Attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Collateral Pool Properties, books or records of the Borrower, the Guarantor,
their Subsidiaries or Investment Affiliates, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any
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collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with the
Loans or the Loan Documents.
6. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Agent, the
Documentation Agent, the Assignor or any other Lender and based on such
documents and information at it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender, (v) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA, (vii)
attaches either U.S. Internal Revenue Service Form 4224 or Form 1001 certifying
that the Assignee claims entitlement to complete exemption from U.S. Federal
withholding tax on all interest payments under the Loans and (viii) if Assignee
is organized under the laws of any jurisdiction other than the United States or
any state thereof, agrees to provide Assignor and the Agent a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations, and amendments duly executed and completed by Assignee, and to
comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
7. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's nonperformance
of the obligations assumed under this Assignment Agreement.
8. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule I
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
9. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
10. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Tennessee.
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11. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
----------------------------------------
Title:
-------------------------------------
[NAME OF ASSIGNEE]
By:
----------------------------------------
Title:
-------------------------------------
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SCHEDULE I
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: _____________, 19___
3. Amounts (As of Date of Item 2 above):
a. Aggregate Commitment
(Loans)* under
Credit Agreement $_________
b. Assignee's Percentage of the Aggregate
Commitment purchased under this
Assignment Agreement** _________%
4. Amount of Assignee's Commitment
(Loan Amount)* Purchased under this
Assignment Agreement: $_________
5. Amount of Assignor's Commitment
(Loan Amount) After Purchase under this
Assignment Agreement __________
6. Proposed Effective Date: __________
Accepted and Agreed:
[NAMES OF ASSIGNOR] [NAMES OF ASSIGNEE]
By: By:
-------------------------------- -------------------------------------
Title: Title:
------------------------------ ----------------------------------
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 8 decimal places
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Attachment to SCHEDULE I to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must include notice
address and account information for the Assignor and the Assignee
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122
EXHIBIT "I"
to Assignment Agreement
NOTICE OF ASSIGNMENT
_______________, 19
To: [NAME OF AGENT]
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Fourth Amended and Restated Revolving Credit
Agreement (the "Credit Agreement") described in Item 1 of Schedule I attached
hereto ("Schedule I"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Agent pursuant to Section 13.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ____________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule I of all
outstandings, rights and obligations under the Credit Agreement. From and after
such purchase, the Assignee's Commitment shall be the amount specified in Item 4
of Schedule I and the Assignor's Commitment shall be the amount specified in
Item 5 of Schedule I. The Effective Date of the Assignment shall be the later of
the date specified in Item 5 of Schedule I or two (2) Business Days (or such
shorter period as agreed to by the Agent) after this Notice of Assignment has
been delivered to the Agent, provided that the Effective Date shall not occur if
any condition precedent agreed to by the Assignor and the Assignee or set forth
in Section 13 of the Credit Agreement has not been satisfied.
4. The Assignor and the Assignee hereby give to the Agent notice of the
assignment and delegation referred to herein. The Assignor will confer with the
Agent before the date specified in Item 6 of Schedule I to determine if the
Assignment Agreement will become effective on such date pursuant to Section 3
hereof, and will confer with the Agent to determine the Effective Date pursuant
to Section 3 hereof if it occurs thereafter. The Assignor shall notify the Agent
if the Assignment Agreement does not become effective on any proposed Effective
Date as a result of the failure to satisfy the conditions precedent agreed to by
the Assignor and the Assignee. At the request of the Agent, the Assignor will
give the Agent written confirmation of the satisfaction of the conditions
precedent.
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5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 13.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacements notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Borrower
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule I.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Borrower or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
----------------------------------------
By: By:
-------------------------------- -------------------------------------
Title: Title:
------------------------------ ----------------------------------
ACKNOWLEDGED AND CONSENTED TO
BY Agent
By:
--------------------------------
Title:
------------------------------
[ATTACH PHOTOCOPY OF SCHEDULE I TO ASSIGNMENT]
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EXHIBIT E
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The Bank of America, N.A.
as Agent (the "Agent") under the Credit Agreement Described Below
Re: Fourth Amended and Restated Revolving Credit Agreement, dated as of
______________, (as amended, modified, renewed or extended from time to
time, the "Agreement"), among RFS Partnership, L.P. (the "Borrower"),
Bank of America, N.A., individually and as Agent, Banc of America
Securities LLC and the Lenders named therein. Terms used herein and not
otherwise defined shall have the meanings assigned thereto in the
Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 14.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.15 of the Credit Agreement.
Facility Identification Number(s)
----------------------------------------------
Customer/Account Name
Transfer Funds To
--------------------------------------------------------------
--------------------------------------------------------------
For Account No.
----------------------------------------------------------------
Reference/Attention To
---------------------------------------------------------
Authorized Officer (Customer Representative) Date
----------------------
(Please Print) Signature
Bank Officer Name Date
----------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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EXHIBIT F
Minimum Specifications for
Environmental Investigations
(See attached)
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EXHIBIT G
Secured Collateral Pool
(As of January 7, 2000)
Hotel (Franchise) City State Franchisor Cost*
1. Hampton Ft. Lauderdale FL Hampton $ 6,408,505
2. Hampton Warren MI Hampton $ 4,059,968
3. Hampton Minnetonka MN Hampton $ 6,291,190
4. Hampton Lincoln NE Hampton $ 6,086,330
5. Hampton Tulsa OK Hampton $ 7,189,123
6. Hawthorne Atlanta GA Hawthorne Suites $21,265,179
7. Holiday Inn Louisville KY Holiday $ 7,038,697
8. Holiday Inn Lafayette LA Holiday $12,534,620
9. Holiday Inn Flint MI Holiday $15,269,124
10. Holiday Inn Clayton MO Holiday $17,922,222
11. Holiday Inn Columbia SC Holiday $ 7,697,098
12. Holiday Inn Express Arlington Heights IL Holiday $ 5,411,385
13. Holiday Inn Express Downers Grove IL Holiday $ 7,326,516
14. Holiday Inn Express Bloomington MN Holiday $ 9,077,513
15. Residence Inn Torrance CA Residence $22,857,650
16. Residence Inn Wilmington DE Residence $10,811,555
* as of November 30, 1999
Choice = Choice Hotels International, Inc.
Hampton = Hampton Inn Hotel Division, Inc. Promus Hotel Corp.
Holiday = Holiday Inn Franchise Division, Inc. Holiday Inn Worldwide
Residence = Residence Inn by Marriott
Promus = Promus Hotel Corporation
ITT = ITT Sheraton
Marriott = Marriott International, Inc.
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EXHIBIT H
Negative Collateral Pool
(As of January 7, 2000)
Hotel (Franchise) City State Franchisor Cost*
Courtyard by Marriott Flint MI Marriott $ 6,637,000
Hampton Laredo TX Promus $ 6,029,000
Hampton Plano TX Promus $ 7,001,000
Hampton Houston TX Promus $ 6,550,000
Residence Inn Tyler TX Residence $ 9,106,000
Residence Inn Fishkill NY Residence 14,364,000
Residence Inn Atlanta GA Residence 13,195,000
Hampton Inn Chandler AZ Promus 5,444,000
Xxxxxxx Heritage Milpitas CA Independent 39,344,000
Homewood Suites Chandler AZ Promus 6,731,000
Hampton Inn Sedona AZ Promus 6,095,000
Residence Inn Jacksonville FL Residence 7,903,000
Xxxxxxxxx Xxx Xxxx Xxxx Xxxxx XX Residence 6,453,000
Hampton Inn Jacksonville FL Promus 6,096,000
TownePlace Suites Fort Worth TX Marriott 6,720,000
TownePlace Suites Miami FL Marriott 6,695,000
*as of January, 2000
Choice = Choice Hotels International, Inc.
Hampton = Hampton Inn Hotel Division, Inc. Promus Hotel Corp.
Holiday = Holiday Inn Franchise Division, Inc. Holiday Inn Worldwide
Residence = Residence Inn by Marriott
Promus = Promus Hotel Corporation
ITT = ITT Sheraton
Marriott = Marriott International, Inc.
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EXHIBIT I-1
BORROWING NOTICE
Notice Date: _____________
TO: Bank of America, N.A., Agent
BORROWER: RFS Partnership, L. P.
LOAN: $130,000,000.00 Fourth Amended and Restated Revolving Credit
Agreement dated as of __________ (as thereafter amended from
time to time referred to as the "Loan Agreement")
ADVANCE:
ADVANCE AMOUNT REQUESTED: $
-------------------------
EFFECTIVE DATE OF ADVANCE: (1 day for Prime Advance/
--------------------------
3 days for LIBOR Advance from Notice Date)
ADVANCE TYPE: Prime Advance/LIBOR Advance (Circle one)
---------------------------
If a LIBOR Advance:
INTEREST PERIOD: 30, 60, 90 or 180 (Circle One)
-----------------
EXPIRATION DATE OF
INTEREST PERIOD:
-----------------
INTEREST RATE WILL BE SET BY AGENT 2 BUSINESS DAYS PRIOR TO THE EFFECTIVE DATE
OF THE ADVANCE.
AGENT IS AUTHORIZED TO WIRE THE ADVANCE AMOUNT TO BORROWER'S ACCOUNT PER
STANDING WIRING INSTRUCTIONS.
PAYMENT:
PAYMENT AMOUNT REMITTED: $
-------------------------
PROPOSED DATE OF PAYMENT: (if different from above)
-------------------------
ADVANCE TYPE TO BE REPAID: Prime Advance/LIBOR Advance (Circle one)
---------------------------
If a LIBOR Advance, select tranche
to be repaid: $ (original $ amt of tranche)
----------------
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(orig Exp Date of tranche)
BREAK-UP FEE TO BE
COLLECTED IN ADDITION TO
PAYMENT AMOUNT:
--------------------------------
THE ABOVE PAYMENT AMOUNT AND BREAK-UP FEE WILL BE WIRED BY BORROWER TO AGENT PER
STANDING WIRING INSTRUCTIONS.
All capitalized terms not otherwise defined herein shall have the meanings as
set forth in the Loan Agreement.
Borrower represents and warrants that:
1. All of the representations and warranties of the Borrower contained in the
Loan Agreement continue to be true and correct at such time, both before and
after giving effect to the application of the proceeds of the Advance hereto;
2. The incumbency of the Authorized Officers of the corporate general partner of
the Borrower as stated in the most recent certificate dated ___________________,
199__ delivered to the Agent by the Borrower, has not been modified, amended or
rescinded; and
3. There does not exist and, after giving effect to the Advance hereto, there
will not exist, a Default or Unmatured Default under the Loan Agreement.
RFS Partnership, L.P.
By: RFS Hotel Investors, Inc.,
Its General Partner
By:
---------------------------------
Title:
-------------------------------
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130
EXHIBIT I-2
CONVERSION/CONTINUATION NOTICE
Notice Date:
TO: Bank of America, N.A., Agent
BORROWER: RFS Partnership, L. P.
LOAN: $130,000,000.00 Fourth Amended and Restated Revolving Credit and Term
Agreement dated as of _____________ (as thereafter amended from time
to time referred to as the "Loan Agreement")
AMOUNT TO BE CONVERTED: $
-------------------------------------
EFFECTIVE DATE OF CONVERSION: (1 day for PrimeAdvance/
----------------------
3 days for LIBOR Advance from Notice Date)
CONVERSION TYPE:
If converting to Prime Rate:
NOTE: No notice is required if the Effective Date of the Conversion is
at the end of the then applicable LIBOR Interest Period.
ORIGINAL AMOUNT AND EXPIRATION
DATE OF INTEREST PERIOD OF LIBOR
ADVANCE SUBJECT TO CONVERSION: $
---------------------------
If converting to LIBOR Rate:
INTEREST PERIOD: 30, 60, 90 or 180 (Circle One)
-----------------
EXPIRATION DATE OF
INTEREST PERIOD:
--------------------------------------------
INTEREST RATE:
--------------------------------------------
BREAK-UP FEE TO BE COLLECTED: $
--------------------------------------------
THE ABOVE BREAK-UP FEE WILL BE WIRED BY BORROWER TO AGENT PER STANDING WIRING
INSTRUCTIONS.
All capitalized terms not otherwise defined herein shall have the meanings as
set forth in the Loan Agreement.
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Borrower represents and warrants that:
1. All of the representations and warranties of the Borrower under the
Loan Agreement continue to be true and correct at such time, both
before and after giving effect to the application of the conversion
hereto;
2. The incumbency of the Authorized Officers of the corporate general
partner of the Borrower as stated in the most recent certificate dated
___________________, 199__ delivered to the Agent by the Borrower, has
not been modified, amended or rescinded; and
3. There does not exist and, after giving effect to the conversion hereto,
there will not exist, a Default or an Unmatured Default under the Loan
Agreement.
RFS Partnership, L.P.
By: RFS Hotel Investors, Inc.,
General Partner
By:
--------------------------------
Title:
------------------------------
EXHIBIT I-3
LETTER OF CREDIT REQUEST
I, _______________________________, am an Authorized Officer of RFS
Hotel Investors, Inc. (the "General Partner"), the general partner of RFS
Partnership, L.P. (the "Borrower"), and as such Authorized Officer, do hereby
certify pursuant to the provisions of the Fourth Amended and Restated Revolving
Credit Agreement dated as of __________ (as amended from time to time, the "Loan
Agreement"), by and among the Borrower, Agent, Banc of America Securities LLC,
the Lenders thereto (collectively, the "Lenders"), to ______________ [Bank of
America, N.A. or other Lender], as issuer of certain letters of credit (in such
capacity, the "Issuing Bank") and Bank of America, N.A., as agent for the
Lenders (in such capacity, the "Agent"), that:
1. Pursuant to Section 3.4 of the Loan Agreement, the Borrower hereby
requests the issuance by the Issuing Bank of a Facility Letter of Credit in the
stated amount of $______________ to be issued on ____________, 199__ (the
"Issuance Date") and expire on _____________________, 199__, for the benefit of
___________________________ (the "Beneficiary"), substantially in the form of or
containing the terms as set forth in Exhibit A attached hereto.
2. The address of the Beneficiary is as follows:
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3. I hereby certify to the Agent that the Issuing Bank is permitted to
issue such Facility Letter of Credit for such purpose under the terms of Section
7.2 of the Loan Agreement. The purpose of such Letter of Credit is: ____________
_______________________.
4. After giving effect to the issuance of the Letter of Credit hereto,
the aggregate Facility Letter of Credit Obligations will not exceed
$10,000,000.00 and the Allocated Facility Amount will not exceed the Aggregate
Commitment.
5. There does not exist on this date, and will not exist after issuance
of the requested Facility Letter of Credit, a Default or Unmatured Default.
6. No material adverse change has occurred in the business, assets,
liabilities, financial condition, results of operations or business prospects of
the Borrower since the date of the Loan Agreement.
7. All representations and warranties of the Borrower made under the
Loan Agreement, which in accordance with Section VI of the Loan Agreement are
made at and as of the time of such issuance of the requested Facility Letter of
Credit, are true and correct in all material respects as of the date hereof,
both before and after giving effect to the issuance of the Facility Letter of
Credit in connection with which this Request is given, except to the extent that
such representations and warranties relate solely to an earlier date (in such
case such representations and warranties shall have been true and accurate on
and as of such earlier date), and except for changes in factual circumstances
specifically permitted under the Loan Agreement.
8. The incumbency of the Authorized Officers of the General Partner, as
stated in the most recent certificate dated ___________________, 199__ delivered
to the Agent by the Borrower, has not been modified, amended or rescinded.
Capitalized terms used herein and not otherwise defined are used as defined in
the Loan Agreement.
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Dated as of this ________ day of ___________________, 199__.
RFS Partnership, L.P.
By: RFS Hotel Investors, Inc.,
General Partner
By:
------------------------------------
Title:
----------------------------------
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EXHIBIT J
COMMITMENT AMOUNTS AND PERCENTAGES
Lender Commitment Amount Percentage
------ ----------------- ----------
Bank of America, N.A $ 25,000,000.00 19.230769231%
SouthTrust Bank, N.A $ 25,000,000.00 19.230769231%
First Tennessee Bank
National Association $ 20,000,000.00 15.384615384%
PNC Bank, N.A $ 20,000,000.00 15.384615384%
Xxxxx Fargo Bank $ 20,000,000.00 15.384615384%
AmSouth Bank $ 20,000,000.00 15.384615384%
---------------- ------------
$ 130,000,000.00 100.00%
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SCHEDULE 1
SUBSIDIARIES AND INVESTMENT AFFILIATES
1. RFS Managers, Inc. (owned 100% by RFS Hotel Investors, Inc.)
2. RFS Financing Partnership, L.P. (owned 99% by RFS Partnership, L.P. and
1% by RFS Financing Corp.)
3. RFS Financing Corp. (owned 100% by RFS Hotel Investors, Inc.)
4. Ridge Lake L.P., having as its general partner Ridge Lake General
Partner, Inc. (owned 100% by RFS Hotel Investors, Inc.)
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SCHEDULE 2
INDEBTEDNESS AND LIENS
None.
1
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SCHEDULE 3
PLANS AND MULTIEMPLOYER PLANS
None.
1
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SCHEDULE 4
ENVIRONMENTAL DISCLOSURES
None.
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SCHEDULE 5
NONCOMPLIANCE WITH LAWS
None.
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SCHEDULE 6
LITIGATION AND INVESTIGATIONS
Eminent Domain Proceeding (Case No. CV762336) styled Santa Xxxxx County
Transit District v. Xxx Enterprises VIII, Title Insurance and Trust Co., Society
National Bank, Trustee of the Xxxxxx Xxxx Trust No. 9, RCA Corp., Sunnyvale
Host, Inc., Prudential Insurance Co. and DOES I-50 inclusive. [Note RFS
Partnership, L.P., is successor in interest to Xxx Enterprises VIII.]
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SCHEDULE 7
CONTINGENT OBLIGATIONS
None.
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SCHEDULE 8
INDEBTEDNESS DEFAULTS
None.
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SCHEDULE 9
LESSEES AND MANAGERS OTHER THAN RFS, INC.
Property Lessee
-------- ------
Residence Inn Jacksonville Landcom Hospitality Management, Inc.
Hampton Inn Jacksonville Landcom Hospitality Management, Inc.
Residence Inn West Palm Beach Pinnacle Hotel Management, LLC
TownePlace Suites Miami Lakes Landcom Hospitality Management, Inc.
TownePlace Suites Miami Airport Landcom Hospitality Management, Inc.
Manager
-------
Hotel Rex Joie de Vivre Hotels, Inc.
1
