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Exhibit 4.15(c)
PRIME HOSPITALITY CORP.
LIMITED WAIVER TO CREDIT AGREEMENT
This LIMITED WAIVER (this "WAIVER") is dated as of August 20, 1997
and entered into by and among Prime Hospitality Corp., a Delaware corporation
("COMPANY"), and Bankers Trust Company, as agent for lenders party to the Credit
Agreement referred to below ("AGENT"), and, for purposes of Section 7 hereof,
the subsidiaries of Company listed on the signature pages hereto and is made
with reference to that certain Senior Secured Revolving Credit Agreement dated
as of June 26, 1996, (the "CREDIT AGREEMENT"), by and among Company, the
financial institutions party thereto ("LENDERS"), Credit Lyonnais New York
Branch, as documentation agent ("DOCUMENTATION AGENT") and Agent. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.
RECITALS
WHEREAS, Company has told Agent and Lenders that:
(i) Company has made debt Investments in ▇▇▇▇▇ Trout (as
defined below) in excess of the dollar limit set forth in subsection
6.3 of the Credit Agreement and intends to continue to increase the
dollar amount of its debt Investments in ▇▇▇▇▇ Trout;
(ii) Company has made loans to Homegate Hospitality, Inc.
("HOMEGATE") secured by mortgages on real property, contrary to
subsection 6.3(c) of the Credit Agreement;
(iii) Company intends to make bridge loans secured by
mortgages on real property in an aggregate principal amount,
including the loans already made to Homegate and referenced in (ii)
above, not to exceed $65,000,000 plus capitalized interest at any
time pursuant to the Interim Secured Construction Term Loan
Agreement by and between Company, as lender, and Homegate, as
borrower (said Interim Loan Agreement, as it may hereafter be
amended from time to time, being the "INTERIM LOAN AGREEMENT"),
contrary to subsection 6.3 of the Credit Agreement generally, as
well as subsection (c) thereof;
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(iv) Company intends to enter into a transaction, contrary to
subsection 6.7 of the Credit Agreement, whereby Homegate will be
merged into a wholly-owned Subsidiary of Company with Homegate being
the surviving corporation in such merger and remaining as a
Subsidiary of Company (the "HOMEGATE MERGER");
(v) Following the Homegate Merger, Company may elect to enter
into a transaction, contrary to subsection 6.7 of the Credit
Agreement, whereby Homegate will be merged directly into Company and
any Subsidiaries of Homegate may be merged into Homegate or directly
into Company (the "SECONDARY MERGER"); and
(vi) If Company elects not to consummate the Secondary Merger
then, under the terms of the Mortgage Note Indenture and the Senior
Subordinated Note Indenture, Homegate will be required to guarantee
Company's obligations with respect to its Mortgage Notes and its
Senior Subordinated Notes (as hereinafter defined), contrary to
subsection 6.1 of the Credit Agreement.
WHEREAS, Company has requested that Agent waive the provisions of
subsections 6.1, 6.3, 6.4, 6.7 and 6.14(i) of the Credit Agreement in order to
permit Company to (i) expand its ability to make debt Investments in ▇▇▇▇▇
Trout, (ii) make certain loans secured by mortgages on real property to
Homegate, and (iii) consummate the Homegate Merger and the Secondary Merger and,
subject to the terms and conditions hereof, Agent is willing to consent to such
waiver.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. WAIVER REGARDING PRE-MERGER EVENTS
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Company herein contained, Agent hereby
waives compliance with the provisions of:
(a) subsection 6.3 of the Credit Agreement to the extent and only to
the extent necessary to permit Company, after the date hereof:
(i) to make debt Investments in ▇▇▇▇▇ Trout Investments, Ltd.
("▇▇▇▇▇ TROUT"), or another entity approved by Lenders,
secured by mortgages or deeds of trust on real property in
order to facilitate like-kind exchanges under Section 1031 of
the Internal Revenue Code ("▇▇▇▇▇ TROUT INVESTMENTS") and to
exclude the amount of such ▇▇▇▇▇ Trout Investments from the
dollar limit on Investments set
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forth in subsection 6.3(ii) of the Credit Agreement; provided
that at the time such ▇▇▇▇▇ Trout Investments are made (A)
Company would be able to incur $1 of additional Indebtedness
pursuant to the Mortgage Note Indenture (as in effect on the
Closing Date), (B) no Event of Default or Potential Event of
Default has occurred and is continuing, (C) such ▇▇▇▇▇ Trout
Investments, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect,
and (D) Company shall not, and shall cause its Subsidiaries to
not, pledge or permit a lien on, or any security interest in,
any such ▇▇▇▇▇ Trout Investment; provided further that (W)
each promissory note evidencing such debt and each related
mortgage, deed of trust and lease shall be valid and
enforceable, (X) Company shall have a valid and enforceable
right to purchase, at Company's option, each property subject
to such mortgage or deed of trust for consideration in an
aggregate amount not to exceed the amount of the related
Investment by Company plus a nominal charge to exercise such
option, (Y) at all times during which any such Investment
exists, Company shall appoint and maintain a member of the
Board of Directors of ▇▇▇▇▇ Trout, or such other entity (the
"COMPANY DIRECTOR"), and such Company Director's vote shall be
necessary for ▇▇▇▇▇ Trout, or such other entity, to incur
indebtedness, dissolve, liquidate or commence bankruptcy
proceedings, and (Z) Company Director shall not vote to permit
▇▇▇▇▇ Trout, or such other entity, to incur any indebtedness
other than indebtedness owed to Company or indebtedness
incurred in the ordinary course, dissolve, liquidate, commence
any bankruptcy proceedings, make loans or other advances of
credit, declare or pay dividends, redeem or acquire any
outstanding stock, issue additional stock or other securities
(other than to Company), merge or consolidate ▇▇▇▇▇ Trout (or
such other entity) with any other Person, sell (other than
directly or indirectly to Company) substantially all of the
assets of ▇▇▇▇▇ Trout (or such other entity), adopt, amend or
repeal any bylaw or the certificate of incorporation of ▇▇▇▇▇
Trout (or such other entity) without the prior consent of
Agent, or engage in any business other than the ownership and
development of hotels subject to mortgages or deeds of trust
in favor of Company and the leasing of property to Company;
provided further that together with each delivery of operating
statements of Company and its Subsidiaries pursuant to
subsection 5.1(i) of the Credit Agreement, Company shall
deliver to Agent an Officer's Certificate certifying as to its
compliance with all conditions set forth in (W)-(Z) above;
provided further that the aggregate Potential Tax Effect (as
hereinafter defined) of all such ▇▇▇▇▇ Trout Investments shall
at no time exceed $150,000,000, where Potential Tax Effect
shall mean, with respect to each individual property (the
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"RELINQUISHED PROPERTY") being exchanged for a property held
by ▇▇▇▇▇ Trout, the product of (1) the difference of the sale
price of such Relinquished Property less the basis of such
Relinquished Property immediately prior to the sale times (2)
forty percent (40%); and
(ii) to make Investments in Homegate secured by mortgages or
deeds of trust on real property in an aggregate principal
amount not to exceed at any time $65,000,000 plus capitalized
interest pursuant to the Interim Loan Agreement (the "HOMEGATE
LOANS") and to exclude the amount of such Homegate Loans from
the dollar limit on Investments set forth in subsection
6.3(ii) of the Credit Agreement; provided that (A)
notwithstanding the exclusion of the Homegate Loans from the
dollar limit on Investments set forth in subsection 6.3(ii) of
the Credit Agreement, Company shall not be permitted at any
time to make loans to Homegate in amounts in excess of
$65,000,000 plus capitalized interest, (B) all Homegate Loans
must be evidenced by a note and secured by a mortgage or deed
of trust on real property, however, Company shall be permitted
to have up to $10,000,000 of such Homegate Loans outstanding
at any one time on an unsecured basis; provided further that
any such unsecured Homegate Loans must be evidenced by a note
and secured by a mortgage or deed of trust on real property
within 14 days, (C) at the time such Homegate Loans are made
(1) Company would be able to incur $1 of additional
Indebtedness pursuant to the Mortgage Note Indenture (as in
effect on the Closing Date), (2) no Event of Default or
Potential Event of Default has occurred or is continuing, and
(3) such Investments, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect, (D) Company shall not, and shall cause its
Subsidiaries to not, pledge or permit a lien on, or any
security interest in, the Homegate Loans or any Collateral
securing the Homegate Loans (other than in favor of Company or
Permitted Encumbrances); Permitted Encumbrances shall mean any
exception to title shown in any title policy and/or marked-up
commitment insuring the liens on the Collateral, any
mechanics' and materialmen's liens, any liens arising in the
ordinary course that do not materially impair the value or
utility of the Collateral and any liens being contested in
good faith, and (E) the Homegate Loans shall be comprised
solely of loans advanced by Company under the Interim Loan
Agreement; and
(b) subsection 6.3 of the Credit Agreement to the extent and
only to the extent necessary to permit (i) the loans made or to be
made by Company to Homegate and evidenced by notes and secured by
mortgages or
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deeds of trust on real property; provided that the full amount of
such loans shall be included as part of the Homegate Loans once the
Interim Loan Agreement is effective and (ii) the debt Investments
made in ▇▇▇▇▇ Trout in excess of $25,000,000.
SECTION 2. WAIVER REGARDING MERGER AND POST-MERGER EVENTS
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Company herein contained, Agent hereby
waives compliance with the provisions of:
(a) subsection 6.7 of the Credit Agreement to the extent and only to
the extent necessary to permit the consummation of:
(i) the Homegate Merger; provided that prior to and
immediately following the consummation of the Homegate Merger,
(A) Company would be able to incur $1 of additional
Indebtedness pursuant to the Mortgage Note Indenture (as in
effect on the Closing Date), (B) no Event of Default or
Potential Event of Default has occurred or is continuing, (C)
the Homegate Merger could not reasonably be expected to have a
Material Adverse Effect, and (D) Homegate shall not have
incurred any material Indebtedness other than (i) to Company,
(ii) under existing credit facilities as in effect on the date
hereof but not in excess of the credit limits set forth
therein on the date hereof, and (iii) in the ordinary course
of business; provided further that immediately following the
consummation of the Homegate Merger, Homegate shall be a
Wholly Owned Subsidiary of Company; provided further that if
any Indebtedness of Homegate (other than Indebtedness owed to
Company) (A) is secured by a Lien on the assets or Capital
Stock of Company or any of Company's Subsidiaries (other than
Homegate and its Subsidiaries in existence as of the Homegate
Merger) or (B) is recourse to Company or any of Company's
Subsidiaries (other than Homegate and its Subsidiaries in
existence as of the Homegate Merger), then Company shall
provide evidence, satisfactory to Agent, as to the absence of
any material liabilities of Homegate and/or any of Homegate's
Subsidiaries whether direct or indirect, contingent or
absolute, known or unknown other than those liabilities
certified by Company to Agent as of the date of the Homegate
Merger; and
(ii) the Secondary Merger; provided that prior to and
immediately following the consummation of the Secondary
Merger, (A) Company would be able to incur $1 of additional
Indebtedness pursuant to the
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Mortgage Note Indenture (as in effect on the Closing Date),
(B) no Event of Default or Potential Event of Default has
occurred or is continuing, (C) the Secondary Merger could not
reasonably be expected to have a Material Adverse Effect, and
(D) Company shall provide evidence, satisfactory to Agent, as
to the absence of any material liabilities of Homegate and/or
any of Homegate's Subsidiaries whether direct or indirect,
contingent or absolute, known or unknown other than those
liabilities certified by Company to Agent as of the date of
the Secondary Merger;
(b) subsection 6.14(i) of the Credit Agreement to the extent and
only to the extent necessary to permit the ownership, operation,
management, renovation, disposition and development of mid-price,
extended-stay hotels; provided that any such hotels to be developed in the
future shall be similar to the type of hotels presently owned or being
developed by Homegate or its Subsidiaries as of the date hereof;
(c) subsections 6.1 and 6.4 of the Credit Agreement to the extent
and only to the extent necessary to permit Homegate to guarantee (A) on a
pari passu basis all of the obligations of Company with respect to the
Mortgage Notes issued by Company pursuant to the Mortgage Note Indenture
and (B) on an unsecured senior subordinated basis all of the obligations
of Company with respect to the $200,000,000 of Senior Subordinated Notes
issued by Company pursuant to the Indenture dated as of March 26, 1997
between Company and PNC Bank, as trustee (the "SENIOR SUBORDINATED
NOTES"); provided that prior to entering into the guaranties set forth in
(A) and (B) above, Homegate shall execute and deliver to Agent a
Subsidiary Guaranty in the form attached hereto as Exhibit I, together
with an opinion of counsel to the effect that such Subsidiary Guaranty has
been duly executed and delivered by, and is valid and binding on,
Homegate; and
(d) subsection 6.3 of the Credit Agreement to the extent and only to
the extent necessary to permit Company to make a capital contribution to
Homegate following the consummation of the Homegate Merger, in an amount
equal to the amount then outstanding under the Interim Loan Agreement but
in no event to exceed $65,000,000 plus any capitalized and accrued
interest.
SECTION 3. LIMITATION OF WAIVER
Without limiting the generality of the provisions of subsection 8.6
of the Credit Agreement, the waiver set forth above shall be limited precisely
as written and relates solely to the noncompliance by Company with the
provisions of subsections 6.1, 6.3, 6.4, 6.7 and 6.14(i) of the Credit Agreement
in the manner and to the extent described above, and nothing in this Waiver
shall be deemed to:
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(a) constitute a waiver of compliance by Company with respect to (i)
subsections 6.1, 6.3, 6.4, 6.7 and 6.14(i) of the Credit Agreement in any
other instance or (ii) any other term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to therein;
or
(b) prejudice any right or remedy that Agent or any Lender may now
have (except to the extent such right or remedy was based upon existing
defaults that will not exist after giving effect to this Waiver) or may
have in the future under or in connection with the Credit Agreement or any
other instrument or agreement referred to therein.
This Waiver shall constitute a Loan Document. Except as expressly
set forth herein, the terms, provisions and conditions of the Credit Agreement
and the other Loan Documents shall remain in full force and effect and in all
other respects are hereby ratified and confirmed.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Agent to enter into, and Lenders to approve, this
Waiver, Company hereby represents and warrants to Agent and Lenders that after
giving effect to this Waiver:
(a) as of the date hereof, there exists no Event of Default or
Potential Event of Default under the Credit Agreement;
(b) all representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date; and
(c) as of the date hereof, Company has performed all agreements to
be performed on its part as set forth in the Credit Agreement.
SECTION 5. COUNTERPARTS; EFFECTIVENESS
This Waiver may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
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This Waiver shall become effective as of the date hereof upon (i)
the execution of counterparts hereof by Company, Guarantors and Agent and
acknowledgment by Lenders holding 100% of the Commitments, (ii) receipt by Agent
of a waiver fee of $100,000 from Company for distribution to each Lender in
proportion to that Lender's Pro Rata Share of the Commitments, and (iii) receipt
by Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
SECTION 6. GOVERNING LAW
THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
PRIME HOSPITALITY CORP.
By: _________________________
Title:
AGENT:
BANKERS TRUST COMPANY
By: _________________________
Title:
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ACKNOWLEDGED AND AGREED TO:
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Documentation Agent
By: ____________________________
Title:
MIDLANTIC BANK, NATIONAL ASSOCIATION
By: ____________________________
Title:
IMPERIAL BANK
By: ____________________________
Title:
SOUTHERN PACIFIC THRIFT &
LOAN ASSOCIATION
By: ____________________________
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY
By: ____________________________
Title:
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