Exhibit 10.37
Conformed copy
U.S. $400,000,000
CREDIT AGREEMENT
among
HOST MARRIOTT, L.P.,
as the U.S. Borrower
CERTAIN CANADIAN SUBSIDIARIES OF HOST MARRIOTT, L.P.,
as the Canadian Revolving Loan Borrowers,
VARIOUS LENDERS,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent,
and
BANK OF AMERICA, N.A.
as Syndication Agent
CITICORP REAL ESTATE, INC.
CREDIT LYONNAIS NEW YORK BRANCH
and
▇▇▇▇▇ FARGO BANK, N.A.,
as Co-Documentation Agents
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Dated as of June 6, 2002
===============================
DEUTSCHE BANK SECURITIES INC.
AND
BANC OF AMERICA SECURITIES LLC.
as Co-Lead Arrangers and Joint Book Running Managers
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Table of Contents
Page
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SECTION 1. Definitions and Accounting Terms.................................................................... 1
1.01 Defined Terms....................................................................................... 1
SECTION 2. Amount and Terms of Credit.......................................................................... 40
2.01 The Commitments..................................................................................... 40
2.02 Minimum Amount of Each Borrowing.................................................................... 42
2.03 Notice of Borrowing................................................................................. 42
2.04 Extension of Maturity Date.......................................................................... 43
2.05 Disbursement of Funds............................................................................... 44
2.06 Notes............................................................................................... 44
2.07 Conversions......................................................................................... 46
2.08 Pro Rata Borrowings................................................................................. 47
2.09 Interest............................................................................................ 48
2.10 Interest Periods.................................................................................... 49
2.11 Increased Costs, Illegality, etc.................................................................... 50
2.12 Compensation........................................................................................ 52
2.13 Lending Offices; Changes Thereto.................................................................... 53
2.14 Replacement of Lenders.............................................................................. 53
2.15 Bankers' Acceptance Provisions...................................................................... 55
2.16 Additional Revolving Loan Commitments............................................................... 55
2.17 Special Provisions Regarding RL Lenders and Canadian Revolving Loans................................ 56
2.18 Voluntary Adjustment or Termination of Total Maximum Canadian Dollar Revolving Loan Sub-Commitment
and Total Canadian Dollar Revolving Loan Sub-Commitment.......................................... 59
SECTION 3. Letters of Credit................................................................................... 61
3.01 Letters of Credit................................................................................... 61
3.02 Maximum Letter of Credit Outstandings; Final Maturities; etc........................................ 62
3.03 Letter of Credit Requests; Notices of Issuance...................................................... 63
3.04 Letter of Credit Participations..................................................................... 63
3.05 Agreement to Repay Letter of Credit Drawings........................................................ 66
3.06 Increased Letter of Credit Costs.................................................................... 67
SECTION 4. Commitment Commission; Canadian Commitment Commission; Fees;
Reductions of Commitment.................................................................................. 67
4.01 Fees................................................................................................ 67
4.02 Voluntary Termination or Reduction of Total Unutilized Revolving Loan
Commitment......................................................................................... ▇▇
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▇▇▇▇▇▇▇ ▇. Prepayments; Payments; Taxes............................................................. 69
5.01 Voluntary Prepayments.................................................................... 69
5.02 Mandatory Repayments and Commitment Reductions........................................... 70
5.03 Method and Place of Payment.............................................................. 74
5.04 Net Payments............................................................................. 74
SECTION 6. Conditions Precedent to Initial Credit Events............................................ 77
6.01 Execution of Agreement; Notes............................................................ 77
6.02 Opinions of Counsel...................................................................... 77
6.03 Corporate Documents; Proceedings; etc.................................................... 78
6.04 Fees, etc................................................................................ 78
6.05 Pledge and Security Agreement............................................................ 78
6.06 Subsidiaries Guaranty.................................................................... 79
6.07 Adverse Change, etc...................................................................... 79
6.08 Litigation............................................................................... 80
6.09 Original Credit Agreement................................................................ 80
6.10 Solvency Certificate; Insurance Certificates............................................. 80
6.11 Financial Statements; Projections........................................................ 80
6.12 No Default; Representations and Warranties............................................... 80
SECTION 7. Conditions Precedent to All Credit Events................................................ 81
7.01 No Default; Representations and Warranties............................................... 81
7.02 Notice of Borrowing; Letter of Credit Request............................................ 81
SECTION 8. Representations, Warranties and Agreements............................................... 81
8.01 Status................................................................................... 81
8.02 Power and Authority...................................................................... 82
8.03 No Violation............................................................................. 82
8.04 Governmental Approvals................................................................... 82
8.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc........................................................................ 83
8.06 Litigation............................................................................... 84
8.07 True and Complete Disclosure............................................................. 84
8.08 Use of Proceeds; Margin Regulations...................................................... 84
8.09 Tax Returns and Payments................................................................. 84
8.10 Compliance with ERISA.................................................................... 85
8.11 The Pledge and Security Agreement; Equity Pledges........................................ 86
8.12 Properties............................................................................... 86
8.13 Subsidiaries............................................................................. 87
8.14 Compliance with Statutes, etc............................................................ 87
8.15 Investment Company Act................................................................... 87
8.16 Public Utility Holding Company Act....................................................... 87
8.17 Environmental Matters.................................................................... 87
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8.18 Labor Relations.......................................................................... 88
8.19 Intellectual Property.................................................................... 88
8.20 Indebtedness............................................................................. 88
8.21 Management Agreements, Franchise Agreements, Operating Leases, Ground
Leases.................................................................................. 88
8.22 Status as REIT........................................................................... 89
8.23 Facility Managers; Approved Lessees...................................................... 89
SECTION 9. Financial Covenants...................................................................... 89
9.01 Maximum Leverage Ratio................................................................... 89
9.02 Minimum Consolidated Interest Coverage Ratio; Minimum Unsecured
Interest Coverage Ratio................................................................. 90
9.03 Minimum Consolidated Fixed Charge Coverage Ratio......................................... 91
9.04 Additional Financial Covenants and Limitations on Incurrence of Indebtedness............. 92
SECTION 10. Affirmative Covenants.................................................................... 92
10.01 Compliance with Laws, Etc................................................................ 92
10.02 Conduct of Business...................................................................... 93
10.03 Payment of Taxes, Etc.................................................................... 93
10.04 Maintenance of Insurance................................................................. 93
10.05 Preservation of Existence, Etc........................................................... 93
10.06 Access; Annual Meetings with Lenders..................................................... 93
10.07 Keeping of Books......................................................................... 94
10.08 Maintenance of Properties, Etc........................................................... 94
10.09 Management Agreements, Operating Leases and Certain Other Contracts...................... 94
10.10 Application of Proceeds.................................................................. 95
10.11 Information Covenants.................................................................... 95
10.12 Intentionally Omitted.................................................................... 98
10.13 Certain Subsidiaries..................................................................... 98
10.14 Foreign Subsidiaries Security............................................................ 99
10.15 Additional Guarantors; Release of Guarantors and Collateral.............................. 99
10.16 End of Fiscal Years; Fiscal Quarters..................................................... 102
10.17 Environmental Matters.................................................................... 102
SECTION 11. Negative Covenants....................................................................... 103
11.01 Liens.................................................................................... 103
11.02 Indebtedness............................................................................. 103
11.03 Limitation on Certain Restrictions on Subsidiaries....................................... 104
11.04 Limitation on Issuance of Capital Stock.................................................. 104
11.05 Modification and Enforcement of Certain Agreements....................................... 104
11.06 Limitation on Creation of Subsidiaries................................................... 105
11.07 Transactions with Affiliates............................................................. 105
11.08 Sales of Assets.......................................................................... 106
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11.09 Consolidation, Merger, etc................................................................. 107
11.10 Acquisitions; Investments.................................................................. 108
11.11 Dividends.................................................................................. 111
11.12 Capital Expenditures....................................................................... 112
11.13 Limitation on Payments of Certain Indebtedness; Modifications of Certain Indebtedness;
Modifications of Organizational Documents; etc........................................... 113
11.14 Business................................................................................... 114
SECTION 12. Events of Default.......................................................................... 114
12.01 Payments................................................................................... 114
12.02 Representations, etc....................................................................... 115
12.03 Covenants.................................................................................. 115
12.04 Default Under Other Agreements............................................................. 115
12.05 Bankruptcy, etc............................................................................ 115
12.06 ERISA...................................................................................... 116
12.07 Pledge and Security Agreement.............................................................. 116
12.08 Guaranty................................................................................... 116
12.09 Judgments.................................................................................. 117
12.10 Management Agreements...................................................................... 117
12.11 Operating Leases........................................................................... 117
12.12 Change of Control.......................................................................... 117
12.13 Trademark Permission....................................................................... 117
12.14 REIT Status; Cash Proceeds Retained by HMC................................................. 117
12.15 General Partner Status..................................................................... 118
12.16 Certain FF&E............................................................................... 118
SECTION 13. The Agents................................................................................. 119
13.01 Appointment................................................................................ 119
13.02 Nature of Duties........................................................................... 119
13.03 Lack of Reliance on the Agents............................................................. 119
13.04 Certain Rights of the Agents............................................................... 120
13.05 Reliance................................................................................... 120
13.06 Indemnification............................................................................ 120
13.07 Each Agent in its Individual Capacity...................................................... 120
13.08 Holders.................................................................................... 121
13.09 Removal of or Resignation by the Agents.................................................... 121
SECTION 14. Miscellaneous.............................................................................. 121
14.01 Payment of Expenses, etc................................................................... 121
14.02 Notices.................................................................................... 123
14.03 Benefit of Agreement....................................................................... 123
14.04 No Waiver; Remedies Cumulative............................................................. 125
14.05 Payments Pro Rata.......................................................................... 126
14.06 Calculations; Computations................................................................. 126
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14.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL....................... 127
14.08 Counterparts................................................................................. 128
14.09 Effectiveness................................................................................ 128
14.10 Headings Descriptive......................................................................... 128
14.11 Amendment or Waiver; etc..................................................................... 128
14.12 Survival..................................................................................... 130
14.13 Domicile of Loans............................................................................ 130
14.14 Confidentiality.............................................................................. 130
14.15 Register..................................................................................... 131
14.16 Commercial Loan Transactions................................................................. 132
14.17 Limitations on Recourse...................................................................... 132
14.18 Judgment Currency............................................................................ 132
14.19 Right of Setoff.............................................................................. 133
14.20 Termination of Liens......................................................................... 133
14.21 Severability................................................................................. 133
SECTION 15. Nature of Borrowers' Obligations............................................................ 134
15.01 Nature of Obligations........................................................................ 134
SECTION 16. U.S. Borrower Guaranty...................................................................... 134
16.01 The Guaranty................................................................................. 134
16.02 Bankruptcy................................................................................... 134
16.03 Nature of Liability.......................................................................... 134
16.04 Guaranty Absolute............................................................................ 135
16.05 Independent Obligation....................................................................... 135
16.06 Authorization................................................................................ 135
16.07 Reliance..................................................................................... 136
16.08 Subordination................................................................................ 136
16.09 Waivers...................................................................................... 136
16.10 Guaranty Continuing.......................................................................... 137
16.11 Binding Nature of Guaranties................................................................. 138
16.12 Judgments Binding............................................................................ 138
SCHEDULE I-A Commitments
SCHEDULE I-B Canadian Dollar Revolving Loan Sub-Commitments
SCHEDULE II Lender Addresses and Applicable Lending Offices
SCHEDULE III Certain Provisions Relating to Bankers' Acceptances
SCHEDULE IV Subsidiaries
SCHEDULE 8.20 Indebtedness
SCHEDULE 11.12 Certain New Hotel Properties
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EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Term Note
EXHIBIT B-2 Dollar Revolving Note
EXHIBIT B-3 Canadian Dollar Revolving Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 5.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel to
HMC, and counsel to the U.S. Borrower
EXHIBIT E-2 Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., special counsel to
the Credit Parties
EXHIBIT E-3 Opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, special
Canadian counsel to the Credit Parties
EXHIBIT E-4 Opinion of ▇▇▇, ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, special
Canadian counsel to the Credit Parties
EXHIBIT F Secretaries' Certificate
EXHIBIT G Pledge and Security Agreement
EXHIBIT H Subsidiaries Guaranty
EXHIBIT I Solvency Certificate
EXHIBIT J Additional Revolving Loan Commitment Agreement
EXHIBIT K Form of Corporate Forecast
EXHIBIT L Assignment and Assumption Agreement
EXHIBIT M Senior Note Indenture
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CREDIT AGREEMENT, dated as of June 6, 2002, among HOST MARRIOTT, L.P.,
a Delaware limited partnership (the "U.S. Borrower"), each CANADIAN REVOLVING
LOAN BORROWER from time to time party hereto, the LENDERS party hereto from time
to time, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the U.S. Borrower is party to the Original Credit Agreement
(as defined below) and desires to replace the Original Credit Agreement with
this Agreement; and
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrowers the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Definitions and Accounting Terms.
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Absolute Rate" shall mean an interest rate (rounded to the nearest
..0001) expressed as a decimal.
"Acceptance Fee" shall mean, in respect of a Bankers' Acceptance, a
fee calculated on the Face Amount of such Bankers' Acceptance at a rate per
annum equal to the Applicable Margin that would be payable with respect to a
Revolving Loan maintained as a Eurodollar Loan borrowed on the Drawing Date of
such Bankers' Acceptance. Acceptance Fees shall be calculated on the basis of
the term to maturity of the Bankers' Acceptance and a year of 365 days.
"Additional Revolving Loan Commitment" shall mean, for each Additional
Revolving Loan Lender, any commitment to make Revolving Loans by such Lender
pursuant to Section 2.16, in such amount as agreed to by such Lender in the
respective Additional Revolving Loan Commitment Agreement; provided that on the
Additional Revolving Loan Commitment Date upon which an Additional Revolving
Loan Commitment of any Additional Revolving Loan Lender becomes effective, such
Additional Revolving Loan Commitment of such Additional Revolving Loan Lender
shall be added to (and thereafter become a part of) the Revolving Loan
Commitment of such Additional Revolving Loan Lender for all purposes of this
Agreement as contemplated by Section 2.16.
"Additional Revolving Loan Commitment Agreement" shall mean an
Additional Revolving Loan Commitment Agreement substantially in the form of
Exhibit J (appropriately completed).
"Additional Revolving Loan Commitment Date" shall mean each date upon
which an Additional Revolving Loan Commitment under an Additional Revolving Loan
Commitment Agreement becomes effective as provided in Section 2.16(b).
"Additional Revolving Loan Lender" shall have the meaning provided in
Section 2.16(b).
"Adjusted Funds From Operations" shall mean, for any period,
Consolidated Net Income for such period plus (a) the sum of the following
amounts for such period (without duplication) to the extent deducted in the
determination of Consolidated Net Income for such period: (i) depreciation
expense, (ii) amortization expense and other non-cash charges of HMC and its
Subsidiaries with respect to their real estate assets for such period, (iii)
losses from Asset Sales, losses resulting from restructuring of Indebtedness and
other extraordinary losses, (iv) amortization of financing cost, and (v)
minority interest expense; less (b) the sum of the following amounts to the
extent included in the determination of Consolidated Net Income for such period:
(i) gains from Asset Sales, gains resulting from restructuring of Indebtedness
and other extraordinary gains, (ii) the applicable share of Consolidated Net
Income of HMC's Unconsolidated Entities, and (iii) minority partner adjusted
funds from operations; plus (without duplication of any amounts referred to in
clause (a) above in this definition) (c) HMC's pro rata share of Adjusted Funds
From Operations of HMC's Unconsolidated Entities based upon HMC's percentage
ownership interest in such Unconsolidated Entities.
"Adjusted Total Assets" shall mean the sum of (i) Undepreciated Real
Estate Assets and (ii) all other assets (excluding intangibles) of the U.S.
Borrower and its Subsidiaries determined on a consolidated basis (it being
understood that the accounts of Subsidiaries shall be consolidated with those of
the U.S. Borrower only to the extent of the U.S. Borrower's proportionate
interest therein) as of any transaction date, as adjusted to reflect the
application of the proceeds of such transaction on such transaction date.
Adjusted Total Assets, as of any date of determination, shall mean the Adjusted
Total Assets as of the end of the most recent fiscal quarter ending on or prior
to the date of determination for which financial statements are required to have
been delivered pursuant to Section 10.11 or prior to the first date such
financial statements are required to be delivered, the fiscal quarter ending
closest to March 31, 2002.
"Adjustment Date" shall have the meaning provided in Section 2.18(b).
"Administrative Agent" shall mean DBTCA in its capacity as
Administrative Agent for the Lenders hereunder, and shall include any successor
Administrative Agent appointed pursuant to Section 13.09.
"Affected Eurodollar Loans" shall have the meaning provided in Section
5.02(d).
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers and general partners of such Person) controlled by, or under
direct or indirect common control with, such Person or (ii) that directly or
indirectly owns more than 10% of the total voting power normally entitled to
vote in the election of directors, managers or trustees, as applicable, in such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to
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direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise, provided that the right to designate a member of the board of
directors or managers of a Person will not, by itself, be deemed to constitute
control. Notwithstanding the foregoing, neither Marriott International nor any
of its Subsidiaries shall be considered to be Affiliates of HMC or any of its
Subsidiaries.
"Affiliate Debt" shall mean any Indebtedness, whether now existing or
hereafter incurred, owed by any Credit Party or any of its Subsidiaries to any
other Credit Party or any of its Affiliates (including, without limitation, any
Intercompany Existing Indebtedness).
"Affiliate Transaction" shall have the meaning provided for in Section
11.07.
"Agent" shall mean each of the Administrative Agent, the Syndication
Agent, the Co-Documentation Agents and Collateral Agent.
"Aggregate U.S. Revolving Exposure" at any time shall mean the sum of
(i) the aggregate principal amount of all Dollar Revolving Loans then
outstanding and (ii) the aggregate amount of all Letter of Credit Outstandings
at such time.
"Aggregate Revolving Credit Exposure" at any time shall mean the sum
of (i) the aggregate principal amount of all Revolving Loans then outstanding
(for this purpose, (x) at all times prior to the occurrence of any Sharing Event
and the automatic conversion of Canadian Revolving Loans to Dollar Revolving
Loans pursuant to Section 2.17, using the Dollar Equivalent of the principal
amount or Face Amount, as the case may be, of each Canadian Revolving Loan then
outstanding and (y) at all times after any occurrence described in the preceding
clause (x), giving effect to the conversions to Dollar obligations required by
Section 2.17), plus (ii) the aggregate amount of all Letter of Credit
Outstandings at such time.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended (including any amendment and restatement hereof) from
time to time.
"Applicable Commitment Commission Percentage" shall mean, with respect
to any quarterly period occurring between successive Quarterly Payment Dates
(or, if shorter, the period through the termination of the Total Revolving Loan
Commitment) during which the daily average Aggregate Revolving Credit Exposure
is (i) less than 50% of the Total Revolving Loan Commitment, .55% per annum,
(ii) greater than or equal to 50%, but less than 75%, of the Total Revolving
Loan Commitment, .45% per annum; and (iii) greater than or equal to 75% of the
Total Revolving Loan Commitment, .35% per annum; provided, however, that to the
extent any portion of the Total Revolving Loan Commitment is not available
pursuant to clause (vii) of Section 2.01(a), the Applicable Commitment
Commission Percentage solely with respect to such portion shall be 0.10% per
annum rather than the higher percentages set forth above in the definition.
"Applicable Currency" shall mean, with respect to any Obligations,
Dollars or, to the extent relating to Canadian Revolving Loans, the respective
Canadian Dollars, in which the respective Loans or related amounts are
denominated.
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"Applicable Margin" shall mean, with respect to any Revolving Loan,
from and after any Start Date to and including the corresponding End Date, the
respective percentage per annum set forth below under the respective Type of
Loan and opposite the respective ▇▇▇▇▇ (▇.▇., ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇,
Level IV, Level V or Level VI, as the case may be) indicated to have been
achieved on the Test Date immediately preceding such Start Date (as shown on the
respective officer's certificate delivered pursuant to Section 10.11(d) or the
first proviso below):
Base Eurodollar
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
Level I Less than 5:00:1.00 1.50% 2.50%
Level II Greater than or equal to 5.00:1.00 but
less than 5.50:1.00 1.75% 2.75%
Level III Greater than or equal to 5.50:1.00 but
less than 6.00:1.00 2.00% 3.00%
Level IV greater than or equal to 6.00:1.00 but
less than 6.50:1.00 2.25% 3.25%
Level V greater than or equal to 6.50:1.00 but
less than 7.00:1.00 2.50% 3.50%
Level VI greater than or equal to 7.00:1.00 2.75% 3.75%
; provided, however, that if the U.S. Borrower fails to deliver the financial
statements required to be delivered pursuant to Section 10.11(a) or (b)
(accompanied by the officer's certificate required to be delivered pursuant to
Section 10.11(d) showing the applicable Leverage Ratio on the relevant Test
Date) on or prior to the respective date required by such Sections, then Level
VI pricing shall apply until such time, if any, as the financial statements
required as set forth above and the accompanying officer's certificate have been
delivered showing the pricing for the respective Margin Reduction Period is at a
level which is less than Level VI (it being understood that, in the case of any
late delivery of the financial statements and officer's certificate as so
required, any reduction in the Applicable Margin shall apply only from and after
the date of the delivery of the complying financial statements and officer's
certificate); provided, further, that Level VI pricing shall apply at any time
when any Specified Default or Event of Default is in existence. Notwithstanding
anything to the contrary contained in the immediately preceding sentence (other
than the second proviso thereof), Level IV pricing shall apply for the period
from the Effective Date to but not including the date which is the first Start
Date after the Effective Date.
The Applicable Margin for Term Loans shall be the above rates as in effect from
time to time plus 0.50% per annum. The Applicable Margin for Canadian Revolving
Loans is the Applicable Margin determined above for Base Rate Loans.
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"Approved Lessee" shall mean (i) a Taxable REIT Subsidiary of the U.S.
Borrower or (ii) another lessee under an Operating Lease, which lessee must be
approved by the Administrative Agent (such approval not to be unreasonably
withheld) unless either such Operating Lease relates to Hotel Properties
accounting, individually or with other leases of such lessee, for less than 10%
of the Consolidated EBITDA of the U.S. Borrower or such lessee is a Permitted
Facility Manager.
"Asset Sale" shall mean any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the U.S. Borrower or any of
its Subsidiaries to any Person other than the U.S. Borrower or any of its
Subsidiaries of (i) all or any of the Capital Stock of any Subsidiary (including
by issuance of such Capital Stock), (ii) all or substantially all of the
property and assets of an operating unit or business of the U.S. Borrower or any
of its Subsidiaries, or (iii) any other property and assets of the U.S. Borrower
or any of its Subsidiaries (other than Capital Stock of a Person which is not a
Subsidiary) outside the ordinary course of business of the U.S. Borrower or such
Subsidiary and, in each case, that is not governed by Section 11.09; provided
that "Asset Sale" shall not include (a) sales or other dispositions of
inventory, receivables and other current assets, (b) sales, transfers or other
dispositions of assets with a fair market value not in excess of $10 million in
any transaction or series of related transactions, (c) leases of real estate
assets, (d) Investments complying with Section 11.10 and (e) any transactions
that, pursuant to clause (b) of Section 11.08, are not deemed not to be an
"Asset Sale."
"Assets" shall mean, with respect to any Person, all assets of such
Person that would, in accordance with GAAP, be classified as assets of a company
conducting a business the same as or similar to that of such Person, including
without limitation, all hotels, mortgage loans, management agreements, franchise
agreements, representation agreements, undeveloped land, joint ventures, hotel
construction and available cash balances.
"Assignee Canadian Lender" shall have the meaning provided in Section
14.03(d).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Authorized Financial Officer" of any Credit Party shall mean any of
the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of
such Credit Party or any other officer of such Credit Party designated in
writing to the Administrative Agent by any of the foregoing officers of such
Credit Party as being authorized to act in such capacity so long as such other
officer is a financial person who works in such Credit Party's controller's or
accounting office.
"Authorized Officer" of any Credit Party shall mean any of the Chief
Executive Officer, the President, the Chief Operating Officer, any Authorized
Financial Officer or any Vice-President of such Credit Party or any other
officer of such Credit Party which is designated in writing to the
Administrative Agent by any of the foregoing officers of such Credit Party as
being authorized to give notices under this Agreement.
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"BA Discount Proceeds" shall mean, in respect of any Bankers'
Acceptance to be purchased by a Canadian Lender on any date pursuant to Section
2.01 and Schedule III hereto, an amount rounded to the nearest whole Canadian
cent, and with one-half of one Canadian cent being rounded up, calculated on
such day by dividing:
(a) the Face Amount of such Banker's Acceptance; by
(b) the sum of one plus the product of:
(i) the respective Canadian Lender's Discount Rate
(expressed as a decimal) applicable to such Bankers' Acceptance;
and
(ii) a fraction, the numerator of which is the number of
days in the term of maturity of such Banker's Acceptance and the
denominator of which is 365;
with such product being rounded up or down to the fifth decimal place
and .000005 being rounded up.
"Bank of America" shall mean Bank of America, N.A., in its individual
capacity.
"Bankers' Acceptance" shall mean a Draft accepted by a Canadian Lender
pursuant to Section 2.01 and Schedule III hereto.
"Bankers' Acceptance Loans" shall mean the creation and discount of
Bankers' Acceptances as contemplated in Section 2.01 and Schedule III hereto.
"Bankruptcy Code" shall have the meaning provided in Section 12.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% plus
the overnight Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Dollar Loan designated or deemed
designated as such by the respective Borrower at the time of the incurrence
thereof or conversion thereto.
"Borrowers" shall mean and include (i) the U.S. Borrower, and (ii) all
Canadian Revolving Loan Borrowers. Each reference in this Agreement or any other
Credit Document to any "Borrower" shall mean, if the respective reference
relates to the Obligations of a Borrower or its liabilities to make payments of
principal, interest, fees or other amounts with respect to any outstanding
Obligation, the respective Person which is the Borrower of the respective Loans
in the case of Canadian Revolving Loans, or the Persons jointly and severally
acting as the Borrower with respect thereto, in the case of Term Loans, Dollar
Revolving Loans or Letter of Credit Outstandings. Each other reference in this
Agreement or any other Credit Document to a Borrower (including without
limitation for purposes of the representations and warranties, covenants and
events of default) shall mean, unless the context otherwise indicates, any
Person which, either individually or jointly and severally, is a Borrower
hereunder (including the U.S. Borrower and each Canadian Revolving Loan
Borrower).
-6-
"Borrowing" shall mean the borrowing by a Borrower of one Type of Loan
of a single Tranche from all the Lenders having Commitments of the respective
Tranche on a given date (or resulting from a conversion or conversions on such
date) and having in the case of Eurodollar Loans the same Interest Period,
provided that Base Rate Loans incurred pursuant to Section 2.11(b) shall be
considered part of the related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) or clause (iii) below, any day except Saturday, Sunday and any
day which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the London interbank market and which shall not be a
legal holiday or a day on which banking institutions are authorized or required
by law or other government action to close in the city where the applicable
Payment Office of the Administrative Agent is located in respect of Eurodollar
Loans and (iii) solely for purposes of Canadian Revolving Loans, any day except
Saturday, Sunday and any day which shall be in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ a legal
holiday or a day on which banking institutions are authorized or required by law
or other government action to close.
"Calculation Period" shall mean the period of four consecutive fiscal
quarters last ended before the date of the respective event or incurrence which
requires calculations to be made on a Pro Forma Basis and for which financial
information of the kind referred to in Sections 10.11(a) and (b) is available.
"Canadian Commitment Commission" shall have the meaning provided in
Section 4.01(a).
"Canadian Dollars" and "Cdn $" shall mean freely and transferable
lawful money of Canada.
"Canadian Dollar Equivalent" shall mean, at any time for the
determination thereof, the amount of Canadian Dollars which could be purchased
with the amount of Dollars involved in such computation at the spot rate of
exchange therefor as quoted by the Person serving as the Administrative Agent as
of 11:00 A.M. (New York time) on the date two Business Days prior to the date of
any determination thereof for purchase on such date.
"Canadian Dollar Revolving Loan Sub-Commitment" shall mean, as to any
Canadian Lender, the such Lender's Canadian RL Percentage of the Total Canadian
Dollar Revolving Loan Sub-Commitment as determined pursuant to Sections 2.18(a),
(b), (c) and (e) from time to time. The Canadian Dollar Revolving Loan
Sub-Commitments of the Canadian Lenders in no event may exceed the Maximum
Canadian Dollar Revolving Loan Sub-Commitments of the Canadian Lenders.
"Canadian Dollar Revolving Notes" shall have the meaning provided in
Section 2.06(a).
-7-
"Canadian Lender" shall mean (i) each Lender listed on Schedule I-B,
and (ii) each additional Person that becomes a Canadian Lender party hereto as a
lender in Canada to any Canadian Revolving Loan Borrower under the Maximum
Canadian Dollar Revolving Loan Sub-Commitments in accordance with Section 2.14
or 14.03(b) (provided that a Canadian Lender must be (x) a person resident in
Canada for purposes of the Income Tax Act (Canada), (y) an authorized foreign
bank which at all times holds all of its interest in any Canadian Obligations in
the course of its Canadian banking business for purposes of subsection 212(13.3)
of the Income Tax Act (Canada) or (z) able to establish to the satisfaction of
the Canadian Revolving Loan Borrowers and the Administrative Agent based on
applicable law in effect on the Effective Date or on such later date on which it
becomes a Canadian Lender that such Lender is not subject to deduction or
withholding of Canadian Taxes with respect to any payments to such Lenders of
interest, fees, commissions, or any other amount payable by any Canadian
Revolving Loan Borrower under the Credit Documents, on the Effective Date or
such other date on which it becomes a Canadian Lender), in each case, in their
capacities as lenders in Canada to the Canadian Revolving Loan Borrowers under
the Maximum Canadian Dollar Revolving Loan Sub-Commitments. A Canadian Lender
shall cease to be a "Canadian Lender" when it has assigned all of its Maximum
Canadian Dollar Revolving Loan Sub-Commitment in accordance with Section 2.14
and/or 14.03(b). For purposes of this Agreement, (x) unless the context
otherwise indicates, each reference to a Canadian Lender which has one or more
affiliates which act as a Canadian Lender shall include such affiliate or
affiliates and (y) the terms "Lender" and "RL Lender" include each Canadian
Lender unless the context otherwise requires.
"Canadian Obligations" shall have the meaning provided in Section
16.01.
"Canadian Prime Rate" shall mean, at any time, the greater of (i) the
per annum rate of interest quoted, published and commonly known as the "prime
rate" of Deutsche Bank AG, Canada Branch which Deutsche Bank AG, Canada Branch
establishes at its main office in Toronto, Ontario as the reference rate of
interest in order to determine interest rates for commercial loans in Canadian
Dollars to its Canadian borrowers, adjusted automatically with each quoted or
published change in such rate, all without necessity of any notice to any
Borrower or any other Person and (ii) the sum of (x) the average of the rates
per annum for Canadian Dollar bankers' acceptances having a term of 30 days that
appears on the Reuters Screen CDOR Page as of 10:00 a.m. (Toronto time) on the
date of determination, as reported by Deutsche Bank AG, Canada Branch (and if
such screen is not available, any successor or similar services may be selected
by Deutsche Bank AG, Canada Branch), and (y) 0.75%.
"Canadian Prime Rate Loans" shall mean any Canadian Revolving Loan
designated or deemed designated as such by the respective Canadian Revolving
Loan Borrower at the time of the incurrence thereof or conversion thereof.
"Canadian Revolving Loan" shall have the meaning provided in Section
2.01.
"Canadian Revolving Loan Borrowers" shall mean Calgary Charlotte
Partnership, HMC Toronto Air Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Company and HMC AP Canada
Company.
"Canadian RL Percentage" of any Canadian Lender at any time shall mean
a fraction (expressed as a percentage) the numerator of which is the Maximum
Canadian Dollar
-8-
Revolving Loan Sub-Commitment of such Canadian Lender at such time and the
denominator of which is the aggregate amount of Maximum Canadian Dollar
Revolving Loan Sub-Commitments of all Canadian Lenders at such time.
Notwithstanding anything to the contrary contained above, if the Canadian RL
Percentage of any Canadian Lender is to be determined after the Total Revolving
Loan Commitment has been terminated, then the Canadian RL Percentages of the
Canadian Lenders shall be determined immediately prior (and without giving
effect) to such termination.
"Canadian Taxes" shall have the meaning provided in Section 5.04(e).
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, all expenditures by such Person which should be capitalized in
accordance with GAAP, including all such expenditures with respect to fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with GAAP) and, without
duplication, the amount of Capitalized Lease Obligations of such Person.
"Capital Stock" of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, and participation or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with GAAP.
"Cash Available for Distribution" of any Person for any period shall
mean Consolidated EBITDA of such Person less the sum of (w) 5% of Gross Revenues
received during such period from all Hotel Properties, (x) Consolidated Interest
Expense for such period, (y) scheduled amortization (other than balloon
payments) for such period plus (z) cash Taxes for such period.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Lender that
is a commercial bank or (y) any bank whose short-term commercial paper rating
from S&P is at least A-2 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least
P-2 or the equivalent thereof (any such bank or Lender, an "Approved Bank"), in
each case with maturities of not more than one year from the date of
acquisition, (iii) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper rating of
at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition, (iv) marketable direct obligations issued by
the
-9-
District of Columbia or any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either S&P
or Moody's and (v) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(i) through (iv) above.
"CDOR" shall mean, for any day and relative to Bankers' Acceptances
having any specified term, the arithmetic average of the bid rates of interest
(expressed as an annual percentage rate) rounded to the nearest
one-hundred-thousandth of one percent (with 0.000005 being rounded up) for
Canadian Dollar bankers' acceptances having a term to maturity equal to such
specified term (or a term as closely as possible comparable to such specified
term) of those of Bank of Montreal, Canadian Imperial Bank of Commerce, Royal
Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion Bank that
appears on the Reuters Screen CDOR Page as of 10:00 a.m. (Toronto time) on such
day (or, if such day is not a Business Day, as of 10:00 a.m. on the next
preceding Business Day), provided that if fewer than two such bid rates appear
on the Reuters Screen CDOR Page as of such time on such day, CDOR for such day
will be the arithmetic average of the bid rates of interest (expressed as an
annual percentage rate and rounded as set forth above) for Canadian Dollar
bankers' acceptances, with a term to maturity equal to such specified term (or a
term as closely as possible comparable to such specified term) for same day
settlement as quoted by such of the principal Toronto offices of Bank of
Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Bank of
Nova Scotia and The Toronto-Dominion Bank as may quote such a rate as of 10:00
a.m. (Toronto time) on such day as determined by the Administrative Agent.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (i) HMC shall at any time cease to own
100% of the general partnership interests of the U.S. Borrower, (ii) the direct
or indirect acquisition by any Person or a group (as such term is defined in
Section 13(d)(3) of the Securities Exchange Act), other than Marriott Family
Members, of beneficial ownership (as such term is defined in Rule 13D-3
promulgated under the Securities Exchange Act) of 40% or more of the outstanding
shares of common stock of HMC, or (iii) the Board of Directors of HMC shall not
consist of a majority of Continuing Directors or (iv) any "change of control" or
similar event shall occur under any Qualified Preferred Stock, the Senior Notes
or any other Indebtedness (other than Non-Recourse Indebtedness) of HMC or the
U.S. Borrower with an aggregate principal amount of $40,000,000 or more which
results in a default under such Indebtedness beyond the period of grace (if any)
or a declaration of such Indebtedness to be due and payable prior to the
scheduled maturity thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
-10-
"Collateral" shall mean all "Collateral" as defined in the Pledge and
Security Agreement or any other Security Document and all cash and Cash
Equivalents delivered as collateral pursuant to Section 3, 5.02 or 12.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge and Security
Agreement.
"Collateral Release Date" shall have the meaning provided in Section
10.15(d).
"Commitment" shall mean any of the commitments of any Lender.
"Commitment Commission" shall have the meaning provided in Section
4.01(a).
"Consolidated" or "consolidated" shall mean, with respect to any
Person, the consolidation of the accounts of the Subsidiaries of such Person
with those of such Person; provided that "consolidation" will not include
consolidation of the accounts of any other Person other than a Subsidiary of
such Person with such Person (it being understood that the accounts of such
Person's Consolidated Subsidiaries shall be consolidated only to the extent of
such Person's proportionate interest therein). The terms "consolidated" and
"consolidating" have correlative meanings to the foregoing.
"Consolidated EBITDA" shall mean, for any Person and for any period on
a Pro-Forma Basis, the Consolidated Net Income of such Person for such period
adjusted to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, (A) the sum of (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income (to the extent of
such Person's proportionate interest therein), (iii) depreciation and
amortization expense (to the extent of such Person's proportionate interest
therein), (iv) any other noncash items reducing the Consolidated Net Income of
such Person for such period (to the extent of such Person's proportionate
interest therein), (v) any dividends or distributions during such period to such
Person or a Consolidated Subsidiary of such Person (to the extent of such
Person's proportionate interest therein) from any other Person which is not a
Subsidiary of such Person or which is accounted for by such Person by the equity
method of accounting, to the extent that such dividends or distributions are not
included in the Consolidated Net Income of such Person for such period and (vi)
any cash receipts of such Person or a Consolidated Subsidiary of such Person (to
the extent of such Person's proportionate interest therein) during such period
that represent items included in Consolidated Net Income of such Person for a
prior period which were excluded from Consolidated EBITDA of such Person for
such prior period by virtue of clause (B) of this definition, minus (B) the sum
of (I) all non-cash items increasing the Consolidated Net Income of such Person
(to the extent of such Person's proportionate interest therein) for such period
and (II) any cash expenditures of such Person (to the extent of such Person's
proportionate interest therein) during such period to the extent such cash
expenditures (a) did not reduce the Consolidated Net Income of such Person for
such period and (b) were applied against reserves or accruals that constituted
noncash items reducing the Consolidated Net Income of such Person (to the extent
of such Person's proportionate interest therein) when reserved or accrued; all
as determined on a consolidated basis for such Person and its Consolidated
Subsidiaries (it being understood that the accounts of such Person's
Consolidated
-11-
Subsidiaries shall be consolidated only to the extent of such Person's
proportionate interest therein).
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (x) Consolidated EBITDA for such period, less the sum for such
period of (a) 5% of Gross Revenues received from Hotel Properties and (b) 3% of
Gross Revenues received from all other high quality real estate to (y)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum of
(i) Consolidated Interest Expense for such period, (ii) to the extent that same
does not otherwise constitute Consolidated Interest Expense, all interest
expense on the QUIPs Debt for such period, (iii) preferred stock dividends (or
the equivalent thereof) accrued and/or paid in cash by the U.S. Borrower during
such period, (iv) scheduled amortization payments (other than balloon payments)
during such period and (v) cash taxes on ordinary income for such period.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest
Expense (excluding any interest expense on the QUIPs Debt unless the principal
of the QUIPs Debt has become due and payable and has not been paid) for such
period.
"Consolidated Interest Expense" of any Person shall mean, for any
period on a Pro-Forma Basis, the aggregate amount (without duplication and
determined in each case on a consolidated basis) of (a) interest expensed or
capitalized, paid, accrued, or scheduled to be paid or accrued (including, in
accordance with the following sentence, interest attributable to Capitalized
Lease Obligations but excluding the amortization of fees or expenses incurred in
order to consummate the sale of the Senior Notes or to establish the credit
facility implemented under this Agreement) of such Person and its Consolidated
Subsidiaries during such period, including (i) original issue discount and
noncash interest payments or accruals on any Indebtedness, (ii) the interest
portion of all deferred payment obligations, and (iii) all commissions,
discounts and other fees and charges owed with respect to bankers' acceptances
and letter of credit financings and Interest Rate Protection Agreements and
Other Hedging Agreements, in each case to the extent attributable to such
period, and (b) dividends accrued or payable by such Person or any of its
Consolidated Subsidiaries in respect of Disqualified Stock (other than by
Subsidiaries of such Person to such Person or, to the extent of such Person's
proportionate interest therein, such Person's Subsidiaries); provided, however,
that any such interest, dividends or other payments or accruals (referenced in
clauses (a) or (b)) of a Consolidated Subsidiary that is not a Wholly-Owned
Subsidiary shall be included only to the extent of the proportionate interest of
the referent Person in such Consolidated Subsidiary. For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the U.S. Borrower to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP and (y) interest expense attributable to any Indebtedness represented
by the guaranty by such Person or a Subsidiary of such Person of an obligation
of another Person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Consolidated Net Income" shall mean, with respect to any Person for
any period, the net income (or loss) of such Person and its Consolidated
Subsidiaries for such period,
-12-
determined on a consolidated basis (it being understood that the net income of
Consolidated Subsidiaries shall be consolidated with that of a Person only to
the extent of the proportionate interest of such Person in such Consolidated
Subsidiaries); provided that (i) net income (or loss) of any other Person which
is not a Subsidiary of the Person, or that is accounted for by such specified
Person by the equity method of accounting, shall be included only to the extent
of the amount of dividends or distributions paid to the specified Person or a
Subsidiary of such Person, (ii) the net income (or loss) of any other Person
acquired by such specified Person or a Subsidiary of such Person in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iii) all gains and losses which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including any gain from the sale or other disposition of assets or from the
issuance or sale of any Capital Stock) shall be excluded, and (iv) the net
income, if positive, of any of such Person's Consolidated Subsidiaries other
than Consolidated Subsidiaries that are not Guarantors to the extent that the
declaration or payment of dividends or similar distributions is not at the time
permitted by operation of the terms of its charter or bylaws or any other
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Consolidated Subsidiary shall be excluded;
provided, however, in the case of exclusions from Consolidated Net Income set
forth in clauses (ii), (iii) and (iv), such amounts shall be excluded only to
the extent included in computing such net income (or loss) on a consolidated
basis and without duplication; provided, further, that Consolidated Net Income
for any period shall be increased by the amount of any insurance proceeds in
respect of any Hotel Property or other Real Property received by the U.S.
Borrower or any of its Subsidiaries for business interruption or time element
losses for such period to the extent that such Insurance Proceeds have not
already been included in the computation of such Consolidated Net Income for
such period.
"Consolidated Total Debt" shall mean, at any time, the sum of (without
duplication) (i) the amount of all Indebtedness of the U.S. Borrower and its
Subsidiaries as would be required to be reflected on the liability side of a
balance sheet prepared in accordance with GAAP and determined on a consolidated
basis at such time (it being understood that the amounts of Indebtedness of
Subsidiaries shall be consolidated with that of the U.S. Borrower only to the
extent of the U.S. Borrower's interest in such Subsidiaries) and (ii) guarantees
of third party debt, letters of credit issued to support third party debt and
secured obligations in favor of hotel managers in connection with jointly funded
hotel renovations.
"Contingent Obligation" shall mean any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
terms and are entered into in the ordinary course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term "Contingent Obligation" shall not
include endorsements for collection or deposit in the ordinary course of
business; provided, further, that if the U.S. Borrower or a Subsidiary has
received a letter of credit or other similar credit support
-13-
from a bank or a Person with a long term unsecured credit rating of at least
"BBB-" or higher from S&P or "Baa" from ▇▇▇▇▇'▇ (or, if not from a Person that
has a rating, a Person that, in the sole discretion of the Required Lenders, is
capable of performing and will perform its obligations under such credit
support) or cash collateral in which the U.S. Borrower or such Subsidiary has a
first priority perfected security interest and which is immediately available to
the U.S. Borrower or such Subsidiary in the event of a payment by it under the
related Contingent Obligation (or cash collateral has been deposited with the
obligee (or a trustee for such obligee) under such Contingent Obligation under
similar circumstances, including a defeasance trust), the amount of the
Contingent Obligation shall be reduced by the amount payable under such letter
of credit or other similar credit support but only so long as such letter of
credit or other similar credit support or cash collateral remains in effect and
meets such requirements or such Person providing the credit support satisfies
such criteria.
"Continuing Directors" shall mean the directors of HMC on the
Effective Date and each other director, if such other director's nomination for
election to the Board of Directors of HMC is recommended by a majority of the
then Continuing Directors or is recommended by a committee of the Board of
Directors a majority of which is composed of the then Continuing Directors.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement (including. without limitation, any management or
franchise agreement), undertaking, contract, lease, indenture, mortgage, deed of
trust or other instrument (excluding a Credit Document) to which such Person is
a party or by which it or any of its property is bound or to which any of its
properties is subject.
"Conversion Date" shall have the meaning provided in Section 2.01(b).
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, each
Bankers' Acceptance, the Subsidiaries Guaranty, the Pledge and Security
Agreement and any other guaranties, pledge agreements or additional security
documents executed and delivered in accordance with the requirements of Section
10.14 or 10.15.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit. For clarity, it does not include continuations of
Borrowings or conversions of outstanding Loans from one Type to another except
to the extent additional Borrowings are made).
"Credit Party" shall mean each Borrower and each Guarantor.
"Credit Party Subsidiary" shall mean each Person which is a Subsidiary
of any Credit Party.
"Customary Non-Recourse Exclusions" shall mean usual and customary
exceptions and non-recourse carve-outs in non-recourse debt financings of Real
Property and other carve-outs appropriate in the good faith determination of the
U.S. Borrower to the financing, including, without limitation, exceptions by
reason of (i) any fraudulent
-14-
misrepresentation made by the U.S. Borrower or any of its Subsidiaries in or
pursuant to any document evidencing any Indebtedness, (ii) any unlawful act on
the part of the U.S. Borrower or any of its Subsidiaries in respect of the
Indebtedness or other liabilities of any Subsidiary of the U.S. Borrower, (iii)
any waste or misappropriation of funds by the U.S. Borrower or any of its
Subsidiaries in contravention of the provisions of the Indebtedness or other
liabilities of any Subsidiary, (iv) customary environmental indemnities
associated with the Real Property of any Subsidiary of the U.S. Borrower, (v)
voluntary bankruptcy, or (vi) failure of the U.S. Borrower or any of its
Subsidiaries to comply with applicable special purpose entity covenants but
excluding exceptions by reason of (a) non-payment of the debt incurred in such
non-recourse financing, (b) non-payment of such debt arising out of the
voluntary bankruptcy of the relevant Subsidiary of the U.S. Borrower or (c) the
failure of the relevant Subsidiary of the U.S. Borrower to comply with financial
covenants.
"DBTCA" shall mean Deutsche Bank Trust Company Americas in its
individual capacity.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Determination Date" shall have the meaning provided in the definition
of "Pro Forma Basis".
"Discount Rate" shall mean, as at any Drawing Date, the discount rate,
expressed as a rate per annum, which the Administrative Agent determines (i) in
the case of a Canadian Lender which is named in Schedule I to the Bank Act
(Canada), as CDOR for such Drawing Date, and (ii) in the case of a Canadian
Lender which is named in Schedule II or III to the Bank Act ( Canada), as the
discount rate (expressed to two decimal places and rounded upward, if not an
increment of 1/100th of 1%, the nearest 0.01%) quoted by such Canadian Lender as
the percentage discount rate at which such Canadian Lender would, in accordance
with its normal practice, at or about 10:00 A.M. (Toronto time) on such date, be
prepared to purchase bankers' acceptances having a face amount and term
comparable to the Face Amount and term of such Bankers' Acceptance, provided
however that no Discount Rate calculated pursuant to this clause (ii) shall
exceed the Discount Rate calculated pursuant to clause (i) above in respect of
the same issue of Bankers' Acceptances plus 0.10% per annum.
"Disqualified Stock" shall have the meaning provided in the Senior
Note Indenture.
"Dividends" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders,
partners or members or authorized or made any other distribution, payment or
delivery of property (other than common stock or other common equity interests
of such Person or Qualified Preferred Stock of HMC or the U.S. Borrower) or cash
to its stockholders, partners or members in their capacity as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any
-15-
shares of any class of its capital stock or any other equity interests
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock or other equity interest), or set
aside any funds for any of the foregoing purposes, or shall have permitted any
of its Subsidiaries to purchase or otherwise acquire for consideration any
shares of any class of the capital stock or any partnership interests of such
Person outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
interest).
"Dollar Equivalent" of an amount denominated in Canadian Dollars shall
mean, at any time for the determination thereof, the amount of Dollars which
could be purchased with the amount of Canadian Dollars involved in such
computation at the spot exchange rate therefor as quoted by the Person serving
as the Administrative Agent as of 11:00 A.M. (New York time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date; provided that (1) for purposes of Section 2.17, the Dollar Equivalent
of any amount expressed in Canadian Dollars shall be the amount of Dollars that
the Administrative Agent determines, based upon the actual exchange rates which
the Administrative Agent believes can be obtained on the date of conversion
pursuant to Section 2.17, would be required to be paid in Dollars to purchase
such amount of Canadian Dollars and (2) for purposes of (x) determining
compliance with Sections 2.01, 3.02(a), 5.02(a)(i) and 5.02(a)(ii) and (y)
calculating Fees pursuant to Section 4.01, the Dollar Equivalent of any amounts
expressed in Canadian Dollars shall be revalued on a quarterly basis on each
March 31, June 30, September 30 and December 31 of each year using the spot
exchange rate therefor quoted in the Wall Street Journal on the last Business
Day of each calendar quarter, provided that, at any time during a calendar
quarter, if the full principal amount of Canadian Revolving Loans (including,
without limitation, the Face Amount of Banker's Acceptances) permitted to be
incurred pursuant to this Agreement (i.e., up to the full amount of the
respective Canadian Dollar Revolving Loan Sub-Commitments as then in effect)
were incurred, and if the Dollar Equivalent as recalculated based on the
exchange rate therefor quoted in the Wall Street Journal on the respective date
of determination pursuant to this exception would result in an increase in the
Dollar Equivalent as then in effect of such amounts of 10% or more, then at the
discretion of the Administrative Agent or at the request of the Required
Lenders, the Dollar Equivalent shall be reset based upon the exchange rates
quoted on such date in the Wall Street Journal, which rates shall remain in
effect until the last Business Day of such calendar quarter or such earlier
date, if any, as the rate is reset pursuant to this proviso. Notwithstanding
anything to the contrary contained in this definition, at any time that a
Specified Default or an Event of Default then exists, the Administrative Agent
may revalue the Dollar Equivalent of any amounts outstanding under the Credit
Documents in Canadian Dollars at such times as it may determine in its sole
discretion.
"Dollar Loan" shall mean each Term Loan and each Dollar Revolving
Loan.
"Dollar Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the U.S. Revolving Loan
Sub-Commitment of such Lender at such time and the denominator of which is the
aggregate amount of U.S. Revolving Loan Sub-Commitments of all Lenders at such
time. Notwithstanding anything to the contrary contained above, if the Dollar
Percentage of any Lender is to be determined after the Total Revolving Loan
Commitment has been terminated, then the Dollar Percentages of the Lenders shall
be determined immediately prior (and without giving effect) to such termination.
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"Dollar Revolving Loan" shall have the meaning provided in Section
2.01.
"Dollar Revolving Note" shall have the meaning provided in Section
2.06(a).
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the U.S. Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Draft" shall mean at any time either a depository ▇▇▇▇ within the
meaning of the Depository Bills and Notes Act (Canada) or a ▇▇▇▇ of exchange,
within the meaning of the Bills of Exchange Act (Canada), drawn by any Canadian
Revolving Loan Borrower on a Canadian Lender and bearing such distinguishing
letters and numbers as such Canadian Lender may determine, but which at such
time has not been completed or accepted by such Canadian Lender.
"Drawing" shall have the meaning provided in Section 3.05(c).
"Drawing Date" shall mean any Business Day fixed pursuant to Schedule
III for the creation and purchase of Bankers' Acceptances by a Canadian Lender
pursuant to Schedule III.
"Effective Date" shall have the meaning provided in Section 14.09.
"Eligible Transferee" shall mean and include a commercial bank, a
financial institution, any fund that invests in bank loans and any other
"accredited investor" (as defined in Regulation D under the Securities Act).
"End Date" shall mean, for any Margin Reduction Period, the last day
of such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings arising under any Environmental Law or any permit issued under any
Environmental Law (hereafter, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief arising from alleged injury to human health, safety or the
environment due to the presence of Hazardous Materials.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment or relating to
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water
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Pollution Control Act, 33 U.S.C.(S) 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C.(S) 2601 et seq.; the Clean Air Act, 42 U.S.C.(S) 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C.(S) 3803 et seq.; the Oil Pollution Act of
1990, 33 U.S.C.(S) 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C.(S) 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C.(S) 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C.(S) 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the U.S. Borrower or a Subsidiary of the U.S.
Borrower would be deemed to be a "single employer" within the meaning of Section
414(b) or (c) or, for purposes of Section 412 of the Code, Section 414(m) or (o)
of the Code.
"Eurodollar Loan" shall mean each Dollar Revolving Loan designated as
such by the U.S. Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by DBTCA for Dollar deposits
of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of DBTCA with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period (and rounded up
to the nearest 1/100/th/ of 1%), divided by (b) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
required by applicable law) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 12.
"Exempted Affiliate Transactions" shall have the meaning provided in
Section 11.07.
"Existing Indebtedness" shall have the meaning provided in Section
8.20.
"Existing Liens" shall have the meaning provided in Section 11.01.
"Face Amount" shall mean, in respect of a Bankers' Acceptance, the
amount payable to the holder thereof on its maturity. The Face Amount of any
Bankers' Acceptance Loan shall be equal to the Face Amounts of the underlying
Bankers' Acceptances.
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"Facing Fee" shall have the meaning provided in Section 4.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 4.01.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by any Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of such Borrower or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code and which Plan,
fund or similar program could result in liability or other obligation or lien to
any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate.
"Foreign Subsidiary" shall mean each Subsidiary of the U.S. Borrower
other than a Domestic Subsidiary.
"Franchise Agreements" shall mean all franchise or similar agreements
entered into with respect to a Hotel Property.
"FF&E" shall mean, with respect to any Hotel Property, any furniture,
fixtures and equipment, including any beds, lamps, bedding, tables, chairs,
sofas, curtains, carpeting, smoke detectors, mini bars, paintings, decorations,
televisions, telephones, radios, desks, dressers, towels, bathroom equipment,
heating, cooling, lighting, laundry, incinerating, loading, swimming pool,
landscaping, garage and power equipment, machinery, engines, vehicles, fire
prevention, refrigerating, ventilating and communications apparatus, carts,
dollies, elevators, escalators, kitchen appliances, restaurant equipment,
computers, reservation systems, software, cash registers, switchboards, cleaning
equipment or other items of furniture, fixtures and equipment typically used in
hotel properties (including furniture, fixtures and equipment used in guest
rooms, lobbies and common areas (other than those items of furniture, fixtures
and equipment owned by the occupant or tenant in any such room)).
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time and set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination,
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except that, for purposes of Sections 5.02 and 9 (other than Section 9.04) and
all determinations of Applicable Commitment Commission Percentage and Applicable
Margin, GAAP shall be determined on the basis of such principles in effect on
the date hereof and consistent with those used in the preparation of the audited
consolidated financial statements of the U.S. Borrower and its Subsidiaries
referred to in Section 8.05(a) and (b). For purposes of Section 9.04, however,
GAAP shall be determined on the basis of such principles in effect on August 5,
1998 and consistent with those used in the prepared of the audited combined
consolidated financial statements of the U.S. Borrower and its Subsidiaries for
the fiscal year ended December 31, 1997.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity duly exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Gross Revenues" shall mean, for any Hotel Property or other high
quality real estate, all revenues and receipts of every kind derived from
operating such Hotel Property or other high quality real estate and parts
thereof, including, but not limited to: income (from both cash and credit
transactions), before commissions and discounts for prompt or cash payments,
from rentals or sales of rooms, stores, offices, meeting space, exhibit space or
sales space of every kind; license, lease and concession fees and rentals (not
including gross receipts of licensees, lessees and concessionaires); net income
from vending machines; health club membership fees; food and beverage sales;
sales of merchandise (other than proceeds from the sale of FF&E no longer
necessary to the operation of such Hotel Property or other high quality real
estate); service charges, to the extent not distributed to the employees at such
Hotel Property or other high quality real estate as, or in lieu of, gratuities;
and proceeds, if any, from business interruption or other loss of income
insurance; provided, however, that Gross Revenues shall not include the
following: gratuities to employees of such Hotel Property or other high quality
real estate, federal, state or municipal excise, sales, use or similar taxes
collected directly from tenants, patrons or guests or included as part of the
sales price of any goods or services; insurance proceeds (other than proceeds
from business interruption or other loss of income insurance); condemnation
proceeds; or any proceeds from any sale of such Hotel Property or other high
quality real estate.
"Guarantor" shall mean and include (i) the U.S. Borrower and (ii) each
Subsidiary of the U.S. Borrower which executes and delivers the Subsidiaries
Guaranty, or a counterpart thereof, as required by Section 10.15 or any other
provision of this Agreement; provided that any such Subsidiary shall cease to be
a Guarantor at such time, if any, as it is released from the Subsidiaries
Guaranty in accordance with the express provisions hereof and thereof. As of the
Effective Date, the Guarantors are listed in Part I of Schedule IV.
"Guaranty" shall have the meaning provided in Section 16.04.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing regulated levels of polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or substances defined
as or included in the definitions of "hazardous substances," "hazardous
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waste," "hazardous materials," "extremely hazardous substances," "restricted
hazardous waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, which are regulated under any
applicable Environmental Law.
"HMC" shall mean Host Marriott Corporation, a Maryland corporation.
"Hotel" shall mean any Real Property (including Improvements thereon
and any retail, golf, tennis, spa or other resort amenities appurtenant thereto)
comprising an operating facility offering hotel or lodging services.
"Hotel Business" shall mean the hotel, resort, extended stay lodging,
other hospitality business, and any and all businesses that in the good faith
judgment of the board of directors of HMC are materially related businesses.
"Hotel Property" shall mean each Hotel owned or leased by the U.S.
Borrower or any of its Subsidiaries (including the furniture, fixture and
equipment thereon), provided that the term "Hotel Property" shall not include
any casino or gaming hotel.
"Improvements" shall mean all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Real Property, including all
building materials, water, sanitary and storm sewers, drainage, electricity,
steam, gas, telephone and other utility facilities, parking areas, roads,
driveways, walks and other site improvements; and all additions and betterments
thereto and all renewals, substitutions and replacements thereof.
"Indebtedness" shall mean, as to any Person, without duplication (i)
all liabilities and obligations, contingent or otherwise, of such Person, (a) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (b) evidenced
by bonds, notes, debentures or similar instruments, (c) representing the balance
deferred and unpaid of the purchase price of any property or services, except
those incurred in the ordinary course of its business that would constitute
ordinarily a trade payable to trade creditors, (d) evidenced by bankers'
acceptances, (e) for the payment of money relating to a Capitalized Lease
Obligation, or (f) evidenced by a letter of credit or a reimbursement obligation
of such Person with respect to any letter of credit; (ii) all net obligations of
such Person under any Interest Rate Protection Agreement or Other Hedging
Agreement or under any similar type of agreement or arrangement; and (iii) all
liabilities and obligations of others of the kind described in the preceding
clause (i) or (ii) that such Person has guaranteed or that is otherwise its
legal liability or which are secured by any assets or property of such Person.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 2.10.
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"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investment" shall mean, with respect to any Person, any direct or
indirect advance, loan or other extension of credit (including without
limitation by way of Contingent Obligation or similar arrangement, but excluding
advances to customers in the ordinary course of business that are, in conformity
with GAAP, recorded as accounts receivable on the consolidated balance sheet of
the U.S. Borrower and its Subsidiaries) or capital contribution to (by means of
any transfer of cash or other property (tangible or intangible) to others or any
payment for property or services solely for the account or use of others, or
otherwise), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuing Bank" shall mean DBTCA.
"Judgment Currency" shall have the meaning provided in Section 14.18.
"Judgment Currency Conversion Date" shall have the meaning provided in
Section 14.18.
"L/C Supportable Obligations" shall mean obligations of the U.S.
Borrower or any of its Subsidiaries incurred in the ordinary course of business
and which do not violate the applicable provisions, if any, of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I-A,
as well as any Person which becomes a "Lender" hereunder pursuant to Section
2.14, 2.16 or 14.03(b). Unless the context otherwise requires, each reference in
this Agreement to a Lender includes each Canadian Lender and, if the reference
is to a specific Lender which has a Revolving Loan Commitment hereunder, shall
include references to any Affiliate of any such Lender which is acting as a
Canadian Lender.
"Lender Default" shall mean (i) the wrongful refusal (which has not
been retracted) or the failure of a Lender to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
3.04(c) or to purchase participating interests in Revolving Loans under Section
2.17 or 2.18, or (ii) a Lender having notified in writing any Borrower and/or
the Administrative Agent that such Lender does not intend to comply with its
obligations under Section 2.01 or 3 in circumstances where such non-compliance
would constitute a breach of such Lender's obligations under the respective
Section.
"Letter of Credit" shall have the meaning provided in Section 3.01.
"Letter of Credit Fee" shall have the meaning provided in Section
4.01(b).
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"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
3.03.
"Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Total Debt (excluding QUIPs Debt unless the principal thereof has
become due and payable and has not been paid) at such time to (y) Consolidated
EBITDA for the Test Period then last ended.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, privilege, hypothecation, other encumbrance or charge of any
kind (including, without limitation, any conditional sale or other title
retention agreement or lease in the nature thereof or any agreement to give any
security interest) upon or with respect to any property of any kind now owned or
hereafter acquired.
"Limited Partner Note" shall mean an existing unsecured note of the
U.S. Borrower issued prior to the Effective Date to certain limited partners of
a previous public partnership in which HMC or a Subsidiary thereof was a general
partner.
"Loan" shall mean each Term Loan and each Revolving Loan.
"Look-Through Subsidiary" shall mean a Wholly-Owned Subsidiary of the
U.S. Borrower that is not recognized as existing and is treated as part of the
U.S. Borrower for federal income tax purposes (such as, but not limited to, a
single member limited liability company or a partnership in which the sole
partners are the U.S. Borrower and/or other Look-Through Subsidiaries.
"Maintenance Capital Expenditures" shall mean, with respect to any
Person, any Capital Expenditures made in the ordinary course of business for
maintenance or upkeep of the assets of such Person.
"Management Agreements" shall mean all agreements with respect to the
management of a Hotel Property or other Real Property owned or leased by the
U.S. Borrower or any of its Subsidiaries. With respect to each Hotel Property
acquired after the Effective Date, the terms and conditions of the Management
Agreement with respect thereto shall be generally consistent with those
contained in Management Agreements as in effect on the Effective Date, with any
material inconsistencies which could reasonably be expected to adversely affect
the U.S. Borrower's ability to repay the Obligations, the rights and remedies of
the Lenders under the Credit Documents or, in the U.S. Borrower's reasonable
estimation, the ability to comply with the financial covenants contained in
Sections 9.01 through 9.03, inclusive, and Section 9.04(b) to be approved by the
Administrative Agent, and the manager thereunder shall be a Permitted Facility
Manager.
"Majority Canadian Lenders" at any time shall mean those Canadian
Lenders which at such time hold a majority of the then Maximum Canadian Dollar
Revolving Loan Sub-Commitments.
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"Margin Reduction Period" shall mean each period which shall commence
on the date occurring after the Effective Date on which the respective officer's
certificates are delivered pursuant to Section 10.11(d) (or, if not so
delivered, the latest date on which such officer's certificates are required to
be delivered) together with the related financial statements pursuant to Section
10.11(a) or 10.11(b), as the case may be and which shall end on the earlier of
(i) the date of actual delivery of the next officer's certificates pursuant to
Section 10.11(d) (together with the related financial statements) and (ii) the
latest date on which the next officer's certificates are required to be
delivered pursuant to Section 10.11(d) (together with the related financial
statements).
"Margin Regulations" shall mean Regulations T, U and X, collectively.
"Margin Stock" shall have the meaning provided in Regulation U.
"Marriott Family Members" shall mean any of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (deceased),
▇.▇. Marriott, Jr., ▇▇▇▇▇▇▇ ▇. Marriott, any brother or sister of ▇.▇. Marriott,
Sr. (deceased), any children or grandchildren of any of the foregoing, any
spouses of any of the foregoing, or any trust or other entity established
primarily for the benefit of one or more of the foregoing.
"Marriott International" shall mean Marriott International, Inc., a
Delaware corporation.
"Material Adverse Change" shall mean a material adverse change in any
of (i) the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the U.S. Borrower and its Subsidiaries taken as a
whole, (ii) the legality, validity or enforceability of the Credit Documents
taken as a whole, (iii) the ability of the U.S. Borrower to repay the
Obligations or (iv) the rights and remedies of the Lenders or the Agents under
the Credit Documents.
"Material Adverse Effect" shall mean an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
"Maturity Date" shall mean June 6, 2005, as such date may be extended
pursuant to Section 2.04.
"Maximum Canadian Dollar Revolving Loan Sub-Commitment" shall mean, as
to any Canadian Lender, the amount, if any, set forth opposite such Canadian
Lender's name in Schedule I-B directly below the column entitled "Maximum
Canadian Dollar Revolving Loan Sub-Commitment", as same may be (x) permanently
reduced from time to time pursuant to Sections 2.17, 2.18(d), 4.02, 5.02 and/or
12 and (y) adjusted from time to time as a result of assignments to or from such
Lender pursuant to Section 2.14 or 14.03(b). The Maximum Canadian Dollar
Revolving Loan Sub-Commitment of each Canadian Lender is a sub-limit of the
Revolving Loan Commitment of the respective Canadian Lender (or its respective
affiliate which is a Lender with the related Revolving Loan Commitment) and not
an additional commitment and, in no event, may exceed at any time the Revolving
Loan Commitment of such Canadian Lender (or its respective affiliate which is a
Lender with the related Revolving Loan Commitment).
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"Minimum Borrowing Amount" shall mean, for each Type and Tranche of
Loans hereunder, the respective amount specified below:
(i) in the case of a Borrowing of Eurodollar Loans of any Tranche,
$5,000,000;
(ii) in the case of a Borrowing of Base Rate Loans of any Tranche,
$5,000,000;
(iii) in the case of a Borrowing of Canadian Prime Rate Loans, Cdn
$5,000,000; and
(iv) in the case of Bankers' Acceptance Loans, the amount specified
in Schedule III.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA subject to Title IV of ERISA.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Sale Proceeds" shall mean (i) with respect to any Asset Sale
other than the sale of Capital Stock in a Subsidiary, the proceeds of such Asset
Sale in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or Cash
Equivalents (except to the extent such obligations are financed or sold with
recourse to the U.S. Borrower or any of its Subsidiaries) and proceeds from the
conversion of other property received when converted to cash or Cash
Equivalents, net of (a) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (b) provisions for all Taxes (including Taxes of HMC) actually paid
or payable as a result of such Asset Sale by the U.S. Borrower and its
Subsidiaries, taken as a whole, (c) payments made to repay Indebtedness (other
than Indebtedness subordinated in right of payment to the Obligations or a
Subsidiaries Guaranty) or any other obligations (other than the Obligations )
outstanding at the time of such Asset Sale that either (I) is secured by a Lien
on the property or assets sold or (II) is required to be paid as a result of
such sale, (d) amounts reserved by the U.S. Borrower and its Subsidiaries
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined on a consolidated
basis in conformity with GAAP and (e) unless Taxes thereon are paid by HMC as
set forth in clause (b) above, amounts required to be distributed as a result of
the realization of gains from Asset Sales in order to maintain or preserve HMC's
status as a REIT (provided, however, that with respect to an Asset Sale by any
Person other than the U.S. Borrower or a Wholly-Owned Subsidiary, Net Sale
Proceeds shall be the above amount multiplied by the U.S. Borrower's direct or
indirect percentage ownership interest in such Person) and (ii) with respect to
any issuance or sale of any Capital Stock, the proceeds of such issuance or sale
in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations (to the
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extent corresponding to the principal, but not interest, component thereof) when
received in the form of cash or Cash Equivalents (except to the extent such
obligations are financed or sold with recourse to the U.S. Borrower or any of
its Subsidiaries) and proceeds from the conversion of other property received
when converted to cash or Cash Equivalents, net of attorney's fees, accountant's
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of tax paid or payable as a result thereof (provided, however,
that with respect to an issuance or sale by any Person other than the U.S.
Borrower or a Wholly-Owned Subsidiary, Net Sale Proceeds shall be the above
amount multiplied by the U.S. Borrower's direct or indirect percentage ownership
interest in such Person). Notwithstanding the foregoing, Net Sale Proceeds in
respect of any Asset Sale shall be net of any proceeds from such Asset Sale that
are applied to the voluntary repayment of the Term Loans or applied to a
voluntary prepayment of Revolving Loans as to which there is a permanent
reduction in the Total Revolving Loan Commitment.
"Non-Defaulting Lender" shall mean and include each Lender other than
a Defaulting Lender.
"Non-Recourse Indebtedness" shall mean Indebtedness with respect to
which recourse for payment is limited to specific assets encumbered by a Lien
securing such Indebtedness; provided, however, that personal recourse of a
holder of Indebtedness against any obligor with respect thereto for Customary
Non-Recourse Exclusions shall not, by itself, prevent any Indebtedness from
being characterized as Non-Recourse Indebtedness; provided, further, that if a
personal recourse claim is made in connection therewith, only the amount of such
claim shall not constitute Non-Recourse Indebtedness for the purpose of this
Agreement.
"Note" shall mean each Term Note and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section 2.03.
"Notice of Conversion" shall have the meaning provided in Section
2.07.
"Notice Office" shall mean the office of the Administrative Agent
located at ▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, New York, New York,
Attention: ▇▇▇▇▇ ▇▇▇▇, Vice President, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligation Currency" shall have the meaning provided in Section
14.18.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Syndication Agent, the Collateral Agent or any Lender pursuant to the
terms of this Agreement or any other Credit Document.
"Operating Lease" shall mean a lease or sublease involving the U.S.
Borrower or any Subsidiary thereof, as lessor, which lease shall provide for
rent payments which in the aggregate with all other existing Operating Leases,
provide an economic return to the lessor thereunder generally comparable to the
economic returns provided to the lessors from the rent payments under the
Operating Leases in existence on the Effective Date. With respect to each Hotel
Property acquired after the Effective Date, the terms and conditions of the
Operating Lease
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with respect thereto shall be generally consistent with those contained in
Operating Leases as in effect on the Effective Date, with any material
inconsistencies which could reasonably be expected to adversely affect the U.S.
Borrower's ability to repay the Obligations or the rights and remedies of the
Lenders under the Credit Documents or, in the U.S. Borrower's reasonable
estimation, the ability to comply with the financial covenants contained in
Sections 9.01 through 9.03, inclusive, and Section 9.04(b) to be approved by the
Administrative Agent.
"OP Units" shall mean the partnership units of the U.S. Borrower.
"Original Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of May 31, 2000 among HMC, the U.S. Borrower, various banks
and Bankers Trust Company (now DBTCA), as Administrative Agent, as it may have
been modified, supplemented or amended through the Effective Date.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section 3.04.
"Payment Office" shall mean (i) in respect of Dollar Loans, Letters of
Credit, Fees and, except as provided in clause (ii) below, all other amounts
owing under this Agreement and the other Credit Documents, the office of the
Administrative Agent located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ABA Number: ▇▇▇-▇▇▇-▇▇▇, Credit to Commercial Loan Division,
Account Name: Host Marriott Corporation, Account Number: ▇▇-▇▇▇-▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and (ii) in respect of Canadian Revolving Loans, ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Account Number: 071720000109 Account
Name: Deutsche Bank AG, Canada Branch, Reference: Host Marriott Corporation or
in each case such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto provided the Payment
Office under clause (ii) shall be located in Canada.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permit" shall mean any permit, approval, authorization, license,
variance, registration, permission or consent required from a Governmental
Authority under an applicable Requirement of Law.
"Permitted Facility Manager" shall mean, with respect to each Hotel
Property, Marriott International, a Wholly-Owned Subsidiary of Marriott
International, Interstate Hotels Corporation (or a successor thereto (so long as
such successor remains a first-class nationally recognized hotel management
company)), a Wholly-Owned Subsidiary of Interstate Hotels Corporation (or such
successor), Hyatt Corporation, a Wholly-Owned Subsidiary of Hyatt Corporation,
Four Seasons Hotel Limited, a Wholly-Owned Subsidiary of Four Seasons Hotel
Limited, Swissotel Management (U.S.) LLC, Crestline Capital Corporation, a
Wholly-Owned Subsidiary of Crestline Capital Corporation, Westin Hotels &
Resorts, a Wholly-Owned
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Subsidiary of Westin Hotels & Resorts, Hilton Hotels Corp., a Wholly-Owned
Subsidiary of Hilton Hotels Corp., or another first-class hotel management
company in good standing.
"Permitted Investments" shall mean any of the following: (a)
Investments in Cash Equivalents, (b) Interest Rate Protection Agreements and
Other Hedging Agreements, (c) securities received in connection with an Asset
Sale so long as such Asset Sale complied with this Agreement, including Section
11.08, (d) Permitted Mortgage Investments and (e) securities received from or in
connection with the sale of FF&E at a Hotel Property to a Subsidiary of the U.S.
Borrower that is an Approved Lessee so long as the U.S. Borrower shall have
reasonably determined in good faith that such sale is necessary in order to
avoid the characterization for tax purposes of any portion of the rent payable
under the related Operating Lease as rent not attributable to real property
(allowing reasonable margins with respect to applicable limitations).
"Permitted Liens" shall mean any of the following: (i) Liens imposed
by governmental authorities for taxes, assessments or other charges where
nonpayment thereof is not subject to penalty or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the U.S. Borrower in accordance with
GAAP; (ii) statutory liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business, provided that (a) the underlying obligations are
not overdue for a period of more than 30 days, or (b) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of the U.S. Borrower in
accordance with GAAP; (iii) Liens securing the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business; (iv) Liens arising by operation of
law in connection with judgments, only to the extent, for an amount and for a
period not resulting in an Event of Default with respect thereto; and (v)
pledges or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social security
legislation.
"Permitted Mortgage Investment" means an Investment in Indebtedness
secured by real estate assets or Capital Stock of Persons (other than the U.S.
Borrower or its Subsidiaries) owning such real estate assets; provided that (i)
the U.S. Borrower is able to consolidate the operations of the real estate
assets in its GAAP financial statements, (ii) such real estate assets are owned
by a partnership, limited liability company or other entity which is controlled
by the U.S. Borrower or a Subsidiary thereof as a general partner, managing
member or through similar means, and (iii) the aggregate amount of such
Permitted Mortgage Investments (excluding those referenced in clauses (i) and
(ii) above), determined at the time each such Investment was made, does not
exceed 10% of Adjusted Total Assets after giving effect to such Investment.
"Permitted REIT Subsidiary" shall mean a Wholly-Owned Subsidiary of
HMC which engages in no significant business, has no material liabilities and
otherwise has no material assets other than (i) equity interests in other
Permitted REIT Subsidiaries, (ii) OP Units, (iii) de minimis interests in
Subsidiaries of the U.S. Borrower or (iv) de minimis equity interests in Persons
other than Subsidiaries of HMC provided that (A) in the case of this clause
(iv), Investments in such Persons shall only be made for the purpose of
effecting an acquisition by the U.S. Borrower or a Subsidiary thereof permitted
under this Agreement and immediately
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following the consummation of such acquisition the applicable Permitted REIT
Subsidiary shall not own any Investment other than those described in clauses
(i) through (iii) of this definition and (B) the aggregate value of all
Investments described in clauses (iii) and (iv) of this definition at any time
outstanding (measured by the book value thereof as of the date each such
Investment is made) shall not exceed $10,000,000.
"Permitted Sharing Arrangements" shall mean any contracts, agreements
or other arrangements between the U.S. Borrower and/or one or more of its
Subsidiaries and HMC and/or one or more other Subsidiaries of HMC, pursuant to
which such Persons share centralized services, establish joint payroll
arrangements, procure goods or services jointly or otherwise make payments with
respect to goods or services on a joint basis, or allocate corporate expenses
(other than taxes based on income) (provided that (i) such Permitted Sharing
Arrangements are, in the determination of management of the U.S. Borrower, the
Guarantors or their Subsidiaries in the best interests of the U.S. Borrower, the
Guarantors or their Subsidiaries and (ii) the liabilities of the U.S. Borrower,
the Guarantors and their Subsidiaries under such Permitted Sharing Arrangements
are determined in good faith and on a reasonable basis).
"Permitted Tax Payments" shall mean payment of any liability of HMC,
the U.S. Borrower or any of their respective Subsidiaries for all Federal,
state, provincial, local and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
domestic or foreign governmental authority responsible for the administration of
any such taxes.
"Person" shall mean any individual, partnership, joint venture,
limited liability company, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Personal Property" shall mean, for any Person, to the extent owned by
such Person, all machinery, equipment, fixtures (including but not limited to
all heating, air conditioning, plumbing, lighting, communications, elevator
fixtures, inventory and goods), inventory and articles of personal property and
accessions thereto and renewals and replacements thereof and substitutions
therefor (including, but not limited to, beds, bureaus, chiffonniers, chests,
chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes,
draperies, curtains, shades, venetian blinds, screens, paintings, hangings,
pictures, divans, couches, luggage carts, luggage racks, stools, sofas,
chinaware, linens, pillows, blankets, glassware, silverware, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, bars, bar fixtures, liquor and other drink dispensers, icemakers,
radios, television sets, intercom and paging equipment, electric and electronic
equipment, dictating equipment, private telephone systems, medical equipment,
potted plants, heating, lighting and plumbing fixtures, fire prevention and
extinguishing apparatus, cooling and air-conditioning systems, elevators,
escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry
machines, tools, machinery, engines, dynamos, motors, boilers, incinerators,
switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning,
waxing and polishing equipment, call systems, brackets, electrical signs, bulbs,
bells, ash and fuel, conveyors, cabinets, lockers, shelving, spotlighting
equipment, dishwashers, garbage disposals, washers and dryers), other customary
hotel equipment and other tangible property of every kind and nature whatsoever,
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now or hereafter located upon the Hotels, or appurtenances thereto, or usable in
connection with the present or future operation and occupancy of the Hotels and
all building equipment, materials and supplies of any nature whatsoever, now or
hereafter located upon the Hotels.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) any Borrower or a Subsidiary of any Borrower or an
ERISA Affiliate and any pension plan as defined in Section 3(2) of ERISA with
respect to which any Borrower, or a Subsidiary of any Borrower or an ERISA
Affiliate could have any liability.
"Pledge and Security Agreement" shall have the meaning provided in
Section 6.05.
"Pledge and Security Agreement Collateral" shall have the meaning
provided in the Pledge and Security Agreement.
"Pledged Limited Liability Company Interests" shall have the meaning
provided in the Pledge and Security Agreement.
"Pledged Partnership Interests" shall have the meaning provided in the
Pledge and Security Agreement.
"Pledged Securities" shall have the meaning provided in the Pledge and
Security Agreement.
"Pledged Stock" shall have the meaning provided in the Pledge and
Security Agreement.
"Pledgor" shall mean and include (i) the U.S. Borrower and (ii) each
Subsidiary of the U.S. Borrower which executes and delivers the Pledge and
Security Agreement, or a counterpart thereof, as required by Section 10.15 or
any other provision of this Agreement; provided that any such Subsidiary shall
cease to be a Pledgor at such time, if any, as it is released from the Pledge
and Security Agreement in accordance with the express provisions hereof and
thereof. As of the Effective Date, the Pledgors are listed in Part III of
Schedule IV.
"Preferred Stock", as applied to the Capital Stock of any Person,
shall mean Capital Stock of such Person (other than common stock of such Person)
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person,
to shares of Capital Stock of any other class of such Person.
"Prime Lending Rate" shall mean the rate which the Person serving as
the Administrative Agent announces from time to time as its prime lending rate,
the Prime Lending Rate to change when and as such prime lending rate changes.
The Prime Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. The Person serving as
the Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
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"Pro Forma Basis" shall mean, with respect to (i) any incurrence,
acquisition or assumption of Indebtedness or (ii) any acquisition or sale of a
Hotel Property or other assets with a fair market value of $5,000,000 or more
(or the equity interest of the Person or Persons owning such Hotel Property or
other assets), the calculation of the consolidated results of the U.S. Borrower
and its Subsidiaries otherwise determined in accordance with this Agreement as
if the respective Indebtedness, acquisition or sale (and all other Indebtedness
incurred or assumed or other such acquisitions or sales effected during the
respective Calculation Period or thereafter and on or prior to the date of
determination) (each such date, a "Determination Date") had been effected on the
first day of the respective Calculation Period; provided that all such
calculations shall take into account the following assumptions:
(i) pro forma effect shall be given to (1) any Indebtedness incurred
subsequent to the end of the Calculation Period and prior to the
Determination Date, (2) any Indebtedness incurred during such period to the
extent such Indebtedness is outstanding at the Determination Date and (3)
any Indebtedness to be incurred on the Determination Date, in each case as
if such Indebtedness had been incurred on the first day of such Calculation
Period and after giving effect to the application of the proceeds thereof
(but excluding normal fluctuations in revolving Indebtedness incurred for
working capital purposes and not to finance any acquisition or Investment);
(ii) interest expense attributable to interest or dividends on any
Indebtedness (whether existing or being incurred) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement
has a remaining term in excess of 12 months) had been the applicable rate
for the entire period;
(iii) there shall be excluded from interest expense any interest
expense related to any amount of Indebtedness that was outstanding during
such Calculation Period or thereafter but that is not outstanding or is to
be permanently repaid on the Determination Date; and
(iv) pro forma effect shall be given to all sales and acquisitions of
Hotel Properties and other assets with a fair market value of $5,000,000 or
more (by excluding or including, as the case may be, the historical
financial results for the respective Hotel Properties and/or such other
assets) that occur during such Calculation Period or thereafter and on or
prior to the Determination Date (including any Indebtedness assumed or
acquired in connection therewith) as if they had occurred on the first day
of such Calculation Period, provided that in connection with any such
acquisitions, pro forma effect (for periods prior to such acquisition)
shall be given to the management fees payable pursuant to the respective
Management Agreement as if such management fees had been payable throughout
the Calculation Period.
"Projections" shall have the meaning provided in Section 8.05(d).
"Qualified Preferred Stock" shall mean any preferred stock or other
preference shares of HMC or the U.S. Borrower, so long as the terms of such
preferred stock or other
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preference shares (i) do not provide any collateral security, (ii) do not
provide any guaranty or other support by HMC or any of its Subsidiaries, (iii)
do not require any cash dividends or cash distributions (other than dividends or
distributions payable when and if declared by the Board of Directors of HMC or
the Borrower) or contain any mandatory put, redemption, repayment, sinking fund
or other similar provision in each case occurring before June 8, 2006 (other
than any such provision that can be satisfied, at the election of HMC or the
U.S. Borrower, by the issuance of OP Units or common stock or Qualified
Preferred Stock of HMC), (iv) do not contain any covenants other than periodic
reporting requirements, (v) do not grant the holders thereof any voting rights
except for (x) voting rights required to be granted to such holders under
applicable law or listing requirements and (y) limited customary voting rights
on fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of HMC, liquidations involving HMC or dividend
arrearages, and (vi) do not provide for the conversion into, or the exchange for
(unless at the sole discretion of the issuer thereof), debt securities.
"Quarterly Payment Date" shall mean the last Business Day of each
April, July, October and January occurring after the Effective Date.
"QUIPs" shall mean the 6 3/4% Convertible Preferred Securities issued
by Host Marriott Financial Trust, a statutory business trust and a Subsidiary of
HMC.
"QUIPs Debt" shall mean the $550,000,000 aggregate original principal
amount of 6 3/4% convertible subordinated debentures due 2026 of HMC, held by
Host Marriott Financial Trust, a statutory business trust and a Subsidiary of
HMC.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recourse Indebtedness" of any Person shall mean all Indebtedness of
such Person and its Subsidiaries for which recourse for payment may be made
against such Person for the obligations thereunder (and in any event shall
include all Indebtedness of such Person which is not Non-Recourse Indebtedness).
"Register" shall have the meaning provided in Section 14.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
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"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Related Businesses" shall mean the businesses conducted by the U.S.
Borrower and its Subsidiaries as of the Effective Date and any and all
businesses that in the good faith judgment of the Board of Directors of the U.S.
Borrower are materially related businesses or real estate related businesses.
Without limiting the generality of the foregoing, Related Business shall include
the ownership and operation of lodging properties.
"Release" shall mean disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Lender" shall have the meaning provided in Section 2.14.
"Replacement" shall have the meaning provided in Section 2.14.
"Replacement Lender" shall have the meaning provided in Section 2.14.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Participations in Letter of Credit
Outstandings) represent an amount greater than 50% of the sum of all outstanding
Term Loans of Non-Defaulting Lenders and the Total Revolving Loan Commitment
less the Revolving Loan Commitments of Defaulting Lenders (or after the
termination of the Total Revolving Loan Commitment, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Lenders, and the aggregate
Participations of all Non-Defaulting Lenders in Letter of Credit Outstandings at
such time). For purposes of determining Required Lenders, all outstanding Loans
and Commitments, as the case may be, that are denominated in Dollars will be
calculated in Dollars and all Loans and Commitments, as the case may be,
denominated in Canadian Dollars will be calculated according to the Dollar
Equivalent thereof.
"Requirements of Law" shall mean, as to any Person, the certificate of
incorporation, and by-laws or other organizational or governing documents of
such Person, and all foreign, federal, state and local laws, rules and
regulations, including, without limitation, Environmental Laws, ERISA, foreign,
federal, state or local securities, antitrust and licensing laws, all food,
health and safety laws, and all applicable trade laws and requirements,
including, without limitation, all disclosure requirements of Environmental Laws
and ERISA and all orders, judgments, decrees or other determinations of any
Governmental Authority or arbitrator, in each case, applicable to and binding
upon such Person, its business or any of its property.
"Returns" shall have the meaning provided in Section 8.09.
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"Revolving Credit Exposure" shall mean, for any RL Lender at any time,
the sum of (i) the aggregate principal amount of all Revolving Loans made by
such Lender (and its affiliates, if any, acting as Canadian Lenders) (for this
purpose, (x) at all times prior to the occurrence of any Sharing Event and the
automatic conversion of Canadian Revolving Loans to Dollar Revolving Loans
pursuant to Section 2.17, using the Dollar Equivalent of the principal amount or
Face Amount, as the case may be, of all Canadian Revolving Loans then
outstanding from such RL Lender or any affiliate thereof acting as a Canadian
Lender and (y) at all times after the occurrence of any Sharing Event, giving
effect to the conversions required by Section 2.17 and to all participations
purchased by such RL Lender pursuant to Section 2.17), plus (ii) the product of
(A) such Lender's Dollar Percentage (or, after the occurrence of a Sharing
Event, its RL Percentage) and (B) the aggregate amount of all Letter of Credit
Outstandings at such time.
"Revolving Credit Period" shall mean the period from and including the
Effective Date to but not including the Maturity Date.
"Revolving Loan" shall have the meaning provided in Section 2.01.
"Revolving Loan Borrowers" shall mean and include each of the U.S.
Borrower and the Canadian Revolving Loan Borrowers.
"Revolving Loan Commitment" shall mean, for each Lender, the amount
set forth opposite such Lender's name in Schedule I-A directly below the column
entitled "Revolving Loan Commitment," as the same may be (x) reduced from time
to time pursuant to Sections 2.01(b), 4.02, 5.02(f), 5.02(f) and/or 12 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 2.14 or 14.03(b) or (z) increased from time to time pursuant
to Section 2.16. For the avoidance of doubt, any limitations in effect from time
to time pursuant to Section 2.01(a)(vii) on amounts available for drawing shall
not alter the Revolving Loan Commitment of any Lender.
"Revolving Notes" shall mean each Dollar Revolving Note and each
Canadian Dollar Revolving Note.
"RL Lender" shall mean, at any time, each Lender with a Revolving Loan
Commitment or with outstanding Revolving Loans at such time.
"RL Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Lender at such time and the denominator of which is the Total
Revolving Loan Commitment at such time. Notwithstanding anything to the contrary
contained above, if the RL Percentage of any Lender is to be determined after
the Total Revolving Loan Commitment has been terminated, then the RL Percentages
of the Lenders shall be determined immediately prior (and without giving effect)
to such termination.
"Roll Forward Amount" shall mean, with respect to any covenant that
permits an action to be taken in a fiscal year with reference to Adjusted Total
Assets, the cumulative unused Dollar amount relating to such action referred to
in such covenant from all prior fiscal years commencing with the fiscal year
ending nearest to December 31, 2002, it being understood that
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such unused amounts shall be calculated independently for each covenant that
references a Roll Forward Amount, irrespective of any application of such Roll
Forward Amount for the purpose of another covenant. For purposes of computing
the Roll Forward Amount attributable to any fiscal year, the unused Dollar
amount shall be determined according to the Adjusted Total Assets measured as of
the end of such fiscal year.
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 5.04(b)(ii) Certificate" shall have the meaning provided in
Section 5.04(b).
"Secured Creditors" shall have the meaning provided in the Pledge and
Security Agreement.
"Secured Indebtedness" shall mean any Indebtedness or Disqualified
Stock secured by a Lien (other than any Permitted Lien (as defined in the Senior
Note Indenture)) upon the property of the U.S. Borrower or any of its
Subsidiaries.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Documents" shall mean the Pledge and Security Agreement and
any other pledge or similar agreement executed and delivered after the Effective
Date pursuant to Section 10.14, 10.15 or any other provision of this Agreement
or the Pledge and Security Agreement.
"Senior Note Documents" shall mean the Senior Note Indenture, the
Senior Notes and each other document or agreement relating to the issuance of
the Senior Notes.
"Senior Note Indenture" shall mean the Indenture, dated as of August
5, 1998, among the U.S. Borrower (successor to HMH Properties, Inc.), the
subsidiary guarantors named therein and Marine Midland Bank as Trustee, in
connection with the Senior Notes.
"Senior Notes" shall mean each of the U.S. Borrower's (i) $500,000,000
7-7/8% Series A Senior Notes due August 2005, (ii) $1,200,000,000 7-7/8% Series
B Senior Notes due August 2008, (iii) $500,000,000 8.45% Series C Senior Notes
due December 2008, (iv) $300,000,000 8-3/8% Series E Senior Notes due February
2006, (v) $250,000,000 9-1/4% Series G Senior Notes due 2007, (vi) $450,000,000
9-1/2% Series H Senior Notes due January 2007, (vii) other issues of senior
notes issued pursuant to the Senior Note Indenture, (viii) $12,584,000 9 1/2%
Senior Secured Notes due May 2005, (ix) $50,000 8 7/8% Senior Notes due December
2007, (x) 5,922,000 9 3/8% Debentures due June 2007 and (xi) $6,873,000 10%
Series L Senior Notes due May 2012.
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"Sharing Event" shall mean (i) the occurrence of any Event of Default
with respect to any Borrower pursuant to Section 12.05, (ii) the declaration of
the Total Revolving Loan Commitment terminated, or the acceleration of the
maturity of any Loans, in each case pursuant to the last paragraph of Section 12
or (iii) the failure of any Borrower to pay any principal of, Face Amount of, or
interest on, Loans or any Letter of Credit Obligations on the Maturity Date.
"Significant Subsidiary" shall mean any Subsidiary which is a
"significant subsidiary" of the U.S. Borrower within the meaning of Rule 1-02 of
Regulation S-X promulgated by the SEC as in effect on August 5, 1998.
"Single Employer Plan" shall have the meaning provided in Section
8.10.
"Specified Default" shall mean any Default or Event of Default under
Sections 12.01, 12.03 (solely as a result of a failure to comply with Section
10.11(a), 10.11(b), 10.11(d)), 12.05 or 12.08.
"Start Date" shall mean, with respect to any Margin Reduction Period,
the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met, but after giving
effect to all previous drawings made thereunder).
"Stock Collateral" shall have the meaning provided in Section
10.05(d).
"Subsidiaries Guaranty" shall have the meaning provided in Section
6.06.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
ordinary voting power of the outstanding Capital Stock is owned, directly or
indirectly, by such Person, by such Person and one or more Subsidiaries of such
Person or by one or more Subsidiaries of such Person, or the accounts of which
would be consolidated with those of such Person in its consolidated financial
statements in accordance with GAAP, if such statements were prepared as of such
date, (ii) any partnership (a) in which such Person or one or more Subsidiaries
of such Person is, at the time, a general partner and owns alone or together
with the U.S. Borrower a majority of the partnership interests or (b) in which
such Person or one or more Subsidiaries of such Person is, at the time, a
general partner and which is controlled by such Person in a manner sufficient to
permit its financial statements to be consolidated with the financial statements
of such Person in conformance with GAAP and the financial statements of which
are so consolidated, and (iii) any Person, if so designated by the U.S. Borrower
in writing to the Administrative Agent (which designation shall be deemed made
if a similar designation is made under the Senior Note Indenture), (x) in which
the U.S. Borrower owns (directly or indirectly) at least 50% of the aggregate
economic interests; (y) in which the U.S. Borrower or a Subsidiary participates
in control as a general partner, a managing member or through similar means, and
(z) which is not consolidated for financial reporting purposes with the U.S.
Borrower under GAAP.
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"Subsidiary Indebtedness" shall mean, without duplication, all
Unsecured Indebtedness (including Contingent Obligations) (other than Contingent
Obligations incurred by Subsidiaries in respect of Secured Indebtedness)) of
which a Subsidiary other than a Guarantor is the obligor. Obligations under this
Agreement shall not constitute Subsidiary Indebtedness. A release under the
Subsidiaries Guaranty of a Guarantor which remains a Subsidiary shall be deemed
to be an incurrence of Subsidiary Indebtedness in amount equal to the U.S.
Borrower's proportionate interest in the Unsecured Indebtedness of such
Guarantor.
"Syndication Agent" shall mean Bank of America, N.A.
"Tax Affiliate" shall mean, as to any Person, (i) any Subsidiary of
such Person and (ii) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns.
"Taxable Income" shall mean Real Estate Investment Trust Taxable
Income as defined in Section 857(b) of the Code.
"Taxable REIT Subsidiary" shall mean any Subsidiary of the U.S.
Borrower that is a "taxable REIT subsidiary" within the meaning of Section
856(l) of the Code on or after January 1, 2001, or a Subsidiary of such Taxable
REIT Subsidiary.
"Taxes" shall have the meaning provided in Section 5.04.
"Term Loan" shall have the meaning provided in Section 2.01.
"Term Note" shall have the meaning provided in Section 2.06(a).
"Test Date" shall mean the last day of each fiscal quarter ended after
the Effective Date.
"Test Period" shall mean each period of four consecutive fiscal
quarters of the U.S. Borrower then last ended (in each case taken as one
accounting period).
"Total Canadian Dollar Revolving Loan Sub-Commitment" shall mean, at
any time, (x) the sum of the Canadian Dollar Revolving Loan Sub-Commitments of
all Canadian Lenders at such time or, if less, (y) the Total Canadian Dollar
Revolving Loan Sub-Commitment as then in effect pursuant to Section 2.18.
"Total Maximum Canadian Dollar Revolving Loan Sub-Commitment" shall
mean, at any time, the sum of the Maximum Canadian Dollar Revolving Loan
Sub-Commitments of all Canadian Lenders at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Lenders.
"Total Unencumbered Assets" as of any date shall mean the sum of (i)
Undepreciated Real Estate Assets not securing any portion of Secured
Indebtedness and (ii) all other assets (but excluding intangibles and minority
interests in Persons who are obligors
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with respect to outstanding secured debt) of the U.S. Borrower and its
Subsidiaries not securing any portion of Secured Indebtedness, determined on a
consolidated basis (it being understood that the accounts of the Subsidiaries
shall be consolidated with those of the U.S. Borrower only to the extent of the
U.S. Borrower's proportionate interest therein).
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment then
in effect, less (y) the sum of (i) the aggregate principal amount of Revolving
Loans then outstanding (for this purpose, taking the Dollar Equivalent thereof
in the case of Canadian Revolving Loans then outstanding) plus (ii) the then
aggregate amount of Letter of Credit Outstandings.
"Total U.S. Revolving Loan Sub-Commitment" at any time shall mean the
sum of the U.S. Revolving Loan Sub-Commitments of all the Lenders; provided that
at no time shall the Total U.S. Revolving Loan Sub-Commitment exceed the Total
Revolving Loan Commitment as then in effect.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being two separate Tranches, i.e., Term
Loans and Revolving Loans.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar
Loan, a Canadian Prime Rate Loan or a Bankers' Acceptance Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unconsolidated Entity" shall mean, with respect to any Person, at any
date, any other Person in whom such Person holds an Investment, and whose
financial results would not be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person,
if such statements were prepared as of such date.
"Undepreciated Real Estate Assets" shall mean, as of any date, the
cost (being the original cost to the U.S. Borrower, the Guarantors or any of
their Subsidiaries plus capital improvements) of real estate assets of the U.S.
Borrower, the Guarantors or any of their Subsidiaries on such date, before
depreciation and amortization of such real estate assets, determined on a
consolidated basis (it being understood that the accounts of Subsidiaries shall
be consolidated with those of the U.S. Borrower only to the extent of the U.S.
Borrower's proportionate interest therein).
"Unencumbered Consolidated EBITDA" shall mean, for any period, that
portion of Consolidated EBITDA for such period attributable to those assets
which are not encumbered by Liens or which are owned by Subsidiaries of the U.S.
Borrower that have not incurred Subsidiary Indebtedness.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
such Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time
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consistent with Statement of Financial Accounting Standards No. 87, exceeds the
market value of the assets allocable thereto.
"United States" and "U.S." shall each mean the United States of
America.
"U.S. Borrower" shall mean Host Marriott, L.P., a Delaware limited
partnership.
"U.S. Revolving Loan Sub-Commitment" shall mean, for any Lender at any
time, such Lender's Revolving Loan Commitment minus, in the case of a Lender
that is, or whose Affiliate is, a Canadian Lender, the sum of such Lender's and
its Affiliates' Canadian Dollar Revolving Loan Sub-Commitments.
"Unpaid Drawing" shall have the meaning provided in Section 3.05.
"Unsecured Consolidated Interest Expense" shall mean, for any period,
that portion of Consolidated Interest Expense (excluding the interest expense
attributable to QUIPs Debt) attributable to Indebtedness that is neither Secured
Indebtedness nor Subsidiary Indebtedness.
"Unsecured Indebtedness" shall mean any Indebtedness or Disqualified
Stock of the U.S. Borrower or any of its Subsidiaries that is not Secured
Indebtedness.
"Unsecured Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) Unencumbered Consolidated EBITDA for such period to (y) Unsecured
Consolidated Interest Expense for such period.
"Unutilized Canadian Dollar Revolving Loan Sub-Commitment" shall mean,
as to any Canadian Lender at any time, the Canadian Dollar Revolving Loan
Sub-Commitment of such Canadian Lender at such time minus the Dollar Equivalent
of the aggregate principal amount or Face Amount, as the case may be, of all
Canadian Revolving Loans of such Canadian Lender then outstanding.
"Unutilized Canadian RL Percentage" of any Lender at any time shall
mean a fraction (expressed as a percentage) the numerator of which is the
Unutilized Canadian Dollar Revolving Loan Sub-Commitment of such Lender (and its
respective affiliates which act as Canadian Lenders) at such time and the
denominator of which is the aggregate amount of Unutilized Canadian Dollar
Revolving Loan Sub-Commitments of all Canadian Lenders at such time.
"Unutilized Revolving Loan Commitment" with respect to any Lender, at
any time, shall mean an amount equal to the remainder of (I) such Lender's
Revolving Loan Commitment at such time less (II) the sum of (x) the aggregate
principal amount of Revolving Loans of such Lender (including any Affiliate of
any such Lender acting as a Canadian Lender) then outstanding (taking the Dollar
Equivalent of the principal amount or Face Amount, as the case may be, in the
case of any Canadian Revolving Loans then outstanding) and (y) such Lender's
Dollar Percentage (or, after a Sharing Event has occurred, its RL Percentage) of
the Letter of Credit Outstandings at such time.
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"Voting Stock" shall mean, as to any Person, any class or classes of
outstanding Capital Stock of such Person pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect at least a
majority of the Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" of any Person shall mean any
Subsidiary of such Person which is both a Domestic Subsidiary and a Wholly-Owned
Subsidiary of such Person.
"Wholly-Owned Foreign Subsidiary" of any Person shall mean any
Subsidiary of such Person which is both a Foreign Subsidiary and a Wholly-Owned
Subsidiary of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
SECTION 2. Amount and Terms of Credit.
2.01 The Commitments. (a) Revolving Loans. Subject to and upon the
terms and conditions set forth herein, (x) each RL Lender severally agrees, at
any time and from time to time during the Revolving Credit Period, to make a
revolving loan or revolving loans, which revolving loans shall be made and
maintained in Dollars (each a "Dollar Revolving Loan" and, collectively, the
"Dollar Revolving Loans") to the U.S. Borrower and (y) each Canadian Lender with
a Maximum Canadian Dollar Revolving Loan Sub-Commitment severally agrees, at any
time and from time to time during the Revolving Credit Period, to make a
revolving loan or revolving loans, which revolving loans shall be made and
maintained in Canadian Dollars (each a "Canadian Revolving Loan" and,
collectively, the "Canadian Revolving Loans") to one or more Canadian Revolving
Loan Borrowers (with the revolving loans made to the various Revolving Loan
Borrowers pursuant to this Section 2.01 being herein called a "Revolving Loan"
and, collectively, the "Revolving Loans"). The Revolving Loans:
(i) shall, in the case of Dollar Revolving Loans, at the option
of the U.S. Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that except as otherwise
specifically provided herein, all Dollar Revolving Loans comprising the
same Borrowing shall be of the same Type,
(ii) shall, in the case of Canadian Revolving Loans, be made and
maintained in Canadian Dollars, provided that all Canadian Revolving Loans
shall, at the option of the respective Canadian Revolving Loan Borrower, be
made by each Canadian Lender with a Maximum Canadian Dollar Revolving Loan
Sub-Commitment either by means of (x) Canadian Prime Rate Loans in Canadian
Dollars or (y) the creation and discount of Bankers' Acceptances in
Canadian Dollars on the terms and conditions provided for herein and in
Schedule III hereto (the terms and conditions of which shall be deemed
incorporated by reference into this Agreement),
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(iii) may be repaid and reborrowed in accordance with the
provisions hereof,
(iv) shall not, in the case of Canadian Revolving Loans, be made
at any time if, for any Canadian Lender, at the time of making any such
Canadian Revolving Loans and after giving effect thereto, the Dollar
Equivalent of the aggregate principal amount (or Face Amount, as the case
may be) of such Canadian Revolving Loans, when added to the Dollar
Equivalent of the aggregate principal amount (or Face Amount, as the case
may be) of all other Canadian Revolving Loans then outstanding from such
Canadian Lender, exceeds the related Maximum Canadian Dollar Revolving Loan
Sub-Commitment or the Canadian Dollar Revolving Loan Sub-Commitment of such
Canadian Lender at such time,
(v) shall not, in the case of all Revolving Loans, be made at
any time if, after giving effect thereto, the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Loan Commitment at such time,
(vi) shall not, in the case of Dollar Revolving Loans, be made
at any time if, for any Lender, at the time of making any such Dollar
Revolving Loan and after giving effect thereto, the Aggregate U.S.
Revolving Exposure of such Lender exceeds the U.S. Revolving Loan
Sub-Commitment of such Lender at such time, and
(vii) shall not, in the case of all Revolving Loans, be made at
any time, if after giving effect thereto, the Aggregate Revolving Credit
Exposure plus the aggregate amount of Term Loans then outstanding would
exceed (A) $300,000,000 at any time prior to the date the compliance
certificate is delivered pursuant to Section 10.11(d) with respect to the
fiscal quarter ending nearest to September 30, 2002 and, thereafter, so
long as the Leverage Ratio is equal to or greater than 6.50:1:00, (B)
$350,000,000 so long as the Leverage Ratio is equal to or greater than
6:00:1:00 but less than 6.50:1:00 and (C) $400,000,000 plus any amounts
under Additional Revolving Loan Commitments so long as the Leverage Ratio
is less than 6.00:1:00; provided, however, that the limitations contained
in this clause (vii) shall apply only at the time of any Credit Event and
in no event shall such limitations require any Borrower to prepay any Loan
for which the conditions contained in this clause (vii) were satisfied at
the time such Loan was incurred.
Notwithstanding the foregoing, in the event a Lender Default exists, the
Canadian Lenders shall not be required to make Canadian Revolving Loans unless
the Canadian Lenders have entered into arrangements satisfactory to them and the
U.S. Borrower to eliminate the Canadian Lenders' risk with respect to the
participation arrangements set forth in Section 2.17 of the Defaulting Lender or
Lenders, which may include cash collateralizing such Defaulting Lender's or
Lenders' RL Percentage of the outstanding Canadian Revolving Loans.
All Canadian Revolving Loans shall constitute the several, and not
joint or joint and several, obligations of the Canadian Revolving Loan
Borrowers.
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(b) Term Loans. Subject to and upon the terms and conditions set
forth herein, each Lender agrees to make, on the Conversion Date, a term loan
(the "Term Loan") to the U.S. Borrower, which Term Loan (i) shall be made and
maintained in Dollars, (ii) shall be incurred and initially maintained as a
Borrowing of Base Rate Loans or Eurodollar Loans as set forth below (subject to
the option to convert such Term Loans pursuant to Section 2.07), (iii) shall be
made by each Lender with a U.S. Revolving Loan Sub-Commitment in an aggregate
principal amount as is equal to the product of the Dollar Percentage of such
Lender on the Conversion Date and $100,000,000. Once repaid, Term Loans incurred
hereunder may not be reborrowed. The "Conversion Date" shall mean the first
date, if any, on which the aggregate principal amount of Dollar Revolving Loans
exceeds $100,000,000 for more than 180 consecutive days. During the Revolving
Credit Period, there shall be only one Conversion Date. On the Conversion Date,
the conversion referred to in this Section 2.01(b) shall occur automatically
(and without the taking of further action) by redesignating (as compared to
repaying and borrowing) outstanding Dollar Revolving Loans in the aggregate
principal amount of $100,000,000 as Term Loans: (i) first, Dollar Loans
maintained as Base Rate Loans, and (ii) second, Dollar Loans maintained as
Eurodollar Loans as Borrower shall designate, and failing such designation,
having an Interest Period ending furthest from the Conversion Date. Such
redesignation shall not constitute a prepayment for purposes of Section 2.12. If
the aggregate principal amount of Dollar Revolving Loans exceeds $100,000,000
for more than a period of 175 consecutive days and is reduced to $100,000,000 or
less prior to the 181st day of such period, then the Conversion Date shall be
deemed to have occurred unless any Notice of Borrowing delivered with respect to
a Borrowing to occur on the 181/st/ through 190/th/ day of such period shall be
accompanied by a certificate from an Authorized Officer of the U.S. Borrower
containing a representation and warranty that the reduction was not made in an
attempt to avoid the application of this Section 2.01(b). The Administrative
Agent shall promptly notify the U.S. Borrower and the Lenders of the occurrence
of the Conversion Date. The Revolving Loan Commitment of each RL Lender shall be
permanently reduced on the Conversion Date by the amount of the Term Loan made
by such RL Lender on such date.
2.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Loans shall not be less than the respective Minimum
Borrowing Amount for the respective Type and Tranche of Loans to be made or
maintained pursuant to the respective Borrowing. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than ten
Borrowings of Loans maintained as Eurodollar Loans.
2.03 Notice of Borrowing. (a) Whenever a Borrower desires to incur
Loans hereunder (excluding Borrowings of Canadian Prime Rate Loans to the extent
resulting from automatic conversions of Bankers' Acceptance Loans as provided in
clause (i) of Schedule III and Borrowings of Term Loans pursuant to Section
2.01(b)), it shall give the Administrative Agent at the Notice Office at least
one Business Day's prior written notice (or telephonic notice promptly confirmed
in writing) of each Base Rate Loan or Canadian Prime Rate Loan and at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Eurodollar Loan or Bankers' Acceptance Loan to be
incurred hereunder, provided that any such notice shall be deemed to have been
given on a certain day only if given before 12:00 Noon (New York time) on such
day. Each such written notice or written confirmation of telephonic notice (each
a "Notice of Borrowing"), except as otherwise expressly provided in Section
2.10, shall be irrevocable and shall be given by the respective Borrower in
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the form of Exhibit A appropriately completed to specify (i) the name of such
Borrower or Borrowers, (ii) the aggregate principal amount (or Face Amount, as
the case may be) of the Loans to be incurred pursuant to such Borrowing (stated
in the applicable currency), (iii) the date of such Borrowing (which shall be a
Business Day), (iv) in the case of Dollar Loans, whether the Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or Eurodollar Loans, (v) in the case of Canadian Revolving Loans, whether
the Loans being made pursuant to such Borrowing are to be initially maintained
as Canadian Prime Rate Loans or Bankers' Acceptance Loans and, if Bankers'
Acceptance Loans, the term thereof (which shall comply with the requirements of
clause (a) of Schedule III) and (vi) in the case of Eurodollar Loans, the
initial Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Lender which is required to make Loans of the Tranche
specified in the respective Notice of Borrowing, notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing. Notwithstanding anything to the contrary contained in this Agreement,
unless the Administrative Agent otherwise agrees, no more than four Notices of
Borrowing may be given in any 30 consecutive day period.
(b) Without in any way limiting the obligation of any Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the Issuing Bank (in the case of issuances of Letters of
Credit), as the case may be, may act without liability upon the basis of such
telephonic notice, believed by the Administrative Agent or the Issuing Bank, as
the case may be, in good faith to be from an Authorized Officer of such Borrower
prior to receipt of written confirmation. In each such case, each Borrower
hereby waives the right to dispute the Administrative Agent's or Issuing Bank's
record of the terms of such telephonic notice.
2.04 Extension of Maturity Date. The U.S. Borrower may one time prior
to the initial Maturity Date extend the initial Maturity Date to June 6, 2006
subject to the following terms and conditions: (a) not later than 60 days prior
to the initial Maturity Date, the U.S. Borrower shall deliver a written notice
indicating its intention to extend the initial Maturity Date to the
Administrative Agent (which shall promptly notify each of the Lenders), (b) the
U.S. Borrower shall pay to each Lender on or before the initial Maturity Date an
extension fee equal to .50% of the sum of the aggregate amount of the Term Loan
of such Lender then outstanding and being extended plus the Revolving Loan
Commitment of such Lender being extended, (c) no Default or Event of Default
shall exist on the initial Maturity Date, (d) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the initial Maturity Date (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date), (e) the Leverage Ratio (computed by taking into
account the portion of the Term Loans and the portion of any Revolving Loans
that will continue to remain outstanding after the initial Maturity Date) may
not exceed 5.75:1.00 as of the initial Maturity Date (computed as of the end of
the fiscal quarter ending closest to March 31, 2005 but on a Pro-Forma Basis for
events occurring after such date through the initial Maturity Date) and (f) the
U.S. Borrower shall deliver to the Administrative Agent on the initial Maturity
Date a certificate of an Authorized Officer of the U.S. Borrower certifying as
to the compliance with the foregoing provisions of this Section 2.04.
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2.05 Disbursement of Funds. No later than 1:00 P.M. (New York time) on
the date specified in each Notice of Borrowing, each Lender with a Commitment of
the respective Tranche will make available its pro rata portion (determined in
accordance with Section 2.08) of each Borrowing requested to be made on such
date in the manner provided below. All such amounts will be made available in
Dollars (in the case of Dollar Revolving Loans) or Canadian Dollars (in the case
of Canadian Revolving Loans), as the case may be, and in immediately available
funds at the appropriate Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the relevant Borrower or Borrowers
by depositing to its, or their, relevant account as directed by the respective
Borrower or Borrowers, the aggregate of the amounts so made available by the
Lenders. Unless the Administrative Agent shall have been notified by any Lender
prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date of Borrowing
and the Administrative Agent may, in reliance upon such assumption, make
available to the relevant Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender,
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the respective Borrower or Borrowers,
and, to the extent such corresponding amount has previously been disbursed to
such Borrower or Borrowers, such Borrower or Borrowers shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such Lender or such Borrower or
Borrowers, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
the respective Borrower or Borrowers until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Lender, the overnight Federal Funds Rate as in effect from
time to time for the first three days and the interest rate applicable to Dollar
Revolving Loans maintained as Base Rate Loans for each day thereafter and (ii)
if recovered from the respective Borrower or Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 2.09.
Nothing in this Section 2.05 shall be deemed to relieve any Lender from its
obligation to make Loans hereunder or to prejudice any rights which the relevant
Borrower or Borrowers may have against any Lender as a result of any failure by
such Lender to make Loans required to be made by it hereunder.
2.06 Notes. (a) Subject to the provisions of the following clause (f),
each Borrower's obligation to pay the principal of (or the Face Amount of, as
the case may be), and interest on, the Loans made by each Lender to such
Borrower shall be evidenced (i) if Term Loans, by a promissory note duly
executed and delivered by the U.S. Borrower substantially in the form of Exhibit
B-1, with blanks appropriately completed in conformity herewith (each a "Term
Note" and, collectively, the "Term Notes"), (ii) if Dollar Revolving Loans, by a
promissory note duly executed and delivered by the U.S. Borrower substantially
in the form of Exhibit B-2, with blanks appropriately completed in conformity
herewith (each a "Dollar Revolving Note" and, collectively, the "Dollar
Revolving Notes"), and (iii) if Canadian Revolving Loans, by a promissory note
duly executed and delivered by the respective Canadian Revolving Loan Borrower
substantially in the form of Exhibit B-3, with blanks appropriately
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completed in conformity herewith (each a "Canadian Dollar Revolving Note" and,
collectively, the "Canadian Dollar Revolving Notes").
(b) The Term Note issued by the U.S. Borrower to each Lender that
has outstanding Term Loans shall (i) be executed by the U.S. Borrower, (ii) be
payable to the order of such Lender and be dated the Conversion Date, (iii) be
in a stated principal amount equal to the Term Loans made by such Lender on the
Conversion Date and be payable in Dollars in the outstanding principal amount of
Term Loans evidenced thereby, (iv) mature on the Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 2.09 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 5.01, and
mandatory repayment as provided in Section 5.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) The Dollar Revolving Note issued by the U.S. Borrower to each
Lender that has a Revolving Loan Commitment or outstanding Dollar Revolving
Loans shall (i) be executed by the U.S. Borrower, (ii) be payable to the order
of such Lender and be dated the Effective Date (or, if issued thereafter, the
date of issuance), (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Lender (or, if issued after the termination thereof, be
in a stated principal amount equal to the outstanding Dollar Revolving Loans of
such Lender to the U.S. Borrower at such time) and be payable in Dollars in the
outstanding principal amount of Dollar Revolving Loans evidenced thereby, (iv)
mature on the Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 2.09 in respect of Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 5.01, mandatory repayment as provided in Section 5.02 and
conversion into a Term Loan as provided in Section 2.01(b) and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(d) The Canadian Dollar Revolving Note issued by each Canadian
Revolving Loan Borrower shall (i) be executed by the respective Canadian
Revolving Loan Borrower, (ii) be payable to the order of the applicable Canadian
Lender (or an affiliate designated by such Lender) and be dated the Effective
Date (or, if issued thereafter, the date of issuance), (iii) be in a stated
principal amount (expressed in Canadian Dollars) which exceeds by 25% the
Canadian Dollar Equivalent (as of the date of issuance) of the respective
Lender's Maximum Canadian Dollar Revolving Loan Sub-Commitment; provided that
if, because of fluctuations in exchange rates after the Effective Date, the
amount of the Canadian Dollar Revolving Note of any Canadian Revolving Loan
Borrower held by any Lender would not be at least as great as the outstanding
principal amount of, and the Face Amount of, as applicable, Canadian Revolving
Loans made by such Lender to such Canadian Revolving Loan Borrower and evidenced
thereby, the respective Lender may request (and in such case the respective
Canadian Revolving Loan Borrower shall promptly execute and deliver (provided
that such Lender shall return to the Canadian Revolving Loan Borrower any Note
or Notes theretofore delivered to such Lender pursuant to this Agreement marked
"cancelled", or if such Lender has lost or cannot find any such Note or Notes,
such Lender will execute and deliver to such Borrower a lost note and indemnity
agreement in form and substance as is usual and customary)) a new Canadian
Dollar Revolving Note in an amount equal to the greater of (x) that amount
(expressed in Canadian Dollars) which at that time exceeds by 25% the Canadian
Dollar
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Equivalent of the respective Lender's Maximum Canadian Dollar Revolving Loan
Sub-Commitment or (y) the then outstanding principal amount of, and the Face
Amount of, as applicable, all Canadian Revolving Loans made by such Lender to
such Canadian Revolving Loan Borrower, (iv) be payable in Canadian Dollars in
the outstanding principal amount of, and Face Amount of, as applicable, the
Canadian Revolving Loans made to the respective Canadian Revolving Loan Borrower
and evidenced thereby, (v) mature on the Maturity Date, (vi) bear interest as
provided in the appropriate clause of Section 2.09 in respect of the Canadian
Revolving Loans evidenced thereby, (vii) be subject to voluntary prepayment as
provided in Section 5.01, and mandatory repayment as provided in Section 5.02
and (viii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) Each Lender will note on its internal records the amount of
each Loan made by it to each Borrower and each payment in respect thereof and
will prior to any transfer of any of its Notes endorse on the reverse side
thereof the outstanding principal amount of Loans (including, without
limitation, the Face Amount of any Bankers' Acceptances) evidenced thereby.
Failure to make any such notation, or any error in such notation, shall not
affect any Borrower's obligations in respect of such Loans.
(f) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, Term Notes and Revolving Notes shall only be
delivered to Lenders with Loans of the respective Tranches which at any time
specifically request the delivery of such Notes. No failure of any Lender to
request or obtain a Note evidencing its Loans of any Tranche or to any Borrower
shall affect or in any manner impair the obligations of the respective Borrower
or Borrowers to pay the Loans (and all related Obligations) which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Lender which does not
have a Note evidencing its outstanding Loans shall in no event be required to
make the notations on a Note otherwise required in preceding clause (e). At any
time when any Lender requests the delivery of a Note to evidence its Loans of
any Tranche, the respective Borrower or Borrowers shall promptly execute and
deliver to the respective Lender the requested Note or Notes in the appropriate
amount or amounts to evidence such Loans.
2.07 Conversions. (a) Each Borrower shall have the option to convert,
on any Business Day, all or a portion equal to at least the Minimum Borrowing
Amount (for the Type of Loan into which the conversion is being made), of the
outstanding principal amount of Dollar Loans made to such Borrower pursuant to
one or more Borrowings (so long as of the same Tranche of Loans) of one or more
Types of Loans into a Borrowing (of the same Tranche of Loans) of another Type
of Loan, provided that, (i) Dollar Revolving Loans shall not be permitted to be
converted into Canadian Revolving Loans, and Canadian Revolving Loans shall not
be permitted to be converted into Dollar Revolving Loans, (ii) Term Loans may
not be converted into Revolving Loans and, except as required by Section
2.01(b), Revolving Loans may not be converted into Term Loans, (iii) if
Eurodollar Loans are converted into Base Rate Loans on a date other than the
last day of an Interest Period applicable to the Loans being converted, the
respective Borrower shall compensate the applicable Lenders for any breakage
costs incurred in connection therewith as set forth in Section 2.12, (iv) no
such partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to
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a single Borrowing to less than the Minimum Borrowing Amount for Eurodollar
Loans of the respective Tranche, (v) unless the Required Lenders otherwise
agree, Base Rate Loans may not be converted into Eurodollar Loans if any Default
or Event of Default exists on the date of conversion, and (vi) no conversion
pursuant to this Section 2.07 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 2.02. Each such conversion
shall be effected by the respective Borrower giving the Administrative Agent at
the Notice Office, prior to Noon (New York time), at least three (3) Business
Days' prior notice (each a "Notice of Conversion") specifying the Loans to be so
converted, the Borrowing or Borrowings pursuant to which such Loans were made
and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
(b) Each Canadian Revolving Loan Borrower shall be entitled: (i)
to convert from time to time any Canadian Prime Rate Loans then outstanding
under the Canadian Dollar Loan Sub-Commitments into Bankers' Acceptance Loans
under the Canadian Dollar Loan Sub-Commitments in an aggregate Face Amount equal
to the aggregate principal amount in Canadian Dollars of such outstanding
Canadian Prime Rate Loans, provided that the applicable Canadian Revolving Loan
Borrower shall pay the proceeds of such Bankers' Acceptance Loans, together with
such additional funds as may be required, to the Administrative Agent for the
account of the Canadian Lenders to repay such outstanding Canadian Prime Rate
Loans, and provided further that such Canadian Prime Rate Loans are repaid and
such Bankers' Acceptance Loans are obtained in accordance with Section 2 and any
other applicable provisions of this Agreement; and (ii) contemporaneously with
the maturity of any Bankers' Acceptance Loans outstanding under the Canadian
Dollar Loan Sub-Commitments, to obtain Bankers' Acceptance Loans or Canadian
Prime Rate Loans under the Canadian Dollar Loan Sub-Commitments in an aggregate
Face Amount or principal amount as the case may be, equal to the aggregate Face
Amount of such maturing Bankers' Acceptance Loans, provided that the applicable
Canadian Revolving Loan Borrower shall pay the proceeds of such new Canadian
Revolving Loan together with such additional funds as may be required to the
Administrative Agent for the account of the Canadian Lenders to repay such
maturing Bankers' Acceptance Loans, and provided further that such new Canadian
Revolving Loans are obtained in accordance with Section 2 and any other
applicable provisions of this Agreement.
(c) Mandatory conversions of Bankers' Acceptance Loans into
Canadian Prime Rate Loans shall be made in the circumstances, and to the extent,
provided in clause (i) of Schedule III. Except as otherwise provided under
Section 2.17, Bankers' Acceptance Loans shall not be permitted to be converted
into any other Type of Loan prior to the maturity date of the respective
Bankers' Acceptance Loan.
2.08 Pro Rata Borrowings. All Borrowings of Term Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their U.S.
Revolving Loan Sub-Commitments. Subject to the provisions of Section 2.17(b),
all Borrowings of Dollar Revolving Loans under this Agreement shall be incurred
from the RL Lenders pro rata on the basis of their Dollar Percentages and (ii)
all Borrowings of Canadian Revolving Loans under this Agreement shall be
incurred from the Canadian Lenders pro rata on the basis of their Canadian RL
Percentage. No Lender shall be responsible for any default by any other Lender
of its obligation to make Loans hereunder and each Lender shall be obligated to
make the Loans
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provided to be made by it hereunder, regardless of the failure of any other
Lender to make its Loans hereunder.
2.09 Interest. (a) Each Borrower hereby agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to it from
the date of Borrowing until the earlier of (x) the maturity thereof (whether by
acceleration, prepayment or otherwise) and (y) the conversion of such Base Rate
Loan to a Eurodollar Loan pursuant to Section 2.07, at a rate per annum which
shall be equal to the sum of the Applicable Margin plus the Base Rate, each as
in effect from time to time.
(b) Each Borrower hereby agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to it from the date of
Borrowing until the earlier of (x) the maturity thereof (whether by
acceleration, prepayment or otherwise) and (y) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 2.07, 2.10, or 2.11, as applicable,
at a rate per annum which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Margin as in effect from time to time plus
the Eurodollar Rate for such Interest Period.
(c) Each Canadian Revolving Loan Borrower hereby agrees to pay
interest in respect of the unpaid principal amount of each Canadian Prime Rate
Loan made to such Borrower from the date of Borrowing (which shall, in the case
of a conversion pursuant to clause (i) of Schedule III, be deemed to be the date
upon which a maturing Bankers' Acceptance is converted into a Canadian Prime
Rate Loan pursuant to said clause (i), with the proceeds thereof to be equal to
the full Face Amount of the maturing Bankers' Acceptances) until the maturity
thereof (whether by acceleration or otherwise) or earlier repayment thereof or
conversion thereof pursuant to Section 2.17 at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Canadian Prime Rate, each as
in effect from time to time.
(d) With respect to Bankers' Acceptance Loans, Acceptance Fees
shall be payable in connection therewith as provided in clause (g) of Schedule
III. Until maturity of the respective Banker's Acceptances, interest shall not
otherwise be payable with respect thereto.
(e) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum (1) in the case
of overdue principal of, and interest or other amounts owing with respect to,
Canadian Revolving Loans and any other amounts owing in Canadian Dollars, equal
to 2% per annum plus the Applicable Margin for Canadian Prime Rate Loans plus
the Canadian Prime Rate, each as in effect from time to time, and (2) in all
other cases, equal to the greater of (x) 2% per annum plus the rate otherwise
applicable to Base Rate Loans of the respective Tranche (or in the case of
amounts which do not relate to a given Tranche of outstanding Dollar Loans, 2%
per annum plus the rate otherwise applicable to Revolving Loans maintained as
Base Rate Loans) from time to time and (y) the rate which is 2% plus the rate
then borne by such Loans (without giving effect to any increase in the rate
borne by such Loans as a result of the operation of this clause (e)).
(f) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan and each Canadian Prime Rate Loan, monthly
in arrears on the
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last Business Day of each calendar month after the Effective Date, (ii) in the
case of any Eurodollar Loan, on the date of any conversion to a Base Rate Loan
pursuant to Section 2.07, 2.10, or 2.11, as applicable (on the amount so
converted), (iii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto (and, in addition in the case of any Interest
Period with a duration of six months, at the date which occurs three calendar
months after the first day of such Interest Period), and (iv) in respect of each
Loan (other than Bankers' Acceptances), on any repayment or prepayment (on the
amount repaid or prepaid), at maturity (whether by acceleration or otherwise)
and, after such maturity, on demand; provided that, in the case of Base Rate
Loans and Canadian Revolving Loans, interest shall not be payable pursuant to
preceding clause (iv) at the time of any repayment or prepayment thereof unless
the respective repayment or prepayment is made in conjunction with a permanent
reduction of the Total Revolving Loan Commitment, including upon conversion of a
Revolving Loan to a Term Loan pursuant to Section 2.01(b).
(g) Upon each Interest Determination Date, the Administrative
Agent shall determine the respective Eurodollar Rate for the respective Interest
Period or Interest Periods to be applicable to Eurodollar Loans and shall
promptly notify the respective Borrower and the Lenders thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
2.10 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the respective Borrower or Borrowers shall have the right to elect, by
giving the Administrative Agent (and the Administrative Agent shall promptly
give each affected Lender notice) notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of such Borrower, be a one, two, three or six month period,
provided that:
(i) all Eurodollar Loans comprising a single Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including, in the case
of Dollar Loans, the date of any conversion thereto from a Dollar Loan of a
different Type) and each Interest Period occurring thereafter in respect of
such Borrowing of Eurodollar Loans shall commence on the day on which the
next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest Period
shall expire on the next
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succeeding Business Day; provided, however, that if any Interest Period for
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) unless the Required Lenders otherwise agree, no Interest
Period may be selected at any time when any Default or Event of Default is
in existence;
(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the Maturity Date;
and
(vii) no Interest Period in respect of any Borrowing of Loans
shall be selected if the U.S. Borrower then knows that such Interest Period
extends beyond the date upon which a mandatory repayment of such Tranche of
Loans will be required to be made under Section 5.02 if the aggregate
principal amount of Loans of such Tranche which have Interest Periods which
will expire after such date will be in excess of the aggregate principal
amount of Loans of such Tranche permitted to be outstanding after such
mandatory repayment.
Prior to the termination of any Interest Period applicable to
Eurodollar Loans, the U.S. Borrower may, at its option, designate that the
respective Borrowing subject thereto be split into more than one Borrowing (for
purposes of electing multiple Interest Periods to be subsequently applicable
thereto), so long as each such Borrowing resulting from the action taken
pursuant to this sentence meets the Minimum Borrowing Amount for the respective
Tranche. If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the U.S. Borrower has failed to elect, or is not permitted
to elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, it shall be deemed to have elected to convert such Eurodollar
Loans into Base Rate Loans, effective as of the expiration date of such current
Interest Period.
2.11 Increased Costs, Illegality, etc. In the event that any Lender
shall have determined in good faith (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the applicable
interbank market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of (x) the adoption after the date hereof or
any change arising after the date of this Agreement in any applicable law
or governmental rule, regulation, order, guideline or request (whether or
not having the force of law) or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a
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change in the basis of taxation of payment to any Lender of the principal
of or interest on the Notes or any other amounts payable hereunder (except
for changes in the rate of tax on, or determined by reference to, the net
income or profits of such Lender pursuant to the laws of the jurisdiction
in which it is organized or in which its principal office or applicable
lending office is located or any subdivision thereof or therein) or (B) a
change in official reserve requirements (other than Eurodollar reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate) or any special deposit, assessment or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (or its applicable lending office) and/or
(y) other circumstances since the date of this Agreement affecting the
applicable interbank market; or
(iii) at any time after the date of this Agreement, that the making or
continuance of any Eurodollar Loan has been made (x) unlawful by any law or
governmental rule, regulation or order, (y) impossible by compliance by any
Lender in good faith with any governmental request (whether or not having
the force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and adversely
affects the applicable interbank market.
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the respective Borrower or Borrowers and, except in the
case of clause (i) above, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Lenders). Thereafter (w) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies the U.S. Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by any Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the respective Borrower, (x) in the
case of clause (ii) above, the respective Borrower or Borrowers shall pay to
such Lender, upon its written request therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender shall determine) as shall be required to compensate
such Lender for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing in reasonable detail the basis for the calculation thereof,
submitted to the respective Borrower or Borrowers by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties hereto),
and (y) in the case of clause (iii) above, the respective Borrower or Borrowers
shall take one of the actions specified in Section 2.11(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 2.11(a)(ii) or (a)(iii), the respective
Borrower or Borrowers may (and in the case of a Eurodollar Loan affected by the
circumstances described in Section 2.11(a)(iii) shall) either (x) if the
affected Eurodollar Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that such Borrower was
notified by the affected Lender or the Administrative Agent or (y) if the
affected Eurodollar Loan is then
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outstanding, upon at least three Business Days' written notice to the
Administrative Agent, request the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan (which conversion, in the case of the circumstances
described in Section 2.11(a)(iii)) shall occur no later than the last day of the
Interest Period then applicable to such Eurodollar Loan (or such earlier date as
shall be required by applicable law)); provided that, if more than one Lender is
affected at any time as described above in this clause (b), then all affected
Lenders must be treated the same pursuant to this Section 2.11(b).
(c) If at any time after the date of this Agreement any Lender
determines that the introduction of or any change (which introduction or change
shall have occurred after the date of this Agreement) in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitments
hereunder or its obligations hereunder, then the U.S. Borrower and the Canadian
Revolving Loan Borrowers, as applicable, agree to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Lender's reasonable good faith determination of compensation
owing under this Section 2.11(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.11(c),
will give prompt written notice thereof to the Borrowers, which notice shall
show in reasonable detail the basis for calculation of such additional amounts
and shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. In addition, each such Lender, upon determining that the
circumstances giving rise to the payment of additional amounts pursuant to this
Section 2.11(c) cease to exist, will give prompt written notice thereof to the
U.S. Borrower.
2.12 Compensation. The respective Borrower or Borrowers shall
compensate each Lender, upon its written request (which request shall set forth
the basis for requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans, but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a Borrowing or continuation of, or conversion
from or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not rescinded or deemed
rescinded pursuant to Section 2.11(a)); (ii) if any repayment (including any
repayment made pursuant to Sections 2.16, 5.01 or 5.02 or as a result of an
acceleration of the Loans pursuant to Section 12) or conversion of any
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any repayment (including any repayment
made pursuant to Sections 2.16, 5.01 or 5.02 or as a result of an acceleration
of the Loans pursuant to Section 12) of any Bankers' Acceptance Loan occurs on a
date which is not the maturity date of the respective Bankers' Acceptance; (iv)
if any
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prepayment of any Eurodollar Loans or Bankers' Acceptance Loans is not
made on any date specified in a notice of prepayment given by the respective
Borrower or Borrowers; (v) as a consequence of (x) any other default by the
respective Borrower or Borrowers to repay its Loans when required by the terms
of this Agreement or any Note held by such Lender or (y) any election made
pursuant to Section 2.11(b) or (vi) as a result of any repayment or purchase
contemplated by Section 2.18(e). A written notice as to the amount owed to a
Lender pursuant to this Section 2.12 shall show in reasonable detail the basis
of calculation of such amount and shall, absent manifest error, be final and
conclusive and binding on all the parties hereto.
2.13 Lending Offices; Changes Thereto. (a) Each Lender may at any time
or from time to time designate, by written notice to the Administrative Agent to
the extent not already reflected on Schedule II, one or more lending offices
(which, for this purpose, may include Affiliates of the respective Lender) for
the various Loans made, and Letters of Credit participated in, by such Lender
(including by designating a separate lending office (or Affiliate) to act as
such with respect to Dollar Loans and Letter of Credit Outstandings versus
Canadian Revolving Loans); provided that, for designations made after the
Effective Date, to the extent such designation shall result in increased costs
or Taxes under Section 2.11, 3.06 or 5.04 in excess of those which would be
charged in the absence of the designation of a different lending office
(including a different Affiliate of the respective Lender), then the Borrowers
shall not be obligated to pay such excess increased costs (although the
Borrowers, in accordance with and pursuant to the other provisions of this
Agreement, shall be obligated to pay the costs which would apply in the absence
of such designation and any subsequent increased costs of the type described
above resulting from changes after the date of the respective designation). Each
lending office and Affiliate of any Lender designated as provided above shall,
for all purposes of this Agreement, be treated in the same manner as the
respective Lender (and shall be entitled to all indemnities and similar
provisions in respect of its acting as such hereunder).
(b) Each Lender agrees that on the occurrence of any event giving
rise to the operation of Section 2.11(a)(ii) or (iii), Section 2.11(c), Section
3.06 or Section 5.04 with respect to such Lender, it will, if requested by the
applicable Borrower or Borrowers, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 2.13 shall affect or postpone any of the obligations of any
Borrower or the right of any Lender provided in Sections 2.11, 3.06 and 5.04.
2.14 Replacement of Lenders. (a) (x) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Loans or fund
Unpaid Drawings, (y) upon the occurrence of an event giving rise to the
operation of Section 2.11(a)(ii) or (iii), Section 2.11(c), Section 3.06 or
Section 5.04 with respect to any Lender which results in such Lender charging to
any Borrower increased costs in excess of those being generally charged by the
other Lenders or (z) in the case of the refusal by a Lender to consent to
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 14.11, the U.S. Borrower shall have the right, if no
Default or Event of Default will exist immediately after giving effect to such
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replacement, to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferees, none of whom shall constitute a Defaulting Lender at
the time of such replacement (collectively, the "Replacement Lender") and each
of whom shall be required to be reasonably acceptable to the Administrative
Agent, the Issuing Bank and, if the Person serving as the Administrative Agent
is not a Canadian Lender, any Canadian Lender whose Maximum Canadian Dollar
Revolving Loan Sub-Commitment is not exceeded by any other Canadian Lender;
provided that:
(i) any Replacement Lender in a replacement pursuant to this
Section 2.14 (a) (with each such replacement being herein called a
"Replacement") shall be required to comply with the requirements of Section
14.03(b) and at the time of any Replacement the Replacement Lender shall
enter into one or more Assignment and Assumption Agreements pursuant to
Section 14.03(b) (and shall pay all fees payable pursuant to said Section
14.03(b)) pursuant to which the Replacement Lender shall acquire all of the
Commitments (and related sub-commitments) and outstanding Loans of, and in
each case participations in Letters of Credit by, the Replaced Lender and,
in connection therewith, shall pay to (x) the Replaced Lender in respect
thereof amounts (in the respective currencies in which such obligations are
denominated) equal to the sum of (I) the principal of (including, without
limitation, the Face Amount of Bankers' Acceptance Loans), and all accrued
interest on, all outstanding Loans of the Replaced Lender, (II) all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced
Lender, together with all then unpaid interest with respect thereto at such
time and (III) all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender pursuant to Section 4.01, and (y) the Issuing Bank an
amount equal to such Replaced Lender's Dollar Percentage of any Unpaid
Drawing (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Lender to such Issuing
Bank and
(ii) all obligations of the Borrowers due and owing to the
Replaced Lender at such time (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has
been, or is concurrently being, paid) shall be paid in full to such
Replaced Lender concurrently with such replacement.
(b) Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i) and
(ii) above, recordation of the assignment on the Register by the Administrative
Agent pursuant to Section 14.14 and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the respective Borrowers, the Replacement Lender shall become a Lender hereunder
and the Replaced Lender shall cease to constitute a Lender hereunder, except
with respect to indemnification provisions under this Agreement (including,
without limitation, Sections 2.11, 2.12, 2.16, 3.06, 5.04, 13.06 and 14.01),
which shall survive as to such Replaced Lender. In connection with any
replacement of Lenders pursuant to, and as contemplated by, this Section 2.14,
each of the Borrowers hereby irrevocably authorizes the U.S. Borrower to take
all necessary action, in the name of the U.S. Borrower, as described above in
this Section 2.14 in order to effect the replacement of the respective Lender or
Lenders in accordance with the preceding provisions of this Section 2.14. Upon
the Replaced Lender ceasing to be a Lender hereunder, such Replaced Lender
agrees to promptly return to the U.S. Borrower any Note or
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Notes theretofore delivered to such Replaced Lender pursuant to this Agreement
marked "cancelled", or if such Replaced Lender has lost or cannot find any such
Note or Notes, such Replaced Lender will execute and deliver to the U.S.
Borrower a customary lost note and indemnity agreement in form and substance
reasonably satisfactory to the U.S. Borrower.
2.15 Bankers' Acceptance Provisions. The parties hereto agree that the
provisions of Schedule III shall apply to all Bankers' Acceptances and Bankers'
Acceptance Loans created hereunder, and that the provisions of Schedule III
shall be deemed incorporated by reference into this Agreement as if such
provisions were set forth in their entirety herein.
2.16 Additional Revolving Loan Commitments. (a) So long as no Default
or Event of Default then exists or would result therefrom, the U.S. Borrower
shall have the right at any time and from time to time after the Effective Date
and on or prior to 30 days prior to the Maturity Date, and upon at least 15
Business Days prior written notice to the Administrative Agent (which shall
promptly notify each of the Lenders), to request on up to four occasions that
one or more Lenders (and/or one or more other Persons which will become Lenders
as provided below) provide Additional Revolving Loan Commitments and, subject to
the applicable terms and conditions contained in this Agreement, make Dollar
Revolving Loans pursuant thereto, it being understood and agreed, however, that
(i) no Lender shall be obligated to provide an Additional Revolving Loan
Commitment as a result of any such request by the U.S. Borrower, (ii) until such
time, if any, as such Lender has agreed in its sole discretion to provide an
Additional Revolving Loan Commitment and executed and delivered to the
Administrative Agent an Additional Revolving Loan Commitment Agreement in
respect thereof as provided in Section 2.16(b) and such Additional Revolving
Loan Commitment Agreement has become effective, such Lender shall not be
obligated to fund any Revolving Loans in excess of its Revolving Loan Commitment
as in effect prior to giving effect to such Additional Revolving Loan
Commitments provided pursuant to this Section 2.16, (iii) any Lender (or, in the
circumstances contemplated by clause (vii) below, any other Person which will
qualify as an Eligible Transferee) may so provide an Additional Revolving Loan
Commitment without the consent of any other Lender but with the prior consent of
the Administrative Agent (which consent shall not be unreasonably withheld),
(iv) each provision of Additional Revolving Loan Commitments on a given date
pursuant to this Section 2.16 shall be in a minimum aggregate amount (for all
Lenders (including, in the circumstances contemplated by clause (vii) below,
Eligible Transferees who will become Lenders)) of at least $10,000,000 and in
integral multiples of $1,000,000 in excess thereof, (v) the aggregate amount of
all Additional Revolving Loan Commitments permitted to be provided pursuant to
this Section 2.16 shall not exceed $100,000,000, (vi) the fees payable to any
Lender (including, in the circumstances contemplated by clause (vii) below, any
Eligible Transferee who will become a Lender) providing an Additional Revolving
Loan Commitment shall be as set forth in the relevant Additional Revolving Loan
Commitment Agreement, (vii) if, after the U.S. Borrower has requested the then
existing Lenders (other than Defaulting Lenders) to provide Additional Revolving
Loan Commitments pursuant to this Section 2.16, the U.S. Borrower has not
received Additional Revolving Loan Commitments in an aggregate amount equal to
that amount of the Additional Revolving Loan Commitments which the U.S. Borrower
desires to obtain pursuant to such request (as set forth in the notice provided
by the U.S. Borrower to the Administrative Agent as provided above), then the
U.S. Borrower may request Additional Revolving Loan Commitments from Persons
which would qualify as Eligible Transferees hereunder in an aggregate amount
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equal to such deficiency on terms which are no more favorable to such Eligible
Transferee in any respect than the terms offered to the Lenders, provided that
any such Additional Revolving Loan Commitments provided by any such Eligible
Transferee which is not already a Lender shall be in a minimum amount (for such
Eligible Transferee) of at least $10,000,000, and (viii) all actions taken by
the U.S. Borrower pursuant to this Section 2.16 shall be done in coordination
with the Administrative Agent.
(b) At the time of any provision of Additional
Revolving Loan Commitments pursuant to this Section 2.16, (i) the U.S. Borrower,
the Administrative Agent and each Lender or other Eligible Transferee (each, an
"Additional Revolving Loan Lender") which agrees to provide an Additional
Revolving Loan Commitment shall execute and deliver to the Administrative Agent
an Additional Revolving Loan Commitment Agreement substantially in the form of
Exhibit J (appropriately completed), subject to such modifications in form and
substance reasonably satisfactory to the Administrative Agent as may be
necessary or appropriate (with the effectiveness of such Additional Revolving
Loan Lender's Additional Revolving Loan Commitment to occur upon delivery of
such Additional Revolving Loan Commitment Agreement to the Administrative Agent,
the payment of any fees required in connection therewith and the satisfaction of
the other conditions in this Section 2.16(b) to the reasonable satisfaction of
the Administrative Agent), (ii) the U.S. Borrower shall, in coordination with
the Administrative Agent, repay outstanding Revolving Loans of certain of the
Lenders, and incur additional Revolving Loans from certain other Lenders, in
each case so that all of the Lenders participate in each outstanding Borrowing
of Revolving Loans pro rata on the basis of their respective Revolving Loan
Commitments (after giving effect to any increase in the Total Revolving Loan
Commitment pursuant to this Section 2.16) and with the U.S. Borrower being
obligated to pay to the respective Lenders the costs of the type referred to in
Section 2.12 in connection with any such repayment and (iii) if requested by the
Administrative Agent, the U.S. Borrower shall deliver to the Administrative
Agent an opinion, in form and substance reasonably satisfactory to the
Administrative Agent, from counsel to the U.S. Borrower and dated such date,
covering such matters similar to those set forth in the opinions of counsel
delivered to the Administrative Agent on the Effective Date pursuant to Section
6.02 and such other matters as the Administrative Agent may reasonably request.
The Administrative Agent shall promptly notify each Lender as to the occurrence
of each Additional Revolving Loan Commitment Date, and (x) on each such date,
the Total Revolving Loan Commitment under, and for all purposes of, this
Agreement shall be increased by the aggregate amount of such Additional
Revolving Loan Commitments, and (y) on each such date Schedule I-A shall be
deemed modified to reflect the revised Revolving Loan Commitments of the
affected Lenders.
2.17 Special Provisions Regarding RL Lenders and Canadian
Revolving Loans.
(a) On the fifth Business Day after the occurrence of
a Sharing Event, automatically (and without the taking of any action) (x) all
then outstanding Canadian Revolving Loans shall be automatically converted into
Dollar Loans (in an amount equal to the Dollar Equivalent of the aggregate
principal amount or Face Amount, as the case may be, of the respective Canadian
Revolving Loans on the date such Sharing Event first occurred, which Dollar
Revolving Loans shall be owed by the respective Canadian Revolving Loan
Borrower, shall thereafter be deemed to be Base Rate Loans and shall be
immediately due and payable on the date such Sharing Event has occurred) and (y)
all accrued and unpaid interest and other
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amounts owing with respect to such Canadian Revolving Loans shall be immediately
due and payable in Dollars, taking the Dollar Equivalent of such accrued and
unpaid interest and other amounts. The occurrence of any conversion as provided
above in this Section 2.17(a) shall be deemed to constitute, for purposes of
Section 2.12, a prepayment of the respective Canadian Revolving Loans before the
last day of any Interest Period relating thereto.
(b) Upon the occurrence of a Sharing Event, each RL
Lender shall (and hereby unconditionally and irrevocably agrees to) purchase and
sell (in each case in Dollars) undivided participating interests in the
Revolving Loans outstanding to, and any Unpaid Drawings owing by, each Revolving
Loan Borrower in such amounts so that each RL Lender shall have a share of the
outstanding Revolving Loans and Unpaid Drawings then owing by each Revolving
Loan Borrower equal to its RL Percentage thereof. Upon any such occurrence the
Administrative Agent shall notify each RL Lender and shall specify the amount of
Dollars required from such RL Lender in order to effect the purchases and sales
by the various RL Lenders of participating interests in the amounts required
above (together with accrued interest with respect to the period from the last
interest payment date through the date of the Sharing Event plus any additional
amounts payable by any respective Borrower pursuant to Section 5.04 in respect
of such accrued but unpaid interest); provided that in the event that a Sharing
Event shall have occurred, each RL Lender shall be deemed to have purchased,
automatically and without request, such participating interests. Promptly upon
receipt of such request, each RL Lender shall deliver to the Administrative
Agent (in immediately available funds in Dollars) the net amounts as specified
by the Administrative Agent. If any RL Lender fails to so deliver such net
amounts to the Administrative Agent, distributions of amounts otherwise payable
under this Agreement to such RL Lender shall be distributed instead to the
Canadian Lenders (and applied to the purchase price owing to such Canadian
Lenders) until such payments are made by such defaulting RL Lender or the
Canadian Lenders have received the purchase price owing to them by the
Defaulting Lenders. The Administrative Agent shall promptly deliver the amounts
so received to the various RL Lenders in such amounts as are needed to effect
the purchases and sales of participations as provided above. Promptly following
receipt thereof, each RL Lender which has sold participations in any of its
Revolving Loans (through the Administrative Agent) will deliver to each RL
Lender (through the Administrative Agent) which has so purchased a participating
interest a participation certificate dated the date of receipt of such funds and
in such amount. It is understood that the amount of funds delivered by each RL
Lender shall be calculated on a net basis, giving effect to both the sales and
purchases of participations by the various RL Lenders as required above.
(c) Upon, and after, the occurrence of a Sharing
Event (i) no further Canadian Revolving Loans shall be made to any Borrower,
(ii) all amounts from time to time accruing with respect to, and all amounts
from time to time payable on account of, Canadian Revolving Loans (including,
without limitation, any interest and other amounts which were accrued but unpaid
on the date of such purchase) shall be payable in Dollars as if each such
Canadian Revolving Loan had originally been made in Dollars and shall be
distributed by the relevant RL Lenders (or their affiliates) to the
Administrative Agent for the account of the RL Lenders which are participating
therein and (iii) the Maximum Canadian Dollar Revolving Loan Sub-Commitments of
the various Canadian Lenders shall be automatically terminated (which shall
result in a like increase to the U.S. Revolving Loan Sub-Commitments of the
respective Lenders, except to the extent the Revolving Loan Commitments of the
various Lenders are
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terminated as otherwise provided in this Agreement). Notwithstanding anything to
the contrary contained above, the failure of any RL Lender to purchase its
participating interests in any Revolving Loans upon the occurrence of a Sharing
Event shall not relieve any other RL Lender of its obligation hereunder to
purchase its participating interests in a timely manner, but no RL Lender shall
be responsible for the failure of any other RL Lender to purchase the
participating interest to be purchased by such other RL Lender on any date.
(d) If any amount required to be paid by any RL
Lender pursuant to Section 2.17(b) is paid to the Administrative Agent after the
date such amount is required to be paid by such RL Lender but within three
Business Days following the date upon which such RL Lender receives notice from
the Administrative Agent of the amount of its participations required to be
purchased pursuant to Section 2.17(b), such RL Lender shall also pay to the
Administrative Agent on demand an amount equal to the product of (i) the amount
so required to be paid by such RL Lender for the purchase of its participations
times (ii) the daily average Federal Funds Rate, during the period from and
including the date of request for payment to the date on which such payment is
immediately available to the Administrative Agent times (iii) a fraction of the
numerator of which is the number of days that elapsed during such period and the
denominator of which is 360. If any such amount required to be paid by any RL
Lender pursuant to Section 2.17(b) is not in fact made available to the
Administrative Agent within three Business Days following the date upon which
such RL Lender receives notice from the Administrative Agent as to the amount of
participations required to be purchased by it, the Administrative Agent shall be
entitled to recover from such RL Lender on demand, such amount with interest
thereon calculated from such request date at the rate per annum applicable to
Canadian Revolving Loans maintained as Canadian Prime Rate Loans hereunder. A
certificate of the Administrative Agent submitted to any RL Lender with respect
to any amounts payable under this Section 2.17 shall be conclusive in the
absence of manifest error. Amounts payable by any RL Lender pursuant to this
Section 2.17 shall be paid to the Administrative Agent for the account of the
relevant RL Lenders; provided that, if the Administrative Agent (in its sole
discretion) has elected to fund on behalf of such RL Lender the amounts owing to
such RL Lenders, then the amounts shall be paid to the Administrative Agent for
its own account.
(e) Whenever, at any time after the relevant RL
Lenders have received from any RL Lenders purchases of participations in any
Revolving Loans pursuant to this Section 2.17, the various RL Lenders receive
any payment on account thereof, such RL Lenders will distribute to the
Administrative Agent, for the account of the various RL Lenders participating
therein, such RL Lenders' participating interests in such amounts (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such participations were outstanding but also taking into account the
payment of any interest in connection with the purchase of such participating
interest pursuant to Section 2.18(b)) in like funds as received; provided,
however, that in the event that such payment received by any RL Lenders is
required to be returned, the RL Lenders who received previous distributions in
respect of their participating interests therein will return to the respective
RL Lenders any portion thereof previously so distributed to them in like funds
as such payment is required to be returned by the respective RL Lenders.
(f) Each RL Lender's obligation to purchase
participating interests pursuant to this Section 2.17 shall be absolute and
unconditional and shall not be affected by any
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circumstance including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such RL Lender may have against any
other RL Lender, the relevant Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of an Event of Default, (iii) any
adverse change in the condition (financial or otherwise) of any Borrower or any
other Person, (iv) any breach of this Agreement by any Borrower or any Lender or
any other Person, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(g) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, upon any purchase of participations as
required above, each RL Lender which has purchased such participations shall be
entitled to receive from the relevant Borrowers any reasonable increased costs
and indemnities (including, without limitation, pursuant to Sections 2.11, 2.12,
2.16, 3.06 and 5.04) directly from the Borrowers to the same extent as if it
were the direct Lender as opposed to a participant therein, which reasonable
increased costs shall be calculated without regard to Section 2.13, Section
14.03(a) or the last sentence of Section 14.03(b). The Borrowers acknowledge and
agree that, upon the occurrence of a Sharing Event and after giving effect to
the requirements of this Section 2.17, increased Taxes may be owing by them
pursuant to Section 5.04, which Taxes shall be paid (to the extent provided in
Section 5.04) by the respective Borrowers, without any claim that the increased
Taxes are not payable because same resulted from the participations effected as
otherwise required by this Section 2.17.
2.18 Voluntary Adjustment or Termination of Total Maximum
Canadian Dollar Revolving Loan Sub-Commitment and Total Canadian Dollar
Revolving Loan Sub-Commitment. (a) Notwithstanding anything to the contrary
contained in this Agreement, the parties hereto agree that (i) the Total
Canadian Dollar Revolving Loan Sub-Commitment shall be fixed by the U.S.
Borrower on a monthly basis in accordance with Section 2.18(b) (but no more than
six times in any calendar year); (ii) in no event shall the Total Canadian
Dollar Revolving Loan Sub-Commitment exceed the sum of the Canadian Dollar
Revolving Loan Sub-Commitments of the various Canadian Lenders as then in
effect; (iii) in no event shall the Canadian Dollar Revolving Loan
Sub-Commitment of any Canadian Lender exceed the Maximum Canadian Dollar
Revolving Loan Sub-Commitment of such Lender; (iv) at no time shall the U.S.
Borrower be permitted to request an extension of credit pursuant to the Total
Revolving Loan Commitment (whether in the form of Revolving Loans or Letter of
Credit Outstandings) and no such credit shall be made available, if after giving
effect thereto, the sum of the aggregate principal amount of outstanding
Revolving Loans (excluding for this purpose Canadian Revolving Loans), and the
amount of the Letter of Credit Outstandings at such time would exceed an amount
equal to the Total Revolving Loan Commitment as then in effect less the Total
Canadian Dollar Revolving Loan Sub-Commitment as then in effect; (v) at no time
shall any Canadian Revolving Loan Borrower be permitted to request an extension
of credit in the form of Canadian Revolving Loans if, after giving effect
thereto, the aggregate principal (and Face Amount, as applicable) of outstanding
Canadian Revolving Loans (for this purpose, using the Dollar Equivalent of the
principal and/or Face Amount, as appropriate, of Canadian Revolving Loans) would
exceed the Total Canadian Dollar Revolving Loan Sub-Commitment; and (vi) the
Canadian Dollar Revolving Loan Sub-Commitment of any Canadian Lender at any time
shall be an amount equal to its pro rata share of the Total Canadian Dollar
Revolving Loan Sub-Commitment at such time determined on the basis of the
Canadian RL Percentages of the various Lenders. At all times from and after the
date of this Agreement until an adjustment is
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made in accordance with this Section 2.18, the Total Canadian Dollar Revolving
Loan Sub-Commitment shall be U.S. $0. The Total Canadian Dollar Revolving Loan
Sub-Commitment shall not exceed U.S. $100,000,000.
(b) The U.S. Borrower, not more than 30 days and not
less than 5 Business Days prior to the last day of each calendar month, shall
give written notice, which notice shall be irrevocable, to the Administrative
Agent either (x) requesting an adjustment effective as of the first Business Day
of the immediately following calendar month (each such date an "Adjustment
Date") to the amount of the Total Canadian Dollar Revolving Loan Sub-Commitment;
or (y) confirming that there will be no adjustments to the Total Canadian Dollar
Revolving Loan Sub-Commitment; provided that (i) no reduction to the amount of
the Total Canadian Dollar Revolving Loan Sub-Commitment may be made if, after
giving effect to any such reduction, the Total Canadian Dollar Revolving Loan
Sub-Commitment would be less than the sum of the aggregate Face Amount of all
Bankers' Acceptance Loans and the principal amount of all Canadian Prime Rate
Loans (for this purpose, using the Dollar Equivalent of the Face Amounts or
principal amounts thereof) then outstanding (other than any such Canadian
Revolving Loans which will be repaid in full on or before the respective
Adjustment Date); and (ii) the failure by the U.S. Borrower to deliver any such
written notice (or the delivery by the U.S. Borrower of any such notice which
does not comply with the requirements contained in this Section) to the
Administrative Agent within the period required above will be deemed to be
delivery by the U.S. Borrower to the Administrative Agent of a written notice
that there will be no adjustment to the Total Canadian Dollar Revolving Loan
Sub-Commitment. If any adjustment is made on an Adjustment Date as described in
this Section, then on the respective Adjustment Date all repayments required by
this Section 2.18 and Section 5.02 shall be made on such date to the extent
required as a result of such adjustments and in manner provided in Section 5.02.
At any time the U.S. Borrower may, but shall not be required, to request an
estimate of adjustment costs by written request to the Administrative Agent.
Upon receipt of such request, the Administrative Agent shall solicit from the
Lenders estimates (and the Lenders shall provide such estimates not later than 5
Business Days after such solicitation, promptly after the receipt of which the
Administrative Agent shall provide a summary thereof to the U.S. Borrower) of
costs payable under Sections 2.12 and 2.18(e) as a result of the proposed
adjustment. Such estimates shall be based upon circumstances at the time and
shall not be binding upon any Lender or the Administrative Agent. Such request
for an estimate by the U.S. Borrower shall not be binding upon the U.S. Borrower
and shall not constitute the notice described in the first sentence of this
Section 2.18(b).
(c) In connection with any adjustment to the Totals
Canadian Dollar Revolving Loan Sub-Commitment requested pursuant to Section
2.18(b), (i) if any such adjustment would result in an increase in the Total
Canadian Dollar Revolving Loan Sub-Commitment, commencing on the Adjustment Date
additional Canadian Revolving Loans shall be permitted to be incurred in
accordance with the requirements of Section 2.01 and (ii) if any such adjustment
would result in a decrease in the Total Canadian Dollar Revolving Loan
Sub-Commitment, all Canadian Revolving Loans required to be repaid pursuant to
Section 5.02(a)(ii) shall, to the extent required by Section 5.02(a)(ii), be
repaid on the Adjustment Date by the time required by Section 5.03. It is
understood and agreed that the Administrative Agent shall not have any liability
to any Lenders if the payments contemplated above in this Section are not
actually made on the Adjustment Date, and that any failure to make the payments
required to be
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made on an Adjustment Date pursuant to this Section or Section 5.02(a)(ii) shall
constitute an Event of Default in accordance with the terms of Section 12.01.
(d) On any date the U.S. Borrower may, at its option, permanently
reduce or terminate the Maximum Canadian Dollar Revolving Loan Sub-Commitments
(specifying the aggregate amount of such reduction); provided that (i) no such
reduction shall be made in an amount which would cause the Dollar Equivalent of
the then outstanding aggregate principal amount or Face Amount, as the case may
be, of the Canadian Revolving Loans to exceed the Maximum Canadian Dollar
Revolving Loan Sub-Commitments of the Canadian Lenders or the Canadian Dollar
Revolving Loan Sub-Commitments of the Canadian Lenders after giving effect to
the respective reduction pursuant to this Section 2.18(d), and (ii) each
reduction pursuant to this Section 2.18(d) shall apply pro rata to reduce the
Maximum Canadian Dollar Revolving Loan Sub-Commitments of the Canadian Lenders
(based upon the relative amounts of such sub-commitments).
(e) In connection with any Adjustment Date for any adjustment to
the Total Canadian Dollar Revolving Loan Sub-Commitment pursuant to this Section
2.18, on such Adjustment Date the U.S. Borrower shall, in coordination with the
Administrative Agent, repay outstanding Dollar Revolving Loans of certain of the
Lenders, and incur additional Dollar Revolving Loans from certain other Lenders,
in each case so that all of the Lenders participate in each outstanding
Borrowing of Dollar Revolving Loans pro rata on the basis of their respective
U.S. Revolving Loan Sub-Commitments (after giving effect to any change to the
U.S. Revolving Loan Sub-Commitments as a result of such adjustment to the Total
Canadian Dollar Revolving Loan Sub-Commitment pursuant to this Section 2.18)
(provided, that, if requested by the U.S. Borrower and consented to by the
Administrative Agent (such consent not to be unreasonably withheld), the Lenders
shall in lieu thereof be required to purchase and sell (in each case in Dollars)
undivided participating interests in the Dollar Revolving Loans outstanding to,
and any Unpaid Drawings owing by, the U.S. Borrower) and the U.S. Borrower shall
be obligated to pay to the respective Lenders the costs of the type referred to
in Section 2.12 in connection with any such repayment (or purchases and sales).
SECTION 3. Letters of Credit.
3.01 Letters of Credit. Subject to and upon the terms and conditions
set forth herein, the U.S. Borrower may request that the Issuing Bank issue, at
any time and from time to time on and after the Effective Date and prior to the
tenth Business Day prior to the Maturity Date, for the account of the U.S.
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the U.S. Borrower or any of its Subsidiaries, an irrevocable sight standby
letter of credit, in a form customarily used by the Issuing Bank or in such
other form as has been reasonably approved by the Issuing Bank (each such
standby letter of credit, a "Letter of Credit") in support of such L/C
Supportable Obligations. The Issuing Bank shall not issue any commercial or
trade letters of credit. Letters of Credit may, at the option of the Issuing
Bank, provide that they are governed by the Uniform Customs and Practice for
Documentary Credits or the International Standby Practices or other commercially
standard conventions.
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(b) The Issuing Bank hereby agrees that it will (subject to the
terms and conditions contained herein), at any time and from time to time on and
after the Effective Date and prior to the tenth Business Day prior to the
Maturity Date, following its receipt of the respective Letter of Credit Request,
issue within five (5) Business Days for the account of the U.S. Borrower,
subject to the terms and conditions of this Agreement, one or more Letters of
Credit in support of such L/C Supportable Obligations of the U.S. Borrower or
any of its or their Subsidiaries as are permitted to remain outstanding without
giving rise to a Default or an Event of Default, provided that the Issuing Bank
shall not issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any 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 such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the date hereof
and which the Issuing Bank reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ material to
it; or
(ii) the Issuing Bank shall have received notice from the
Administrative Agent at the direction of the Required Lenders prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 3.03(b).
3.02 Maximum Letter of Credit Outstandings; Final Maturities; etc.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings at such time, would exceed $100,000,000, (ii) no
Letter of Credit shall be issued if, after giving effect thereto, (x) the
Revolving Credit Exposure of any Lender would exceed its Revolving Loan
Commitment as then in effect or (y) the Aggregate Revolving Credit Exposure
would exceed the Total Revolving Loan Commitment as then in effect, (iii) each
Letter of Credit shall by its terms terminate on or before the earlier of (x)
the date which occurs 12 months after the date of the issuance thereof (although
any such Letter of Credit may be extendible for successive periods of up to 12
months, but not beyond the tenth Business Day prior to the Maturity Date (unless
on or before the date of issuance of such Letter of Credit the U.S. Borrower
cash collateralizes (it being understood such cash collateral will be held in an
interest bearing account under the sole dominion and control of the
Administrative Agent in which the Administrative Agent, for the benefit of the
Secured Parties, has a first priority security interest) the reimbursement
obligation with respect thereto with cash equal to 105% of the Stated Amount of
such Letter of Credit or delivers a back-to-back letter of credit in form
satisfactory to the Issuing Bank on terms acceptable to the Issuing Bank)) and
(y) the tenth Business Day prior to the Maturity Date (unless on or before the
Maturity Date the U.S. Borrower cash collateralizes the reimbursement obligation
with respect thereto with cash equal to 105% of the Stated Amount of such Letter
of Credit on terms acceptable to the Issuing Bank or delivers a back-to-back
letter of credit in form satisfactory to the Issuing Bank), (iv) each Letter of
Credit shall be denominated in
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Dollars and (v) the Stated Amount of each Letter of Credit shall be no less than
$500,000, or such lesser amount as is acceptable to the Issuing Bank.
(b) Notwithstanding the foregoing, in the event a Lender Default
exists, the Issuing Bank shall not be required to issue any Letters of Credit
unless the Issuing Bank has entered into arrangements satisfactory to it and the
U.S. Borrower to eliminate the Issuing Bank's risk with respect to the
participation in Letters of Credit of the Defaulting Lender or Lenders, which
may include cash collateralizing such Defaulting Lender's or Lenders' RL
Percentage of the Letter of Credit Outstandings.
3.03 Letter of Credit Requests; Notices of Issuance. 1. Whenever it
desires that a Letter of Credit be issued for its account, the U.S. Borrower
shall give the Administrative Agent and the Issuing Bank written notice thereof
prior to 1:00 P.M. (New York time) at least five Business Days' (or such shorter
period as is acceptable to the Issuing Bank) prior to the proposed date of
issuance (which shall be a Business Day). Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request") and may be delivered to the
Administrative Agent and the Issuing Bank by facsimile.
(b)The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the U.S. Borrower that (i) the requested
Letter of Credit may be issued in accordance with, and will not violate the
requirements of, Section 3.02 and (ii) all of the applicable conditions set
forth in Sections 6 and 7 shall be met at the time of such issuance. Unless the
Issuing Bank has received notice from the Administrative Agent at the direction
of the Required Lenders before it issues a Letter of Credit that one or more of
the conditions specified in Section 6 are not satisfied on the Effective Date or
Section 7 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 3.02, then the Issuing Bank shall issue the requested
Letter of Credit for the account of the U.S. Borrower in accordance with the
Issuing Bank's usual and customary practices. Promptly after the issuance of or
amendment to any Letter of Credit, the Issuing Bank shall notify the
Administrative Agent and the U.S. Borrower, in writing, of such issuance or
amendment and such notice shall be accompanied by a copy of such Letter of
Credit or amendment. Promptly after receipt of such notice, the Administrative
Agent shall notify each RL Lender in writing of such issuance or amendment and,
if so requested by any RL Lender, the Administrative Agent shall furnish such RL
Lender with a copy of the issued Letter of Credit or such amendment.
3.04 Letter of Credit Participations. a. Immediately upon the issuance
by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each RL Lender (other than the Issuing Bank) (each
such Lender with respect to any Letter of Credit, in its capacity under this
Section 3.04, a "Participant"), and each Participant shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation, in a
percentage equal to such Participant's Dollar Percentage, in such Letter of
Credit, each drawing or payment made thereunder and the obligations of the U.S.
Borrower under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto (although Letter of Credit Fees shall be paid
directly to the Administrative Agent for the ratable account of the RL Lenders
based on their Dollar Percentages as provided in Section 4.01(c) and the
Participants shall have no right to receive any portion of any Facing Fees);
provided that, upon the
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occurrence of a Sharing Event, the participations described above shall be
automatically adjusted so that each RL Lender shall have a participation in all
then outstanding Letters of Credit, and related obligations as described above,
in a percentage equal to its RL Percentage (which adjustments shall occur
concurrently with the adjustments described in Section 2.17). Upon any change in
the Revolving Loan Commitments or Dollar Percentages of the RL Lenders pursuant
to this Agreement (or in the circumstances provided in the proviso to the
immediately preceding sentence, the RL Percentages of the RL Lenders pursuant to
this Agreement), it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to
the participations pursuant to this Section 3.04 to reflect the new Dollar
Percentages or, in the circumstances described in the proviso to the immediately
preceding sentence, the RL Percentages of the various RL Lenders.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation relative to the Participants or any other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct (as finally determined by a court of competent
jurisdiction), shall not create for the Issuing Bank any resulting liability to
the U.S. Borrower, any other Credit Party, any Lender or any other Person.
(c) If the Issuing Bank makes any payment under any Letter of
Credit and the U.S. Borrower shall not have reimbursed such amount in full to
the Issuing Bank pursuant to Section 3.05(a), the Issuing Bank shall promptly
notify the Administrative Agent, and the Administrative Agent shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the benefit of the Issuing
Bank the amount of such Participant's Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) of such unreimbursed payment
in Dollars and in same day funds. If the Administrative Agent so notifies, prior
to 11:00 A.M. (New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the Administrative Agent for the benefit of the Issuing Bank, in Dollars,
such Participant's Dollar Percentage (or, after the occurrence of a Sharing
Event, its RL Percentage) of the amount of such payment on such Business Day in
same day funds; provided, however, that no Participant shall be obligated to pay
to the Administrative Agent for the benefit of the Issuing Bank its Dollar
Percentage (or, after the occurrence of a Sharing Event, its RL Percentage) of
such unreimbursed amount for (i) any wrongful payment made by the Issuing Bank
under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction) and (ii) with
respect to any Letter of Credit with an expiration date after the tenth Business
Day prior to the Maturity Date, any payment made by the Issuing Bank in excess
of the amount of cash collateral delivered by the U.S. Borrower pursuant to
Section 3.02(a)(iii)(y). If and to the extent such Participant shall not have so
made its Dollar Percentage (or, after the occurrence of a Sharing Event, its RL
Percentage) of the amount of such payment available to the Administrative Agent
for the benefit of the Issuing Bank, such Participant agrees to pay to the
Administrative Agent for the benefit of the Issuing Bank, forthwith on demand
such amount, together with interest thereon, for each day from such date
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until the date such amount is paid to the Administrative Agent for the benefit
of the Issuing Bank at the overnight Federal Funds Rate for the first three days
and at the interest rate applicable to Dollar Revolving Loans maintained as Base
Rate Loans hereunder for each day thereafter. The failure of any Participant to
make available to the Issuing Bank its Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) of any payment under any
Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to the Issuing Bank its Dollar Percentage (or, after
the occurrence of a Sharing Event, its RL Percentage) of any unreimbursed
payment with respect to a Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Administrative Agent for the benefit of the
Issuing Bank such other Participant's Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) of any such payment.
(d) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Bank shall pay to the
Administrative Agent for the benefit of each Participant which has paid its
Dollar Percentage (or, after the occurrence of a Sharing Event, its RL
Percentage) thereof, in Dollars and in same day funds, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, the Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the
Administrative Agent for the benefit of the Issuing Bank with respect to Letters
of Credit issued by it shall be irrevocable and not subject to any qualification
or exception whatsoever (except as otherwise provided in the proviso to the
second sentence of Section 3.04(c)) and shall be made in accordance with the
terms and conditions of this Agreement 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 Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which any Credit Party or any of its Subsidiaries or Affiliates may have at
any time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may be
acting), any Agent, the Issuing Bank, any Participant, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including
any underlying transaction between any Credit Party or any Subsidiary or
Affiliate of any Credit Party and the beneficiary named in any such Letter
of Credit);
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(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) subject to the provisions of Section 3.04(c), the fact that
the expiration date of any Letter of Credit is beyond the Maturity Date.
3.05 Agreement to Repay Letter of Credit Drawings. Subject to Section
3.05(b), the U.S. Borrower hereby agrees to reimburse the Issuing Bank, by
making payment in Dollars and in immediately available funds directly to the
Administrative Agent at the Payment Office for the benefit of the Issuing Bank,
for any payment or disbursement made by the Issuing Bank under any Letter of
Credit issued by it (with each such amount so paid, until reimbursed, an "Unpaid
Drawing"), immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by the Issuing
Bank, to the extent not reimbursed prior to 2:00 P.M. (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Issuing Bank was reimbursed by the U.S.
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Dollar Revolving Loans
maintained as Base Rate Loans; provided, however, to the extent such amounts are
not reimbursed prior to 12:00 Noon (New York time) on the third Business Day
following the receipt of notice of such payment or disbursement or upon the
occurrence of a Default or an Event of Default under Section 12.05, interest
shall thereafter accrue on the amounts so paid or disbursed by the Issuing Bank
(and until reimbursed by the U.S. Borrower) at a rate per annum which shall be
the Base Rate in effect from time to time plus the Applicable Margin for Dollar
Revolving Loans maintained as Base Rate Loans plus 2%, in each such case, with
interest to be payable on demand. The Issuing Bank shall give the U.S. Borrower
and the Administrative Agent prompt written notice of each Drawing under any
Letter of Credit, provided that except as provided in the immediately preceding
sentence, the failure to give any such notice shall in no way affect, impair or
diminish the U.S. Borrower's obligations hereunder.
(b) Notwithstanding the requirements of Section 3.05(a), unless
otherwise requested by the U.S. Borrower prior to 2:00 p.m. on the date of such
payment or disbursement made by the Issuing Bank under a Letter of Credit, any
reimbursement of an Unpaid Drawing in an amount equal to or exceeding $1,000,000
shall be effected by having such Unpaid Drawing amount treated as a Base Rate
Loan (which Base Rate Loan may be converted in accordance with the provisions of
Section 2.07).
(c) The obligations of the U.S. Borrower under this Section
3.05 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the U.S.
Borrower may have or have had against any Lender (including in its capacity as
issuer of any Letter of Credit or as Participant), including, without
limitation, any defense based upon the failure of any drawing under a Letter of
Credit
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(each a "Drawing") to conform to the terms of such Letter of Credit or any
nonapplication or misapplication by the beneficiary of the proceeds of such
Drawing or any other matter or circumstance referred to in clauses (i) through
(v) of Section 3.04(f); provided that the Issuing Bank shall be responsible for
any damages (excluding consequential damages) to the U.S. Borrower for its gross
negligence or willful misconduct (as finally determined by a court of competent
jurisdiction) in connection with drawings made under a Letter of Credit which
did not comply or conform to the terms of the respective Letter of Credit.
3.06 Increased Letter of Credit Costs. Subject to the provisions of
Section 2.13(b), if at any time after the date of this Agreement, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by the Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law),
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by the Issuing
Bank or participated in by any Participant, or (ii) impose on the Issuing Bank
or any Participant any other conditions relating, directly or indirectly, to
this Agreement; and the result of any of the foregoing is to increase the cost
to the Issuing Bank or any Participant of issuing, maintaining or participating
in any Letter of Credit, or reduce the amount of any sum received or receivable
by the Issuing Bank or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits or franchise
taxes based on net income of the Issuing Bank or such Participant pursuant to
the laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, upon written demand to the U.S. Borrower by the Issuing Bank or
such Participant (a copy of which certificate shall be sent by the Issuing Bank
or such Participant to the Administrative Agent), the U.S. Borrower shall pay to
the Issuing Bank or such Participant such additional amount or amounts as will
compensate the Issuing Bank or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 3.06, will give
prompt written notice thereof to the U.S. Borrower which notice shall include a
certificate submitted to the U.S. Borrower by the Issuing Bank or such
Participant (a copy of which certificate shall be sent by the Issuing Bank or
such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate the Issuing Bank or such Participant. The certificate
required to be delivered pursuant to this Section 3.06 shall, absent manifest
error, be final and conclusive and binding on the U.S. Borrower.
SECTION 4. Commitment Commission; Canadian Commitment Commission;
Fees; Reductions of Commitment.
4.01 Fees. The U.S. Borrower agrees to pay to the Administrative Agent
in Dollars for distribution to each Non-Defaulting Lender with a Revolving Loan
Commitment a commitment commission (the "Commitment Commission") for the period
from and including the Effective Date to, but excluding, the Maturity Date (or
such earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate per annum equal to the Applicable Commitment
Commission Percentage (as in effect from time to time) on the
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average daily Unutilized Revolving Loan Commitment of such Lender. Accrued
Commitment Commission shall be due and payable in arrears on each Quarterly
Payment Date and on the Maturity Date or such earlier date upon which the Total
Revolving Loan Commitment is terminated. In addition, the U.S. Borrower agrees
to pay to the Administrative Agent in Dollars for distribution to each Canadian
Lender (other than a Defaulting Lender) an additional commitment commission (the
"Canadian Commitment Commission") for the period from and including the
Effective Date to, but excluding, the Maturity Date (or such earlier date as the
Total Maximum Canadian Dollar Revolving Loan Sub-Commitment shall have been
terminated), computed at a rate per annum equal to .10% on the on the average
daily Unutilized Canadian Dollar Revolving Loan Sub-Commitment of such Lender.
Accrued Canadian Commitment Commission shall be due and payable in arrears on
each Quarterly Payment Date and on the Maturity Date or such earlier date upon
which the Total Maximum Canadian Dollar Revolving Loan Sub-Commitment is
terminated.
(b) The U.S. Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Lender with a Revolving Loan Commitment
(based on their respective Dollar Percentages or, for periods from and after the
occurrence of a Sharing Event, their respective RL Percentages) in Dollars, a
fee in respect of each Letter of Credit issued for the account of the U.S.
Borrower hereunder (the "Letter of Credit Fee"), in each case for the period
from and including the date of issuance of the respective Letter of Credit to
and including the date of termination of such Letter of Credit, computed at a
rate per annum equal to the Applicable Margin for Revolving Loans maintained as
Eurodollar Loans (as in effect from time to time) on the daily Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable on
each Quarterly Payment Date after the Effective Date and on the Maturity Date or
such earlier date upon which the Total Revolving Loan Commitment is terminated.
(c) The U.S. Borrower agrees to pay to the Issuing Bank, for its
own account, in Dollars, a facing fee in respect of each Letter of Credit issued
for the account of the U.S. Borrower by the Issuing Bank (the "Facing Fee"), for
the period from and including the date of issuance of such Letter of Credit to
and including the date of the termination of such Letter of Credit, computed at
a rate equal to 1/8 of 1% per annum of the daily Stated Amount of such Letter of
Credit; provided that in no event shall the annual Facing Fee with respect to
any Letter of Credit be less than $500. Accrued Facing Fees shall be due and
payable in arrears on each Quarterly Payment Date and on the Maturity Date or
such earlier date upon which the Total Revolving Loan Commitment is terminated.
(d) The U.S. Borrower shall pay, upon each payment under,
issuance of, or amendment to, any Letter of Credit, such amount as shall at the
time of such event be the administrative charge and the reasonable expenses
which the Issuing Bank is generally imposing for payment under, issuance of, or
amendment to, Letters of Credit issued by it, not to exceed $500 per issuance or
amendment.
(e) At the time of the incurrence of each Bankers' Acceptance
Loan, Acceptance Fees shall be paid by the respective Canadian Revolving Loan
Borrower as required by, and in accordance with, clause (g) of Schedule III.
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(f) The Borrowers shall pay to the Agents, for their own
accounts, such other fees as have been agreed to in writing by the Borrowers and
the Agents.
4.02 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment. Upon at least three Business Days' prior notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the U.S. Borrower shall have
the right, at any time or from time to time, without premium or penalty, to
terminate or partially reduce the Total Unutilized Revolving Loan Commitment;
provided that (x) any partial reduction pursuant to this Section 4.02 shall be
in an amount of at least $1,000,000 or, if greater, in integral multiples of
$1,000,000 thereof. Each reduction to the Total Unutilized Revolving Loan
Commitment pursuant to this Section 4.02 shall apply to reduce the Revolving
Loan Commitments of the various RL Lenders pro rata based on their respective RL
Percentages. The amount of any reduction to the Revolving Loan Commitment of any
Lender pursuant to this Section 4.02 shall reduce the U.S. Revolving Loan
Sub-Commitment and the Maximum Canadian Dollar Revolving Loan Sub-Commitments of
such Lender on a pro rata basis.
SECTION 5. Prepayments; Payments; Taxes.
5.01 Voluntary Prepayments. Each Borrower shall have the right to
prepay the Loans made to such Borrower, without premium or penalty (other than
amounts payable pursuant to Section 2.12), in whole or in part, at any time and
from time to time on the following terms and conditions:
(i) such Borrower shall give the Administrative Agent at the
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of (1) its intent to prepay such Loans, (2) whether Term Loans,
Dollar Revolving Loans or Canadian Revolving Loans shall be prepaid, (3)
the amount of such prepayment and the Types of Loans to be prepaid and (4)
in the case of Eurodollar Loans, the specific Borrowing or Borrowings to be
prepaid. Such notice shall be given by such Borrower prior to 12:00 Noon
(local time where the respective Payment Office is located) at least one
Business Day prior to the date of such prepayment, which notice the
Administrative Agent shall promptly transmit to each of the Lenders with
Loans of the respective Tranche and Type;
(ii) each prepayment shall be in an aggregate principal amount
at least equal to $1,000,000 or, in the case of Canadian Revolving Loans,
Canadian Revolving Loans having a Dollar Equivalent of $1,000,000 for the
applicable Tranche and Type of Loans, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an
amount less than the respective Minimum Borrowing Amount for such Tranche
and Type of Loans, then such Borrowing may not be continued as a Borrowing
of Eurodollar Loans and shall be converted to Base Rate Loans and any
election of an Interest Period with respect thereto shall have no force or
effect;
(iii) prepayments of Bankers' Acceptance Loans may not be made
prior to the maturity date of the respective Bankers' Acceptances;
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(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans, provided that until
the date on which the amount giving rise to a Lender Default of the
applicable Lender shall have been reduced to zero (whether by the funding
by such Defaulting Lender of any defaulted Loans of such Defaulting Lender
or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 5.01,
Section 5.02 or by a combination thereof), any prepayment in respect of
Loans shall not be applied to any Loan of a Defaulting Lender; and
(v) each voluntary prepayment of Term Loans pursuant to this
Section 5.01 shall apply to reduce the principal amount of the Term Loan
due on the Maturity Date.
5.02 Mandatory Repayments and Commitment Reductions.
(a) (i) On any day on which the Aggregate Revolving Credit
Exposure exceeds the Total Revolving Loan Commitment as then in effect, the
Revolving Loan Borrowers shall repay the principal of outstanding Revolving
Loans (other than Bankers' Acceptance Loans where the underlying Bankers'
Acceptances have not yet matured) (allocated between Dollar Revolving Loans
and Canadian Revolving Loans as the Revolving Loan Borrowers may elect) in
an amount (for this purpose, taking the Dollar Equivalent of payments made
with respect to the Canadian Revolving Loans) equal to such excess but if
any such repayment shall effect a repayment of a Eurodollar Loan prior to
the expiration of the applicable Interest Period, such repayment may be
delayed until the date of such expiration subject to compliance with the
provisions of Section 5.02(d), provided, that in determining whether such
excess exists, the Dollar Equivalent of Canadian Revolving Loans shall be
determined quarterly on each March 31, June 30, September 30 and December
31 except as otherwise provided in the definition of the term "Dollar
Equivalent". If, after giving effect to the prepayment of all outstanding
Revolving Loans (other than Bankers' Acceptance Loans as referenced in the
immediately preceding sentence), the sum of the outstanding Bankers'
Acceptance Loans (for this purpose, using the Dollar Equivalent of the Face
Amounts thereof) and Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment then in effect, (x) an amount equal to the lesser
of such excess and the then outstanding Face Amount of all Bankers'
Acceptances shall be deposited (and, so long as no Default or Event of
Default has occurred and is continuing, on any subsequent date on which any
such excess is determined, any such cash collateral shall be returned to
the applicable Borrower to the extent it exceeds the excess, if any,
determined on such subsequent date) by the respective Borrower with the
Administrative Agent as cash collateral for the obligations of the
respective Canadian Revolving Loan Borrower or Borrowers to the Canadian
Lenders (rounded up to the nearest integral multiple of Cdn.$100,000) in
respect of an equivalent Face Amount of outstanding Bankers' Acceptances
accepted by the Canadian Lenders which shall be paid to and applied by the
Canadian Lenders, in satisfaction of the obligations to the Canadian
Lenders of the respective Canadian Revolving Loan Borrower or Borrowers in
respect of such Banker's Acceptances, on the maturity date thereof, and (y)
to the extent such excess exceeds the amount applied pursuant to preceding
clause (x), the respective Borrowers shall pay to the Administrative
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Agent cash or Cash Equivalents in an amount equal to the amount of such
excess (less the amount applied pursuant to preceding clause (x)) (up to a
maximum amount equal to the Letter of Credit Outstandings at such time),
such cash or Cash Equivalents to be held as security for all obligations of
the respective Borrowers hereunder and under the other Credit Documents in
a cash collateral account (and invested from time to time in Cash
Equivalents selected by the Administrative Agent) to be established by the
Administrative Agent.
(ii) If on any date the Dollar Equivalent of the aggregate
outstanding principal amount (or Face Amount, as the case may be) of
Canadian Revolving Loans exceeds the Canadian Dollar Revolving Loan
Sub-Commitments of the Canadian Lenders as then in effect, the respective
Canadian Revolving Loan Borrowers shall prepay on such day the principal of
outstanding Canadian Revolving Loans (for this purpose, taking the Dollar
Equivalent of payments in any Canadian Dollars made with respect to
Canadian Revolving Loans) (other than Bankers' Acceptance Loans where the
underlying Bankers' Acceptances have not matured) equal to such excess,
provided, that in determining whether such excess exists, the Dollar
Equivalent of Canadian Revolving Loans shall be determined quarterly on
each March 31, June 30, September 30 and December 31 except as otherwise
provided in the definition of the term "Dollar Equivalent". In the case of
Canadian Revolving Loans, if after giving effect to the prepayment of all
outstanding Canadian Revolving Loans (other than Bankers' Acceptance Loans
where the underlying Bankers' Acceptances have not yet matured), the sum of
the aggregate Face Amount of outstanding Bankers' Acceptance Loans (for
this purpose, using the Dollar Equivalent of the Face Amounts thereof)
exceeds the sum of the Canadian Dollar Revolving Loan Sub-Commitments of
the various Canadian Lenders as then in effect, an amount equal to such
excess shall be deposited (and, so long as no Default or Event of Default
has occurred and is continuing, on any subsequent date on which any such
excess is determined, any such cash collateral shall be returned to the
applicable Borrower to the extent it exceeds the excess, if any, determined
on such subsequent date) by the respective Canadian Revolving Loan Borrower
with the Administrative Agent as cash collateral for the obligations of the
respective Canadian Revolving Loan Borrower or Borrowers to the Canadian
Lenders (rounded up to the nearest integral multiple of Cdn.$100,000) in
respect of an equivalent Face Amount of outstanding Bankers' Acceptances
accepted by the Canadian Lenders which shall be paid to and applied by the
Canadian Lenders, in satisfaction of the obligations to the Canadian
Lenders of the respective Canadian Revolving Loan Borrower or Borrowers in
respect of such Banker's Acceptances, on the maturity date thereof.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 5.02, in the event that the aggregate Net
Sale Proceeds received by the U.S. Borrower or any of its Subsidiaries from one
or more Asset Sales occurring on or after the Effective Date in any period of 12
consecutive months exceed 1% of Adjusted Total Assets (determined as of the date
closest to the commencement of such 12-month period for which a consolidated
balance sheet of the U.S. Borrower and its Subsidiaries has been filed with the
SEC or delivered to the Administrative Agent pursuant to Section 10.11), an
amount equal to 100% of the Net Sale Proceeds from all Asset Sales effected
during such 12 month period shall be applied at such time as a mandatory
repayment and/or commitment reduction in
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accordance with the requirements of Section 5.02(c); provided, however, that the
Net Sale Proceeds from any such Asset Sale shall not be required to be so
applied on such date so long as no Event of Default then exists and such Net
Sale Proceeds shall be used or contractually committed to be used pursuant to a
binding agreement (subject only to reasonable, customary closing conditions) (A)
to purchase fixed assets and property (other than notes, bonds, obligations and
securities) which in the good faith reasonable judgment of the Board of
Directors of the U.S. Borrower will immediately constitute or be part of a
Related Business of the U.S. Borrower or such Subsidiary (if it continues to be
a Subsidiary of the U.S. Borrower) immediately following such transaction, (B)
to make Investments permitted by Section 11 constituting Permitted Mortgage
Investments and/or (C) to purchase at least a controlling interest in the
capital stock or other equity of a Person engaged in a Related Business, and
pursuant to a transaction otherwise permitted under this Agreement (provided
that, concurrently with a purchase described in this clause (C), such Person
becomes a Subsidiary of the U.S. Borrower), in each case within 364 days (or
earlier to the extent required to be so applied pursuant to the terms of any
other outstanding Indebtedness) following the date of such Asset Sale, it being
understood, however, that (I) if all or any portion of such Net Sale Proceeds
are not so used (or contractually committed to be used) within such 364 day
period (or earlier period, as the case may be) or (II) if all or any portion of
such Net Sale Proceeds is contractually committed to be used as provided above
within the 364 day period (or earlier period, as the case may be) and is not
actually used within an additional 180 day period, such remaining portion (in
either case) shall be applied on the last day of the respective period as a
mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 5.02(c); and provided further, that so long as no
Specified Default or Event of Default then exists, no mandatory repayment or
commitment reduction shall be required pursuant to this Section 5.02(b) until
the date on which the aggregate Net Sale Proceeds not so reinvested within the
time periods specified above equals or exceeds $25,000,000.
(c) Each amount required to be applied pursuant to this clause
(c) as a result of the requirements of Section 5.02(b) shall be applied (after
any conversion by the respective Borrower of any amounts received in a currency
other than Dollars in the case of the U.S. Borrower or Canadian Dollars in the
case of the Canadian Revolving Loan Borrowers into Dollars or Canadian Dollars,
respectively): unless otherwise directed by the U.S. Borrower, (i) first, to
repay the outstanding principal amount of Term Loans, and (ii) second, to the
extent in excess thereof, to repay (with a corresponding commitment reduction)
the outstanding principal amount of Revolving Loans other than Bankers'
Acceptance Loans (allocated between Dollar Revolving Loans and Canadian
Revolving Loans as the relevant Borrowers may elect). All mandatory repayments
of Term Loans made pursuant to this Section 5.02(c), shall be applied to reduce
the then remaining principal amount of the Term Loan due at the Maturity Date.
(d) With respect to each repayment of Loans required by this
Section 5.02, the respective Borrower may designate the Types of Loans of the
respective Tranche which are to be repaid and, in the case of Eurodollar Loans
and Bankers' Acceptance Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which made, provided that: (i) in the case of
repayments of Dollar Loans, repayments of Eurodollar Loans of the respective
Tranche pursuant to this Section 5.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans of the respective
Tranche with Interest Periods ending on such date of required repayment and all
Base Rate Loans of the
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respective Tranche have been paid in full; (ii) if any repayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the respective Minimum
Borrowing Amount for the respective Tranche and Type of Loan, such Borrowing
shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans; (iii) no repayment of Bankers' Acceptance Loans
may be made prior to the maturity date of the related Bankers' Acceptances; and
(iv) each repayment of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans. In the absence of a designation by the respective
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion.
Notwithstanding the foregoing provisions of this Section 5.02, if at any time
the mandatory prepayment of Loans pursuant to Section 5.02(a) or 5.02(c) would
result, after giving effect to the procedures set forth above, in any Borrower
incurring breakage costs under Section 2.12 as a result of Eurodollar Loans
being prepaid other than on the last day of an Interest Period applicable
thereto (the "Affected Eurodollar Loans"), then the U.S. Borrower may in its
sole discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent (which deposit must be equal in amount to the amount of
Affected Eurodollar Loans not immediately prepaid) to be held as security for
the obligations of the U.S. Borrower hereunder pursuant to a cash collateral
agreement (which shall permit investments in Cash Equivalents satisfactory to
the Administrative Agent) to be entered into in form and substance reasonably
satisfactory to the Administrative Agent (which agreement shall provide for the
payment of interest to U.S. Borrower in respect of such deposit), with such cash
collateral to be directly applied upon the first occurrence (or occurrences)
thereafter of the last day of an Interest Period applicable to the relevant
Loans that are Eurodollar Loans (or such earlier date or dates as shall be
requested by the U.S. Borrower), to repay an aggregate principal amount of such
Loans equal to the Affected Eurodollar Loans not initially repaid pursuant to
this sentence. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, all amounts deposited as cash collateral
pursuant to the immediately preceding sentence shall be held for the benefit of
the Lenders whose Loans would otherwise have been immediately repaid with the
amounts deposited and upon the taking of any action by the Administrative Agent
or the Lenders pursuant to the remedial provisions of Section 12, any amounts
held as cash collateral pursuant to this Section 5.02(d) shall, subject to the
requirements of applicable law, be immediately applied to the relevant Loans.
Until actually applied to the repayment of Eurodollar Loans, interest shall
continue to accrue thereon.
(e) Notwithstanding anything to the contrary contained in this
Agreement, the Borrowers shall repay in full all outstanding Loans on the
earlier of (i) the Maturity Date and (ii) the date on which a Change of Control
occurs.
(f) The Total Revolving Loan Commitment shall be reduced
permanently on the date and by the amount of any repayment of Revolving Loans
made pursuant to Section 5.02(b).
(g) The Total Revolving Loan Commitment shall be reduced
permanently as set forth in Section 2.01(b) on the Conversion Date by the amount
of the Term Loan made on such date.
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(h) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 5.02 shall be applied proportionately to reduce the
Revolving Loan Commitment of each Lender with such a Commitment. The amount of
any reduction to the Revolving Loan Commitment of any Lender pursuant to this
Section 5.02 shall reduce the U.S. Revolving Loan Sub-Commitment and the Maximum
Canadian Dollar Revolving Loan Sub-Commitment of such Lender on a pro rata
basis.
(i) Until the date on which the amount giving rise to a Lender
Default of the applicable Lender shall have been reduced to zero (whether by the
funding by such Defaulting Lender of any defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in accordance with the terms of Section 5.01, Section
5.02 or by a combination thereof), any prepayment in respect of Loans shall not
be applied to any Loan of a Defaulting Lender.
5.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 1:00 P.M. (local time in the city in which the Payment
Office for the respective payments is located) on the date when due and shall be
made in (x) Dollars in immediately available funds at the appropriate Payment
Office of the Administrative Agent in respect of any obligation of the Borrowers
under this Agreement except as otherwise provided in the immediately following
clause (y) and (y) subject to the provisions of Section 2.17, in Canadian
Dollars in immediately available funds at the appropriate Payment Office (which
must be located in Canada) of the Administrative Agent, if such payment is made
in respect of (i) principal of, the Face Amount of or interest on Canadian
Revolving Loans, or (ii) any increased costs, indemnities or other amounts owing
with respect to Canadian Revolving Loans (or Commitments relating thereto), in
the case of this clause (ii) to the extent the respective Lender which is
charging same denominates the amounts owing in Canadian Dollars. The
Administrative Agent will thereafter cause to be distributed on the same day (if
payment was actually received by the Administrative Agent prior to 12:00 Noon
(local time in the city in which such payments are to be made)) like funds
relating to the payment of principal, interest or Fees ratably to the Lenders
entitled thereto. Any payments under this Agreement which are made later than
12:00 Noon (local time in the city in which such payments are to be made) shall
be deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest and fees shall be payable at the applicable rate during such extension.
5.04 Net Payments. All payments made by any Borrower hereunder or
under any Note or other Credit Document will be made without setoff,
counterclaim or other defense. Except as provided in Sections 5.04(b) and (c),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
profits of a Lender pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which it is resident or the jurisdiction in
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which the principal office or applicable lending office or other permanent
establishment of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect thereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, subject to Section 5.04(b), the respective Borrower agrees to pay
the full amount of such Taxes, and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement or under any Note
or other Credit Document, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note
or other Credit Document. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, subject to Section 5.04(b), the respective
Borrower agrees to reimburse each Lender, upon the written request of such
Lender, for the net additional amount of taxes imposed on or measured by the net
income or profits of such Lender pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which the principal office or applicable lending office
of such Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The respective Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the respective Borrower. Each Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender and any
liability (including penalties, interest and expenses) arising from or with
respect to such Taxes whether or not they were correctly or legally asserted.
(b) Each Lender (other than any Canadian Lender with Maximum
Canadian Dollar Revolving Loan Sub-Commitments only) that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the U.S. Borrower and the Administrative Agent on or prior to the
Effective Date, or in the case of any such Lender (other than any Canadian
Lender with Maximum Canadian Dollar Revolving Sub-Commitments only) that is an
assignee or transferee of an interest under this Agreement pursuant to Section
2.14 or 14.03 (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (or
successor forms) certifying to such Lender's entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if such Lender is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D (any
such certificate, a "Section 5.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (or
successor form) certifying to such Lender's entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each such Lender agrees that from time to time after the Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the U.S.
Borrower
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and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI or Form W-8BEN, or Form W-8 and a
Section 5.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the U.S. Borrower and the Administrative Agent of its inability to
deliver any such form or certificate in which case such Lender shall not be
required to deliver any such form or certificate pursuant to this Section
5.04(b). Notwithstanding anything to the contrary contained in Section 5.04(a),
but subject to Section 14.03 and the immediately succeeding sentence, (x) each
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender (other
than any Canadian Lender with Maximum Canadian Dollar Revolving Loan
Sub-Commitments only) which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
to the extent that such Lender has not provided to the U.S. Borrower U.S.
Internal Revenue Service forms that establish a complete exemption from such
deduction or withholding and (y) the Borrowers shall not be obligated pursuant
to Section 5.04(a) hereof to gross-up payments to be made to a Lender (other
than any Canadian Lender with Maximum Canadian Dollar Revolving Loan
Sub-Commitments only) in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the U.S. Borrower the
Internal Revenue Service Forms required to be provided by it to the U.S.
Borrower pursuant to this Section 5.04(b) or (II) in the case of a payment,
other than interest, to a Lender described in clause (ii) above, to the extent
that such forms do not establish a complete exemption from withholding of such
taxes. Notwithstanding anything to the contrary contained in the immediately
preceding sentence or elsewhere in this Section 5.04 (other than clause (e)
below) and except as set forth in Section 14.03, each Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 5.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
that are effective after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
(c) Each Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions and subject to overall policy considerations of such
Lender) to file any certificate or document or to furnish any information as
reasonably requested by the U.S. Borrower pursuant to any applicable treaty, law
or regulation if the making of such filing or the furnishing of such information
would avoid the need for or reduce the amount of any additional amounts payable
by the respective Borrower and would not, in the sole discretion of such Lender,
be disadvantageous to such Lender.
(d) Nothing in this Section 5.04 shall require any Lender (or any
Eligible Transferee) or the Administrative Agent to make available any of its
tax returns (or any other information that it deems to be confidential or
proprietary, in its sole discretion).
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(e) If any Canadian Lender is not resident in Canada for the
purpose of Income Tax Act (Canada) or an authorized foreign bank which at all
times holds all of its interest in any Canadian Obligations in the course of its
Canadian banking business for purposes of subsection 212(13.3) of the Income Tax
Act (Canada), or otherwise able to establish to the satisfaction of the Canadian
Revolving Loan Borrowers and the Administrative Agent based on Applicable Law in
effect on the Effective Date or on such later date on which it becomes a
Canadian Lender that such Lender is not subject to deduction or withholding of
income or similar Taxes imposed by Canada (or any political subdivision or
taxing authority thereof or therein) ("Canadian Taxes") with respect to any
payments to such Lender of interest, fees, commissions, or any other amount
payable by any Canadian Revolving Loan Borrower under the Credit Documents, on
the Effective Date or on such later date on which it becomes a Canadian Lender:
(i) the Canadian Revolving Loan Borrowers shall be entitled, to the extent that
they are required to do so by Applicable Law, to deduct or withhold Canadian
Taxes from interest, fees, commissions or other amounts payable under this
Agreement for the account of any Canadian Lender which is not a resident of
Canada for the purpose of the Income Tax Act (Canada) to the extent that such
Lender has not previously established to the satisfaction of the Administrative
Agent and the Canadian Revolving Loan Borrowers a complete exemption from such
deduction or withholding; and (ii) the Canadian Revolving Loan Borrowers shall
not be obligated pursuant to Section 5.04(a) to gross-up payments to be made to
such Canadian Lender in respect of Canadian Taxes. Notwithstanding anything to
the contrary contained in this Section 5.04, the Canadian Revolving Loan
Borrowers agree to pay any additional amounts and to indemnify the applicable
Canadian Lender in the manner set forth in Section 5.04(a) (without regard to
the identity of the jurisdiction requiring the deduction or withholding) in
respect of any incremental Canadian Taxes deducted or withheld by it as
described in the immediately preceding sentence following any changes after the
Effective Date (or after the date such Lender became a Canadian Lender, as
applicable) in any applicable law, or in the interpretation thereof, relating to
the deducting or withholding of such Canadian Taxes to the extent, and only to
the extent, that the obligation to pay such incremental Canadian Taxes arises as
a consequence of such change in applicable law.
SECTION 6. Conditions Precedent to Initial Credit Events. The
obligation of each Lender to make Loans, and the obligation of the Issuing Bank
to issue Letters of Credit, on the Effective Date, is subject to the
satisfaction of the following conditions:
6.01 Execution of Agreement; Notes. On or prior to the Effective Date,
there shall have been delivered to the Administrative Agent (i) for the account
of each of the Lenders (subject to Section 2.06(f)) the appropriate Notes
executed by the appropriate Borrower or Borrowers, in each case in the amount,
maturity and as otherwise provided herein and (ii) such Drafts and powers of
attorney executed by the Canadian Revolving Loan Borrowers as may be requested
by the Canadian Lenders pursuant to Schedule III.
6.02 Opinions of Counsel. On the Effective Date, the Administrative
Agent shall have received (i) from ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel to
HMC, and counsel to the Borrower, an opinion addressed to the Administrative
Agent and each of the Lenders and dated the Effective Date covering the matters
set forth in Exhibit E-1 and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request, (ii)
from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., special counsel to the Credit Parties, an opinion
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addressed to the Administrative Agent and each of the Lenders and dated the
Effective Date covering the matters set forth in Exhibit E-2 and such other
matters incident to the transactions contemplated herein as the Administrative
Agent may reasonably request, and (iii) from each of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, and ▇▇▇ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, special Canadian counsel to the Credit
Parties, an opinion addressed to the Administrative Agent and each of the
Lenders and dated the Effective Date covering the matters set forth in Exhibits
E-3 and E-4, respectively, and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request.
6.03 Corporate Documents; Proceedings; etc. 1. On the Effective Date,
the Administrative Agent shall have received a certificate, dated the Effective
Date, signed by the Secretary or an Assistant Secretary of each Credit Party (or
from the Secretary or an Assistant Secretary of the general partner of each
Credit Party that is a limited partnership), in the form of Exhibit F with
appropriate insertions, together with copies of the declaration of trust,
certificate of incorporation and by-laws or other organizational documents
(including partnership agreements and certificates of partnership and limited
liability company agreements and certificates of limited liability company) of
each such Credit Party and the resolutions of each Credit Party referred to in
such certificate, and the foregoing shall be reasonably acceptable to the
Administrative Agent.
(b) All trust, corporate, partnership, limited liability company
and legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other documents in effect on
the Effective Date shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Required Banks, and the Administrative Agent shall
have received all information and copies of all documents and papers, including
records of corporate and partnership proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Administrative
Agent may have reasonably requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate, partnership or
governmental authorities.
(c) On the Effective Date, the Administrative Agent shall have
received a certificate, dated the Effective Date and signed by an Authorized
Officer of the U.S. Borrower, certifying that all of the applicable conditions
set forth in Sections 6.07, 6.08 and 6.12 have been satisfied as of the
Effective Date (except to the extent that any such conditions require a
determination to be made by the Administrative Agent and/or the Required Banks).
6.04 Fees, etc. On the Effective Date, all costs, fees and expenses,
and all other costs contemplated by this Agreement, due to the Agents and the
Lenders (including, without limitation, legal fees and expenses) shall have been
paid to the extent then due.
6.05 Pledge and Security Agreement. On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered an amended and restated
Pledge and Security Agreement in the form of Exhibit G (as modified,
supplemented or amended from time to time, the "Pledge and Security Agreement")
covering all of such Credit Party's present and future Pledge and Security
Agreement Collateral, together with (to the extent not theretofore delivered
pursuant to the Original Credit Agreement):
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(a) all of the certificated Pledged Securities, if any, referred
to therein and then owned by such Credit Party, together with executed and
undated stock powers in blank or such other instruments of transfer as may be
reasonably requested by the Administrative Agent;
(b) proper financing statements (Form UCC-1) for filing under the
UCC or other appropriate filing offices of each jurisdiction as may be necessary
or, in the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Pledge and Security Agreement;
(c) certified copies of requests for information or copies (Form
UCC- 11), or equivalent reports, listing all effective financing statements that
name such Credit Party as debtor and that are filed in the jurisdictions
referred to in clause (b) above, together with copies of such other financing
statements that name such Credit Party as debtor (none of which shall cover the
Pledge and Security Agreement Collateral except to the extent evidencing
Permitted Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3 or such other termination statements as shall
be required by local law) for filing);
(d) evidence of the completion of (or the Administrative Agent
shall be reasonably satisfied that arrangements are in place to complete) all
other recordings and filings of, or with respect to, the Pledge and Security
Agreement (and delivery of control agreements among the pledgor, pledgee and
issuer) as may be necessary or, in the reasonable opinion of the Collateral
Agent, desirable to perfect the security interests intended to be created by the
Pledge and Security Agreement; and
(e) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Pledge and Security Agreement
have been taken (or the Administrative Agent shall be reasonably satisfied that
arrangements are in place to perfect and protect such security interests).
6.06 Subsidiaries Guaranty. On the Effective Date, each Guarantor (as
listed on Part I of Schedule IV) shall have duly authorized, executed and
delivered a guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time, the "Subsidiaries Guaranty").
6.07 Adverse Change, etc. 1. Since December 31, 2001, nothing shall
have occurred (and neither the Administrative Agent nor any of the Lenders shall
have become aware of any facts, conditions or other information not previously
known) which the Administrative Agent or the Required Lenders shall determine
has had, or believe could reasonably be expected to have, a Material Adverse
Effect.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and material third party approvals and consents in
connection with the transactions contemplated by the Credit Documents to occur
on or prior to the Effective Date and otherwise referred to herein or therein
shall have been obtained and remain in effect, and all
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applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated by the Credit Documents.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the transactions contemplated by the Credit Documents to occur
on or prior to the Effective Date.
6.08 Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or threatened (i) with respect to any
Credit Document or the transactions contemplated thereby or (ii) which the
Administrative Agent or the Required Lenders shall determine could reasonably be
expected to have a Material Adverse Effect.
6.09 Original Credit Agreement. On the Effective Date, (i) all
outstanding loans under the Original Credit Agreement shall be prepaid in full,
together with interest thereon and all other amounts owing pursuant to the
Original Credit Agreement (whether or not any such amounts are due on the
Effective Date pursuant to the terms thereof) and (ii) all outstanding
commitments under the Original Credit Agreement shall be terminated.
6.10 Solvency Certificate; Insurance Certificates. On or prior to the
Effective Date, there shall have been delivered to the Administrative Agent:
(a) a solvency certificate in the form of Exhibit I, addressed to
the Administrative Agent and each of the Lenders and dated the Effective Date
from an Authorized Financial Officer of the U.S. Borrower providing the opinion
of such Authorized Financial Officer as to the solvency of the U.S. Borrower and
its Subsidiaries taken as a whole and the U.S. Borrower on a stand-alone basis;
and
(b) certificates of insurance or other information regarding the
compliance by the U.S. Borrower with the requirements of Section 10.04 for the
business and properties of the U.S. Borrower and its Subsidiaries, in each case
in scope, form and substance reasonably satisfactory to the Administrative
Agent.
6.11 Financial Statements; Projections. On or prior to the Effective
Date, the Administrative Agent shall have received the financial statements and
the Projections referred to in Section 8.05(d), all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent and the
Required Lenders.
6.12 No Default; Representations and Warranties. On the Effective
Date, (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the
Effective Date (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
The occurrence of the Effective Date shall constitute a representation and
warranty by each of the Borrowers to the Administrative Agent and each of the
Lenders that all the conditions specified in this Section 6 exist as of the
Effective Date (except to the extent that any of the
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conditions specified in this Section 6 are required to be satisfactory to or
determined by any Lender, the Required Lenders, the Collateral Agent and/or the
Administrative Agent or otherwise expressly calls for a subjective determination
to be made by any Lender, the Required Lenders, the Collateral Agent and/or the
Administrative Agent). All of the Notes, certificates, legal opinions and other
documents and papers referred to in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
benefit of each of the Lenders and shall be in form and substance reasonably
satisfactory to the Lenders.
SECTION 7. Conditions Precedent to All Credit Events. The obligation
of each Lender to make Loans (including Loans made on the Effective Date, but
excluding Term Loans, which shall be made as provided in Section 2.01(b)), and
the obligation of any Issuing Bank to issue any Letter of Credit, is subject, at
the time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
7.01 No Default; Representations and Warranties. At the time of such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
7.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (other than a Term Loan), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section 2.03(a).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 3.03.
The acceptance of the proceeds of each Loan or the making of each
Letter of Credit Request (occurring on the Effective Date and thereafter) shall
constitute a representation and warranty by each Credit Party to the
Administrative Agent and each of the Lenders that all the conditions specified
in Section 6 (with respect to Credit Events on the Effective Date) and in this
Section 7 (with respect to Credit Events on and after the Effective Date) and
applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 7, unless otherwise specified, shall be delivered to the Administrative
Agent at the Notice Office for the account of each of the Lenders and, except
for the Notes, in sufficient counterparts or copies for each of the Lenders and
shall be in form and substance reasonably satisfactory to the Administrative
Agent and the Required Lenders.
SECTION 8. Representations, Warranties and Agreements. Each Borrower
makes the following representations, warranties and agreements:
8.01 Status. Each of the U.S. Borrower and each of its Subsidiaries
(i) is a duly organized and validly existing corporation, partnership or limited
liability company, as the case
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may be, in good standing (if applicable) under the laws of the jurisdiction of
its organization, (ii) has the corporate, partnership or limited liability
company power and authority, as the case may be, to own or lease its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
requires such qualification except (in the case of clauses (i), (ii) and (iii))
for failures which, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
8.02 Power and Authority. Each Credit Party has the corporate,
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is a party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is a party, and each of such Credit Documents constitutes
the legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance (but
only with respect to any guaranties or security interests given by a Guarantor),
reorganization or other similar laws generally affecting creditors' rights and
by equitable principles (regardless of whether enforcement is sought in equity
or at law).
8.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any applicable law, statute, rule or regulation or any applicable order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Pledge and Security Agreement) upon any of the
properties or assets of the U.S. Borrower or any of its Subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which the
U.S. Borrower or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject, except for violations
and defaults that may arise under contracts of the U.S. Borrower or a Subsidiary
thereof otherwise permitted under this Agreement as a result of the sale of, or
foreclosure of a lien upon, the Securities (as defined in the Pledge and
Security Agreement) of Subsidiaries pledged under the Pledge and Security
Agreement to the extent that the prior consent of other parties to such
contracts has not been obtained or other actions specified in such contracts
have not been taken in connection with any such sale or foreclosure or (iii)
will violate any provision of the certificate of incorporation, partnership
agreement, certificate of partnership, limited liability company agreement or
by-laws, as the case may be, of the U.S. Borrower or any of its Subsidiaries.
The Obligations constitute indebtedness issued to replace the Credit Facility,
as such term is defined in the Senior Note Indenture.
8.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in
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connection with, (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
8.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. The consolidated balance sheets of the U.S.
Borrower and its Subsidiaries for the fiscal year ended December 31, 2001 and
the fiscal quarter ended March 22, 2002, and the related consolidated statements
of income, cash flows and shareholders' equity of such Persons for the fiscal
year and fiscal quarter ended on such dates, as the case may be, copies of which
have been furnished to the Lenders on or prior to the Effective Date, present
fairly in all material respects the consolidated financial position of the U.S.
Borrower and its Subsidiaries at the date of such balance sheets and the
consolidated results of the operations of such Persons for the periods covered
thereby. All of the foregoing financial statements have been prepared in
accordance with GAAP consistently applied. Except as, and to the extent,
disclosed in the U.S. Borrower's Form 10-K for the fiscal year ended December
31, 2001, since December 31, 2001, nothing has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect.
(b) On and as of the Effective Date and on the date on which each
Loan is made or each Letter of Credit is issued, on a Pro Forma Basis after
giving effect to all Indebtedness (including the Loans and the Letters of
Credit) being incurred or assumed and Liens created by each Credit Party in
connection therewith, (x) the sum of the assets, at a fair valuation, of the
U.S. Borrower and its Subsidiaries (taken as a whole) and the U.S. Borrower (on
a stand-alone basis) will exceed their respective debts, (y) the U.S. Borrower
and its Subsidiaries (taken as a whole) and the U.S. Borrower (on a stand-alone
basis) have not incurred and do not intend to incur, and do not believe that
they will incur, debts beyond their ability to pay such debts as such debts
mature and (z) the U.S. Borrower and its Subsidiaries (taken as a whole) and the
U.S. Borrower (on a stand-alone basis) have sufficient capital with which to
conduct its business. For purposes of this Section 8.05(b) "debt" means any
liability on a claim, and "claim" means (i) the right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, secured or
unsecured, in each case, to the extent of the reasonably anticipated liability
thereof, as determined by the U.S. Borrower in good faith or (ii) the absolute
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully disclosed in the financial statements (and
footnotes applicable thereto) referred to in Section 8.05(a) or in the Schedules
to this Agreement, there were as of the Effective Date no liabilities or
obligations with respect to the U.S. Borrower or any of its Subsidiaries
(whether absolute, accrued, contingent or otherwise and whether or not due) of a
nature required to be set forth in a balance sheet or footnote thereto prepared
in accordance with GAAP which, either individually or in the aggregate, would be
material to the U.S. Borrower or the U.S. Borrower and its Subsidiaries taken as
a whole. As of the Effective Date, the U.S. Borrower does not know of any
liability or obligation of itself or any of its Subsidiaries of any such nature
that is not fully disclosed in the financial statements referred to in Section
8.05(a) or in the footnotes thereto which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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(d) On and as of the Effective Date, the projections previously
delivered to the Administrative Agent and the Lenders (the "Projections") have
been prepared on a basis consistent in all material respects with the financial
statements referred to in Section 8.05(a) (other than as set forth or presented
in such Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to any Borrower to
be misleading in any material respect or which fail to take into account known
material information regarding the matters reported therein. On the Effective
Date, the U.S. Borrower believes that the Projections are reasonable and
attainable.
8.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of any Borrower, threatened (i) which purports to
affect the legality, validity or enforceability of any Credit Document or (ii)
that could reasonably be expected to have a Material Adverse Effect.
8.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of U.S. Borrower or any of its Subsidiaries in
writing to the Administrative Agent or any Lender (including, without
limitation, all information contained in the Credit Documents) for purposes of
or in connection with or pursuant to this Agreement, the other Credit Documents
or any of the other transactions contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of U.S. Borrower or any of its Subsidiaries in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and, to
the best of each Borrower's knowledge, not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information is or was provided.
8.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be used by the U.S. Borrower and its Subsidiaries, subject to the
other restrictions set forth in this Agreement, for their working capital and
general corporate, partnership or limited liability company purposes. Each
Letter of Credit shall be used in support of any purpose not prohibited by this
Agreement or the other Credit Documents.
(b) No part of the proceeds of any Loan, and no Letter of Credit,
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof nor the issuance of any Letter of
Credit will violate or be inconsistent with the provisions of Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
8.09 Tax Returns and Payments. Each of the U.S. Borrower and each of
its Subsidiaries has timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal, material state and other material returns, statements,
forms and reports for taxes (the "Returns") required to be filed by or with
respect to the income, properties or operations of the U.S. Borrower and/or its
Subsidiaries. The Returns accurately reflect in all material respects all
material liability for taxes of the U.S. Borrower and its Subsidiaries for the
periods covered thereby except for amounts for which adequate reserves have been
established in accordance with GAAP. Each of the U.S.
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Borrower and each of its Subsidiaries has paid all material taxes payable by
them other than taxes which are not delinquent, and other than those contested
in good faith and for which adequate reserves have been established in
accordance with GAAP. There is no action, suit, proceeding, investigation,
audit, or claim now pending or, to the best knowledge of each Borrower,
threatened by any authority regarding any taxes relating to the U.S. Borrower or
any of its Subsidiaries which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. As of the Effective
Date, the U.S. Borrower and each of its Subsidiaries have properly accrued
adequate reserves in accordance with GAAP for any amount of taxes in dispute for
a Return which is the subject of any waiver extending the statute of limitations
relating to the payment or collection of taxes of the U.S. Borrower or any of
its Subsidiaries.
8.10 Compliance with ERISA. (a) Each Plan that is a single employer
plan as defined in Section 4001(a)(15) of ERISA (a "Single Employer Plan") is in
substantial compliance with ERISA and the Code; no Reportable Event has occurred
with respect to a Single Employer Plan; no Single Employer Plan is insolvent or
in reorganization; to the best knowledge of the Borrowers, no Multiemployer Plan
is insolvent or in reorganization; no Single Employer Plan has an Unfunded
Current Liability; no Single Employer Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such Sections of the Code or ERISA, or has applied for or
received an extension of any amortization period within the meaning of Section
412 of the Code or Section 303 or 304 of ERISA; all contributions required to be
made by the U.S. Borrower or any of its Subsidiaries or any ERISA Affiliate with
respect to a Plan and a Foreign Pension Plan have been timely made; neither the
U.S. Borrower nor any of its Subsidiaries nor any ERISA Affiliate has incurred
any material liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code or reasonably expects to
incur any material liability (including any indirect, contingent, or secondary
liability) under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Single Employer Plan; to the best knowledge of each Borrower, no proceedings
have been instituted to terminate or appoint a trustee to administer any
Multiemployer Plan; no condition exists which presents a substantial risk to the
U.S. Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
material liability to or on account of a Single Employer Plan pursuant to the
foregoing provisions of ERISA and the Code; to the best knowledge of each
Borrower, no condition exists which presents a substantial risk to the U.S.
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring any
material liability to or on account of a Multiemployer Plan pursuant to the
foregoing provisions of ERISA and the Code; the U.S. Borrower believes that the
aggregate liabilities of the U.S. Borrower and its Subsidiaries and its ERISA
Affiliates to all Multiemployer Plans in the event of a withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the incurrence of any Loan or the issuance of any Letter of Credit,
could not reasonably be expected to have a Material Adverse Effect; each group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) which covers or has covered employees or former employees of HMC or any of
its Subsidiaries or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of the U.S. Borrower or any of its Subsidiaries or any ERISA
Affiliate exists or, to the best knowledge of the U.S. Borrower, is likely to
arise on
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account of any Plan; and HMC and its Subsidiaries do not maintain or contribute
to (A) any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
which provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or (B) any Plan, the obligations with
respect to which could reasonably be expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
U.S. Borrower nor or any of its Subsidiaries has incurred any obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of the U.S. Borrower's
most recently ended fiscal year on the basis of actuarial assumptions, each of
which is reasonable, does not exceed the current value of the assets of each
Foreign Pension Plan allocable to such benefit liabilities, in the aggregate, by
a material amount.
8.11 The Pledge and Security Agreement; Equity Pledges. (a) The Pledge
and Security Agreement creates (after all steps required under Articles 8 and 9
of the New York UCC have been taken) in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of each Credit Party in the Pledge and
Security Agreement Collateral described therein and owned by such Credit Party
on any date on which this representation and warranty is made or deemed made to
the extent that a security interest therein can be created pursuant to the UCC,
which security interest shall, (i) upon delivery to the Collateral Agent of any
certificates evidencing any Pledged Securities, (ii) upon the filing of
appropriate financing statements under the UCC in respect of any uncertificated
Pledged Securities that constitute a "general intangible" under the New York UCC
or (iii) upon the completion of such other actions as may be required under the
applicable provisions of the UCC (which delivery, filings and/or other actions
have been done and remain in full force and effect as to the Pledge and Security
Agreement Collateral owned by any Credit Party on any date on which this
representation and warranty is made or deemed made), constitute a fully
perfected first lien on, and security interest in, all right, title and interest
of such Credit Party in all of the Pledge and Security Agreement Collateral
described therein, subject to no security interests of any other Person.
(b) Part III of Schedule IV sets forth, as of the Effective Date,
whether the capital stock or other equity interests in each Subsidiary listed on
Part I and Part II of Schedule IV is pledged (as of the Effective Date) pursuant
to the Pledge and Security Agreement, and to the extent any such interest is not
so pledged, Part III of Schedule IV indicates the reason therefor.
8.12 Properties. Each of the U.S. Borrower and its Subsidiaries has
good and marketable title to all material properties owned by them, including
all material property reflected in the balance sheets referred to in Section
8.05(a) (except as sold or otherwise disposed of since the date of such balance
sheets).
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8.12 Subsidiaries. (a) The U.S. Borrower has no Subsidiaries other than
(i) those Subsidiaries listed on Schedule IV and (ii) new Subsidiaries created
or acquired in compliance with Section 11.06. Schedule IV correctly sets forth,
as of the Effective Date, the percentage ownership (direct or indirect) of HMC
and the U.S. Borrower in each class of capital stock or other equity of each of
the U.S. Borrower's Subsidiaries existing on the Effective Date and also
identifies the direct owner thereof.
(b) Part I of Schedule IV sets forth, as of the Effective Date,
each Guarantor as of such date. Part II of Schedule IV sets forth, as of the
Effective Date, each Subsidiary of the U.S. Borrower which is not a Guarantor on
the Effective Date, which Part II of Schedule IV also shall specify the reason
the respective Subsidiary is not required to be a Guarantor.
8.14 Compliance with Statutes, etc. Each of the U.S. Borrower and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to zoning compliance and
environmental standards and controls), except such noncompliances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.15 Investment Company Act. Neither the U.S. Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
8.16 Public Utility Holding Company Act. Neither the U.S. Borrower nor
any of its Subsidiaries 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.
8.17 Environmental Matters. (a) To the best knowledge of each Borrower,
each of the U.S. Borrower and its Subsidiaries has complied with all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws. To the best knowledge of each Borrower, there are no pending
or threatened Environmental Claims against the U.S. Borrower or any of its
Subsidiaries or any Real Property owned, leased or operated by the U.S. Borrower
or any of its Subsidiaries. To the best knowledge of each of the U.S. Borrower
and its Subsidiaries, there are no facts, circumstances, conditions or
occurrences on any Real Property owned, leased or operated by the U.S. Borrower
or any of its Subsidiaries or on any property adjoining any such Real Property
that could reasonably be expected (i) to form the basis of an Environmental
Claim against the U.S. Borrower or any of its Subsidiaries or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by the U.S. Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) To the best knowledge of the U.S. Borrower, Hazardous
Materials have not at any time been generated, used, treated or stored on, or
transported to or from, or Released on or from, any Real Property owned, leased
or operated by the U.S. Borrower or any
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of its Subsidiaries except in compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and maintenance of
any such Real Property by the U.S. Borrower or such Subsidiary's business.
(c) Notwithstanding anything to the contrary in this Section
8.17, the representations made in this Section 8.17 shall only be untrue if the
aggregate effect of all failures and noncompliance of the types described above
could reasonably be expected to have a Material Adverse Effect.
8.18 Labor Relations. Neither the U.S. Borrower nor any of its
Subsidiaries has received written notice that it or any Facility Manager is
engaged in any unfair labor practice with respect to any Hotel Property or other
Real Property owned or leased by the U.S. Borrower or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect. To the best
knowledge of each Borrower, there is (i) no unfair labor practice complaint
pending or reasonably expected to arise against the U.S. Borrower or any of its
Subsidiaries before the National Labor Relations Board and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or reasonably expected to arise
against the U.S. Borrower or any of its Subsidiaries, (ii) no strike, labor
dispute, slowdown or stoppage that is pending or reasonably expected to arise
against the U.S. Borrower or any of its Subsidiaries, and (iii) no union
representation question that exists with respect to the employees of the U.S.
Borrower or any of its Subsidiaries, in each case with respect to the Hotel
Properties and/or other Real Properties owned or leased by the U.S. Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a Material Adverse Effect.
8.19 Intellectual Property. Each of the U.S. Borrower and its
Subsidiaries owns or has the right to use all trademarks, permits, service
marks, trade names, licenses and franchises necessary for the conduct of its
respective businesses, except such as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.20 Indebtedness. Schedule 8.20 sets forth a true and complete list of
all Indebtedness of the U.S. Borrower and its Subsidiaries as of the Effective
Date and which is to remain outstanding after giving effect thereto (excluding
the Loans, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any other
entity which directly or indirectly guaranteed such debt (it being understood
that Schedule 8.20 does not have to set forth immaterial items of Indebtedness
that do not otherwise constitute Indebtedness under clause (i) of the definition
of Consolidated Total Debt, although such items of immaterial Indebtedness will
still constitute Existing Indebtedness). A true and correct copy of the Senior
Note Indenture is attached hereto as Exhibit L.
8.21 Management Agreements, Franchise Agreements, Operating Leases,
Ground Leases. (a) Each Management Agreement, Franchise Agreement and Operating
Lease with respect to any Hotel Property owned or leased by the U.S. Borrower or
any of its Subsidiaries is in full force and effect in accordance with its terms
and has not been terminated, modified or amended without the consent of the
Administrative Agent (other than in accordance
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with its terms) and no party thereto has denied or disaffirmed any of its
material obligations thereunder or has defaulted in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant thereto, in each case except to the extent that
the same do not materially adversely affect (a) any Borrower's ability to repay
the Obligations when due or (b) in the U.S. Borrower's reasonable estimation,
the ability to comply with the financial covenants contained in Sections 9.01
through 9.03, inclusive, and Section 9.04(b).
(b) Each ground lease with respect to any Hotel Property which is
a Leasehold is in full force and effect in accordance with its terms and no
party thereto has denied or disaffirmed any of its material obligations
thereunder or has defaulted in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant
thereto except to the extent any of the foregoing in this Section 8.21(b),
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
8.22 Status as REIT. HMC is qualified as a real estate investment trust
under the Code and its proposed methods of operation will enable it to continue
to be so qualified.
8.23 Facility Managers; Approved Lessees. To the best knowledge of each
Borrower, each Facility Manager has full power and authority and the legal right
to manage and operate the properties it operates and to conduct the business in
which it is currently engaged with respect to any Hotel Property owned or leased
by the U.S. Borrower or any of its Subsidiaries, including, without limitation,
to be a party to a Management Agreement, except to the extent any of the
foregoing, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. To the best knowledge of each
Borrower, each Approved Lessee has full power and authority and the legal right
to lease, manage and operate the properties it operates and to conduct the
business in which it is currently engaged with respect to any Hotel Property
owned or leased by the U.S. Borrower or any of its Subsidiaries, including,
without limitation, to be the lessee under an Operating Lease and a party to a
Management Agreement except to the extent any of the foregoing, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 9. Financial Covenants. As long as any of the Obligations or
the Total Revolving Loan Commitment remains outstanding, the U.S. Borrower
agrees with the Lenders and the Administrative Agent that:
9.01 Maximum Leverage Ratio. The U.S. Borrower will not permit the
Leverage Ratio (computed for the purposes of this Section 9.01 only, but only
through and including the U.S. Borrower's fiscal quarter ending closest to March
31, 2003, by reducing Consolidated Total Debt by the amount of unrestricted cash
on hand in excess of $100,000,000) at any time during a period set forth below
to be greater than the ratio set forth opposite such period below:
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Period Ratio
------ -----
Effective Date through and including the day
immediately before the last day of the U.S.
Borrower's fiscal quarter ending closest to December
31, 2002 7.25:1.00
The last day of the U.S. Borrower's fiscal quarter
ending closest to December 31, 2002 through and
including the day immediately before the last day of
the U.S. Borrower's fiscal quarter ending closest to
September 30, 2003 6.75:1.00
The last day of the U.S. Borrower's fiscal quarter
ending closest to September 30, 2003 through and
including the day immediately before the last day of
the U.S. Borrower's fiscal quarter ending closest to
June 30, 2004 6.25:1.00
The last day of the U.S. Borrower's fiscal quarter
ending closest to June 30, 2004 through and including
June 6, 2005 6.00:1.00
Thereafter 5.75:1.00
9.02 Minimum Consolidated Interest Coverage Ratio; Minimum Unsecured
Interest Coverage Ratio. (a) The U.S. Borrower will not permit the Consolidated
Interest Coverage Ratio for any Test Period ending on the last day of a fiscal
quarter of the U.S. Borrower set forth below to be less than the ratio set forth
opposite such fiscal quarter below:
Fiscal Quarter(s) Ending Closest To Ratio
----------------------------------- -----
June 30, 2002 1.60:1.00
September 30, 2002
December 31, 2002 1.75:1.00
March 31, 2003
June 30, 2003
September 30, 2003 1.90:1.00
December 31, 2003
March 31, 2004
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Fiscal Quarter(s) Ending Closest To Ratio
----------------------------------- -----
June 30, 2004 2.00:1.00
September 30, 2004
December 31, 2004
March 31, 2005
The last day of each fiscal quarter thereafter 2.10:1.00
(b) The U.S. Borrower will not permit the Unsecured Interest
Coverage Ratio for any Test Period ending on the last day of a fiscal quarter of
the U.S. Borrower set forth below to be less than the ratio set forth opposite
such fiscal quarter below:
Fiscal Quarter(s) Ending Closest To Ratio
----------------------------------- -----
June 30, 2002 1.40:1.00
September 30, 2002
December 31, 2002 1.50:1.00
March 31, 2003
June 30, 2003
September 30, 2003 1.55:1.00
December 31, 2003
March 31, 2004
June 30, 2004 1.60:1.00
September 30, 2004
December 31, 2004
March 31, 2005
The last day of each fiscal quarter thereafter 1.70:1.00
9.03 Minimum Consolidated Fixed Charge Coverage Ratio. The U.S.
Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for any
Test Period ending on the last day of a fiscal quarter of the U.S. Borrower set
forth below to be less than the ratio set forth opposite such fiscal quarter
below:
Fiscal Quarter Ending Closest To Ratio
-------------------------------- -----
June 30, 2002 1.00:1.00
September 30, 2002
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Fiscal Quarter(s) Ending Closest To Ratio
----------------------------------- -----
December 31, 2002 1.05:1.00
March 31, 2003
June 30, 2003
September 30, 2003 1.10:100
December 31, 2003
March 31, 2004
June 30, 2004 1.15:1.00
September 30, 2004
December 31, 2004
March 31, 2005
The last day of each fiscal quarter thereafter 1.20:1.00
9.04 Additional Financial Covenants and Limitations on Incurrence of
-----------------------------------------------------------------
Indebtedness.
------------
(a) Incurrence of Indebtedness. The U.S. Borrower and its
Subsidiaries will not Incur any additional Indebtedness in violation of Section
4.7(a) or (b) (after giving effect to any exceptions contained in Section
4.7(d)) of the Senior Note Indenture as in effect on Effective Date
(b) Unencumbered Assets. The U.S. Borrower will maintain at all
times Total Unencumbered Assets of not less than 125% of the aggregate
outstanding amount of the Unsecured Indebtedness (other than the QUIPs Debt)
(including amounts of Refinancing Indebtedness outstanding pursuant to Section
4.7(d)(iii) of the Senior Note Indenture as in effect on the Effective Date)
determined on a consolidated basis (it being understood that the Unsecured
Indebtedness of the Subsidiaries shall be consolidated with that of the U.S.
Borrower only to the extent of the U.S. Borrower's proportionate interest in
such Subsidiaries).
(c) Certain Definitions. For the purpose of this Section 9.04
only, all capitalized terms used in this Section 9.04 that are defined in the
Senior Note Indenture as in effect on the Effective Date shall have the meanings
given to them in the Senior Note Indenture as in effect on the Effective Date,
including, without limitation, by making all covenant calculations under this
Section 9.04 by taking into account the designation of any Subsidiary as a
Restricted Subsidiary or an Unrestricted Subsidiary under the Senior Note
Indenture.
SECTION 10. Affirmative Covenants. Each Borrower hereby covenants and
agrees (as to itself and each of its Subsidiaries) that from and after the
Effective Date and until the Total Revolving Loan Commitment has terminated and
the Loans and Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
10.01 Compliance with Laws, Etc. The U.S. Borrower shall comply, and
shall cause each of its Subsidiaries to comply, in all material respects with
all Requirements of Law,
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Contractual Obligations, commitments, instruments, licenses, permits and
franchises, including, without limitation, all Permits; provided, however, that
no Borrower shall be deemed in default of this Section 10.01 if all such
non-compliances in the aggregate could not reasonably be expected to have
Material Adverse Effect.
10.02 Conduct of Business. The U.S. Borrower shall (a) conduct, and
cause each of its Subsidiaries to conduct, its business in the ordinary course
and consistent with past practice; (b) use, and cause each of its Subsidiaries
to use, its reasonable efforts, in the ordinary course and consistent with past
practice, to (i) preserve its business and the goodwill and business of the
customers, advertisers, suppliers and others having business relations with the
U.S. Borrower or any of its Subsidiaries, and (ii) keep available the services
and goodwill of its present employees; (c) preserve, and cause each of its
Subsidiaries to preserve, all registered patents, trademarks, trade names,
copyrights and service marks that are used in its business and owned by the U.S.
Borrower or its Subsidiaries; and (d) perform and observe, and cause each of its
Subsidiaries to perform and observe, all the terms, covenants and conditions
required to be performed and observed by it under its Contractual Obligations
(including, without limitation, to pay all rent and other charges payable under
any lease and all debts and other obligations as the same become due), and do,
and cause its Subsidiaries to do, all things necessary to preserve and to keep
unimpaired its rights under such Contractual Obligations; provided, however,
that, in the case of each of clauses (a) through (d), no Borrower shall be
deemed in default of this Section 10.02 if all such failures in the aggregate
have no Material Adverse Effect.
10.03 Payment of Taxes, Etc. The U.S. Borrower shall pay and discharge,
and shall cause each of its Subsidiaries, as appropriate, to pay and discharge,
before the same shall become delinquent, all lawful governmental claims,
material taxes, material assessments, material charges and material levies,
except where contested in good faith, by proper proceedings, if adequate
reserves therefor have been established on the books of the U.S. Borrower or the
appropriate Subsidiary in conformity with GAAP.
10.04 Maintenance of Insurance. The U.S. Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks (including, without limitation, fire, extended coverage, vandalism,
malicious mischief, flood, earthquake, public liability, product liability,
business interruption and terrorism) (in the case of terrorism, to the extent
commercially available) as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
U.S. Borrower or such Subsidiary engages in business or owns properties. Each
Borrower will furnish to the Lenders from time to time such information as may
be requested as to such insurance.
10.05 Preservation of Existence, Etc. Except as permitted pursuant to
Section 11.09, the U.S. Borrower shall preserve and maintain, and shall cause
each of its Subsidiaries to preserve and maintain, its corporate or partnership
existence, rights (charter and statutory) and franchises.
10.06 Access; Annual Meetings with Lenders. 1. Access. The U.S.
Borrower shall, at any reasonable time and from time to time upon reasonable
advance notice, permit the Administrative Agent or any of the Lenders, or any
agents or representatives thereof, at the
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expense of the Lenders (but such expense to be reimbursed by the U.S. Borrower
in the event that any of the following reveal a material Default or Event of
Default) to, under the guidance of officers of the U.S. Borrower or its
Subsidiaries (unless such officers are not made available for such purpose upon
reasonable advance notice), (i) examine and make copies of and abstracts from
the records and books of account of the U.S. Borrower and each of its
Subsidiaries, (ii) visit the properties of the U.S. Borrower and each of its
Subsidiaries, (iii) discuss the affairs, finances and accounts of the U.S.
Borrower and each of its Subsidiaries with any of their respective officers or
directors, and (iv) communicate directly with each Borrower's independent
certified public accountants.
(b) Annual Meetings with Lenders. At the request of the
Administrative Agent or the Required Lenders, the U.S. Borrower shall, at least
once during each fiscal year (other than during the fiscal year in effect on the
Effective Date) of the U.S. Borrower, hold a meeting (at a mutually agreeable
location and time) with all of the Lenders at which meeting the financial
results of the previous fiscal year and the financial condition of the U.S.
Borrower and its Subsidiaries and the budgets presented for the current fiscal
year of the U.S. Borrower and its Subsidiaries shall be reviewed, with each
Lender bearing its own travel, lodging, food and other costs associated with
attending any such meeting.
10.07 Keeping of Books. The U.S. Borrower shall keep, and shall cause
each of its Subsidiaries to keep, proper books of record and account, in which
proper entries shall be made of all financial transactions and the assets and
business of the U.S. Borrower and each such Subsidiary.
10.08 Maintenance of Properties, Etc. The U.S. Borrower shall maintain
and preserve, and shall cause each of its Subsidiaries to maintain and preserve,
(i) all of its properties which are used or useful or necessary in the conduct
of its business in good working order and condition (ordinary wear and tear and
damage by casualty excepted), and (ii) all rights, permits, licenses, approvals
and privileges (including, without limitation, all Permits) which are used or
useful or necessary in the conduct of its business; provided, however, that no
Borrower shall be deemed in default of this Section 10.08 if all such failures
in the aggregate are not reasonably likely to have a Material Adverse Effect.
10.09 Management Agreements, Operating Leases and Certain Other
Contracts. Management of Hotel Properties. Unless the Required Lenders otherwise
agree in writing, the U.S. Borrower will take, and will cause each of its
Subsidiaries to take, all action necessary so that (i) each Hotel Property is at
all times managed by a Permitted Facility Manager pursuant to a Management
Agreement, and (ii) each Hotel Property that is leased by the U.S. Borrower or
any of its Subsidiaries as lessor is at all times leased to an Approved Lessee
pursuant to an Operating Lease; provided, however, that the U.S. Borrower and
its Subsidiaries shall not be deemed to be in breach of the covenants set forth
in this Section 10.09(a) by virtue of a failure to so maintain a Management
Agreement or Operating Lease, so long as (x) the U.S. Borrower or its relevant
Subsidiary is diligently pursuing engaging a replacement Permitted Facility
Manager or Approved Lessee pursuant to a Management Agreement or Operating
Lease, as applicable, and (y) the failure to have maintained such Management
Agreement or Operating Lease could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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(b) Enforcement of Certain Contracts. The U.S. Borrower will, and
will cause each of its Subsidiaries to, (i) enforce the provisions of each
Operating Lease, each Management Agreement, each Franchise Agreement and each
other material agreement, contract or instrument to which such Approved Lessee
is a party or by which such Approved Lessee is bound and which affects the
ownership, leasing, management or operation of any Real Property owned or leased
by the U.S. Borrower or any of its Subsidiaries, and (ii) to the extent it has
the power or right to do so (whether by contract or otherwise) cause each
Approved Lessee and Facility Manager to, (x) maintain in good standing all
material licenses, certifications, accreditations and other approvals applicable
to it or to any Hotel Property which it owns, leases, manages or operates and
(y) to comply, in all material respects with all Requirements of Law, Permits,
Contractual Obligations, commitments, instruments, licenses, permits and
franchises, except to the extent contested in good faith and by proper
proceedings, or as is appropriate and consistent with good business practice;
provided, however, that, in the case of each of clause (i) and (ii) of this
Section 10.09(b), the U.S. Borrower shall not be deemed in default of such
clause if all non-compliances with the requirements of such clause, individually
or in the aggregate, could not reasonably be expected to have Material Adverse
Effect.
10.10 Application of Proceeds. Each Borrower shall use the entire
amount of the proceeds of the Revolving Credit Loans as provided in Section
8.08.
10.11 Information Covenants. The U.S. Borrower will furnish to the
Administrative Agent and each of the Lenders:
(a) Quarterly Financial Statements and Reports. Within 60 days
(but in no event later than 15 days after the related filing deadline under SEC
rules and regulations) after the close of each of the first three quarterly
accounting periods in each fiscal year of the U.S. Borrower (commencing with the
quarterly accounting period ending closest to June 30, 2002), (i) a consolidated
balance sheet of the U.S. Borrower and its Subsidiaries as at the end of such
quarterly accounting period, (ii) the related consolidated statements of income
for such quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period and (iii) the
related consolidated statements of cash flows for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the corresponding dates and fiscal
periods in the prior fiscal year, all of which shall be in reasonable detail and
certified by an Authorized Financial Officer of the U.S. Borrower that, to the
best of such officer's knowledge after due inquiry, they fairly present, in all
material respects, the financial condition of the U.S. Borrower and its
Subsidiaries as of the dates indicated and the results of their operations and
changes in their cash flows for the periods indicated, subject to normal
year-end audit adjustments.
(b) Annual Financial Statements. Within 105 days (but in no event
later than 15 days after the related filing deadline under SEC rules and
regulations) after the close of each fiscal year of the U.S. Borrower, the
consolidated balance sheet of the U.S. Borrower and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of shareholders'
equity as of the end of such fiscal year and of income and cash flows for such
fiscal year setting forth comparative figures as of the end of and for the
preceding fiscal year and certified by Ernst & Young, KPMG,
PricewaterhouseCoopers or Deloitte & Touche or such other independent certified
public accountants of recognized national standing reasonably
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acceptable to the Administrative Agent, together with a report of such
accounting firm stating that in the course of its regular audit of the financial
statements of the U.S. Borrower and its Subsidiaries, which audit was conducted
in accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has occurred and
is continuing in respect of Section 9, or, if in the opinion of such accounting
firm such a Default or an Event of Default has occurred and is continuing, a
statement as to the nature thereof.
(c) Forecasts. No later than 60 days after the first
day of each fiscal year of the U.S. Borrower, a corporate forecast substantially
in the form attached hereto as Exhibit K for such fiscal year with respect to
the U.S. Borrower and its Subsidiaries, accompanied by a statement of an
Authorized Financial Officer of the U.S. Borrower to the effect that, to the
best of such officer's knowledge, the forecast is a reasonable estimate of the
period covered thereby.
(d) Officer's Certificates. At the time of the
delivery of the financial statements provided for in Sections 10.11(a) and (b),
a certificate of an Authorized Financial Officer of the U.S. Borrower to the
effect that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of Default
has occurred and is continuing, specifying the nature and extent thereof, which
certificate shall (x) set forth (in reasonable detail) the calculations required
to establish whether the U.S. Borrower and its Subsidiaries were in compliance
with the provisions of Sections 9.01, 9.02, 9.03, 11.02, 11.08, 11.10, 11.11 and
11.12, at the end of such fiscal quarter or year, as the case may be (it being
understood that, in any event, such officer's certificate shall set forth in
reasonable detail the calculations required to establish the Consolidated Fixed
Charge Coverage Ratio for the relevant Test Period), and (y) set forth (in
reasonable detail) the calculations and other determinations required to
establish whether the U.S. Borrower and its Subsidiaries were in compliance with
the provisions of Section 5.02(b)) during, and for the 12 month period ending on
the last day of, such quarterly accounting period or fiscal year, as the case
may be. The certificate delivered in connection with the delivery of the
financial statements provided for in Section 10.11(b) shall also apply to
Section 9.04 but may be in the form delivered pursuant to the Senior Note
Indenture.
(e) Notice of Default or Litigation. Promptly, and in
any event within three Business Days after the President, the Chief Executive
Officer, any Vice President or any Authorized Financial Officer of any Credit
Party obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and (ii) any litigation or
governmental investigation or proceeding pending or threatened (x) against the
U.S. Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, (y) with respect to any material Indebtedness of
the U.S. Borrower or any of its Subsidiaries or (z) with respect to any Credit
Document.
(f) Management Letters. Promptly after any Credit
Party's receipt thereof, a copy of any "management letter" received by such
Credit Party from its certified public accountants and management's responses,
if any, thereto.
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(g) Other Reports and Filings. Promptly, and without
duplication of any documents or information delivered pursuant to another clause
of this Section 10.11, copies of all financial information, proxy materials and
other information and reports, if any, which the U.S. Borrower or any of its
Subsidiaries shall file with the SEC (it being understood, however, that with
respect to any preliminary filings made with the SEC, the U.S. Borrower need
only deliver a written notice describing such filing) and copies of all notices
and reports which the U.S. Borrower or any of its Subsidiaries shall deliver to
holders of the Senior Notes pursuant to the terms of the documentation governing
such Indebtedness (or any trustee, agent or other representative therefor).
(h) Environmental Matters. Promptly upon, and in any
event within ten Business Days after the President, the Chief Executive Officer,
any Vice President or any Authorized Financial Officer of any Credit Party
obtaining knowledge thereof, notice of one or more of the following
environmental matters to the extent that any such environmental matters, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect:
(i) any pending or threatened Environmental Claim
against the U.S. Borrower or any of its Subsidiaries or any Real
Property owned, leased or operated by the U.S. Borrower or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from
any Real Property owned, leased or operated by the U.S. Borrower or
any of its Subsidiaries that (a) results in non-compliance by the U.S.
Borrower or any of its Subsidiaries with any applicable Environmental
Law or (b) could reasonably be expected to form the basis of an
Environmental Claim against the U.S. Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned, leased or operated by the U.S. Borrower or any of its
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, lease,
occupancy, use or transferability by the U.S. Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned, leased or operated by the U.S. Borrower or
any of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the U.S. Borrower's or such Subsidiary's response or
proposed response thereto.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to HMC, the U.S.
Borrower and/or any of its Subsidiaries as the Administrative Agent or any
Lender (through the Administrative Agent) may reasonably request.
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(j) ERISA. Within 15 Business Days after the U.S.
Borrower, any Subsidiary of the U.S. Borrower or any ERISA Affiliate knows or
has reason to know of the occurrence of any event relating to compliance by the
U.S. Borrower or any Subsidiary thereof or any ERISA Affiliate under ERISA has
occurred to the extent that such events, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, the
U.S. Borrower will deliver to the Administrative Agent a certificate of an
Authorized Financial Officer of the U.S. Borrower setting forth details as to
such occurrence and the action, if any, that the U.S. Borrower, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the U.S.
Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator with respect thereto. The U.S. Borrower will deliver to
the Administrative Agent (with sufficient copies for each Bank) (i) a complete
copy of the annual report (Form 5500) of each Single Employer Plan (including,
to the extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information) required to be filed by the U.S. Borrower or any of its
Subsidiaries with the Internal Revenue Service and (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates
or notices delivered to the Administrative Agent pursuant to the first sentence
hereof, copies of annual reports and any material notices received by the U.S.
Borrower, any Subsidiary of the U.S. Borrower or any ERISA Affiliate with
respect to any Plan or Foreign Pension Plan shall be delivered to the
Administrative Agent (with sufficient copies for each Bank) no later than 15
Business Days after the date such report has been filed with the Internal
Revenue Service or such notice has been received by the U.S. Borrower, such
Subsidiary or such ERISA Affiliate, as applicable.
(k) Designation of Fifty Percent Ventures as
Subsidiaries. Promptly after the designation of a Fifty Percent Venture as a
Restricted Subsidiary (as such terms are defined in the Senior Note Indenture)
under the Senior Note Indenture, notice thereof to the Administrative Agent
stating that as a result of such designation such Fifty Percent Venture
constitutes a "Subsidiary" pursuant to the definition of such term.
(l) Financial Information Regarding the U.S. Borrower
and Guarantors. As soon as practicable after request from the Administrative
Agent (but not, unless an Event of Default shall have occurred and be
continuing, more than once for the fiscal year ending December 31, 2002 and more
than twice for each fiscal year thereafter), information concerning the combined
EBITDA of the Guarantors and the combined revenues, assets and EBITDA of the
issuers of pledged securities included in the Collateral.
10.12 Intentionally Omitted.
10.13 Certain Subsidiaries. (a) The U.S. Borrower will ensure
that at all times either the U.S. Borrower or a Wholly-Owned Subsidiary of the
U.S. Borrower that is a Guarantor is (i) the sole general partner of any
Guarantor that is a partnership, or (ii) the sole managing member (or has the
sole right to designate members of the Board of Managers) of any Guarantor that
is a limited liability company.
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(b) Except as set forth on Schedule IV or otherwise
permitted pursuant to Section 10.15, the U.S. Borrower will ensure that at all
times (i) either the U.S. Borrower or a Wholly-Owned Subsidiary of the U.S.
Borrower that is a Guarantor owns 100% of the equity interests in each
Look-Through Subsidiary and (ii) the equity interests owned by the U.S. Borrower
(directly or indirectly) in each Subsidiary of the U.S. Borrower that is not a
Look-Through Subsidiary are owned directly or indirectly by a Look-Through
Subsidiary that is a Guarantor.
10.14 Foreign Subsidiaries Security. If following a change
in the relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder, counsel for
the U.S. Borrower reasonably acceptable to the Administrative Agent does not
within 30 days after a request from the Administrative Agent or the Required
Lenders deliver a legal opinion, in form and substance mutually satisfactory to
the Administrative Agent and the U.S. Borrower, with respect to any wholly-owned
Foreign Subsidiary that is not a Look-Through Subsidiary which has not already
had all of its stock pledged pursuant to the Pledge and Security Agreement, that
(i) a pledge of 66-2/3% or more of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote, and (ii)
the entering into by such Foreign Subsidiary of a guaranty in substantially the
form of the Subsidiaries Guaranty, in any such case could reasonably be expected
to cause (I) the undistributed earnings of such Foreign Subsidiary as determined
for Federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary's United States parent for Federal income tax purposes or
(II) other material adverse Federal income tax consequences to the Credit
Parties, then (in each case, subject to any restrictions described in Section
10.15) in the case of a failure to deliver the evidence described in clause (i)
above, that portion of such Foreign Subsidiary's outstanding capital stock not
theretofore pledged pursuant to (and to the extent required by) the Pledge and
Security Agreement shall be pledged to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Pledge and Security Agreement (or another
pledge agreement in substantially similar form, if needed), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary (to the extent that same is a Wholly-Owned Subsidiary) shall execute
and deliver (x) the Subsidiaries Guaranty (or another guaranty in substantially
similar form, if needed), guaranteeing the Obligations of the U.S. Borrower
under the Credit Documents and (y) the Pledge and Security Agreement (or another
pledge agreement in substantially similar form, if needed) securing such Foreign
Subsidiary's obligations under the Subsidiaries Guaranty, in each case to the
extent that entering into such Pledge and Security Agreement or Subsidiaries
Guaranty is permitted by the laws of the respective foreign jurisdiction and
would be required pursuant to Section 10.15, and with all documents delivered
pursuant to this Section 10.14 to be in form and substance reasonably
satisfactory to the Administrative Agent.
10.15 Additional Guarantors; Release of Guarantors and
Collateral. (a) (1) If, at any time after the Effective Date, (x) the U.S.
Borrower (directly or indirectly) acquires, establishes or creates any
Wholly-Owned Subsidiary that is a Look-Through Subsidiary (or in the
circumstances contemplated by Section 10.14, any other Wholly-Owned Foreign
Subsidiary), or (y) any Subsidiary of the U.S. Borrower guaranties the
obligations of the U.S. Borrower under the Senior Notes or under any other
Indebtedness of the U.S. Borrower, such Subsidiary shall be required in
accordance with the requirements of Section 10.15(c) (I) to become a Guarantor
and (II) to the extent that such Subsidiary is a Wholly-Owned Subsidiary and a
Look-Through
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Subsidiary to become a Pledgor; provided, however, that the requirements of this
clause (II) shall not apply to any Subsidiary so long as such Subsidiary does
not own equity interests in any other Person that are required under this
Agreement to be pledged.
(2) Notwithstanding anything to the contrary contained above
in this Section 10.15(a) or anything else in this Agreement or in any other
Credit Document, (I) no Subsidiary of the U.S. Borrower shall be required to
become a Guarantor or Pledgor, (II) in the event that any Subsidiary of the U.S.
Borrower is a Guarantor or Pledgor, such Subsidiary may be released from its
obligations under the Subsidiaries Guaranty and the Pledge and Security
Agreement, as applicable, upon notice by the U.S. Borrower to the Administrative
Agent (so long as, in the case of a Subsidiaries Guaranty delivered pursuant to
clause (y) of Section 10.15(a)(1), such Subsidiary is simultaneously released
from all guaranties of Indebtedness of the U.S. Borrower), and (III) no capital
stock or other equity of a Subsidiary of the U.S. Borrower shall be required to
be pledged under the Pledge and Security Agreement and, to the extent
theretofore pledged, may be released from the Pledge and Security Agreement upon
notice by the U.S. Borrower to the Collateral Agent, in each case under one or
more of the following circumstances:
(i) with respect to clauses (I), (II) and (III)
above, such Subsidiary's only assets consist of $5,000 or less in
cash;
(ii) with respect to clauses (I) and (II) above
only, such Subsidiary, or the direct or indirect parent company
or general partner of such Subsidiary whose only significant
asset (in each case) is the equity ownership of such Subsidiary
(or the direct or indirect parent company of such Subsidiary),
enters into (or is a party to) a material contract pursuant to a
transaction otherwise permitted under this Agreement and the
terms of which prohibit or restrict such Subsidiary from
executing a counterpart of the Subsidiaries Guaranty and/or the
Pledge and Security Agreement (and from becoming a guarantor
under the Senior Notes or other Indebtedness other than
Indebtedness incurred under such material contract); or
(iii) with respect to clause (III) above only, such
Subsidiary, the U.S. Borrower or any other Subsidiary of the U.S.
Borrower, enters into (or is a party to) a material contract
pursuant to a transaction otherwise permitted under this
Agreement and the terms of which prohibit or restrict the capital
stock or other equity of such Subsidiary from being pledged under
the Pledge and Security Agreement (as opposed to restricting or
prohibiting the ability of the Collateral Agent to exercise
remedies with respect to such pledge).
(b) (1) Each Wholly-Owned Subsidiary of the U.S.
Borrower that is a Look-Through Subsidiary that is not a party to the
Subsidiaries Guaranty and the Pledge and Security Agreement (or has been
released from its obligations under the Subsidiaries Guaranty and/or the Pledge
and Security Agreement) because of the restrictions described in Part III of
Schedule IV or under the circumstances described in Section 10.15(a)(2) shall be
required in accordance with the requirements of Section 10.15(c), following the
termination of such restrictions (unless new restrictions are imposed under a
material contract entered into pursuant to a transaction otherwise permitted
under this Agreement) or acquiring assets (including additional cash) in
addition to at least $5,000 in cash (I) to become a Guarantor and (II) to the
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extent that such Subsidiary is a Look-Through Subsidiary, to become a Pledgor;
provided, however, that the requirements of this clause (II) shall not apply to
any Subsidiary so long as such Subsidiary does not own equity interests in any
other Person that are required under this Agreement to be pledged.
(2) The capital stock or other equity of each Subsidiary of
the U.S. Borrower that has not been pledged under the Pledge and Security
Agreement (or has been released from the Pledge and Security Agreement) because
of the restrictions described in Part III of Schedule IV or under the
circumstances described in Section 10.15(a)(2) shall be required in accordance
with the requirements of Section 10.15(c), following the termination of such
restrictions (unless new restrictions are imposed under a material contract
entered into pursuant to a transaction otherwise permitted under this Agreement)
or such Subsidiary acquiring assets (including additional cash) in addition to
at least $5,000 in cash, to be pledged pursuant to (and to the extent required
by) the Pledge and Security Agreement.
(c) Each Subsidiary required to become a Guarantor or Pledgor or
to pledge additional equity interests pursuant to the preceding Sections
10.15(a) and (b) shall (i) promptly thereafter (but in no event later than 30
days after the occurrence of any event specified in such Sections) (i) execute
and deliver counterparts to the Subsidiaries Guaranty or Pledge and Security
Agreement, as applicable, (ii) promptly thereafter (or such other time as is
specified in Section 15(d) of the Pledge and Security Agreement with respect to
delivery of the Partnership/LLC Notice and Pledge Acknowledgment referred to
therein) in the case of the execution of any counterpart to the Pledge and
Security Agreement or the pledge of any additional equity interests pursuant to
Section 10.15(b)(2), cause to be executed and delivered all other relevant
documentation necessary or appropriate to perfect the security interest granted
by such Pledgor pursuant to the Pledge and Security Agreement, with all such
actions to be taken to the reasonable satisfaction of the Administrative Agent,
and (iii) unless the Administrative Agent otherwise agrees in writing, deliver,
no later than the time of required delivery of the compliance certificate
pursuant to Section 10.11(d) relating to the subsequent fiscal quarter (or year
end, as applicable) opinions of counsel of the type described in Section 6 as if
such Subsidiary were a Credit Party on the Effective Date.
(d) Except as otherwise set forth in this Section 10.15(d), upon
the written request to the Administrative Agent, the Collateral consisting of
Pledged Securities pledged pursuant to the Pledge and Security Agreement (the
"Stock Collateral") shall be released, and the requirements of Sections 10.14
and 10.15(a), (b) and (c) shall cease to be in effect to the extent they relate
to pledges but shall continue to be effective with respect to guarantees, if all
of the following conditions have been satisfied on or prior to the date of
release (the "Collateral Release Date"): (i) for the two most recent consecutive
fiscal quarters of the U.S. Borrower ending prior to the Collateral Release Date
the Leverage Ratio is less than 6:00:1.00, (ii) no Default or Event of Default
shall have occurred on or prior to and be continuing on the Collateral Release
Date, (iii) the U.S. Borrower shall have delivered to the Administrative Agent
at least 15 Business Days prior to the Collateral Release Date a request to
release Pledged Collateral, which request shall (w) specify the proposed
Collateral Release Date, (x) if not already provided, provide financial
statements pursuant to Section 10.11 for such fiscal quarters, (y) contain a
certification of an Authorized Financial Officer that the conditions to release
of Stock Collateral have been satisfied (and providing a computation of the
Leverage Ratio
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demonstrating such compliance) and (z) specify whether Capital Stock must be
pledged pursuant to the proviso to this clause (d), and (iv) all Stock
Collateral being released shall also be released as collateral for the U.S.
Borrower's obligations under the Senior Note Indenture; provided, however, that
(I) in the event the Leverage Ratio equals or exceeds 6:00 to 1:00 at any time
after the Collateral Release Date for a period of two consecutive fiscal
quarters, the security interest in all such released Pledged Collateral shall be
recreated within 30 days, and the requirements of Sections 10.14 and 10.15(a),
(b) and (c) shall thereafter once again be in effect, and (II) in the event Term
Loans are outstanding on any Collateral Release Date, the U.S. Borrower or its
Subsidiaries shall provide a pledge of Capital Stock of its Wholly-Owned
Subsidiaries whose (i) assets are not encumbered by Liens securing Secured
Indebtedness, and (ii) combined EBITDA for the four fiscal quarters ending
immediately prior to the Collateral Release Date is at least equal to the
outstanding principal amount of the Term Loan on the Collateral Release Date.
The Collateral Agent shall promptly execute such documents and take such other
actions as the U.S. Borrower may reasonably request to evidence any release of
the Stock Collateral pursuant to this Section 10.15(d).
10.16 End of Fiscal Years; Fiscal Quarters. The U.S. Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31 and (ii) each of its, and each of its Subsidiaries', first three
fiscal quarters to end on the last day of the 12th, 24th and 36th week,
respectively, of each fiscal year and the fourth fiscal quarter to end on
December 31, it being understood that (x) if any Hotel Property owned or leased
by a Subsidiary of HMC is managed or leased by an Approved Lessee or a Facility
Manager other than Marriott International or any Wholly-Owned Subsidiary of
Marriott International, HMC and the U.S. Borrower shall cause such Subsidiary's
fiscal years and fiscal quarters to end on dates as close as reasonably
practicable to the dates set forth above in this Section 10.16 and (y) HMC and
the U.S. Borrower may elect to change each of its and each of its Subsidiaries'
fiscal quarters to end on March 31, June 30, September 30 and December 31.
10.17 Environmental Matters. (a) The U.S. Borrower shall comply and
shall cause each of its Subsidiaries and each property owned or leased by such
parties to comply in all material respects with all applicable Environmental
Laws currently or hereafter in effect except for such non-compliance as could
not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and will pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws.
(b) At the written request of the Administrative Agent or
the Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time after (i) the Administrative Agent
receives notice under Section 10.11(h) of any event for which notice is required
to be delivered for any Real Property or (ii) the U.S. Borrower or any of its
Subsidiaries are not in compliance with Section 10.17(a) with respect to any
Real Property, the U.S. Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any such Real Property now or
hereafter owned, leased or operated by the U.S. Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with any Hazardous Materials on such Real Property. If the U.S. Borrower fails
to provide the same
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within 90 days after such request was made, the Administrative Agent may order
the same, and the U.S. Borrower shall grant and hereby grants, to the
Administrative Agent and the Banks and their agents access to such Real Property
and specifically grants the Administrative Agent and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the U.S. Borrower's expense.
SECTION 11. Negative Covenants. Each Borrower hereby covenants
and agrees (as to itself and each of its Subsidiaries) that from and after the
Effective Date and until the Total Revolving Loan Commitment has terminated and
the Loans and Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
11.01 Liens. The U.S. Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist:
(i) any Lien (other than Permitted Liens, to the extent
such Permitted Liens secure Indebtedness) upon or with respect to any
property or assets (real or personal, tangible or intangible) of the
U.S. Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, if such Lien secures any Indebtedness of the U.S.
Borrower or any of its Subsidiaries other than (x) Secured
Indebtedness otherwise permitted to be incurred or to exist hereunder,
(y) Indebtedness secured by a Lien under the Pledge and Security
Agreement or (z) Indebtedness owed to the U.S. Borrower or any of its
Subsidiaries; provided, that the foregoing shall not permit any Lien
on the Collateral except pursuant to the Pledge and Security
Agreement, or
(ii) any Lien upon or with respect to Capital Stock in
any Subsidiary of the U.S. Borrower securing Indebtedness of the U.S.
Borrower, in the event that the Obligations are no longer secured by
Liens under the Pledge and Security Agreement.
11.02 Indebtedness. The U.S. Borrower will not, and will not
permit any of its Subsidiaries to, incur or assume:
(i) any Indebtedness if (a) either immediately before
or after giving effect to the incurrence or assumption of such
Indebtedness there exists a Default or Event of Default or (b) based
on calculations made by the U.S. Borrower on a Pro Forma Basis after
giving effect to such incurrence or assumption and as if such
incurrence or assumption had occurred on the first day of the
respective Calculation Period, a Default or Event of Default will
exist in respect of, or would have existed during the Test Period last
reported (or required to be reported pursuant to Section 10.11(a) or
Section 10.11(b), as the case may be) prior to the date of the
respective incurrence or assumption in respect of, the financial
covenants contained in Sections 9.01 through 9.03, inclusive; provided
that the foregoing provisions of this Section 11.02(i) shall not apply
to (x) accrued expenses and current trade accounts payable incurred in
the ordinary course of business (to the extent that any such amounts
constitute Indebtedness); (y) Indebtedness under Interest Rate
Protection Agreements and Other Hedging Agreements entered into with
respect to other Indebtedness permitted under this Agreement; and (z)
accrued and deferred management fees under any Management Agreement
(to the extent that any such amounts constitute Indebtedness); or
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(ii) any Contingent Obligations (excluding Contingent
Obligations relating to Customary Non-Recourse Exclusions except to the
extent a personal recourse claim is made in connection therewith) of the
U.S. Borrower in respect of Non-Recourse Indebtedness, if the aggregate
amount of such Contingent Obligations of the U.S. Borrower in respect of
Non-Recourse Indebtedness then outstanding exceeds (x) for any such
Contingent Obligations incurred after the Effective Date during fiscal year
2002 of the U.S. Borrower, an amount equal to 1% of the Adjusted Total
Assets determined at the time any such Contingent Obligation is incurred or
(y) for any such Contingent Obligations incurred during fiscal year 2003 or
any subsequent fiscal year of the U.S. Borrower, an amount (taking into
account Contingent Obligations referred to in the immediately preceding
clause (x) which are then outstanding) equal to 2% of the Adjusted Total
Assets (computed in the same manner as under the immediately preceding
clause (x)) of the U.S. Borrower.
11.03 Limitation on Certain Restrictions on Subsidiaries. The
U.S. Borrower will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary of the U.S.
Borrower to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by the U.S.
Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the U.S.
Borrower or any Subsidiary of the U.S. Borrower, (b) make loans or advances to
the U.S. Borrower or any Subsidiary of the U.S. Borrower or (c) transfer any of
its properties or assets to the U.S. Borrower or any Subsidiary of the U.S.
Borrower, except in each case for such encumbrances or restrictions:
(i) which do not materially adversely affect any
Borrower's ability to repay the Obligations when due or, in the U.S.
Borrower's reasonable estimation, the ability to comply with the covenants
set forth in Sections 9.01 through 9.03, inclusive, and Section 9.04(b), or
(ii) existing under or by reason of (A) applicable law,
(B) this Agreement and the other Credit Documents, or (C) the Senior Note
Documents.
11.04 Limitation on Issuance of Capital Stock. The U.S. Borrower
will not permit any of its Subsidiaries to issue any capital stock (including by
way of sales of treasury stock) or other equity interests or any options or
warrants to purchase, or securities convertible into, capital stock or other
equity interests, unless the same do not materially adversely affect (a) any
Borrower's ability to repay the Obligations when due or (b) in the U.S.
Borrower's reasonable estimation, the ability to comply with the covenants set
forth in Sections 9.01 through 9.03, inclusive, and Section 9.04(b).
11.05 Modification and Enforcement of Certain Agreements. (a)
The U.S. Borrower shall not, and shall not permit any of its Subsidiaries to,
alter, amend, modify, rescind, terminate, supplement or waive any of their
respective rights under, or fail to comply in all material respects with, any of
its material Contractual Obligations (other than the Senior Note Indenture)
except any of the foregoing which do not materially adversely affect (i) any
Borrower's ability to repay the Obligations when due or (ii) in the U.S.
Borrower's reasonable
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estimation, the ability to comply with the covenants set forth in Sections 9.01
through 9.03, inclusive, and Section 9.04(b).
(b) The U.S. Borrower shall not, and shall not permit
any of its Subsidiaries to, amend or modify, or permit the amendment or
modification of, any provision of any Management Agreement or Operating Lease,
other than any amendment or modification thereto which would not violate this
Agreement and the other Credit Documents and so long as the same do not
materially adversely affect (i) any Borrower's ability to repay the Obligations
when due or (ii) in the U.S. Borrower's reasonable estimation, the ability to
comply with the financial covenants contained in Sections 9.01 through 9.03,
inclusive, and Section 9.04(b).
11.06 Limitation on Creation of Subsidiaries. The U.S. Borrower
will not, and will not permit any of its Subsidiaries to, establish, create or
acquire after the Effective Date any Subsidiary unless the same will not
materially adversely affect (a) any Borrower's ability to repay the Obligations
when due or (b) in the U.S. Borrower's reasonable estimation, the ability to
comply with the covenants set forth in Sections 9.01 through 9.03, inclusive,
and Section 9.04(b); provided that the U.S. Borrower shall comply with its
obligations under Section 10.15 and the Pledge and Security Agreement with
respect to any such new Subsidiary within the time periods applicable thereto.
11.07 Transactions with Affiliates. Neither the U.S. Borrower
nor any of its Subsidiaries will, directly or indirectly, enter into, renew or
extend any transaction or series of transactions (including, without limitation,
the purchase, sale, lease or exchange of property or assets, or the rendering of
any service) with any Affiliate of the U.S. Borrower ("Affiliate Transactions"),
other than Exempted Affiliate Transactions, except upon fair and reasonable
terms no less favorable to the U.S. Borrower or such Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to
a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a Person that is not an
Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) Except as otherwise required pursuant to the last
paragraph of this Section 11.07, transactions approved by a majority
of the Board of Directors of HMC;
(ii) Affiliate Transactions on terms and conditions
which do not materially adversely affect (a) any Borrower's ability to
repay the Obligations when due or (b) in the U.S. Borrower's
reasonable estimation, the ability of the U.S. Borrower to comply with
the covenants set forth in Sections 9.01 through 9.03, inclusive, and
Section 9.04(b);
(iii) the payment of reasonable and customary fees and
expenses to members of the Board of Directors of the U.S. Borrower who
are not employees of the U.S. Borrower;
(iv) any Dividends permitted to be paid under Section
11.11;
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(v) loans made and other transactions entered into by the U.S.
Borrower and its Subsidiaries (and not any other Affiliate) to the
extent permitted by Section 11; and
(vi) Permitted Sharing Arrangements and payments made pursuant
thereto to the extent that such transactions are not otherwise
prohibited or restricted pursuant to this Agreement.
Any Affiliate Transaction or series of related Affiliate Transactions, other
than Exempted Affiliate Transactions and other than any transaction or series of
related transactions specified in any of clauses (ii) through (vi) of this
Section 11.07, (a) with an aggregate value in excess of $10 million must first
be approved pursuant to a resolution approved by a majority of the Board of
Directors (or any authorized committee thereof) of the U.S. Borrower who are
disinterested in the subject matter of the transaction, and (b) with an
aggregate value in excess of $25 million, will require the U.S. Borrower to
obtain a favorable written opinion from an independent financial advisor of
national reputation as to the fairness from a financial point of view of such
transaction to the U.S. Borrower or the applicable Subsidiary of the U.S.
Borrower, except that in the case of a real estate transaction or related real
estate transactions with an aggregate value in excess of $25 million but not in
excess of $50 million, an opinion may instead be obtained from an independent,
qualified real estate appraiser that the consideration received in connection
with such transaction is fair to the U.S. Borrower or the applicable Subsidiary
of the U.S. Borrower. As used herein, the term "Exempted Affiliate Transaction"
means (i) employee compensation arrangements approved by a majority of
independent (as to such transactions) members of the Board of Directors of the
U.S. Borrower, (ii) payments of reasonable fees and expenses to the members of
the Board of Directors of HMC, the U.S. Borrower or their Subsidiaries, and
(iii) transactions solely between the U.S. Borrower and any of its Subsidiaries
or solely among Subsidiaries of the U.S. Borrower.
11.08 Sales of Assets. (a) The U.S. Borrower will not, and will not
permit any of its Subsidiaries to, consummate any Asset Sale, unless (i) the
consideration received by the U.S. Borrower or such Subsidiary is at least equal
to the fair market value of the assets sold or disposed of as determined by the
Board of Directors of the U.S. Borrower in good faith and (ii) at least 75% of
the consideration received consists of cash, Cash Equivalents and/or real estate
assets; provided that, with respect to the sale of one or more real estate
properties, up to 75% of the consideration may consist of Indebtedness of the
purchaser of such real estate properties so long as such Indebtedness is secured
by a first priority Lien on the real estate property or properties sold; and
provided further that, for purposes of this clause (ii) the amount of (A) any
Indebtedness (other than Indebtedness subordinated in right of payment to the
Obligations) that is required to be repaid or assumed (and is either repaid or
assumed by the transferee of the related assets) by virtue of such Asset Sale
and which is secured by a Lien on the property or assets sold and (B) any
securities or other obligations received by the U.S. Borrower, or any such
Subsidiary from such transferee that are immediately converted by the U.S.
Borrower or such Subsidiary into cash (or as to which the U.S. Borrower or such
Subsidiary has received at or prior to the consummation of the Asset Sale a
commitment (which may be subject to customary conditions) from a nationally
recognized investment, merchant or commercial bank to convert into cash within
90 days of the consummation of such Asset Sale and which are thereafter actually
converted into cash within such 90-day period) will be deemed to be cash. The
U.S.
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Borrower shall cause the Net Sales Proceeds from any Asset Sale to be applied in
the manner required by Section 5.02(b). All Indebtedness secured by the assets
sold in the Asset Sale shall be repaid (or irrevocably defeased) except to the
extent such Indebtedness is assumed by the transferee of the related assets or
the U.S. Borrower and its Subsidiaries are released from such Indebtedness. In
addition, no Asset Sale shall be permitted if a Default or Event of Default then
exists or would result therefrom or, based on calculations made by the U.S.
Borrower on a Pro Forma Basis after giving effect to such Asset Sale and as if
such Asset Sale had occurred on the first day of the respective Calculation
Period, a Default or Event of Default will exist in respect of, or would have
existed during the Test Period last reported (or required to be reported
pursuant to Section 10.11(a) or 10.11(b), as the case may be) prior to the date
of the respective Asset Sale in respect of, the financial covenants contained in
Sections 9.01 through 9.03, inclusive.
(b) Notwithstanding, and without complying with, any the
provisions of the foregoing paragraph (a) or Section 5.02(b):
(i) the U.S. Borrower and its Subsidiaries may, in the
ordinary course of business, convey, sell, lease, transfer, assign or
otherwise dispose of inventory acquired and held for resale in the
ordinary course of business;
(ii) the U.S. Borrower and its Subsidiaries may convey, sell,
lease, transfer, assign or otherwise dispose of assets pursuant to and
in accordance with Section 11.09;
(iii) the U.S. Borrower and its Subsidiaries may sell or
dispose of damaged, worn out or other obsolete property in the
ordinary course of business so long as such property is no longer
necessary for the proper conduct of the business of the U.S. Borrower
or such Subsidiary, as applicable; and
(iv) the U.S. Borrower and its Subsidiaries may exchange
assets held by the U.S. Borrower or a Subsidiary of the U.S. Borrower
for one or more real estate properties and/or one or more Related
Businesses of any Person or entity owning one or more real estate
properties and/or one or more Related Businesses; provided that the
Board of Directors of the U.S. Borrower has determined in good faith
that the fair market value of the assets received by the U.S. Borrower
or any such Subsidiary are approximately equal to the fair market
value of the assets exchanged by the U.S. Borrower or such Subsidiary.
(c) No transaction listed in clause (b) of this Section
11.08 shall be deemed to be an Asset Sale under this Agreement.
11.09 Consolidation, Merger, etc. The U.S. Borrower will not, and
will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its
affairs or enter into any transaction of merger or consolidation, and the U.S.
Borrower will not sell, convey or transfer or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially as
an entirety in one transaction or a series of related transactions) except that:
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(i) any Subsidiary of the U.S. Borrower may engage in a
merger constituting an Asset Sale or an asset acquisition otherwise
permitted under this Agreement;
(ii) any Subsidiary of the U.S. Borrower that is not a
Guarantor may be merged with and into the U.S. Borrower or any other
Subsidiary of the U.S. Borrower that is not a Guarantor so long as in the
case of any merger involving the U.S. Borrower, the U.S. Borrower is the
surviving Person;
(iii) Subsidiaries of the U.S. Borrower which are Guarantors
may consolidate or merge with or into (whether or not such Guarantor is the
surviving Person) another Person (other than the U.S. Borrower or another
Guarantor), so long as (x) the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor under the Subsidiaries Guaranty and otherwise
complies with the applicable requirements of Section 10.15; provided,
however, that for the purpose of this clause (x), the requirements of
Section 10.15 shall have been satisfied upon the consummation of such
consolidation or merger without regard to any additional time otherwise
permitted under Section 10.15(c); and (y) immediately before and
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred or be continuing; and
(iv) Subsidiaries of the U.S. Borrower which are not
Guarantors or otherwise have no material assets or material liabilities may
be dissolved and liquidated.
11.10 Acquisitions; Investments. The U.S. Borrower will not, and will
not permit any of its Subsidiaries to:
(i) acquire ownership of Hotel Properties or other real
estate or other assets constituting Related Businesses (or all or a portion
of the Capital Stock of a Person owning such real estate or Related
Businesses (including (in either case) by way of merger)) if (x) a
Specified Default or Event of Default (but, solely in the case of an
acquisition of Hotel Properties with insurance proceeds relating to the
World Trade Center Marriott Hotel within two years after the receipt
thereof, limited to an Event of Default under Sections 12.01, 12.03 (to the
extent it relates to a failure to comply with any covenant contained in
Section 9), Section 12.05 and Section 12.15) then exists or would result
therefrom, or (y) based on calculations made by the U.S. Borrower on a Pro
Forma Basis after giving effect to such acquisition and as if such
acquisition had occurred on the first day of the respective Calculation
Period, a Default or Event of Default will exist in respect of, or would
have existed during the Test Period last reported (or required to be
reported pursuant to Section 10.11(a) of Section 10.11(b), as the case may
be) prior to the date of the respective acquisition in respect of, the
financial covenants contained in Sections 9.01 through 9.03, inclusive;
(ii) acquire ownership of non-real estate assets (other than
Permitted Investments or inventory, materials, equipment and other personal
property used in the ordinary course of business) (or all or a portion of
the Capital Stock of a Person owning primarily such non-real estate assets
(including by way of merger or Investment)) if (x) a
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Specified Default or Event of Default then exists or would result
therefrom, or (y) based on calculations made by the U.S. Borrower on a Pro
Forma Basis after giving effect to such acquisition and as if such
acquisition had occurred on the first day of the respective Calculation
Period, a Default or Event of Default will exist in respect of, or would
have existed during the Test Period last reported (or required to be
reported pursuant to Section 10.11(a) or 10.11(b), as the case may be)
prior to the date of the respective acquisition in respect of, the
financial covenants contained in Sections 9.01 through 9.03, inclusive, or
(z), after giving effect to such acquisition, the aggregate amount of
assets acquired in the then current fiscal year of the U.S. Borrower
pursuant to this Section 11.10(ii) would exceed 1% of the Adjusted Total
Assets (with any unused Roll Forward Amount from one fiscal year increasing
the amount available in subsequent fiscal years);
(iii) in the case of the U.S. Borrower or any Guarantor,
subject to the last paragraph of this Section 11.10, make any Investment in
a Person that, prior to the consummation of such Investment, is a
Subsidiary of the U.S. Borrower that is not a Guarantor if (a) at the time
the Investment is made, if the Leverage Ratio is greater than or equal to
6.00:1.00, the aggregate amount of all Investments made in the then current
fiscal year of the U.S. Borrower pursuant to this Section 11.10(iii) would
exceed 1% of the Adjusted Total Assets, determined as of the date of such
Investment (with any unused Roll Forward Amount from one fiscal year
increasing the amount available in subsequent fiscal years) or (b) a
Specified Default or Event of Default then exists or would result therefrom
or, based on calculations made by the U.S. Borrower on a Pro Forma Basis
after giving effect to such Investment and as if such Investment had
occurred on the first day of the respective Calculation Period, a Default
or Event of Default will exist in respect of, or would have existed during
the Test Period last reported (or required to be reported pursuant to
Section 10.11(a) or 10.11(b), as the case may be) prior to the date of the
respective Investment in respect of, the financial covenants contained in
Sections 9.01 through 9.03, inclusive; provided that the amount of
Investments made pursuant to this Section 11.10(iii) shall be calculated
net of (x) any payments by Subsidiaries (other than Guarantors) of
obligations owed to the U.S. Borrower or Guarantors, (y) amounts invested
in Subsidiaries (other than Guarantors) to provide minimum capital to
maintain the existence of Taxable REIT Subsidiaries and (z) distributions
from Subsidiaries (other than Guarantors) to the U.S. Borrower or
Guarantors); and provided, further that the foregoing shall not prevent the
U.S. Borrower or any Guarantor from making Investments, directly or
indirectly, in Subsidiaries that are Approved Lessees to the extent
necessary, in the reasonable judgment of the U.S. Borrower, to maintain
HMC's status as a real estate investment trust under the Code; and
(iv) subject to the last paragraph of this Section 11.10,
make any Investment in a Person that, prior to the consummation of such
Investment, is not a Subsidiary if (a) at the time such Investment is made,
if the Leverage Ratio is greater than or equal to 6.00:1.00, the aggregate
amount of all Investments made in the then current fiscal year of the U.S.
Borrower pursuant to this Section 11.10(iv) would exceed 2% of the Adjusted
Total Assets (with any unused Roll Forward Amount from one fiscal year
increasing the amount available in subsequent fiscal years) or (b) a
Specified Default or Event of Default then exists or would result therefrom
or, based on calculations made by the U.S. Borrower on a Pro Forma Basis
after giving effect to such Investment and as if
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such Investment had occurred on the first day of the respective Calculation
Period, a Default or Event of Default will exist in respect of, or would
have existed during the Test Period last reported (or required to be
reported pursuant to Section 10.11(a) or 10.11(b), as the case may be)
prior to the date of the respective Investment in respect of, the financial
covenants contained in Sections 9.01 through 9.03, inclusive; provided that
the amount of Investments made pursuant to this Section 11.10(iv) shall be
calculated net of (x) any payments by any such non-Subsidiary of
obligations owed to the U.S. Borrower or Guarantors, and (y) distributions
from any such non-Subsidiary to the U.S. Borrower or Guarantors.
Notwithstanding anything to the contrary in this Section 11.10, for the purposes
of determining whether an Investment complies with the requirements of this
Section 11.10, (a) compliance shall be tested as of the date that the U.S.
Borrower or any Subsidiary of the U.S. Borrower enters into a binding
contractual commitment relating to such Investment, (b) an Investment that takes
place in a series of related transactions contemplated by definitive agreements
relating to such Investment (such as an Investment in a form similar to a
reverse like-kind exchange transaction as contemplated by Rev. Proc. 2000-37,
2000-2 C.B. 308) will be permitted pursuant to this Section 11.10 so long as the
completion of such series of related transactions (as opposed to the completion
of any individual component) would result in an Investment permitted under this
Section 11.10 and (c) an Investment otherwise permitted by Section 11.10(i) or
(ii) shall not be subject to the requirements of Sections 11.10(iii) and (iv)
if:
(I) such Investment is in a Person that, following the
consummation of such Investment, (x) is a Guarantor or becomes a Guarantor
in accordance with the requirements of Section 10.15, or (y) is not a
Guarantor or does not become a Guarantor as described in the preceding
clause (x) solely by virtue of the provisions of Section 10.15(a)(2);
(II) such Investment is a Permitted Investment;
(III) such Investment is a single Investment or one of a
series of related Investments by the U.S. Borrower or any Subsidiary
thereof, directly or indirectly, in the ▇.▇. Marriott Hotel in Washington,
DC in an aggregate amount not to exceed $100,000,000; provided that (x) as
a result of such Investment or series of related Investments in the ▇.▇.
Marriott Hotel, the owner of such hotel becomes a Subsidiary of the U.S.
Borrower, (y) such Investment does not materially adversely affect (a) any
Borrower's ability to repay the Obligations when due or (b) in the U.S.
Borrower's reasonable estimation, the ability to comply with the financial
covenants contained in Sections 9.01 through 9.03, inclusive, and Section
9.04(b) and (z) no Specified Default or Event of Default then exists or
would result therefrom; or
(IV) such Investment is in a Person that is not a Subsidiary,
but only to the extent that the consideration paid to acquire such
Investment consists of the equity interests in another Person that is not a
Subsidiary.
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11.11 Dividends. The U.S. Borrower will not, and will not permit any
of its Subsidiaries to, authorize, declare or pay any Dividends with respect to
the U.S. Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the U.S. Borrower may pay cash
Dividends to the U.S. Borrower or to a Wholly-Owned Subsidiary of the U.S.
Borrower;
(ii) any non-Wholly-Owned Subsidiary of the U.S. Borrower may
pay cash Dividends to its shareholders, members or partners generally so
long as the U.S. Borrower or its respective Subsidiary which owns the
equity interest or interests in the Subsidiary paying such Dividends
receives at least its proportionate share thereof (based upon its relative
holdings of equity interests in the Subsidiary paying such Dividends and
taking into account the relative preferences, if any, of the various
classes of equity interests in such Subsidiary);
(iii) so long as (x) no Specified Default or Event of Default
then exists or would exist immediately after giving effect thereto and (y)
HMC qualifies, or has taken all other actions necessary to qualify, as a
"real estate investment trust" under the Code during any fiscal year of
HMC, the U.S. Borrower may pay quarterly cash Dividends (which may be based
on estimates) to HMC and all other holders of OP Units generally when and
to the extent necessary for HMC to distribute, and HMC may so distribute,
cash Dividends to its shareholders generally in an aggregate amount not to
exceed the greater of (I) the greatest of (A) 100% of Cash Available for
Distribution for such fiscal year, (B) 100% of Taxable Income and (C) the
minimum amount necessary for HMC to maintain its tax status as a real
estate investment trust and to satisfy the distributions required to be
made by Notice 88-19 under the Code (or Treasury regulations issued
pursuant thereto) by reason of HMC making the election provided for therein
and (II) at any time when, based upon the financial statements delivered
pursuant to Section 10.11(a) or (b) and the U.S. Borrower's estimation of
the results of the current fiscal quarter, the Consolidated Interest
Coverage Ratio is greater than 2.00:1:00, 85% of the Adjusted Funds From
Operations for the current fiscal year;
(iv) so long as no Specified Default or Event of Default then
exists or would result therefrom, the U.S. Borrower may pay cash Dividends
to HMC so long as the proceeds therefrom are promptly used by HMC to pay
(x) any Permitted Tax Payments at the time and to the extent actually due
and payable (but without duplication of any tax payments permitted to be
made pursuant to Section 11.11(iii) above to satisfy the distribution
required to be made by Notice 88-19 under the Code (or Treasury regulations
issued pursuant thereto)) and (y) any general corporate and other overhead
expenses and liabilities incurred by it to the extent not otherwise
prohibited by this Agreement;
(v) so long as no Specified Default or Event of Default then
exists or would result therefrom, the U.S. Borrower may pay cash Dividends
to HMC in an aggregate amount not to exceed $10,000,000 for the Revolving
Credit Period; and
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(vi) the U.S. Borrower may pay cash Dividends to HMC so long
as HMC promptly thereafter uses the proceeds of such Dividends to
repurchase shares of its capital stock and/or the QUIPs and/or redeem
the QUIPs Debt, and the Borrower may repurchase OP Units, in each case
so long as (i) no Specified Default or Event of Default then exits or
would result therefrom, (ii) the aggregate amount of all repurchases
and redemptions made pursuant to this Section 11.11(vi) in any fiscal
year of HMC does not exceed an amount equal to 1% of Adjusted Total
Assets determined as of the date of declaration of the Dividend (with
any unused Roll Forward Amount from one fiscal year increasing the
amount available to be paid as a Dividend under this Section 11.11(vi)
in subsequent fiscal years).
11.12 Capital Expenditures. The U.S. Borrower will not, and will
not permit any of its Subsidiaries to, make any Capital Expenditures, except:
(i) the U.S. Borrower and its Subsidiaries may make
acquisitions of Hotel Properties and/or other assets in accordance with
the requirements of Sections 11.09 and 11.10, in each case to the
extent that same constitute Capital Expenditures;
(ii) in addition to Capital Expenditures permitted by the
other clauses of this Section 11.12, the U.S. Borrower and its
Subsidiaries may make Maintenance Capital Expenditures with respect to
their Hotel Properties and other high quality real estate so long as
(x) the aggregate amount of all such Capital Expenditures in any fiscal
year of the U.S. Borrower does not exceed an amount equal to 8% of the
Gross Revenues from all such Hotel Properties and other high quality
real estate for such fiscal year plus any amounts then being held on
deposit for such Capital Expenditures for Hotel Properties or high
quality real estate, as the case may be, to the extent deposited in a
prior fiscal year, and (y) all such Capital Expenditures are made in
accordance with the terms of the respective Management Agreement for
such Hotel Properties or high quality real estate, as the case may be;
(iii) in addition to Capital Expenditures permitted by the
other clauses of this Section 11.12, the U.S. Borrower and its
Subsidiaries may make payments in respect of Capitalized Lease
Obligations to the extent such Capitalized Lease Obligations are
otherwise permitted under Section 11.02; and
(iv) in addition to the Capital Expenditures permitted by
the other clauses of this Section 11.12, the U.S. Borrower and its
Subsidiaries may make additional Capital Expenditures:
(1) for the purpose of expanding or constructing
Improvements with respect to Hotel Properties; provided that, if the
Leverage Ratio equals or exceeds 6.00:1.00 at the time any such Capital
Expenditure is made, then such Capital Expenditures in any fiscal year
shall not exceed 2.0% of Adjusted Total Assets (excluding any Capital
Expenditures for the Memphis Marriott up to $14,000,000 in the
aggregate, which shall be permitted without being subject to the
limitations of this clause (1)) determined at the time the Capital
Expenditure is made, with the unused Roll
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Forward Amount from one fiscal year increasing the amount available in
subsequent fiscal years, and
(2) for the purpose of constructing new Hotel
Properties, provided that (A) so long as the Leverage Ratio equals or
exceeds 6.00:1.00, then such Capital Expenditures shall be limited to
construction of the properties identified on Schedule 11.12, (B) so
long as the Leverage Ratio is less than 6.00:1.00, the aggregate
amount of such Capital Expenditures in any fiscal year shall not
exceed 2.0% of Adjusted Total Assets determined at the time the
Capital Expenditure is made, with the unused Roll Forward Amount from
one fiscal year increasing the amount available in subsequent fiscal
years, (C) so long as the Leverage Ratio equals or exceeds 6.00:1.00,
for constructing the World Trade Center Marriott Hotel (or any
replacement thereof wherever located), not in excess of 110% of the
insurance proceeds received in respect thereof, and (D) so long as the
Leverage Ratio is less than 6.00:1.00, for constructing the World
Trade Center Marriott Hotel (or any replacement thereof wherever
located), with any construction costs in excess of the insurance
proceeds received in respect thereof to be charged against the amounts
available for Capital Expenditures under the immediately preceding
clause (B); provided, however, that, in the case of this clause (D),
to the extent that insufficient amounts are available under the
immediately preceding clause (B) during the fiscal year in which such
Capital Expenditures are sought to be made, the U.S. Borrower shall
nevertheless be permitted to make such Capital Expenditures subject to
the requirement that any Capital Expenditures in excess of the amounts
permitted pursuant to such clause (B) for such fiscal year be applied
against the amounts to be available under such clause (B) during the
next succeeding fiscal year and thereafter (in chronological order
until completely used).
11.13 Limitation on Payments of Certain Indebtedness; Modifications
of Certain Indebtedness; Modifications of Organizational Documents; etc. The
U.S. Borrower will not, and will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for
value of, including, in each case without limitation, by way of
depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due, the Senior Notes, any
other pari passu debt, the QUIPs Debt, any Non-Recourse Indebtedness,
any subordinated debt or any Limited Partner Notes other than any
payment, prepayment, redemption or acquisition for value pursuant to
this 11.13(i) which does not violate the provisions of Section
11.11(vi) or materially adversely affect (a) any Borrower's ability to
repay the Obligations when due or (b) in the U.S. Borrower's
reasonable estimation, the ability to comply with the financial
covenants contained in Sections 9.01 through 9.03, inclusive, and
Section 9.04(b),
(ii) amend or modify, or permit the amendment or
modification of, the QUIPs Debt, the Limited Partner Notes, any
Non-Recourse Indebtedness, any subordinated debt, the Senior Notes or
any other pari passu debt or any agreement (including, without
limitation, any purchase agreement, indenture or loan agreement)
related thereto, other than any amendment or modification thereto
which would not
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violate this Agreement and so long as the same do not materially
adversely affect (a) any Borrower's ability to repay the Obligations
when due or (b) in the U.S. Borrower's reasonable estimation, the
ability to comply with the financial covenants contained in Sections
9.01 through 9.03, inclusive, and Section 9.04(b), or
(iii) amend, modify or change its designation of trust,
certificate of incorporation (including, without limitation, by the
filing or modification of any certificate of designation), by-laws,
certificate of partnership, partnership agreement or any equivalent
organizational document, or any agreement entered into by it, with
respect to its capital stock or other equity interests, or enter into
any new agreement with respect to its capital stock or other equity
interests, other than any amendments, modifications or changes
pursuant to this Section 11.13(iii) or any such new agreements, in
each case, which do not materially adversely affect (a) any Borrower's
ability to repay the Obligations when due or (b) in the U.S.
Borrower's reasonable estimation, the ability to comply with the
financial covenants contained in Sections 9.01 through 9.03,
inclusive, and Section 9.04(b).
Notwithstanding the foregoing, (a) the U.S. Borrower may not take any of the
foregoing actions with respect to any subordinated debt if a Default or Event of
Default of the type specified in Section 12.01 exists in the payment of
principal of or interest on the Loans then exists or would result therefrom or
if such action would violate the subordination provisions contained therein and
(b) if a Specified Default or Event of Default shall have occurred or would
occur as a result thereof, the U.S. Borrower may not prepay or repurchase or
advance the maturity of the QUIPs Debt.
11.14 Business. The U.S. Borrower will not, and will not permit any
of its Subsidiaries to, engage (directly or indirectly) in any business other
than (i) the businesses in which the U.S. Borrower and its Subsidiaries are
engaged on the Effective Date including the acquisition, ownership, leasing,
operation, and sale of Hotel Properties and other high quality real estate
consistent with the quality of the U.S. Borrower's and its Subsidiaries'
existing portfolio of Hotel Properties and the acquisition and conduct of
Related Businesses, and (ii) non-real estate related businesses that the U.S.
Borrower and its Subsidiaries may acquire or in which they may make Investments
after the Effective Date to the extent permitted pursuant to Section 11.10(ii).
SECTION 12. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
12.01 Payments. Any Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or the Face Amount of any Bankers'
Acceptance, (ii) default in the payment when due of any Unpaid Drawing and such
default shall continue unremedied for two or more Business Days after notice of
such Unpaid Drawing to the U.S. Borrower has been given, or (iii) default, and
such default shall continue unremedied for two or more Business Days, in the
payment when due of any interest on any Loan, Note or Unpaid Drawing, or any
Fees or any other amounts owing hereunder or under any other Credit Document; or
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12.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered pursuant hereto or thereto shall prove
to be untrue in any material respect on the date as of which made or deemed made
or delivered; or
12.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 9, 10.11(e)(i), or 11 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement (other than as provided in Section 12.01) and such default shall
continue unremedied for a period of 30 days after written notice to the U.S.
Borrower by the Administrative Agent or the Required Lenders; or
12.04 Default Under Other Agreements. (i) HMC or any of its
Subsidiaries shall default in any payment of any Indebtedness (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) any Indebtedness
(other than the Obligations) of HMC or any of its Subsidiaries shall be declared
to be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment or any prepayments required under the Senior Notes
Documents in connection with a prepayment required under this Agreement pursuant
to Section 5.02(b), prior to the stated maturity thereof, provided that it shall
not be a Default or an Event of Default under clause (i) or (ii) of this Section
12.04 unless the Indebtedness described in such clauses (i) and (ii) is (1)
Non-Recourse Indebtedness in an aggregate principal amount in excess of 1% of
the Adjusted Total Assets (measured as of the date of determination) or (2)
other Indebtedness in aggregate principal amount in excess of $40,000,000 (or
the Dollar Equivalent thereof);
12.05 Bankruptcy, etc. HMC or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against HMC
or any of its Subsidiaries and the petition is consented to or acquiesced in by
HMC or any of its Subsidiaries, is not controverted within 10 days, or is not
dismissed within 30 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of HMC or any of its Subsidiaries or HMC or
any of its Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to HMC or any of its Subsidiaries, or there is commenced against
HMC or any of its Subsidiaries any such proceeding which remains undismissed for
a period of 30 days, or HMC or any of its Subsidiaries is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered and is not vacated or stayed within 30 days; or HMC or any
of its Subsidiaries suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or unstayed for
a period of 30 days; or HMC or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any partnership and/or corporate
action is taken by HMC or any of its Subsidiaries for the purpose of effecting
any of the foregoing (it being understood that the provisions of this Section
12.05 shall not apply to any Subsidiary of the U.S. Borrower who is a borrower
(a) under Non-Recourse Indebtedness in aggregate principal amount of less than
or equal to 1% of the Adjusted Total Assets or (b) under other Indebtedness
equal to or less than $40,000,000 (or the
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Dollar Equivalent thereof) but the provisions of this Section 12.05 shall apply
to each Significant Subsidiary and, at any time a Canadian Revolving Loan
Borrower has any outstanding Canadian Revolving Loans, such Canadian Revolving
Loan Borrower); or
12.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in subsection .62, .63, .64., .65, .66, .67 or
..68 or PBGC Regulation Section 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, any Plan shall have had or is
likely to have a trustee appointed to administer such Plan, any Plan is, shall
have been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made by the U.S. Borrower, any Subsidiary of the
U.S. Borrower or any ERISA Affiliate to a Plan or a Foreign Pension Plan has not
been timely made, the U.S. Borrower or any of its Subsidiaries or ERISA
Affiliates has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the U.S. Borrower
or any of its Subsidiaries or ERISA Affiliates has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, either individually and/or in the aggregate, in the reasonable
opinion of the Required Banks, will have a Material Adverse Effect; or
12.07 Pledge and Security Agreement. At any time after the
execution and delivery thereof, the Pledge and Security Agreement shall, unless
otherwise permitted in this Agreement, cease to be in full force and effect, or
shall cease to give the Collateral Agent for the benefit of the Secured
Creditors the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a perfected security interest in, and
Lien on, all of the Pledge and Security Agreement Collateral), in favor of the
Collateral Agent for the benefit of the Secured Creditors, superior to and prior
to the rights of all third Persons, and subject to no other Liens, or any Credit
Party shall default in the due performance or observance of any term, covenant
or agreement on its part to be performed or observed pursuant to the Pledge and
Security Agreement and such default shall continue beyond any grace period
specifically applicable thereto pursuant to the terms of the Pledge and Security
Agreement; or
12.08 Guaranty. The Subsidiaries Guaranty (or the Guaranty of the
U.S. Borrower contained in this Agreement) shall, unless otherwise permitted in
this Agreement, cease to be in full force or effect (other than in accordance
with its terms) as to any Guarantor, or
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any Guarantor or any Person acting by or on behalf of such Guarantor shall deny
or disaffirm such Guarantor's obligations under the Guaranty or any Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to the Subsidiaries
Guaranty (or such guarantee); or
12.09 Judgments. One or more judgments or decrees shall be entered
against HMC or any of its Subsidiaries involving in the aggregate for HMC and
its Subsidiaries a liability (not paid or not fully covered by a reputable and
solvent insurance company) and such judgments and decrees either shall be final
and non-appealable or shall not be vacated, discharged or stayed or bonded
pending appeal for any period of 30 consecutive days, and the aggregate amount
of all such judgments equals or exceeds 0.5% of Adjusted Total Assets; or
12.10 Management Agreements. Any Management Agreement or any
material provision thereof shall cease to be in full force and effect due to a
default by the U.S. Borrower or any Subsidiary of the U.S. Borrower or the U.S.
Borrower or any Subsidiary of the U.S. Borrower shall deny or disaffirm its
material obligations thereunder or shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant thereto after the expiration of any applicable
cure period, other than those failures, defaults or modifications which could
not, either individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect; or
12.11 Operating Leases. Any Operating Lease or any material
provision thereof shall cease to be in full force and effect or otherwise be
amended or modified without the consent of the Administrative Agent or any party
thereto shall deny or disaffirm its material obligations thereunder or shall
default in the due performance or observance of any material term, covenant or
agreement on its part to be performed or observed pursuant thereto after the
expiration of any applicable cure period, other than those failures, defaults or
modifications which could not, either individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect; or
12.12 Change of Control. A Change of Control shall occur; or
12.13 Trademark Permission. At any time Hotel Properties which
account for more than 15% of Consolidated EBITDA for the Test Period then most
recently ended shall be operated without the use of the "Marriott",
"Renaissance", "Hyatt", "Swissotel", "Four Seasons", "▇▇▇▇-▇▇▇▇▇▇▇", "▇▇▇▇▇▇",
"Westin" or other nationally recognized full service chain name or trademark or
shall not be permitted to use any such name or trademark in any advertising
incident thereto; or
12.14 REIT Status; Cash Proceeds Retained by HMC. HMC shall for any
reason whether or not within the control of the U.S. Borrower (a) cease, for any
reason, to be a real estate investment trust under Sections 856 through 860 of
the Code, (b) following its receipt of any cash proceeds from any Asset Sale,
incurrence of Indebtedness, insurance claim or condemnation award, sale or
issuance of its equity, cash capital contributions or cash dividends received
from the U.S. Borrower or a Permitted REIT Subsidiary, fail to (i) apply such
cash proceeds to make a distribution to its shareholders, to pay its general
corporate overhead expenses and other liabilities or to make an Investment in a
Permitted REIT Subsidiary or (ii) to
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the extent not applied pursuant to the immediately preceding clause (i),
contribute such cash proceeds as an equity contribution to the capital of the
U.S. Borrower within 15 days thereafter; or (c) directly or indirectly (other
than through the U.S. Borrower or its Subsidiaries) engage in any business
activities, have significant assets or liabilities or undertake any activities
of the type governed by Sections 11.01, 11.02, 11.10 and 11.12 except to the
extent consistent, in the good faith judgment of the U.S. Borrower, with such
activities on the Effective Date.
12.15 General Partner Status. HMC shall cease at any time to be the
sole general partner of the Borrower; or
12.16 Certain FF&E. Any Person, other than the U.S. Borrower or a
Subsidiary thereof, shall have any consensual Lien on the FF&E owned by a
Taxable REIT Subsidiary and leased to an Approved Lessee (other than Liens
existing on the Effective Date or as otherwise specifically provided in Section
11.01);
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the U.S. Borrower, take any or
all of the following actions (provided that, if an Event of Default specified in
Section 12.05 shall occur with respect to any Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i), (ii), (iv) and (vii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Revolving Loan Commitment
(including the Total Maximum Canadian Dollar Revolving Loan Sub-Commitment)
terminated, whereupon all Commitments of each Lender shall forthwith terminate
immediately and any Commitment Commission and any Canadian Commitment Commission
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of, the Face Amount of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder
(including Unpaid Drawings) and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the relevant Borrowers to pay (and the relevant Borrowers
agree that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 12.05 with respect to any Borrower, they will pay)
to the Collateral Agent at the appropriate Payment Office such additional amount
of cash, to be held as security by the Collateral Agent for the respective
Borrower's reimbursement obligations in respect of Letters of Credit then
outstanding, as is equal to the aggregate Stated Amount of all Letters of Credit
then outstanding for the account of such Borrower and which may be applied by
the Administrative Agent to the repayment of Obligations in respect of Letters
of Credit and which may not be withdrawn by the U.S. Borrower or any of its
Subsidiaries so long as the Letter of Credit to which such cash collateral is
attributable remains outstanding; (v) enforce, as Collateral Agent, all of the
Liens and security interests created pursuant to the Security Documents; (vi)
apply any cash collateral held pursuant to Section 5.02 to the repayment of the
Obligations; and (vii) direct the appropriate Canadian Revolving Loan Borrowers
to pay (and each Canadian Revolving Loan Borrower agrees that upon receipt of
such notice, or upon the occurrence of an Event of Default specified in Section
12.05 with respect to any Borrower, it will pay) to the Administrative Agent
(without duplication) all amounts required to be paid pursuant to clause (j) of
Schedule III.
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SECTION 13. The Agents.
13.01 Appointment. The Lenders hereby designate DBTCA as the
Administrative Agent and as Collateral Agent to act as specified herein and in
the other Credit Documents. The Lenders hereby designate (x) Bank of America,
N.A. as Syndication Agent and (z) each of Citicorp Real Estate, Inc., Credit
Lyonnais New York Branch and ▇▇▇▇▇ Fargo Bank, N.A., as Co-Documentation Agents,
in each case to act as specified herein and in the other Credit Documents. Each
Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, any Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Each Agent may perform any of its duties hereunder by or through its
respective officers, directors, agents, employees or affiliates.
13.02 Nature of Duties. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. No Agent nor any of its respective officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by it or them hereunder or under any other Credit Document or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Agents shall be mechanical and administrative in
nature; no Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Lender or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose on any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
13.03 Lack of Reliance on the Agents. Independently and without
reliance upon any Agent (for purposes of this Section 13.03, the term "Agent"
shall include all officers, directors, agents, employees and affiliates of the
respective Agent), each Lender and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrowers and their
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrowers and their Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent shall be responsible to any Lender or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of any
Borrower or any of its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or
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the financial condition of any Borrower or any of its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
13.04 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender and no holder
of any Note shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders, or if required by Section 14.11, all of the Lenders.
13.05 Reliance. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by such
Agent.
13.06 Indemnification. To the extent any Agent is not reimbursed
and indemnified by the13.06 Credit Parties, the Lenders will reimburse and
indemnify such Agent, its affiliates, and their respective officers, directors,
agents and employees, pro rata based on their respective voting rights
determined in the definition of "Required Lenders" (for this purpose, determined
as if there were no Defaulting Lenders at such time), for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Agent in performing its
respective duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from such Agent's gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
13.07 Each Agent in its Individual Capacity. With respect to its
obligation to make Loans, or issue or participate in Letters of Credit, under
this Agreement, each Person serving as an Agent shall have the rights and powers
specified herein for a "Lender" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Lenders," "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include each Person serving as
an Agent in its individual capacity. Each Person serving as an Agent may accept
deposits from, lend money to, and generally engage in any kind of banking,
investment banking, trust or other business with any Credit Party or any
Affiliate of any Credit Party as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Credit Party for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
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13.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. 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, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
13.09 Removal of or Resignation by he Agents. (a) Any Agent
(including, without limitation, the Administrative Agent and the Collateral
Agent) may resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 30 days' prior
written notice to the Lenders and the Borrowers. Such resignation shall take
effect upon the appointment of a successor Agent pursuant to clauses (b) and (c)
below or as otherwise provided below; provided that the resignation by the
Collateral Agent shall only be effective upon the appointment of a successor
Collateral Agent.
(b) Upon any notice of resignation by, or the removal of,
any Agent, the Required Lenders shall appoint a successor Agent hereunder who
shall be a commercial bank or trust company reasonably acceptable to the U.S.
Borrower.
(c) If a successor Agent shall not have been so appointed
within such 30 day period, the resigning Agent, with the consent of the U.S.
Borrower (which consent shall not be unreasonably withheld or delayed), shall
then appoint a successor Agent who shall serve as Agent hereunder or thereunder
until such time, if any, as the Required Lenders appoint a successor Agent as
provided above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) above by the 35th day after the date such notice of
resignation was given by the resigning Agent, the resigning Agent's resignation
shall become effective and the Required Lenders shall thereafter perform all the
duties of such Agent hereunder and/or under any other Credit Document until such
time, if any, as the Required Lenders appoint a successor Agent as provided
above.
(e) In addition, the Required Lenders shall have the right
to remove the Administrative Agent and appoint a successor Administrative Agent
who shall be a commercial bank or trust company reasonably acceptable to the
U.S. Borrower in the event that the Administrative Agent has been grossly
negligent or has willfully misconducted itself in performing its functions and
duties under this Agreement or any other Credit Document (as determined by a
court of competent jurisdiction in a final and non-appealable decision).
SECTION 14. Miscellaneous.
14.01 Payment of Expenses, etc. The U.S. Borrower agrees that it
shall: (i) whether or not the transactions contemplated herein are consummated,
pay all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of
insurance independent consultants and counsel retained by the Administrative
Agent, including ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ Stirling Scales) in connection with the preparation, execution,
delivery and performance of this Agreement and the other Credit Documents and
the documents and instruments referred to herein and therein, any amendment,
waiver or consent relating hereto or thereto, of the Administrative Agent in
connection with its syndication efforts with respect to this Agreement and, upon
the occurrence and during the continuance of an Event of Default, the reasonable
costs and expenses of each of the Lenders in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and, following an
Event of Default, for each of the Lenders) (it being understood that the
provisions of this clause (i) does not include the normal administrative charges
of the Administrative Agent in administering the Loans (which amounts are
included in a separate letter with the Administrative Agent)); (ii) pay and hold
each of the Lenders harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
save each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify the
Administrative Agent and each Lender, and each of their respective officers,
directors, employees, representatives, affiliates and agents from and hold each
of them harmless against any and all liabilities, obligations (including removal
or remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Administrative Agent or any Lender is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use or proposed use of the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein or in any other Credit
Document or the exercise of any of their rights or remedies provided herein or
in the other Credit Documents, or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the surface
or subsurface of any Real Property owned, leased or at any time operated by the
U.S. Borrower or any of its Subsidiaries, the Release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned, leased or operated by the U.S. Borrower or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the U.S. Borrower, any of its Subsidiaries or any Real Property owned,
leased or at any time operated by the U.S. Borrower or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel and other consultants incurred in connection with any
such investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)). To the extent that the undertaking to indemnify, pay or hold
harmless the Administrative Agent or any Lender set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the U.S. Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
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15.02 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Borrower, at
the U.S. Borrower's address specified opposite its signature below; if to any
Lender, at its address specified opposite its name on Schedule II; and if to the
Administrative Agent, at the Notice Office; or, as to any Borrower or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties hereto and, as to each Lender, at such
other address as shall be designated by such Lender in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrowers shall not be effective until received by
the Administrative Agent or the U.S. Borrower, as the case may be (or when the
addressee refuses to accept delivery).
14.03 Benefit of Agreement. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, that no Borrower may
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of the Lenders (and
any attempted such assignment without such consent shall be null and void) and,
provided further, that, although any Lender may grant participations in its
rights hereunder, such Lender shall remain a "Lender" for all purposes hereunder
and the participant shall not constitute a "Lender" hereunder and no Lender may
transfer or assign any portion of its Commitments hereunder except as provided
in Section 14.03(b) and 14.03(d), provided further, that no Lender shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan or Note in which such participant is
participating, or reduce the rate or extend the time of payment of interest
thereon or Fees (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof
(it being understood that any amendment or modification to the financial
definitions in this Agreement or to Section 14.06(a) shall not constitute a
reduction in any rate of interest or Fees for purposes of this clause (i), so
long as the primary purpose of the respective amendments or modifications to the
financial definitions or to Section 14.06(a) was not to reduce the interest or
Fees payable hereunder), or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Revolving Loan Commitment shall not constitute a change in the terms of
such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower or any other Credit Party of any of its
rights and obligations under this Agreement or any other Credit Document or
(iii) release all or substantially all of the Pledge and Security Agreement
Collateral under the Pledge and Security Agreement (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be
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those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) and/or
its outstanding Term Loans to (i) its parent company and/or any affiliate of
such Lender which is at least 50% owned by such Lender or its parent company or
to one or more Lenders or (ii) in the case of any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed or advised
by the same investment advisor of such Lender or by an Affiliate of such
investment advisor or (y) assign all or a portion of all of the assigning
Lender's Revolving Loan Commitment (and related outstanding Obligations
hereunder) and/or outstanding Term Loans to an Eligible Transferee, and, in the
case of a partial assignment of such Revolving Loan Commitment and/or
outstanding Term Loans, such assignment shall be in a minimum amount of
$5,000,000 or such lesser amount as is acceptable to the Administrative Agent
(and the assignor shall maintain a minimum amount of $5,000,000 for its own
account unless the assignor shall assign its entire interest), and all assignees
shall become a party to this Agreement as a Lender by execution of an Assignment
and Assumption Agreement, provided that (i) at such time Schedule I-A shall be
deemed modified to reflect the Revolving Loan Commitments and/or outstanding
Term Loans, as the case may be, of such new Lender and of the existing Lenders,
(ii) upon surrender of the old Notes, if any, new Notes will be issued to such
new Lender and to the assigning Lender (to the extent requested by such
Lenders), such new Notes to be in conformity with the requirements of Section
2.06 (with appropriate modifications) to the extent needed to reflect the
revised Revolving Loan Commitments and/or outstanding Terms Loans, as the case
may be, (iii) the consent of the Administrative Agent and, if the Person serving
as the Administrative Agent is not a Canadian Lender, any Canadian Lender whose
Maximum Canadian Dollar Revolving Loan Sub-Commitment is not exceeded by any
other Canadian Lender shall be required in connection with any such assignment
pursuant to clause (y) above (which consent shall not be unreasonably withheld)
and (iv) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and, provided further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 14.15. The
Administrative Agent will promptly give the Borrower notice of any assignment to
an Eligible Transferee although the failure to give any such notice shall not
affect such assignment or result in any liability by the Administrative Agent.
To the extent of any assignment pursuant to this Section 14.03(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Revolving Loan Commitments and/or its assigned outstanding Term Loans.
At the time of each assignment pursuant to this Section 14.03(b) to a Person
which is not already a Lender hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Lender shall provide to the Borrower and
the Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable a Section 5.04(b)(ii) Certificate) described in Section 5.04(b). To
the extent that an assignment of all or any portion of a Lender's Revolving Loan
Commitments and related outstanding Obligations and/or outstanding Term Loans
pursuant to Section 2.14 or this Section 14.03(b) would, at the time of such
assignment, result in increased costs or Taxes under Section 2.11, 2.12 or 5.04
from those being charged by the respective assigning Lender prior to
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such assignment, then the Borrower shall not be obligated to pay or reimburse
such increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Lender which is a fund may
pledge all or any portion of its Loans and Notes to its trustee in support of
its obligations to its trustee. No pledge pursuant to this clause (c) shall
release the transferor Lender from any of its obligations hereunder.
(d) So long as no Event of Default has occurred and is
continuing, no RL Lender that at the applicable time has, or that has an
Affiliate that has, a Maximum Canadian Dollar Revolving Loan Sub-Commitment may
assign all or any portion of its Revolving Loan Commitment unless the assignment
includes an assignment of all or the applicable portion of both the Maximum
Canadian Dollar Revolving Loan Sub-Commitment and the Canadian Dollar Revolving
Loan Sub-Commitment of such Revolving Loan Commitment to the applicable Eligible
Transferee or an Affiliate of such Eligible Transferee (the "Assignee Canadian
Lender") and the Assignee Canadian Lender is a resident in Canada for the
purpose of the Income Tax Act (Canada) or an authorized foreign bank which at
all times holds all of its interest in any Canadian Obligations in the course of
its Canadian banking business for purposes of subsection 212(13.3) of the Income
Tax Act (Canada), or is otherwise able to establish to the satisfaction of the
Canadian Revolving Loan Borrowers and the Administrative Agent based on
applicable law in effect at the time of such assignment that such Assignee
Canadian Lender is not subject to deduction or withholding of Canadian Taxes
with respect to any payments to such Assignee Canadian Lender of interest, fees,
commissions, or any other amount payable by any Canadian Revolving Loan Borrower
under the Credit Documents. Notwithstanding the foregoing provisions of this
Section 14.03(d), an RL Lender that at the applicable time has, or that has an
Affiliate that has, a Maximum Canadian Dollar Revolving Loan Sub-Commitment may
assign such portion, if any, of its Revolving Loan Commitment in excess of the
Maximum Canadian Dollar Revolving Loan Sub-Commitment, subject to the
requirements of Section 14.03(b).
14.04 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Lender or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Administrative Agent or any Lender or the holder of any Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Credit Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Administrative Agent or any Lender
or the holder of any Note would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Lender or the holder of any Note to
any other or further action in any circumstances without notice or demand.
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14.05 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise (except pursuant to Section 2.14 or 14.03)), which is
applicable to the payment of the principal of, or interest on, the Loans or
Commitment Commission or Canadian Commitment Commission, of a sum which with
respect to the related sum or sums received by other Lenders is in a greater
proportion than the total of such Obligation then owed and due such Lender bears
to the total of such Obligation then owed and due all of the Lenders immediately
prior to such receipt, then such Lender receiving such excess payment shall
purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the respective Credit Party to such Lenders in
such amount as shall result in a proportional participation by all the Lenders
in such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 14.05(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting
Lenders.
14.06 Calculations; Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP, consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the U.S. Borrower to the Lenders).
(b) Except as otherwise specified in Section 11, for purposes
of computations of baskets included in Section 11, actions during the fiscal
year ending December 31, 2002, including prior to the Effective Date, shall be
included.
(c) All computations of interest, Commitment Commission,
Canadian Commitment Commission and Fees hereunder shall be made on the basis of
a year of 360 days (or 365 or 366 days, as the case may be, in the case of
interest on Base Rate Loans and Canadian Prime Rate Loans or 365 days in the
case of Acceptance Fees) for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
Commitment Commission, Canadian Commitment Commission or Fees are payable.
(d) For purposes of the Interest Act (Canada), (i) whenever
any interest or fee under this Agreement is calculated using a rate based on a
year of 360 days or 365 days, as the case may be, the rate determined pursuant
to such calculation, when expressed as an annual rate, is equivalent to (x) the
applicable rate based on a year of 360 days or 365 days, as
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the case may be, (y) multiplied by the actual number of days in the calendar
year in which the period for which such interest or fee is payable (or
compounded) ends, and (z) divided by 360 or 365, as the case may be; (ii) the
principle of deemed reinvestment of interest does not apply to any interest
calculation under this Agreement; and (iii) the rates of interest stipulated in
this Agreement are intended to be nominal rates and not effective rates or
yields.
14.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE
LOCATED IN THE CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE BORROWERS HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH CREDIT PARTY, AND AGREES
NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS,
THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH CREDIT PARTY. EACH OF THE
BORROWERS FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE U.S.
BORROWER (WHICH, IN THE CASE OF EACH CANADIAN REVOLVING LOAN BORROWER IS HEREBY
IRREVOCABLY APPOINTED AS ITS AGENT TO ACCEPT SUCH SERVICE OF PROCESS) AT THE
ADDRESS OF THE U.S. BORROWER SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF THE BORROWERS
HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE BORROWERS IN ANY OTHER JURISDICTION. THE SUBMISSION TO
JURISDICTION CONTAINED IN THIS SECTION 14.07(a) IS A SUBMISSION TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS.
(b) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS
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ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.08 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
14.09 Effectiveness. This Agreement shall become effective on the
date (the "E Date") on which the Borrowers, the Administrative Agent and each of
the Lenders set forth on Schedule I shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the same
to the Administrative Agent at the Notice Office or, in the case of the Lenders,
shall have given to the Administrative Agent telephonic (confirmed in writing)
or written notice at such office that the same has been signed and mailed to it.
14.10 Headings Descriptive. The headings of the several sections
and subsections of this 1 Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
14.11 Amendment or Waiver; etc. (a) Except as provided in clause
(c) of this Section 14.11, neither this Agreement nor any other Credit Document
nor any terms hereof or thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in writing signed by the
respective Credit Parties party thereto and the Required Lenders (except that
additional parties may be added to, and Subsidiaries of the Borrowers may be
released from, the Subsidiaries Guaranty and the Pledge and Security Agreement
in accordance with the provisions hereof and thereof, without the consent of the
other Credit Parties party thereto or the Required Lenders) provided that:
(1) no such change, waiver, discharge or
termination shall, without the consent of each Lender having Obligations being
directly affected thereby (other than a Defaulting Lender) (i) extend the
expiration date of any Commitment beyond the Maturity Date, the final scheduled
maturity of any Loan or Note or extend the stated expiration date of any Letter
of Credit beyond the Maturity Date, or reduce the rate or extend the time of
payment of interest on any Loan or any Fees, or reduce the principal amount
thereof (except to the extent repaid in cash) (it being understood that any
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amendment or modification to the financial definitions in this
Agreement or to Section 14.06(a) shall not constitute a reduction in
any rate of interest or Fees for purposes of this clause (i), so long
as the primary purpose of the respective amendments or modifications
to the financial definitions or to Section 14.06(a) was not to reduce
the interest or Fees payable hereunder), (ii) release all or
substantially all of the Pledge and Security Agreement Collateral or
the Guarantors from the Subsidiaries Guaranty (except (in either case)
as expressly provided in the Credit Documents) or the U.S. Borrower
from its guarantee contained in Section 16, (iii) amend, modify or
waive any provision of this Section 14.11 (except for technical
amendments with respect to additional extensions of credit pursuant to
this Agreement which afford the protections to such additional
extensions of credit of the type provided to the Term Loans and the
Revolving Loan Commitments on the Effective Date), (iv) reduce the
percentage specified in the definition of Required Lenders (it being
understood that, the transactions contemplated by the Additional
Revolving Loan Commitment may be consummated as expressly provided in
this Agreement and with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially
the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or amend, modify or
waive any provision of any Credit Document that, by its terms,
requires the consent, approval or satisfaction of all of the Lenders
or (v) consent to the assignment or transfer by the U.S. Borrower or
any other Credit Party of any of its rights and obligations under this
Agreement or any other Credit Document;
(2) no such change, waiver, discharge or termination
shall (i) increase the Commitments (or sub-commitments) of any Lender
over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Commitment (or sub-commitment) of any
Lender, and that an increase in the available portion of the
Commitment of any Lender shall not constitute an increase in the
Commitment (or sub-commitment) of such Lender), (ii) without the
consent of the Issuing Bank, amend, modify or waive any provision of
Section 3 or alter its rights or obligations with respect to Letters
of Credit, (iii) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 13 as the same applies
to the Administrative Agent or any other provision as the same relates
to the rights or obligations of the Administrative Agent; (iv) without
the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral
Agent; or (v) modify Section 2.15, 2.17 or 2.18, Schedule III or any
other provision of this Agreement relating solely to Canadian
Revolving Loans without the consent of the Majority Canadian Lenders.
(b) If, in connection with any proposed change, waiver,
discharge or termination with respect to any of the provisions of this Agreement
as contemplated by clause (1) of Section 14.11(a), the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then the Borrower shall have the right, so
long as no Default or Event of Default has occurred and is continuing and all
non-consenting Lenders whose individual consent is required are treated as
described in either
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clause (A) or (B) of this Section 14.11(b), to either (A) replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to Section 2.14 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination or (B) terminate such non-consenting Lender's Revolving Loan
Commitment and repay such non-consenting Lender's outstanding Loans in
accordance with Sections 4.02 and/or 5.01, provided that, unless the Revolving
Loan Commitments are terminated, and Loans repaid, pursuant to the preceding
clause (B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Revolving Loan Commitments and/or outstanding
Loans of existing Lenders (who in each case must specifically consent thereto),
then in the case of any action pursuant to the preceding clause (B) the Required
Lenders (determined before giving effect to the proposed action) shall
specifically consent thereto, provided further, that in any event the Borrower
shall not have the right to replace a Lender, terminate its Revolving Loan
Commitment or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to clause (2) of Section 14.11(a).
(c) Notwithstanding the foregoing, the
Administrative Agent and the Borrowers (without the consent of any other Lender)
may enter into amendments of any Credit Document solely with respect to
corrections of formal defects not having any economic impact.
14.12 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.11, 2.12, 3.06, 5.04, 14.01, 14.05 and 14.18
shall survive the execution, delivery and termination of this Agreement and the
Notes and the making and repayment of the Loans.
14.13 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 14.13 would, at the
time of such transfer, result in increased costs under Section 2.11, 2.12 or
5.04 from those being charged by the respective Lender prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs or Taxes of the
type described above resulting from changes after the date of the respective
transfer).
14.14 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 14.14, each Lender agrees that it will use its
reasonable efforts not to disclose without the prior consent of the U.S.
Borrower (other than to its employees, auditors, advisors or counsel or to
another Lender if such Lender or such Lender's holding or parent company in its
reasonable good faith discretion determines that any such party should have
access to such information, provided such Persons shall be subject to the
provisions of this Section 14.14 to the same extent as such Lender) any
information with respect to any Credit Party or any of its Subsidiaries which
has been, is now or is in the future furnished pursuant to this Agreement or any
other Credit Document and which is designated by any Credit Party to the Lenders
in writing as confidential, provided that any Lender may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or
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their successors, (c) as may be required or appropriate in respect of any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Lender, (e) to the
Administrative Agent or the Collateral Agent, (f) to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 14.14(a)), or to the NAIC or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender and (g) to any prospective or actual transferee or participant in
connection with any contemplated transfer or participation of any of the Notes,
Commitments or Loans or any interest therein by such Lender, provided that such
prospective transferee agrees to be subject to the provisions of this Section
14.14(a).
(b) The Borrowers hereby acknowledge and agree that each
Lender may share with any of its affiliates any information related to Credit
Parties or any of their respective Subsidiaries (including, without limitation,
any nonpublic customer information regarding the creditworthiness of the Credit
Parties and their respective Subsidiaries, provided such Persons shall be
subject to the provisions of this Section 14.14 to the same extent as such
Lender), it being understood that for purposes of this Section 14.14(b), the
term "affiliate" shall mean any direct or indirect holding company of a Lender
as well as any direct or indirect Subsidiary of such holding company.
14.15 Register. Each Borrower hereby designates the Administrative
Agent to serve the Borrower's agent, solely for purposes of this Section 14.15,
to maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation,
shall not affect any Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
14.03(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The U.S. Borrower agrees to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 14.15, provided
that the U.S. Borrower shall have no obligation to indemnify the Administrative
Agent for any loss, claim, damage, liability or expense which resulted solely
from the gross negligence or willful misconduct of the Administrative Agent.
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14.16 Commercial Loan Transactions. Each of the Lenders
acknowledges that the making of its Loans and the issuance by the Borrower of a
Note to such Lender are in the nature of a commercial loan transaction, and that
no such Lender shall assert that such actions are a securities transaction
regulated under the Securities Exchange Act, the Securities Act or any other
Federal or state securities laws, it being understood that nothing in this
Section 14.16 shall limit the rights of the Lenders pursuant to Section 14.01 or
14.03.
14.17 Limitations on Recourse.
(a) Notwithstanding anything to the contrary set forth in
this Agreement or in any of the other Credit Documents, but subject to the last
sentence of this Section 14.17(a) and clause (b) of this Section 14.17, the U.S.
Borrower's Obligations hereunder and under the other Credit Documents shall be
limited recourse obligations of the U.S. Borrower, enforceable against the U.S.
Borrower (and its assets) only and not against any constituent partner in the
U.S. Borrower. The foregoing provisions of this Section 14.17 shall not impair
the liability of the Guarantors under the Subsidiaries Guaranty, the liability
of the U.S. Borrower under its guarantee contained in Section 16 or the liens
and security interests created by the Pledge and Security Agreement which were
granted as security for the Obligations of the Borrowers and the Guaranteed
Obligations (as defined in the Subsidiaries Guaranty) of the Guarantors.
(b) Notwithstanding the foregoing provisions of clause (a)
of this Section 14.17, the Administrative Agent and the Lenders shall have
recourse to HMC (in its capacity as the general partner in the U.S. Borrower) to
the extent (but only to the extent) of any loss, cost, damage, expense or
liability incurred by the Administrative Agent or any of the Lenders by reason
of (i) any unlawful act on the part of HMC, or (ii) any misappropriation of
funds by HMC in contravention of the provisions of the Credit Documents.
14.18 Judgment Currency. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in the
respective Applicable Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent, the Collateral Agent or the respective
Lender of the full amount of the Obligation Currency expressed to be payable to
the Administrative Agent, the Collateral Agent or such Lender under this
Agreement or the other Credit Documents. If for the purpose of obtaining or
enforcing judgment against any Credit Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than the
Obligation Currency (such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in the Obligation Currency, the conversion
shall be made, at the Canadian Dollar Equivalent or the Dollar Equivalent
thereof, as the case may be, the rate of exchange determined, in each case, as
of the day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrowers covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in
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any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate or exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Canadian Dollar
Equivalent or the Dollar Equivalent, such amounts shall include any premium and
costs payable in connection with the purchase of the Obligation Currency.
14.19 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches and agencies of such Lender wherever located or
by any Person controlling such Lender) to or for the credit or the account of
any Credit Party against and on account of the Obligations and liabilities of
such Credit Party to such Lender under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Lender pursuant to Section 14.05(b), and all other claims of
any nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Lender shall have
made any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
14.20 Termination of Liens. Upon the final repayment in full of
the Obligations (including the repayment of all Unpaid Drawings and the
expiration or termination or cancellation of all outstanding Letters of Credit,
other than Letters of Credit which have been cash collateralized pursuant to the
terms of this Agreement) and termination of all Commitments hereunder, the
Administrative Agent shall (and the Lenders hereby authorize the Administrative
Agent to) execute and deliver (or authorize the U.S. Borrower to file) upon the
written request and at the expense of the U.S. Borrower such releases (including
Uniform Commercial Code termination statements) of Collateral as may be
requested by the U.S. Borrower. In the event the Obligations shall have been
repaid in full, the Commitments hereunder shall have been terminated and the
U.S. Borrower shall have provided cash collateral as provided herein for all
outstanding Letters of Credit, the U.S. Borrower shall cease to be bound by the
provisions of Sections 9, 10 and 11.
14.21 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
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SECTION 15. Nature of Borrowers' Obligations.
15.01 Nature of Obligations. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, it is understood and agreed
by the various parties to this Agreement that all Obligations to repay principal
of (including, without limitation, the Face Amount of Bankers' Acceptance
Loans), interest on, and all other amounts with respect to, outstanding Canadian
Revolving Loans extended to a Canadian Revolving Loan Borrower (including,
without limitation, all fees, indemnities, taxes and other Obligations in
connection therewith or in connection with the related Revolving Loan
Commitments required to be paid hereunder) shall constitute the obligations of
such Canadian Revolving Loan Borrower and not any other Canadian Revolving Loan
Borrower and (ii) all Obligations to repay principal of (including, without
limitation the Face Amount of Bankers' Acceptance Loans), interest on, and all
other amounts with respect to, any outstanding Canadian Revolving Loan
(including, without limitation, all fees, indemnities, taxes and other
Obligations in connection therewith) shall constitute the direct obligations of
the respective Canadian Revolving Loan Borrower. In addition to the direct
obligations of the respective Borrowers with respect to Obligations as described
above, all such Obligations shall be guaranteed pursuant to, and in accordance
with the terms of, the Guaranty.
SECTION 16. U.S. Borrower Guaranty.
16.01 The Guaranty. In order to induce the Administrative
Agent and the Lenders to enter into this Agreement and to extend credit
hereunder and in recognition of the direct benefits to be received by the U.S.
Borrower from the proceeds of the Canadian Revolving Loans, the U.S. Borrower
hereby agrees with the Lenders as follows: the U.S. Borrower hereby
unconditionally, irrevocably and absolutely guarantees as primary obligor and
not merely as surety the full and prompt payment when due, whether upon
maturity, by acceleration or otherwise, of any and all Obligations of the
Canadian Revolving Loan Borrowers under this Agreement and the other Credit
Documents to which it is a party (collectively, the "Canadian Obligations"). If
any or all of the Canadian Obligations becomes due and payable hereunder or
under such other Credit Documents, the U.S. Borrower unconditionally promises to
pay such Canadian Obligations, on demand, together with any and all reasonable
out-of-pocket expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the Canadian Obligations.
16.02 Bankruptcy. Additionally, the U.S. Borrower
unconditionally, irrevocably and absolutely guarantees the payment of any and
all Canadian Obligations, including interest which would, but for a bankruptcy
filing, have accrued after a bankruptcy filing, whether or not due or payable by
the Canadian Revolving Loan Borrowers upon the occurrence of any of the events
specified in Section 12.05, and absolutely, unconditionally and irrevocably
promises to pay such Canadian Obligations to order, on demand, in the currency
in which it is required to be paid under this Agreement.
16.03 Nature of Liability. The liability of the U.S.
Borrower hereunder is exclusive and independent of any security for or other
guaranty of the Canadian Obligations whether executed by the U.S. Borrower, any
other guarantor or any other party, and the liability of the U.S. Borrower
hereunder shall not be affected or impaired by (a) any direction as to
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application of payment by the Canadian Revolving Loan Borrowers or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Canadian Obligations,
or (c) any payment on or in reduction of any such other guaranty or undertaking,
or (d) any dissolution, termination or increase, decrease or change in personnel
by the Canadian Revolving Loan Borrowers, or (e) any payment made on the
Canadian Obligations which are repaid to any Canadian Revolving Loan Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and the U.S. Borrower waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding.
16.04 Guaranty Absolute. No invalidity, irregularity or
unenforceability of all or any part of the Canadian Obligations guaranteed
hereby or of any security therefor shall affect, impair or be a defense to the
guaranty contained in this Section 16 (the "Guaranty"), and this Guaranty shall
be primary, absolute, irrevocable and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the Canadian Obligations guaranteed herein.
16.05 Independent Obligation. The obligations of the U.S.
Borrower hereunder are independent of the obligations of any other guarantor or
the Canadian Revolving Loan Borrowers, and a separate action or actions may be
brought and prosecuted against the U.S. Borrower whether or not action is
brought against any other guarantor or the Canadian Revolving Loan Borrowers and
whether or not any other guarantor or the Canadian Revolving Loan Borrower be
joined in any such action or actions. The U.S. Borrower waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Canadian
Revolving Loan Borrowers or other circumstance which operates to toll any
statute of limitations as to the Canadian Revolving Loan Borrowers shall operate
to toll the statute of limitations as to the U.S. Borrower.
16.06 Authorization. The U.S. Borrower authorizes the
Canadian Lenders without notice or demand, and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, increase, accelerate or
alter, any of the indebtedness (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred directly
or indirectly in respect thereof, and the Guaranty herein made shall apply to
the indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the
Canadian Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever securing, the Canadian
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
-135-
(c) exercise or refrain from exercising any rights against the
Canadian Revolving Loan Borrowers or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors,
the Canadian Revolving Loan Borrowers or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Canadian Revolving Loan Borrowers to their creditors other than the Canadian
Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Canadian Revolving Loan Borrowers to the
Canadian Lenders regardless of what liability or liabilities of the U.S.
Borrower or the Canadian Revolving Loan Borrowers remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements referred
to herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of the U.S. Borrower from its liabilities under this Section 16.
16.07 Reliance. It is not necessary for any Canadian Lender to inquire
into the capacity or powers of any Canadian Revolving Loan Borrower or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
16.08 Subordination. Any indebtedness of the Canadian Revolving Loan
Borrowers now or hereafter held by the U.S. Borrower is hereby subordinated to
the Canadian Obligations of the Canadian Revolving Loan Borrowers to the
Canadian Lenders; and such indebtedness of the Canadian Revolving Loan Borrowers
to the U.S. Borrower, if the Administrative Agent (at the direction of the
Required Lenders), after an Event of Default has occurred, so requests, shall be
collected, enforced and received by the U.S. Borrower as trustee for the
Canadian Lenders and be paid over to the Canadian Lenders on account of the
Canadian Obligations of the Canadian Revolving Loan Borrower to the Canadian
Lenders, but without affecting or impairing in any manner the liability of the
U.S. Borrower under the other provisions of this Guaranty. Prior to the transfer
by the U.S. Borrower of any note or negotiable instrument evidencing any
indebtedness of the Canadian Revolving Loan Borrowers to the U.S. Borrower, the
U.S. Borrower shall ▇▇▇▇ such note or negotiable instrument with a legend that
the same is subject to this subordination.
16.09 Waivers. (a) The U.S. Borrower waives any right to require any
Canadian Lender to (i) proceed against the Canadian Revolving Loan Borrowers,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Canadian
-136-
Revolving Loan Borrowers, any other guarantor or any other party or
(iii) pursue any other remedy in any Canadian Lender's power whatsoever. The
U.S. Borrower waives any defense based on or arising out of any defense of the
Canadian Revolving Loan Borrowers, any other guarantor or any other party other
than payment in full in cash of the Canadian Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Canadian Revolving Loan Borrowers, any other guarantor or any other party, or
the unenforceability of the Canadian Obligations or any part thereof for any
cause, or the cessation for any cause of the liability of the Canadian Revolving
Loan Borrowers other than to the extent of payment in full in cash of the
Canadian Obligations. The Canadian Lenders may, at their election, foreclose on
any security held by the Administrative Agent or any Canadian Lenders by one or
more judicial or nonjudicial sales, whether or not every aspect of any such sale
is commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Canadian Lenders may have
against the Canadian Revolving Loan Borrowers or any other party, or any
security, without affecting or impairing in any way the liability of the U.S.
Borrower hereunder except to the extent the Canadian Obligations have been paid
in cash. The U.S. Borrower waives any defense arising out of any such election
by the Canadian Lenders, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
the U.S. Borrower against the Canadian Revolving Loan Borrower or any other
party or any security.
(b) The U.S. Borrower waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Canadian Obligations. The U.S. Borrower assumes all responsibility
for being and keeping itself informed of the Canadian Revolving Loan Borrowers'
financial condition and assets, and of all other circumstances bearing upon the
risk of non-payment of the Canadian Obligations and the nature, scope and extent
of the risks which the U.S. Borrower assumes and incurs hereunder, and agrees
that the Canadian Lenders shall have no duty to advise the U.S. Borrower of
information known to them regarding such circumstances or risks.
(c) All parties hereto agree that the U.S. Borrower shall have
no right of subrogation against any Canadian Revolving Loan Borrower or any
Guarantor regarding any payment of Canadian Obligations until all of the
Obligations have been irrevocably paid in full in cash.
The U.S. Borrower warrants and agrees that each of the waivers set
forth above in this Section 16.09 is made with full knowledge of its
significance and consequences and that if any of such waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the maximum extent permitted by law.
16.10 Guaranty Continuing. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Canadian Lenders in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies
-137-
herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Canadian Lenders or any subsequent holder of a
Canadian Revolving Note, or issuer of, or participant in, a Letter of Credit
would otherwise have. No notice to or demand on the U.S. Borrower in any case
shall entitle the U.S. Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Canadian Lenders or any holder, creator or purchaser to any other or further
action in any circumstances without notice or demand.
16.11 Binding Nature of Guaranties. This Guaranty shall be binding
upon the U.S. Borrower and its successors and assigns and shall inure to the
benefit of the Canadian Lenders and their successors and assigns.
16.12 Judgments Binding. If claim is ever made upon any Canadian
Lender for repayment or recovery of any amount or amounts received in payment or
on account of any of the Canadian Obligations and such Canadian Lender repays
all or part of said amount by reason of (a) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by such
Canadian Lender with any such claimant (including any Canadian Revolving Loan
Borrower) then and in such event the U.S. Borrower agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the U.S.
Borrower, notwithstanding any revocation hereof or the cancellation of any
Canadian Revolving Credit Note, or other instrument evidencing any liability of
the Canadian Revolving Loan Borrowers, and the U.S. Borrower shall be and remain
liable to the Canadian Lenders hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇* HOST MARRIOTT, L.P.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: Host Marriott Corporation,
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ its General Partner
Attention: General Counsel, Dept. 923
with a copy to: By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇*
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer, Dept. 916
(same as above) CALGARY CHARLOTTE PARTNERSHIP
By: HMC Charlotte (Calgary) Company
and HMC
Grace (Calgary) Company, its General
Partners
▇▇▇ ▇▇▇▇▇▇▇ AIR COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ COMPANY
HMC AP CANADA COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
____________________________
*After August 1, 2002 this address shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
CITICORP REAL ESTATE , INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: First Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice Presideny
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
THE INTERNATIONAL COMMERCIAL BANK OF CHINA,
NEW YORK AGENCY
By: /s/ Wen-▇▇▇ ▇▇▇▇
----------------------------------------
Name: Wen-▇▇▇ ▇▇▇▇
Title: Deputy General Manager &
Assistant Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
UBS AG, STAMFORD BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director
Banking Products Services, US
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Associate Director Banking
Products Services, US
[SIGNATURE PAGE TO CREDIT AGREEMENT]
BANK LEUMI USA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
DEUTSCHE BANK AG CANADA BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK AG CANADA BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
BANK OF AMERICA, N.A. (CANADA BRANCH)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Corporate Investment Banking
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
CITIBANK, N.A., CANADIAN BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signer
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
UBS BANK (CANADA)
By: /s/ ▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Associate Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇- Rohrwig
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇-Rohrwig
Title: Director
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
SOCIETE GENERALE (CANADA)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director Legal Affairs and
Assistant Secretary
[SIGNATURE PAGE TO THE CREDIT AGREEMENT]
SCHEDULE I-A
COMMITMENTS
Revolving
Loan
Lender Commitment
------ ----------
Deutsche Bank Trust Company Americas $42,000,000
Bank of America, N.A. $42,000,000
Citicorp Real Estate, Inc. $33,000,000
▇▇▇▇▇ Fargo Bank, N.A. $33,000,000
Credit Lyonnais New York Branch $33,000,000
The Bank of Nova Scotia $33,000,000
Societe Generale $33,000,000
Fleet National Bank $33,000,000
The Bank of New York $33,000,000
The International Commercial Bank of China, New York Agency $20,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. $20,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp. $20,000,000
UBS AG, Stamford Branch $20,000,000
Bank Leumi USA $ 5,000,000
SCHEDULE I-B
MAXIMUM CANADIAN DOLLAR REVOLVING LOAN SUB-COMMITMENTS
Maximum Canadian Dollar Revolving
Canadian Lenders
----------------
Loan Sub-Commitments
--------------------
Deutsche Bank AG Canada Branch $ 25,000,000
Bank of America, N.A. (Canada Branch) $ 25,000,000
Citibank, N.A. Canadian Branch $ 15,000,000
The Bank of Nova Scotia $ 15,000,000
Societe Generale (Canada) $ 15,000,000
UBS Bank (Canada) $ 5,000,000
----------------- -----------------
TOTAL: U.S. $100,000,000
SCHEDULE II
LENDER ADDRESSES AND APPLICABLE LENDING OFFICES
Lender Address
Deutsche Bank Trust Company Americas ▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of America, N.A. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Citicorp Real Estate, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A. ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Lyonnais New York Branch 1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Day
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The International Commercial Bank of China, New York Agency ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇-▇▇▇▇ ▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp. 4 World Financial Center, 7/th/ Floor
New York, New York 10080
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UBS AG, Stamford Branch ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank Leumi USA ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche Bank AG Canada Branch ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of America, N.A. (Canada Branch) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ Sales ▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Citibank, N.A. Canadian Branch ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ii
The Bank of Nova Scotia Toronto Main Branch
Scotia Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UBS Bank (Canada) ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale (Canada) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
iii
SCHEDULE III
CERTAIN PROVISIONS RELATING TO BANKERS' ACCEPTANCES
This Schedule III sets forth certain terms and conditions
relating to the obligation of the Canadian Lenders to make loans to any Canadian
Revolving Loan Borrower pursuant to Section 2.01(a)(ii)(y) of the Credit
Agreement by way of Bankers' Acceptances. Capitalized terms used herein shall
have the meanings assigned to such terms in the Credit Agreement.
(a) Availability. All notices of borrowings, conversions
or continuations of Bankers' Acceptances shall be in a minimum aggregate Face
Amount of Cdn $10,000,000 or a multiple of Cdn $100,000 in excess thereof, and a
Canadian Lender shall not be obliged to accept any Draft:
(i) which is drawn on or which matures on a day which is
not a Business Day;
(ii) which matures on a day subsequent to the Maturity
Date;
(iii) which has a term other than approximately 30, 60, 90
or 180 days;
(iv) which is denominated in any currency other than
Canadian Dollars;
(v) which is not in a form satisfactory to such Canadian
Lender and or the Administrative Agent;
(vi) which has a Face Amount of less than Cdn. $1,000,000
or such Face Amount is not an integral multiple of Cdn. $100,000;
(vii) in respect of which the respective Canadian Revolving
Loan Borrower has not then paid the applicable Acceptance Fee; or
(viii) if a Default or an Event of Default has occurred and
is continuing.
(b) Grace. Each Canadian Revolving Loan Borrower hereby
renounces, and shall not claim or request or require any Canadian Lender to
claim, any days of grace for the payment of any Bankers' Acceptance.
(c) Bankers' Acceptances in Blank. To facilitate the
acceptance by the Canadian Lenders of Drafts as contemplated by the Credit
Agreement and this Schedule III, each Canadian Revolving Loan Borrower that
wishes to incur Bankers' Acceptance Loans shall, on the Effective Date and from
time to time as required, supply each Canadian Lender with such numbers of
Drafts as it may request, each executed and endorsed in blank by such Canadian
Revolving Loan Borrower. Each Canadian Lender shall exercise such care in the
custody and safekeeping of such Drafts as they give to similar property owned by
them. Each Canadian Lender is hereby authorized to issue such Bankers'
Acceptances endorsed in blank in such Face Amounts as may be determined by such
Canadian Lender, provided that the aggregate amount thereof is equal to the
aggregate amount of Bankers' Acceptances required to be accepted by such
Canadian Lender. No Canadian Lender shall be responsible or liable for its
failure to accept a Bankers' Acceptance if the cause of such failure is, in
whole or in part, due to the failure of any Canadian Revolving Loan Borrower to
provide duly executed and endorsed Drafts to such Canadian Lender on a timely
basis, nor shall any Canadian Lender be liable for any damage, loss or other
claim arising by reason of any loss or improper use of any such instrument
except loss or improper use to the extent the same has been finally judicially
determined to have arisen by reason of the gross negligence or willful
misconduct of such Canadian Lender, its officers, employees, agents or
representatives.
(d) Execution of Bankers' Acceptances. Drafts of any
Canadian Revolving Loan Borrower to be accepted as Bankers' Acceptances
hereunder shall be duly executed on behalf of such Canadian Revolving Loan
Borrower and upon the request of any Canadian Lender, each Canadian Revolving
Loan Borrower shall provide to such Canadian Lender a power of attorney to
complete, sign, endorse and issue Bankers' Acceptances on behalf of such
Canadian Revolving Loan Borrower in form and substance satisfactory to such
Canadian Lender. Notwithstanding that any one or more of the individuals whose
manual or facsimile signature appears on any ▇▇▇▇ as a signatory on behalf of
any Canadian Revolving Loan Borrower may no longer hold office at the date of
such ▇▇▇▇ or at the date of its acceptance by any Canadian Lender hereunder, or
at any time thereafter, any Bankers' Acceptance signed as aforesaid on behalf of
such Canadian Revolving Loan Borrower shall be valid and binding upon such
Canadian Revolving Loan Borrower. Alternatively, at the request of any Canadian
Lender, each Canadian Revolving Loan Borrower shall deliver to such Canadian
Lender a "depository note" which complies with the requirements of the
Depository Bills and Notes Act (Canada), and hereby consents to the deposit of
any Bankers' Acceptance in the form of a depository note in the book-based debt
clearance system maintained by the Canadian Depository of Securities Limited or
other recognized clearing house. In such circumstances, the delivery of Bankers'
Acceptances shall be governed by the clearance procedures established
thereunder.
(e) Issuance of Bankers' Acceptances. Promptly following
receipt of a notice of borrowing, conversion or continuation by way of Bankers'
Acceptances, the Administrative Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the Face Amount of each Bankers' Acceptance
to be accepted by it and the term thereof. The aggregate Face Amount of Bankers'
Acceptances to be accepted by a Canadian Lender shall be determined by the
Administrative Agent by reference to the respective Canadian RL Percentages of
the Canadian Lenders, except that, if the Face Amount of any Bankers' Acceptance
that would otherwise be accepted by a Canadian Lender would not be Cdn. $100,000
or a multiple thereof, such Face Amount shall be increased or reduced by the
Administrative Agent in its sole discretion to the nearest multiple of Cdn.
$100,000.
Notwithstanding the foregoing, if by reason of any increase or
reduction described in the immediately preceding sentence, any Canadian Lender
shall have aggregate Canadian Revolving Loans in excess of its respective RL
Percentage of the total outstanding Canadian Revolving Loans for all the
Canadian Lenders (any such
2
Lender being herein called an "Over-Allotted Lender"), then at any time
following the occurrence and during the continuance of an Event of Default, each
other Canadian Lender agrees, upon request of the Over-Allotted Lender, to
promptly purchase from such Over-Allotted Lender participations in (or, if and
to the extent specified by any such purchasing Lender, direct interests in) the
Bankers' Acceptances Loans and Canadian Prime Rate Loans owing to the
Over-Allotted Lender (and in interest due thereon, as the case may be) in such
amounts, and to make such other adjustments from time to time as shall be
equitable, to the end that all the Canadian Lenders shall hold the Bankers'
Acceptances Loans and Canadian Prime Rate Loans ratably according to their
respective Alternate Currency RL Percentages.
(f) Purchase of Bankers' Acceptances: Continuations as
and Conversions into Bankers' Acceptance Loans. Subject to subsection (k) below,
upon the acceptance of a Bankers' Acceptance by a Canadian Lender, such Canadian
Lender shall purchase, or arrange the purchase of, each Bankers' Acceptance from
the respective Canadian Revolving Loan Borrower at a price equal to the BA
Discount Proceeds of such Bankers' Acceptance and provide to the Administrative
Agent at the relevant Payment Office an amount in Canadian Dollars equal to such
BA Discount Proceeds for the account of the respective Canadian Revolving Loan
Borrower. The BA Discount Proceeds so received by the Administrative Agent from
the Canadian Lenders shall be retained by the Administrative Agent and applied
as follows: (i) remitted to the respective Canadian Revolving Loan Borrower (in
the case of the making of a Canadian Revolving Loan), (ii) to the prepayment of
Canadian Prime Rate Loans (in the case of a conversion of the Canadian Revolving
Loans from Canadian Prime Rate Loans to Bankers' Acceptance Loans) or (iii) to
the payment of Bankers' Acceptances maturing on such date (in the case of a
continuation of Bankers' Acceptance Loans to new Bankers' Acceptance Loans),
provided that in the case of any such conversion or continuation of Loans, the
respective Canadian Revolving Loan Borrower shall pay to the Administrative
Agent for account of the respective Canadian Lenders such additional amounts, if
any, as shall be necessary to effect the prepayment in full of the respective
Canadian Prime Rate Loans being prepaid, or the Bankers' Acceptances maturing,
on such date.
On any date on which a borrowing, conversion or continuation
shall occur, the Administrative Agent shall be entitled to net all amounts
payable on such date by the Administrative Agent to a Canadian Lender against
all amounts payable on such date by such Canadian Lender to the Administrative
Agent. Similarly, on any such date, each Canadian Revolving Loan Borrower hereby
authorizes each Canadian Lender to net all amounts payable on such date by such
Canadian Lender to the Administrative Agent for the account of such Canadian
Revolving Loan Borrower, against all amounts (including, without limitation,
Acceptance Fees under paragraph (g) below) payable on such date by such Canadian
Revolving Loan Borrower to such Canadian Lender in accordance with the
Administrative Agent's calculations.
(g) Acceptance Fees. Each Canadian Revolving Loan
Borrower shall pay to the Administrative Agent, in advance, for distribution to
each Canadian Lender which accepts a Bankers' Acceptance (based on their
respective Canadian RL Percentages), an Acceptance Fee in respect of the Face
Amount of such Bankers'
3
Acceptance, which shall be payable on or before the date of acceptance of such
Bankers' Acceptance.
(h) Prepayments and Payments. Subject to paragraph (j) of
this Schedule III, and except as otherwise provided under Section 2.17, no
prepayment of any Bankers' Acceptances shall be made by any Canadian Revolving
Loan Borrower prior to the maturity date of such Bankers' Acceptance. Each
Canadian Revolving Loan Borrower hereby unconditionally agrees to pay to the
Administrative Agent for the account of each Canadian Lender an amount in
Canadian Dollars equal to the Face Amount of each Bankers' Acceptance created by
such Canadian Lender for the account of such Canadian Revolving Loan Borrower on
the maturity date thereof (whether at stated maturity, by acceleration or
otherwise) (notwithstanding that such Canadian Lender may be the holder of it at
maturity).
(i) Conversion to Canadian Prime Rate Loans upon
Maturity. Unless a Bankers' Acceptance is paid in full at the maturity thereof,
or continued as another Canadian Revolving Loan by way of Bankers' Acceptances,
the obligation of any Canadian Revolving Loan Borrower to any Canadian Lender in
respect of a maturing Bankers' Acceptance accepted by such Canadian Lender shall
be deemed to be converted automatically on the maturity date thereof into a
Canadian Prime Rate Loan in an amount equal to the full Face Amount of the
maturing Bankers' Acceptance. Such Canadian Prime Rate Loan shall be subject to
all of the provisions of the Credit Agreement applicable to a Canadian Prime
Rate Loan, including in particular the obligation to pay interest, from and
after the maturity date of such Bankers' Acceptance. Each Canadian Lender shall
be obligated to make the Canadian Prime Rate Loan contemplated under this
paragraph (i) regardless of whether the conditions precedent to borrowing set
forth in the Credit Agreement are then satisfied.
(j) Default. Upon the acceleration of the Canadian
Revolving Loans pursuant to Section 12 of the Credit Agreement (whether by
action of the Administrative Agent or the Required Lenders, or automatically by
reason of the occurrence of an Event of Default referred to in Section 12.05
with respect to any Borrower), each Canadian Revolving Loan Borrower shall pay
to the Administrative Agent in satisfaction of the obligations of such Canadian
Revolving Loan Borrower to the Canadian Lenders in respect of then-outstanding
Bankers' Acceptances, and there shall become immediately due and payable, an
amount equal to (i) the aggregate Face Amount of all outstanding Bankers'
Acceptances thereof; and (ii) all unpaid Acceptance Fees, if any.
(k) Circumstances Making Bankers' Acceptances
Unavailable. If the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon all parties hereto) and
notified the Canadian Revolving Loan Borrowers and each of the Canadian Lenders
that, by reason of circumstances arising after the Effective Date and affecting
the Canadian money market (i) there is no market for Bankers' Acceptances or
(ii) the demand for Bankers' Acceptances is insufficient to allow the sale or
trading of the Bankers' Acceptances created and purchased hereunder, then the
right of any Canadian Revolving Loan Borrower to request that any Canadian
Lender accept a Bankers' Acceptance shall be suspended until the
4
Administrative Agent determines that the circumstances giving rise to such
suspension no longer exist and the Administrative Agent so notifies the Canadian
Revolving Loan Borrowers.
(l) Indemnification in Respect of Bankers' Acceptances.
In addition to any liability of any Canadian Revolving Loan Borrower to any
Lender or the Administrative Agent under any other provision hereof, each
Canadian Revolving Loan Borrower shall indemnify each Lender and the
Administrative Agent and hold each of them harmless against any reasonable loss
or expense incurred by such Lender or the Administrative Agent as a result of
(x) any failure by such Canadian Revolving Loan Borrower to fulfill any of its
obligations hereunder including, without limitation, any cost or expense
incurred by reason of the liquidation or re-employment in whole or in part of
deposits or other funds required by any Lender to fund any Bankers' Acceptance
as a result of the failure of such Canadian Revolving Loan Borrower to make any
payment, repayment or prepayment on the date required hereunder or specified by
it in any notice given hereunder or under the Credit Agreement; or (y) such
Canadian Revolving Loan Borrower's failure to provide for the payment to the
Administrative Agent, for the account of each of the Canadian Lenders, of the
full Face Amount of each Bankers' Acceptance on its maturity date except for any
failure arising from a conversion to Canadian Prime Rate Loans in accordance
with Section 2.07(b) of the Credit Agreement.
(m) Canadian Lenders as Holders. Bankers' Acceptances
purchased by a Canadian Lender may be held by it for its own account until the
maturity date or sold by it at any time prior to that date in any relevant
Canadian market in such Canadian Lender's sole discretion.
(n) Utilizations under Maximum Canadian Dollar Revolving
Loan Sub-Commitment. For the purposes of the Credit Agreement and this Schedule
III, all Bankers' Acceptances shall be considered a utilization of the Maximum
Canadian Dollar Revolving Loan Sub-Commitments and the Revolving Loan
Commitments in an amount equal to the aggregate Face Amount of such Bankers'
Acceptances.
5
