Exhibit 10.44
THIRD AMENDMENT TO TRANCHE A CREDIT AGREEMENT
THIS THIRD AMENDMENT dated as of November 5, 1996 (the "Third Amendment")
is to that Tranche A Credit Agreement dated as of June 7, 1995 as amended by
that First Amendment to Tranche A Credit Agreement dated as of June 30, 1995 and
as further amended by that Second Amendment to Tranche A Credit Agreement dated
as of May 15, 1996 (the "Credit Agreement"; capitalized terms used but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement) by and among EMBASSY SUITES, INC., a Delaware corporation as the
initial Borrower, and PROMUS HOTELS, INC., a Delaware corporation, as assignee
and subsequent Borrower (the applicable Borrower hereunder being referred to as
the "Borrower"), THE PROMUS COMPANIES INCORPORATED, a Delaware corporation as an
initial guarantor, and PROMUS HOTEL CORPORATION, a Delaware corporation as a
guarantor and those certain Subsidiaries and related parties identified as
"Guarantors" on the signature pages thereto as listed on the signature pages
hereto, the several lenders identified on the signature pages thereto as listed
on the signature pages hereto (each a "Lender" and collectively, the "Lenders")
and NATIONSBANK, N.A., a national banking association formerly known as
NationsBank, N.A. (Carolinas), as agent for the Lenders (in such capacity, the
"Agent").
W I T N E S S E T H :
WHEREAS, the Lenders have executed a $300,000,000 5-year revolving credit
facility pursuant to the terms of the Credit Agreement;
WHEREAS, the Borrower has requested the modification of certain provisions
of the Credit Agreement;
WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
A. The Credit Agreement is amended and modified in the following respects:
1. The definition of "Applicable Percentage" in Section 1.1 is
hereby amended and restated in its entirety to read as follows:
"Applicable Percentage" means, for any day, the rate per annum
set forth below opposite the applicable Level Period then in effect,
it being understood that the Applicable Percentage for (i) Base Rate
Loans shall be the percentage set forth under the column "Base Rate
Margin", (ii) Eurodollar Loans shall be the percentage set forth
under the column "Eurodollar Margin", (iii) the Commitment Fee shall
be the percentage set forth under the column "Commitment Fee" and
(iv) the Letter of Credit Fee shall be the percentage set forth
under the column "Letter of Credit Fee":
Level Base Rate Eurodollar Commitment Letter of
Period Margin Margin Fee Credit Fee
------ ------ ------ --- ----------
Level I Period 0% .225% .10% .225%
Level II Period 0% .275% .125% .275%
Level III Period 0% .325% .15% .325%
Level IV Period 0% .45% .25% .45%
Level V Period 0% .6875% .3125% .6875%
In the event the applicable Level Period is determined by reference
to clause (i) of the definitions of "Level I Period", "Level II
Period", "Level III Period", "Level IV Period" and "Level V Period",
the Applicable Percentage shall be adjusted for all purposes as soon
as reasonably practicable, but in no event later than 5 days, after
the date of receipt by the Agent of notice of a change in the
applicable debt rating. In the event the applicable Level Period is
determined by reference to clause (ii) of the definitions of "Level
I Period", "Level II Period", "Level III Period", "Level IV Period"
and "Level V Period", the Applicable Percentage shall be adjusted
for all purposes quarterly as soon as reasonably practicable, but
not later than 5 days, after the date of receipt by the Agent of the
quarterly financial information in accordance with the provisions of
Section 7.1(b) together with a calculation by the Borrower of the
Leverage Ratio for the period ending on the last day of the most
recent fiscal quarter.
2. The definition of "Consolidated Fixed Charges" in Section 1.1 of
the Credit Agreement is amended and restated to read as follows:
"Consolidated Fixed Charges" means, for any period, without
duplication, the sum of (i) all Rentals (other than Rentals on
Capitalized Leases) payable during such period, (ii) the cash
portion of Consolidated Interest Expense during such period and
(iii) the cash payment portion of current maturities of Funded Debt,
in each case for the Parent Company and its Subsidiaries on a
consolidated basis determined in accordance with GAAP. For the
portion of any such period which is prior to the Closing Date,
Consolidated Fixed Charges shall be calculated with respect to Hotel
Inc. Business.
3. The definition of "Level IV Period" in Section 1.1 of the Credit
Agreement is amended and restated to read as follows:
"Level IV Period" means a period during which none of a Level
I Period, a Level II Period nor a Level III Period shall exist and
(i) the Parent Company and
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its consolidated Subsidiaries have an actual or implied senior
unsecured long-term debt rating (without third party credit
enhancement) of "BB+" or better by S&P or "Bal" or better by
Xxxxx'x, or (ii) the Leverage Ratio for the period of four
consecutive fiscal quarters ending on the last day of the most
recent fiscal quarter shall be less than 2.50:1.0 but greater than
or equal to 2.25:1.0.
4. The definition of "Level V Period" in Section 1.1 of the Credit
Agreement is amended and restated to read as follows:
"Level V Period" means a period during which none of a Level I
Period, a Level II Period, a Level III Period nor a Level IV Period
shall exist and (i) the Parent Company and its consolidated
Subsidiaries have an actual or implied senior unsecured long-term
debt rating (without third party credit enhancement) of "BB" or
worse by S&P or "Ba2" or worse by Xxxxx'x, or (ii) the Leverage
Ratio for the period of four consecutive fiscal quarters ending on
the last day of the most recent fiscal quarter shall be greater than
or equal to 2.50:1.0.
5. The Termination Date as referenced and defined in Section 2.1(a)
of the Credit Agreement is hereby extended to November 1, 2001 and the
reference therein to the date that is the fifth anniversary of the Closing
Date is modified to read "November 1, 2001."
6. Section 7.11(a) of the Credit Agreement entitled "Consolidated
Net Worth" is hereby amended and restated to read as follows:
"(a) Consolidated Net Worth. There shall be maintained
at all times, determined at the end of each fiscal quarter,
Consolidated Net Worth of at least $125,000,000; provided,
however, that the minimum Consolidated Net Worth required
hereunder shall be increased by (i)(A) on the last day of each
fiscal quarter to occur from the Closing Date until September
30, 1996, an amount equal to 50% of Consolidated Net Income
for the fiscal quarter then ended (or if Consolidated Net
Income is a deficit, then zero), (B) on the last day of the
fiscal quarter ending December 31, 1996, an amount equal to
25% of Consolidated Net Income for the fiscal quarter then
ended (or if Consolidated Net Income is a deficit, then zero)
and (C) on the last day of each fiscal year occurring
thereafter, an amount equal to 25% of Consolidated Net Income
for the fiscal year then ended (or if Consolidated Net Income
is a deficit, then zero) and (ii) immediately upon receipt,
100% of the net proceeds received by the Borrower or any
Subsidiary pursuant to any Equity Transaction occurring after
the Closing Date."
7. Section 7.11(b) of the Credit Agreement entitled "Leverage Ratio"
is hereby amended and restated to read as follows:
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"(b) Leverage Ratio. The Leverage Ratio, as determined at
the end of each fiscal quarter for the four consecutive fiscal
quarter period then ended, shall not at any time exceed:
Period Ending
-------------
Closing Date through the last day
of fiscal year 1995 3.5:1.0
First day of fiscal year 1996 through
last day of fiscal year 1996 3.25:1.0
First day of fiscal year 1997 and
thereafter 2.5:1.0"
8. Section 7.12 is hereby deleted in its entirety.
9. A new subsection (r) is hereby added to Section 8.1 to read as
follows:
"(r) other unsecured Indebtedness of the Borrower in an
aggregate amount of up to $300,000,000 provided that such
Indebtedness has a maturity later than the Termination Date."
B. In connection with the execution and delivery of this Amendment,
Hampton Inns, Inc. and Embassy Equity Development Corporation (each a "Released
Guarantor", and collectively the "Released Guarantors") are hereby released from
all of their respective obligations and liabilities as Guarantors pursuant to
Section 4 of the Credit Agreement. Each Guarantor, other than the Released
Guarantors, shall remain liable pursuant to Section 4 and by its execution and
delivery of this Amendment, such Guarantor acknowledges and consents to all of
the terms and conditions of this Third Amendment and agrees that this Third
Amendment does not operate to reduce or discharge the Guarantor's obligations
under the Credit Agreement or the other Credit Documents. Each Guarantor, other
than the Released Guarantors, acknowledges and agrees that each such Guarantor
shall have no claims, counterclaims, offsets, credits or defenses to the Credit
Documents and the performance of the Guarantors' obligations thereunder or if
such Guarantor, other than the Released Guarantors, has any such claims,
counterclaims, offsets, credits or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Lenders' execution and
delivery of this Third Amendment.
C. The Borrower and the Guarantors hereby certify that as of the date
hereof:
(i) the representations and warranties set forth in Section 6
of the Credit Agreement are true and correct in all material
respects (except for those which expressly relate to an earlier
date); and
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(ii) no Default or Event of Default exists and is continuing
either prior to or after giving effect to this Third Amendment.
D. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (and schedules) remain in full force and effect.
E. This Amendment shall be effective upon the execution of this Amendment
by the Borrower, the Guarantors and the Lenders and the payment by the Borrower
of the fees payable in connection herewith.
F. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Third Amendment,
including without limitation the reasonable fees and expenses of Xxxxx & Xxx
Xxxxx, PLLC.
G. This Third Amendment may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original and
it shall not be necessary in making proof of this Third Amendment to produce or
account for more than one such counterpart.
H. This Third Amendment and the Credit Agreement, as amended hereby, shall
be deemed to be contracts made under, and for all purposes be construed in
accordance with the laws of the State of North Carolina.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Third
Amendment to be duly executed and delivered as of the date first above written.
BORROWER:
PROMUS HOTELS, INC.,
a Delaware corporation
By____________________________
Xxxxx X. Xxxxxxxx,
Vice President
GUARANTOR: PROMUS HOTEL CORPORATION,
a Delaware corporation
By____________________________
Xxxxx X. Xxxxxxxx,
Vice President
LENDERS: NATIONSBANK, N.A., a national banking
association formerly known as
NationsBank, N.A. (Carolinas),
individually in its capacity as a
Lender and in its capacity as Agent
By_____________________________
Title__________________________
THE BANK OF NEW YORK
By_____________________________
Title__________________________
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XXX XXXX XX XXXX XXXXXX
By_____________________________
Title__________________________
CIBC INC.
By_____________________________
Title__________________________
THE SUMITOMO BANK, LIMITED, ATLANTA AGENCY
By_____________________________
Title__________________________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By_____________________________
Title__________________________
LTCB TRUST COMPANY
By_____________________________
Title__________________________
THE NIPPON CREDIT BANK, LTD. -
LOS ANGELES AGENCY
By_____________________________
Title__________________________
SOCIETE GENERALE, SOUTHWEST AGENCY
By_____________________________
Title__________________________
CREDIT LYONNAIS, NEW YORK BRANCH
By_____________________________
Title__________________________
FIRST AMERICAN NATIONAL BANK
By_____________________________
Title__________________________
FIRST NATIONAL BANK OF COMMERCE
By_____________________________
Title__________________________
FIRST TENNESSEE BANK, NATIONAL ASSOCIATION
By_____________________________
Title__________________________
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY
By_____________________________
Title__________________________
U.S. NATIONAL BANK OF OREGON
By_____________________________
Title__________________________
SUNTRUST BANK
By_____________________________
Title__________________________
WACHOVIA BANK OF GEORGIA, N.A.
By_____________________________
Title__________________________
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