10% Senior Secured Notes due 2014

 

Exhibit 4.1

EXECUTION VERSION

FELCOR ESCROW HOLDINGS, L.L.C.

as Issuer,

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee and Collateral Agent

__________________

INDENTURE

Dated as of October 1, 2009

__________________

10% Senior Secured Notes due 2014

 

 

CROSS-REFERENCE TABLE

*Note:  The Cross-Reference Table shall not for any purpose be deemed to be a part of the Indenture.

 

 

TABLE OF CONTENTS

Page

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

ARTICLE TWO

NOTES

ARTICLE THREE

REDEMPTION

 

 

ARTICLE FOUR

COVENANTS

ARTICLE FIVE

SUCCESOR CORPORATION

ARTICLE SIX

DEFAULT AND REMEDIES

 

 

ARTICLE SEVEN

TRUSTEE

ARTICLE EIGHT

DISCHARGE OF INDENTURE

ARTICLE NINE

ADMENDMENTS,  SUPPLEMENTS AND WAIVERS

ARTICLE TEN

MISCELLANEOUS

 

 

ARTICLE ELEVEN

GUARANTEE OF THE NOTES

ARTICLE TWELVWE

SECURITY

iv

 

 

INDENTURE, dated as of October 1, 2009, between FelCor Escrow Holdings, L.L.C., a Delaware limited liability company (“ Escrow Subsidiary ”) and U.S. Bank National Association, a national banking association, as trustee (the “ Trustee ”) and as collateral agent (“ Collateral Agent ”).  For purposes of this Indenture, prior to the Assumption (as defined herein), references to FelCor LP, FelCor and the Guarantors, individually or collectively shall be deemed to refer to Escrow Subsidiary (unless the context otherwise requires).  From and after the Assumption, references to FelCor LP, FelCor and the Guarantors, individually or collectively shall be deemed to be references to such entities.

RECITALS OF COMPANY

Escrow Subsidiary has duly authorized the execution and delivery of this Indenture to provide for the issuance initially of up to $636,000,000 aggregate principal amount at maturity of Escrow Subsidiary’s 10% Senior Secured Notes Due 2014 issuable as provided in this Indenture.  All things necessary to make this Indenture a valid agreement of Escrow Subsidiary in accordance with its terms have been done, and Escrow Subsidiary has done all things necessary to make the Notes, when executed by Escrow Subsidiary and authenticated and delivered by the Trustee hereunder and duly issued by Escrow Subsidiary, the valid obligations of Escrow Subsidiary as hereinafter provided.

This Indenture is subject to, and shall be governed by, the provisions of the Trust Indenture Act of 1939, as amended, that are required to be a part of and to govern indentures qualified under the Trust Indenture Act of 1939, as amended.

AND THIS INDENTURE FURTHER WITNESSETH

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE ONE

 

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.                                 Definitions.

“ Acceptable Event of Loss Commitment ” has the meaning provided in Section 4.12.

“ Acquired Indebtedness ” means Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or assumed in connection with an Asset Acquisition from such Person by a Restricted Subsidiary and not Incurred by such Person in connection with, or in anticipation of, such Person becoming a Restricted Subsidiary or such Asset Acquisition; provided that Indebtedness of such Person that is redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transactions by which such Person becomes a Restricted Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.

“ Additional Interest ” means all additional interest owing on the Notes pursuant to the Registration Rights Agreement.

“ Additional Lien ” has the meaning provided in Section 4.09.

“ Additional Pari Passu Collateral ” has the meaning provided for it under the term “Additional Pari Passu Indebtedness.”

“ Additional Pari Passu Indebtedness ” means any Indebtedness Incurred by FelCor LP, FelCor or any Subsidiary Guarantor so long as (i) such Indebtedness, together with the Notes, is secured equally and ratably on a first priority basis by additional owned or leased real property and related operating assets (“ Additional Pari Passu Collateral ”) which have an appraisal value (as determined by the report or analysis of an independent appraiser selected by or reasonably satisfactory to the Trustee and delivered to the Trustee and the Collateral Agent) of not less than

 

 

(x) 120% of the aggregate principal amount of such Indebtedness if so Incurred prior to the second anniversary of the Closing Date and (y) 150% of the aggregate principal amount of such Indebtedness if so Incurred on or after the second anniversary of the Closing Date, (ii) the holders of such Indebtedness enter into an intercreditor agreement with respect to such Additional Pari Passu Collateral and the Collateral on terms reasonably satisfactory to the Collateral Agent and (iii) such Indebtedness is otherwise permitted to be incurred under Section 4.03(d)(vii).

“ Additional Restricted Assets ” means the assets and properties (including the related operating assets) of each Grantor/Guarantor relating to the following hotels: (i) the Embassy Suites San Francisco Airport – Burlingame; (ii) the Holiday Inn Boston at Beacon Hill; (iii) the Holiday Inn San Diego – on the Bay; (iv) Holiday Inn San Francisco – Fisherman’s Wharf; and (v) Replacement Collateral or After-Acquired Property, if applicable.

“ Adjusted Consolidated Net Income ” means, for any period, the aggregate net income (or loss) of FelCor, FelCor LP and their respective Restricted Subsidiaries for such period determined on a consolidated basis in conformity with GAAP (without taking into account Unrestricted Subsidiaries) plus the minority interest in FelCor LP, if applicable; provided that the following items shall be excluded in computing Adjusted Consolidated Net Income, without duplication:

“ Adjusted Consolidated Net Tangible Assets ” means the total amount of assets of FelCor LP, FelCor and their respective Restricted Subsidiaries (less applicable depreciation, amortization and other valuation reserves), except to the extent resulting from write ups of capital assets (excluding write ups in connection with accounting for acquisitions in conformity with GAAP), after deducting from the total amount of assets:

 

 

“ Adjusted Total Assets ” means, for any Person, the sum of :

“ Adjusted Treasury Rate ” means, with respect to any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity corresponding to the Comparable Treasury Issue with respect to the Notes called for redemption (if no maturity is within three months before or after October 1, 2014, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date, in each case calculated on the third business day immediately preceding the Redemption Date, plus, in the case of each of clause (i) and (ii), 0.50%.

“ Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person.  For purposes of this definition, “ control ” (including, with correlative meanings, the terms “ controlling ,” “ controlled by ” and “ under common control with ”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ After-Acquired Property ” has the meaning provided in Section 4.24.

“ Agent ” means any Registrar, Paying Agent, authenticating agent or co-Registrar.

“ Agent Members ” has the meaning provided in Section 2.07(a).

“ Applicable Premium ” means, at any Redemption Date, the excess of (A) the present value at such Redemption Date of (1) the Redemption Price of the Notes on October 1, 2014 plus (2) all required remaining scheduled interest payments due on the Notes through October 1, 2014 (excluding accrued and unpaid interest), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of the Notes on such Redemption Date.

 

 

“ Asset Acquisition ” means:

“ Asset Disposition ” means the sale or other disposition by FelCor LP or FelCor or any of their respective Restricted Subsidiaries, other than to FelCor LP, FelCor or another Restricted Subsidiary, of:

“ Asset Sale ” means a Collateral Asset Sale or a Non-Collateral Asset Sale, as the case may be.

“ Assumption ” means consummation of transactions contemplated under Section 3 of the Escrow Agreement for purposes of releasing the Escrow Property (as defined therein) as contemplated thereby and including the assumption by FelCor LP of Escrow Subsidiary’s obligations under the Notes and this Indenture.

“ Average Life ” means at any date of determination with respect to any debt security, the quotient obtained by dividing:

“ Board of Directors ” means (i) with respect to FelCor, the Board of Directors of FelCor, (ii) with respect to FelCor LP, the Board of Directors of its general partner, (iii) with respect to the Subsidiary Guarantors, the board of directors of its general partner or manager, as the case may be, or, in each case, any committee of such Board of Directors duly authorized to act under this Indenture, and (iv) with respect to any other Person, the board or committee serving a similar function.

 “ Board Resolution ” means a copy of a resolution, certified by the Secretary of such Person to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in The City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized by law to close.

 

 

“ Capital Stock ” means, with respect to any Person, any and all shares, interests, participation or other equivalents (however designated, whether voting or non-voting), including partnership interests, whether general or limited, in the equity of such Person, whether outstanding on the Closing Date or issued thereafter, including, without limitation, all Common Stock, Preferred Stock and Units.

“ Capitalized Lease ” means, as applied to any Person, any lease of any property, whether real, personal or mixed, of which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

“ Capitalized Lease Obligations ” means the discounted present value of the rental obligations under a Capitalized Lease as reflected on the balance sheet of such Person in accordance with GAAP.

“ Casualty ” means any casualty, loss, damage, destruction or other similar loss with respect to real or personal property or improvements.

“ Change of Control ” means such time as:

“ Change of Control Offer ” has the meaning provided in Section 4.13.

“ Change of Control Payment ” has the meaning provided in Section 4.13.

“ Change of Control Payment Date ” has the meaning provided in Section 4.13.

“ Closing Date ” means October 1, 2009.

“ Collateral ” means any property, assets, proceeds or other items that may be pledged as security for the Notes (including, without limitation, any Additional Pari Passu Collateral, Pledged Collateral, Mortgaged Property, Replacement Collateral and After-Acquired Property), whether pursuant to Sections 4.09, 4.10, 4.12, 4.23, 4.24, Article Twelve or otherwise; provided that Collateral shall exclude any securities to be excluded from the Collateral pursuant to the Pledge Agreement.

“ Collateral Agent ” has the meaning provided in Section 12.10.

“ Collateral Asset Sale ” means the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of Collateral or Additional Restricted Assets.

“ Collateral Asset Sale Offer Payment Date ” has the meaning provided in Section 4.10.

“ Collateral Asset Sale Payment ” has the meaning provided in Section 4.10.

“ Collateral Documents ” means, collectively, one or more Deeds of Trust, the Pledge Agreement, mortgages, intercreditor agreements, if any, and any other security agreement, pledge agreement, financing statement or other document applicable to the Collateral, each as amended from time to time, and any other instruments of assignment or other instruments or agreements executed pursuant to the foregoing.

 

 

“ Collateral Excess Proceeds ” has the meaning provided in Section 4.10.

“ Collateral Hotel EBITDA ” means Consolidated EBITDA derived solely from the Restricted Hotels.

“ Collateral Hotel Interest Coverage Ratio ” means, on any date a certificate is required to be delivered to the Trustee pursuant to Section 4.19 (a “ Report Date ”), the ratio of:

In making the foregoing calculation, the following, to the extent they apply to any Restricted Hotel, shall be taken into account:

“ Collateral Hotel Interest Expense ” means Consolidated Interest Expense derived solely from the Restricted Hotels.

“ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the TIA, then the body performing such duties at such time.

“ Common Stock ” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) that have no preference on liquidation or with respect to distributions over any other class of Capital Stock, including partnership interests, whether general or limited, of such Person’s equity, whether outstanding on the Closing Date or issued thereafter, including, without limitation, all series and classes of common stock.

“ Company Order ” means a written request or order signed in the name of a Person (i) by its Chairman, a Vice Chairman, its President, a Vice President, manager or similar officer of its general partner and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, manager or similar officer of its general partner and delivered to the Trustee; provided , however , that such written request or order may be signed by any two of the officers or directors listed in clause (i) above in lieu of being signed by one of such officers or directors listed in such clause (i) and one of the officers listed in clause (ii) above.

 

 

“ Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to October 1, 2014, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to October 1, 2014.

“ Comparable Treasury Price ” means, with respect to any Redemption Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the applicable trustee, Reference Treasury Dealer Quotations for the Redemption Date.

“ Condemnation ” means any temporary or permanent taking by a Governmental Authority of assets or property, or any part thereof or interest therein, for public or quasi-public use as the result of or in lieu or anticipation of the exercise of the right of condemnation under the power of eminent domain or in any other manner.

“ Consolidated EBITDA ” means, for any period, without duplication, Adjusted Consolidated Net Income for such period plus , to the extent such amount was deducted in calculating such Adjusted Consolidated Net Income:

less all non-cash items increasing Adjusted Consolidated Net Income, all as determined on a consolidated basis for FelCor LP, FelCor and their respective Restricted Subsidiaries in conformity with GAAP; provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to:

“ Consolidated Interest Expense ” means, for any period, without duplication, the aggregate amount of interest expense in respect of Indebtedness during such period, all as determined on a consolidated basis (without taking into account Unrestricted Subsidiaries) in conformity with GAAP, including, without limitation:

 

 

excluding (i) the amount of such interest expense of any Restricted Subsidiary if the net income of such Restricted Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income pursuant to clause (ii) of the definition thereof (but only in the same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated Net Income pursuant to clause (ii) of the definition thereof), (ii) any premiums, fees and expenses (and any amortization thereof) paid in connection with the Incurrence of any Indebtedness, all as determined on a consolidated basis (without taking into account Unrestricted Subsidiaries) in conformity with GAAP, and (iii) any non-cash interest expense arising from the application of Statement of Financial Accounting Standards No. 133 or the adoption of FASB Staff Position No. APB 14-1.

“ Corporate Trust Office ” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at 60 Livingston Avenue, EP-MN-WS3C, St. Paul, Minnesota 55107-2292, Attention: Corporate Trust Administration.

“ Currency Agreement ” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.

“ Deeds of Trust ” “Deeds of Trust” means, individually or collectively as the context may require, one or more first priority (subject to Permitted Collateral Encumbrances) mortgages, deeds of trust, trust deeds, deeds to secure indebtedness, debenture, financing statement or other similar document entered into or authorized to be filed by the owner or leaseholder and applicable Operating Lessee of each Mortgaged Property, After-Acquired Property or Replacement Collateral, as applicable, encumbering each such owner’s or leaseholder’s fee or leasehold interest, as applicable, in the Mortgaged Property, After-Acquired Property or Replacement Collateral, as applicable, the Operating Lessee’s interest in the Operating Lease in respect of such Mortgaged Property, After-Acquired Property or Replacement Collateral, as applicable, collectively with all additions, improvements, component parts and personal property related thereto and all rents and profits therefrom, each securing the Secured Obligations, in favor of the Collateral Agent for the benefit of the Secured Parties, as the same may be amended, supplemented or otherwise modified from time to time.

“ Default ” means any event that is, or after notice or passage of time or both would be, an Event of Default.

“ Depositary ” means The Depository Trust Company, its nominees and their respective successors.

“ Disqualified Stock ” means any class or series of Capital Stock of any Person that by its terms or otherwise is:

provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the Stated Maturity of the Notes shall not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are no more

 

 

favorable to the holders of such Capital Stock than the provisions contained in Sections 4.10, 4.11 and 4.13, as applicable and such Capital Stock specifically provides that such Person will not repurchase or redeem any such stock pursuant to such provisions prior to FelCor LP’s repurchase of such Notes as are required to be repurchased pursuant to Sections 4.11 and 4.13.

“ Equity Offering ” means a public or private offering of Capital Stock (other than Disqualified Stock) of FelCor or FelCor LP; provided that the proceeds received by FelCor or FelCor LP directly or indirectly from such offering are not less than $50 million.

“ Escrow Agent ” means the escrow agent from time to time under the Escrow Agreement.

“ Escrow Agreement ” means that certain Escrow and Security Agreement dated as of October 1, 2009 among Escrow Subsidiary, FelCor LP, FelCor and U.S. Bank National Association as Escrow Agent and Trustee.

“ Escrow Property ” has the meaning provided in the Escrow Agreement.

“ Escrow Subsidiary ” has the meaning provided in the preamble and includes its successors and assigns.

“ Event of Default ” has the meaning provided in Section 6.01.

“ Event of Loss ” means, with respect to any Collateral or Additional Restricted Asset (each an “ Event of Loss Asset ”) having a fair market value in excess of $15 million, any (1) Casualty of such Event of Loss Asset, (2) Condemnation or seizure of such Event of Loss Asset (other than pursuant to foreclosure or confiscation or requisition of the use of such Event of Loss Asset) or (3) settlement in lieu of clause (2) above; provided that an “Event of Loss” shall not include any of the foregoing if the Net Loss Proceeds therefrom are not in excess of $3 million in any occurrence or series of related occurrences.

“ Event of Loss Asset ” has the meaning provided for it under the term “Event of Loss.”

“ Excess Net Loss Proceeds ” has the meaning provided in Section 4.12.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exchange Notes ” means any securities of FelCor LP containing terms identical to the Notes (except that such Exchange Notes shall be registered under the Securities Act) that are issued and exchanged for such Notes pursuant to the Registration Rights Agreement (or, with respect to Notes issued after the Closing Date, pursuant to a registration rights agreement with substantially the same terms and conditions as the Registration Rights Agreement) and this Indenture.

“ Existing Senior Notes ” means FelCor LP’s outstanding 8½% senior notes due 2011 and senior secured floating rate notes due 2011.

“ fair market value ” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Board of Directors, whose determination shall be conclusive if evidenced by a Board Resolution.

“ FelCor Holdings Trust ” means FelCor Holdings Trust, a Massachusetts business trust, and its successors and assigns.

“ FelCor LP ” means FelCor Lodging Limited Partnership, a Delaware limited partnership and its successors and assigns.

“ FelCor ” means FelCor Lodging Trust Incorporated, a Maryland corporation and its successors and assigns.

 

 

“ Four Quarter Period ” has the meaning provided for it under the term “Collateral Hotel Interest Coverage Ratio.”

“ Funds From Operations ” for any period means the consolidated net income of FelCor LP, FelCor and their respective Restricted Subsidiaries for such period in conformity with GAAP (without taking into account Unrestricted Subsidiaries) excluding gains or losses from debt restructurings and sales of depreciable operating property, plus depreciation of real property (including furniture and equipment) and amortization related to real property and other non-cash charges related to real property, after adjustments for unconsolidated partnerships and joint ventures plus the minority interest in FelCor LP, if applicable.

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect as of July 1, 2009, including, without limitation, as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.  All ratios and computations contained or referred to in this Indenture shall be computed in conformity with GAAP applied on a consistent basis, except that calculations made for purposes of determining compliance with the terms of the covenants and with other provisions of this Indenture shall be made without giving effect to:

“ Global Notes ” has the meaning provided in Section 2.01.

“ Government Securities ” means direct obligations of, obligations guaranteed by, or participations in pools consisting solely of obligations of or obligations guaranteed by, the United States of America for the payment of which obligations or guarantee the full faith and credit of the United States of America is pledged and that are not callable or redeemable at the option of the issuer thereof.

 “ Ground Leases ” means, individually or collectively as the context may require, those certain ground leases as set forth on Schedule 9 of the Perfection Certificate, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

 “ Grantors ” means, from and after the date of the Assumption, each of FelCor Lodging Limited Partnership, FelCor Hotel Asset Company, L.L.C., FelCor TRS Borrower 1, L.P., FelCor Lodging Holding Company, L.L.C., FelCor TRS Borrower 4, L.L.C., FelCor/CSS Holdings, L.P., FelCor Canada Co., DJONT Operations, L.L.C., DJONT Leasing, L.L.C., FCH/SH Leasing, L.L.C., FelCor TRS Holdings, L.L.C., FelCor TRS 1, L.P., BHR Operations, L.L.C., BHR Lodging Tenants Company and BHR Canada Tenant Company and any other Subsidiaries which own or lease all or any portion of any Mortgaged Property or is the Operating Lessee under any Operating Leases relating thereto.

“ Guarantee ” means 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:

 

 

provided that the term “Guarantee” shall not include (a) endorsements for collection or deposit in the ordinary course of business or (b) a guarantee by FelCor LP or FelCor of Indebtedness of a Subsidiary of FelCor LP that is recourse (except upon the occurrence of certain events set forth in the instruments governing such Indebtedness, including, without limitation, fraud, misapplication of funds or other customary recourse provisions) solely to assets pledged to secure such Indebtedness, for so long as such guarantee may not be enforced against FelCor LP or FelCor by the holder of such Indebtedness (except upon the occurrence of such an event), provided that upon the occurrence of such an event, such guarantee shall be deemed to be the Incurrence of a “Guarantee” and at the time of such Incurrence and during such period as such guarantee may be enforced against FelCor LP or FelCor by the holder of such Indebtedness with respect to such Incurrence, such guarantee shall be deemed to be a “Guarantee” for all purposes under this Indenture.  The term “ Guarantee ” used as a verb has a corresponding meaning.

“ Guaranteed Indebtedness ” has the meaning provided in Section 4.07.

“ Guarantors ” means, from and after the date of the Assumption, FelCor and the Subsidiary Guarantors, collectively.

“ Holder ” or “ Noteholder ” means the registered holder of any Note.

“ Incur ” means, with respect to any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness, including an “ Incurrence ” of Acquired Indebtedness; provided that neither the accrual of interest nor the accretion of original issue discount shall be considered an Incurrence of Indebtedness.

“ Indebtedness ” means, with respect to any Person at any date of determination (without duplication):

 

 

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations of the type described above and, with respect to obligations under any Guarantee, the maximum liability upon the occurrence of the contingency giving rise to the obligation; provided that:

“ Indenture ” means this Indenture as originally executed or as it may be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture.

“ Institutional Accredited Investor ” means an institution that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“ Insurance Certificate ” means, individually or collectively as the context may require, a certificate evidencing the insurance requirements (i) reasonably acceptable to the Trustee and Collateral Agent that (A) provides that the insurance has been issued, is in full force and effect, and conveys all the rights and privileges afforded under the insurance policies, (B) provides an unequivocal obligation to give notice in advance to additional interest parties of termination and (C) purports to convey all the privileges of the insurance policies to the certificate holders and (ii) otherwise complies with the requirements with respect thereto set forth in Section 4.16 hereof.

“ Interest Coverage Ratio ” means, on any Transaction Date, the ratio of:

In making the foregoing calculation,

 

 

“ Interest Payment Date ” means each semiannual interest payment date on April 1 and October 1 of each year, commencing April 1, 2010.

“ Interest Rate Agreement ” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement with respect to interest rates.

“ Investment ” in any Person means any direct or indirect advance, loan or other extension of credit (including without limitation by way of Guarantee 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 FelCor LP, FelCor and their respective Restricted Subsidiaries, and residual liabilities with respect to assigned leaseholds incurred in the ordinary course of business) 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 and shall include:

provided that the fair market value of the Investment remaining in any Person that has ceased to be a Restricted Subsidiary shall be deemed not to exceed the aggregate amount of Investments previously made in such Person valued at the time such Investments were made, less the net reduction of such Investments.  For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

 

 

“ Investment Grade ” means a rating of the Notes by both S&P and Moody’s, each such rating being in one of such agency’s four highest generic rating categories that signifies investment grade ( i.e ., BBB- (or the equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by Moody’s); provided , in each case, such ratings are publicly available; provided , further , that in the event Moody’s or S&P is no longer in existence for purposes of determining whether the Notes are rated “Investment Grade,” such organization may be replaced by a nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) designated by FelCor LP and FelCor, notice of which shall be given to a Responsible Officer of the Trustee.

“ Lien ” means any mortgage, deed of trust, pledge, security interest, encumbrance, lien or charge of any kind (including without limitation, any conditional sale or other title retention agreement or, lease in the nature thereof).

“ Line of Credit ” means one or more debt facilities, commercial paper facilities or other debt instruments, indentures or agreements providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), letters of credit or other debt obligations, in each case, as amended, restated, modified, renewed, refunded, restructured, supplemented, replaced or refinanced in whole or in part from time to time, including without limitation any amendment increasing the amount of Indebtedness Incurred or available to be borrowed thereunder, extending the maturity of any Indebtedness Incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties thereto (whether or not such added or substituted parties are banks or other institutional lenders).

“ Loss Proceeds Offer ” has the meaning provided in Section 4.12.

“ Loss Proceeds Offer Payment Date ” has the meaning provided in Section 4.12.

“ Management Agreements ” means, collectively, those certain management agreements as set forth on Schedule 10 of the Perfection Certificate, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“ Manager ” means such Person, in its capacity as manager under the applicable Management Agreement, together with their successor and assign thereunder.

“ Material Agreement ” has the meaning ascribed to such term in Section 4.24.

“ Moody’s ” means Moody’s Investors Service, Inc. and its successors.

“ Mortgaged Property ” means, individually or collectively as the context may require, (i) those properties listed on Schedule 5(a) of the Perfection Certificate which are designated to be encumbered by a Deed of Trust and (ii) the real property that becomes subject Collateral .

“ Net Cash Proceeds ” means:

 

 

“ Net Loss Proceeds ” means, with respect to any Event of Loss, the proceeds in the form of (i) cash or Temporary Cash Investments, (ii) insurance proceeds, (iii) all proceeds of any Condemnation or (iv) damages awarded by any judgment, in each case received by FelCor LP, FelCor or any of their Restricted Subsidiaries from such Event of Loss, net of:

“ Non-Collateral Asset Sale ” means 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 FelCor LP or FelCor or any of their Restricted Subsidiaries to any Person other than FelCor LP or FelCor or any of their respective Restricted Subsidiaries of any assets or properties other than Collateral consisting of:

 

 

provided that “Non-Collateral Asset Sale” shall not include:

“ Non-Collateral Excess Proceeds ” has the meaning provided in Section 4.11.

“ Non-U.S. Person ” means a person who is not a U.S. person, as defined in Regulation S.

“ Note Guarantee ” means, from and after the date of the Assumption, a Guarantee by FelCor and the Subsidiary Guarantors for payment of the Notes by such Person.  From and after the date of the Assumption, the Note Guarantees will be senior secured obligations or senior unsecured obligations of each such Person, as applicable, and will be unconditional regardless of the enforceability of the Notes or this Indenture.

“ Note Register ” has the meaning provided in Section 2.04.

“ Notes ” means any of the securities, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Indenture.  For all purposes of this Indenture, the term “Notes” shall include the Notes initially issued on the Closing Date, any other Notes issued after the Closing Date under this Indenture and any Exchange Notes.  For purposes of this Indenture, all Notes shall vote together as one series of Notes under this Indenture.

“ Offer to Purchase ” means an offer to purchase Notes by FelCor LP, from the Holders commenced by mailing a notice to the Trustee and each Holder stating:

(i)           the covenant pursuant to which the offer is being made and that all Notes validly tendered will be accepted for payment on a pro rata basis;

(ii)           the purchase price and the date of purchase (which shall be a Business Day no earlier than 15 days (20 Business Days in the case of a Collateral Asset Sale Offer Payment Date or Loss Proceeds Offer Payment Date) nor later than 60 days from the date such notice is mailed) (“ Payment Date ”);

(iii)           that any Note not tendered will continue to accrue interest pursuant to its terms;

 

 

(iv)           that, unless FelCor LP defaults in the payment of the purchase price, any Note accepted for payment pursuant to the Offer to Purchase shall cease to accrue interest on and after the Payment Date;

(v)           that Holders electing to have a Note purchased pursuant to the Offer to Purchase will be required to surrender the Note, together with the form entitled “Option of the Holder To Elect Purchase” on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the Payment Date;

(vi)           that Holders will be entitled to withdraw their election if the Payment Agent receives, not later than the close of business on the third Business Day immediately preceding the Payment Date, a facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and

(vii)           that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof.

On the Payment Date, FelCor LP shall

(a)           accept for payment on a pro rata basis Notes or portions thereof tendered pursuant to an Offer to Purchase;

(b)           deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and

(c)           promptly thereafter deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officers’ Certificate specifying the Notes or portions thereof accepted for payment by FelCor LP.

The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of any Note surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof.  FelCor LP shall publicly announce the results of an Offer to Purchase as soon as practicable after the Payment Date.  FelCor LP shall comply with Rule 14e 1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable, in the event that FelCor LP is required to repurchase Notes pursuant to an Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, FelCor LP and FelCor will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.

“ Offering Memorandum ” means the final offering memorandum related to the offering of the Notes described in the first paragraph of the Recitals hereof dated September 17, 2009.

“ Officer ” means, with respect to any Person, (i) the Chairman of the Board, the President, any Vice President, the Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or the Secretary or any Assistant Secretary or Person holding a similar position at the general partner or manager of such Person.

“ Officers’ Certificate ” means a certificate signed by one Officer listed in clause (i) of the definition thereof and one Officer listed in clause (ii) of the definition thereof.  Each Officers’ Certificate (other than certificates provided pursuant to TIA Section 314(a)(4)) shall meet the requirements of Section 10.03.

“ Offshore Global Notes ” has the meaning provided in Section 2.01.

“ Offshore Notes Exchange Date ” has the meaning provided in Section 2.01.

 

 

“ Offshore Physical Notes ” has the meaning provided in Section 2.01.

“ Opinion of Counsel ” means a written opinion signed by legal counsel who may be an employee of or counsel to FelCor or FelCor LP.  Each such Opinion of Counsel shall meet the requirements of Section 10.03.

 “ Paying Agent ” has the meaning provided in Section 2.04, except that, for the purposes of Article Eight, the Paying Agent shall not be FelCor LP, a Subsidiary of FelCor LP, any Guarantor or an Affiliate of any of them.  The term “Paying Agent” includes any additional Paying Agent.

“ Payment Date ” has the meaning provided to it under the term “Offer to Purchase.”

“ Perfection Certificate ” means the perfection certificate dated October 1, 2009, delivered to the Collateral Agent.

“ Permanent Offshore Global Notes ” has the meaning provided in Section 2.01.

“ Permitted Investment ” means:

“ Permitted Liens ” means, with respect to any Person:

 

 

 

 

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest, fees, expenses and other similar obligations on such Indebtedness.  The foregoing notwithstanding, the Liens set forth in clause (v) above shall not apply to any assets or properties that constitute Collateral or Additional Restricted Assets.

“ Person ” means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

“ Physical Notes ” has the meaning provided in Section 2.01.

“ Pledge Agreement ” means that certain pledge agreement, to be dated as of the date of the Assumption, among FelCor LP, FelCor, the Pledgors and the Collateral Agent as the same may be amended, supplemented or otherwise modified from time to time.

“ Pledged Collateral ” means, from and after the date of the Assumption, (i) the units of limited partner interest of FelCor LP held by FelCor Holdings Trust, representing a greater than 95% common limited partnership interest in FelCor LP, and (ii) the other equity interests of the Pledgors being pledged as Collateral to secure the Notes pursuant to the Pledge Agreement.

“ Pledgors ” means, from and after the date of the Assumption, FelCor Holdings Trust, FelCor LP, FelCor Canada Holdings, L.P., a Delaware limited partnership, FelCor/CSS Hotels, L.L.C., a Delaware limited liability company, FelCor TRS Holdings, L.L.C., a Delaware limited liability company, FelCor TRS Borrower GP 1, L.L.C.,

 

 

a Delaware limited liability company, FelCor Hotel Asset Company, L.L.C., a Delaware limited liability company, and any other entity party to the Pledge Agreement after the date hereof as a Pledgor.

“ Preferred Stock ” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) that have a preference on liquidation or with respect to distributions over any other class of Capital Stock, including preferred partnership interests, whether general or limited, or such Person’s preferred or preference stock, whether outstanding on the Closing Date or issued thereafter, including, without limitation, all series and classes of such preferred or preference stock.

“ Private Placement Legend ” means the legend initially set forth on the Notes in the form set forth in the first paragraph of Section 2.02.

“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

“ Quotation Agent ” means the Reference Treasury Dealer selected by the applicable trustee after consultation with FelCor LP and FelCor.

“ Redemption Date ,” when used with respect to any Note to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

“ Redemption Price ,” when used with respect to any Note to be redeemed, means the price at which such Note is to be redeemed pursuant to this Indenture.

“ Reference Period ” has the meaning provided to it under the term “Interest Coverage Ratio.”

“ Reference Treasury Dealer ” means any three nationally recognized investment banking firms selected by FelCor LP and FelCor that are primary dealers of Government Securities.

“ Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue with respect to the Notes, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding the Redemption Date.

“ Registrar ” has the meaning provided in Section 2.04.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of October 1, 2009, among FelCor LP, FelCor, the Subsidiary Guarantors and certain permitted assigns specified therein.

“ Registration Statement ” means the Registration Statement as defined and described in the Registration Rights Agreement.

“ Regular Record Date ” for the interest payable on any Interest Payment Date means the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

“ Regulation S ” means Regulation S under the Securities Act.

“ Replacement Collateral ” has the meaning provided in Section 4.10.

“ Replacement Pledged Equity ” has the meaning provided in Section 4.10.

“ Replacement Property Collateral ” has the meaning provided in Section 4.10.

“ Report Date ” has the meaning provided for it under the term “Collateral Hotel Interest Coverage Ratio.”

 

 

“ Responsible Officer ,” when used with respect to the Trustee, means the chairman or any vice chairman of the board of directors, the chairman or any vice chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.

“ Restricted Hotels ” means the hotels constituting Collateral, Additional Restricted Assets and, for the avoidance of doubt, Additional Pari Passu Collateral, Replacement Property Collateral and After-Acquired Property.

“ Restricted Subsidiary ” means any Subsidiary of FelCor LP or FelCor other than an Unrestricted Subsidiary.

“ Rule 144A ” means Rule 144A under the Securities Act.

“ Secured Indebtedness ” means any Indebtedness secured by a Lien upon the property of FelCor LP or FelCor or any of their respective Restricted Subsidiaries, other than (i) Indebtedness represented by the Notes and any Additional Pari Passu Indebtedness and (ii) Indebtedness secured solely by a Stock Pledge to the extent such Indebtedness does not exceed 50% of Adjusted Total Assets.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Secured Parties ” has the meaning set forth in the Pledge Agreement.

“ Senior Indebtedness ” means the following obligations of FelCor LP or FelCor or any of their respective Restricted Subsidiaries, whether outstanding on the Closing Date or thereafter Incurred:

Senior Indebtedness will also include interest accruing subsequent to events of bankruptcy of FelCor LP and FelCor and their respective Restricted Subsidiaries at the rate provided for in the document governing such Senior Indebtedness, whether or not such interest is an allowed claim enforceable against the debtor in a bankruptcy case under bankruptcy law.

 “ Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

“ Significant Subsidiary ” means, at any determination date, any Restricted Subsidiary that, together with its Subsidiaries:

 

 

provided that from the Closing Date until the third anniversary thereof, the reference to 10% in clauses (i) and (ii) above shall be deemed to be 15%.

“ S&P ” means Standard & Poor’s and its successors.

“ Stated Maturity ” means:

“ Stock Pledge ” means a security interest in the equity interests of Subsidiaries of FelCor and/or FelCor LP.

“ Subsidiary ” means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more other Subsidiaries of such Person and 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.

“ Subsidiary Debt ” means all unsecured Indebtedness of which a Restricted Subsidiary is the primary obligor.

“ Subsidiary Guarantee ” means a Guarantee by each Subsidiary Guarantor for payment of the Notes by such Subsidiary Guarantor.  The Subsidiary Guarantee will be an unsecured senior obligation of each Subsidiary Guarantor and will be unconditional regardless of the enforceability of the Notes and this Indenture.  Notwithstanding the foregoing, each Subsidiary Guarantee by a Subsidiary Guarantor shall provide by its terms that it shall be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer, to any Person not an Affiliate of FelCor LP or FelCor, of all of the Capital Stock owned by FelCor LP, FelCor and their respective Restricted Subsidiaries in, or all or substantially all the assets of, such Restricted Subsidiary (which sale, exchange or transfer is not then prohibited by this Indenture), (ii) satisfaction or discharge of the obligations under this Indenture or a defeasance under Section 8.02 or 8.03 of this Indenture and (iii)  the unconditional and complete release of such Subsidiary Guarantor from its Guarantee of all Guaranteed Indebtedness.

“ Subsidiary Guarantor ” means, from and after the date of the Assumption, FelCor/CSS Holdings, L.P., FelCor Lodging Holding Company, L.L.C., FelCor TRS Borrower 1, L.P., FelCor TRS Borrower 4, L.L.C., FelCor TRS Holdings, L.P., FelCor Canada Co., FelCor/St. Paul Holdings, L.P., FelCor Hotel Asset Company, L.L.C., any other Restricted Subsidiary that owns a Restricted Hotel and any Restricted Subsidiary that executes a Subsidiary Guarantee in compliance with Section 4.07.

“ Temporary Cash Investment ” means any of the following:

 

 

“ Temporary Offshore Global Note ” has the meaning provided in Section 2.01.

“ TIA ” or “ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbb), as in effect on the date this Indenture was executed, except as provided in Section 9.06.

“ Total Assets ” means the sum of:

“ Trade Payables ” means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person or any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods or services.

“ Transaction Date ” means, with respect to the Incurrence of any Indebtedness by FelCor LP or FelCor or any of their respective Restricted Subsidiaries, the date such Indebtedness is to be Incurred and, with respect to any Restricted Payment, the date such Restricted Payment is to be made.

“ Trustee ” means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of Article Seven of this Indenture and thereafter means such successor.

 

 

“ Undepreciated Real Estate Assets ” means, as of any date, the cost (being the original cost to FelCor LP or FelCor or any of their respective Restricted Subsidiaries plus capital improvements) of real estate assets of FelCor LP, FelCor and their Restricted Subsidiaries on such date, before depreciation and amortization of such real estate assets, determined on a consolidated basis in conformity with GAAP.

“ United States Bankruptcy Code ” means the Bankruptcy Reform Act of 1978, as amended and as codified in Title 11 of the United States Code, as amended from time to time hereafter, or any successor federal bankruptcy law.

“ Units ” means the limited partnership units of FelCor LP that by their terms are redeemable at the option of the holder thereof and that, if so redeemed, at the election of FelCor are redeemable for cash or Common Stock of FelCor.

“ Unrestricted Subsidiary ” means

The Board of Directors may designate any Restricted Subsidiary (including any newly acquired or newly formed Subsidiary of FelCor LP or FelCor) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, FelCor LP or FelCor or any of their respective Restricted Subsidiaries (other than Capital Stock of any Subsidiaries of such Subsidiary); provided that:

The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that

Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“ Unsecured Indebtedness ” means any Indebtedness of FelCor LP or FelCor or any of their respective Restricted Subsidiaries that is not Secured Indebtedness.

“ U.S. Global Notes ” has the meaning provided in Section 2.01.

 

 

“ U.S. Physical Notes ” has the meaning provided in Section 2.01.

“ Voting Stock ” means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

“ Wholly Owned ” means, with respect to any Subsidiary of any Person, the ownership of all of the outstanding Capital Stock of such Subsidiary (other than any director’s qualifying shares or Investments by individuals mandated by applicable law) by such Person or one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02.             Incorporation by Reference of Trust Indenture Act.

  Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by a rule of the Commission and not otherwise defined herein have the meanings assigned to them therein.

SECTION 1.03.                                 Rules of Construction.  Unless the context otherwise requires:

 

 

ARTICLE TWO

NOTES

SECTION 2.01           Form and Dating.   The Notes and the Trustee’s certificate of authentication shall be until the Assumption substantially in the form annexed hereto as Exhibit A with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture.  The Notes may have notations, legends or endorsements required by law, by stock exchange agreements to which Escrow Subsidiary prior to the Assumption and thereafter FelCor LP or the Guarantors are subject or by usage.  Escrow Subsidiary prior to the Assumption and thereafter FelCor LP shall approve the form of the Notes and any notation, legend or endorsement on the Notes.  Each Note shall be dated the date of its authentication.

The terms and provisions contained in the form of the Notes annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture.  To the extent applicable, Escrow Subsidiary prior to the Assumption and thereafter FelCor LP, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Notes in registered form, substantially in the form set forth in Exhibit A (collectively, the “ U.S. Global Notes ”), deposited with the Trustee, as custodian for the Depositary, duly executed by Escrow Subsidiary prior to the Assumption and thereafter FelCor LP and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the U.S. Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.

Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more temporary global Notes in registered form substantially in the form set forth in Exhibit A (the “ Temporary Offshore Global Notes ”) deposited with the Trustee, as custodian for the Depositary, duly executed by FelCor LP and authenticated by the Trustee as hereinafter provided.  At any time following 40 days from the initial issuance of a series of notes (the “ Offshore Notes Exchange Date ”), upon receipt by the Trustee and FelCor LP of a certificate substantially in the form of Exhibit B hereto, one or more permanent global Notes in registered form substantially in the form set forth in Exhibit A (the “ Permanent Offshore Global Notes ,” and together with the Temporary Offshore Global Notes, the “ Offshore Global Notes ”) duly executed by FelCor LP and authenticated by the Trustee as hereinafter provided shall be deposited with the Trustee, as custodian for the Depositary, and the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Temporary Offshore Global Notes in an amount equal to the principal amount of the beneficial interest in the Temporary Offshore Global Notes transferred.

Notes offered and sold in reliance on Regulation D under the Securities Act shall be issued in the form of permanent certificated Notes in registered form in substantially the form set forth in Exhibit A (the “ U.S. Physical Notes ”).  Notes issued pursuant to Section 2.07 in exchange for interests in the Offshore Global Note shall be in the form of permanent certificated Notes in registered form substantially in the form set forth in Exhibit A (the “ Off-shore Physical Notes ”).

The Offshore Physical Notes and U.S. Physical Notes are sometimes collectively herein referred to as the “ Physical Notes .”  The U.S. Global Notes and the Offshore Global Notes are sometimes referred to herein as the “ Global Notes .”

The definitive Notes shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Notes may be listed, all as determined by the Officers executing such Notes, as evidenced by their execution of such Notes.  Notwithstanding anything in Section 2.07 or Section 2.08 of this Indenture, prior to the date of the Assumption, beneficial interests in the Global Notes shall not be transferred to, or exchanged for, interests in a Physical Note without the consent of Escrow Subsidiary and the Trustee.

.  Unless and until a Note is exchanged for an Exchange Note or sold in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, the U.S.

 

 

Global Notes, Temporary Offshore Global Notes and each U.S. Physical Note shall bear the following legend on the face thereof:

Each Global Note, whether or not an Exchange Note, shall also bear the following legend on the face thereof:

 

 

Each Global Note, whether or not an Exchange Note, shall also include the following legend if such Note is issued with more than de minimis original issue discount for United States federal income tax purposes:

.  The Notes shall be executed by two Officers of Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor, as general partner of FelCor LP.  The signature of any of these Officers on the Notes may be by facsimile or manual signature in the name and on behalf of the Escrow Subsidiary, FelCor or FelCor LP, as the case may be.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee or authenticating agent authenticates the Note, the Note shall be valid nevertheless.

A Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on the Note.  The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The Notes shall be issued in the initial aggregate principal amount of $636,000,000, provided that FelCor LP may issue additional Notes hereunder without limitation as to principal amount in accordance with Section 2.15 hereof.

At any time and from time to time after the execution of this Indenture, the Trustee or an authenticating agent shall upon receipt of a Company Order authenticate for original issue Notes in the aggregate principal amount specified in such Company Order; provided that the Trustee shall be entitled to receive an Officers’ Certificate and an Opinion of Counsel of Escrow Subsidiary or FelCor LP, as the case may be, in connection with such authentication of Notes.  Such Company Order shall specify the amount of Notes to be authenticated, the principal amount of each Note to be authenticated, the date on which the original issue of Notes is to be authenticated, the registered holder of each of the said Notes, delivery instruction for each such Note and in case of an issuance of Notes pursuant to Section 2.15, shall certify that such issuance is in compliance with Article Four.

The Trustee may appoint an authenticating agent to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such authenticating agent.  An authenticating agent has the same rights as an Agent to deal with FelCor LP or an Affiliate of FelCor LP.

The Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 in principal amount at maturity and any integral multiple of $1,000 in excess thereof.

FelCor LP shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the “ Registrar ”), an office or agency where Notes may

 

 

be presented for payment (the “ Paying Agent ”) and an office or agency where notices and demands to or upon FelCor LP in respect of the Notes and this Indenture may be served, which shall be in the Borough of Manhattan, The City of New York.  FelCor LP shall cause the Registrar to keep a register of the Notes and of their transfer and exchange (the “ Note Register ”).  FelCor LP may have one or more co-Registrars and one or more additional Paying Agents.

FelCor LP shall enter into an appropriate agency agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions of this Indenture that relate to such Agent.  FelCor LP shall give prompt written notice to the Trustee of the name and address of any such Agent and any change in the address of such Agent.  If FelCor LP fails to maintain a Registrar, Paying Agent and/or agent for service of notices and demands, the Trustee shall act as such Registrar, Paying Agent and/or agent for service of notices and demands.  FelCor LP may remove any Agent upon written notice to such Agent and the Trustee; provided that no such removal shall become effective until (i) the acceptance of an appointment by a successor Agent to such Agent as evidenced by an appropriate agency agreement entered into by FelCor LP and such successor Agent and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as such Agent until the appointment of a successor Agent in accordance with clause (i) of this proviso.  Except with respect to Article Eight, FelCor, FelCor LP, any Subsidiary of FelCor or FelCor LP, or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar, and/or agent for service of notice and demands.

FelCor LP initially appoints the Trustee as Registrar, Paying Agent, authenticating agent and agent for ser-vice of notice and demands.  If, at any time, the Trustee is not the Registrar, the Registrar shall make available to the Trustee on or before each Interest Payment Date and at such other times as the Trustee may reasonably request, the names and addresses of the Holders as they appear in the Note Register.

Not later than each due date of the principal, premium, if any, interest and Additional Interest, if any, on any Notes, FelCor LP shall deposit with the Paying Agent money in immediately available funds sufficient to pay such principal, premium, if any, and interest so becoming due; provided that if the Trustee is then serving as Paying Agent, FelCor LP agrees to use its reasonable best efforts to deposit or otherwise transfer such funds to the Trustee by no later than 11:00 a.m., New York City time, on the applicable due date.  FelCor LP shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, interest and Additional Interest, if any, on the Notes (whether such money has been paid to it by FelCor LP or any other obligor on the Notes), and such Paying Agent shall promptly notify the Trustee of any default by FelCor LP (or any other obligor on the Notes) in making any such payment.  FelCor LP at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed.  Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee.  If FelCor, FelCor LP or any Subsidiary of FelCor or FelCor LP or any Affiliate of any of them acts as Paying Agent, it will, on or before each due date of any principal of, premium, if any, or interest on the Notes, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such principal, premium, if any, interest or Additional Interest, if any, so becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the Trustee of its action or failure to act.

SECTION 2.06.                Transfer and Exchange.   The Notes are issuable only in registered form.  A Holder may transfer a Note only by written application to the Registrar stating the name of the proposed transferee and otherwise complying with the terms of this Indenture.  No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer by the Registrar in the Note Register.  Prior to the registration of any transfer by a Holder as provided herein, FelCor LP, the Guarantors, the Trustee and any agent of FelCor LP shall treat the person in whose name the Note is registered as the owner thereof for all purposes whether or not the Note shall be overdue, and neither FelCor LP, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.  Furthermore, any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent) and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry.  When Notes are presented to the   Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Notes of other authorized denominations (including an exchange of Notes for Exchange Notes), the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met; provided that no exchanges of Notes for Exchange Notes shall occur until a Registration Statement shall have been declared effective by the Commission and that any Notes that are exchanged for Exchange Notes shall be cancelled by the Trustee.  To permit registrations of transfers and exchanges, FelCor LP shall execute and the Trustee shall authenticate Notes at the Registrar’s request.  No service charge shall be made for any registration of transfer or ex-change or redemption of the Notes, but FelCor LP may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or other similar governmental charge payable upon exchanges pursuant to Section 2.11, 3.08, 4.10, 4.11, 4.14 or 9.04).

The Registrar shall not be required (i) to issue, register the transfer of or exchange any Note during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Notes selected for redemption under Section 3.03 and ending at the close of business on the day of such mailing, (ii) to register the transfer of or exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, or (iii) to register the transfer of or to exchange a Note between a Regular Record Date and the next succeeding Interest Payment Date.

Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent, FelCor LP and the Guarantors may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal and interest on such Notes and for all other purposes, and none of the Trustee, any Agent, FelCor LP or the Guarantors shall be affected by notice to the contrary.

 

(a)           The U.S. Global Note and Offshore Global Note initially shall (i) be registered in the name of the Depositary for such Global Notes or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear legends as set forth in Section 2.02.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Note, and the Depositary may be treated by FelCor LP, the Guarantors, the Trustee and any agent of FelCor LP, the Guarantors or the Trustee as the absolute owner of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent FelCor LP, the Guarantors, the Trustee or any agent of FelCor LP, the Guarantors or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

(c)           Any beneficial interest in one of the Global Notes that is transferred to a person who takes delivery in the form of an interest in the other Global Note will, upon transfer, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

 

 

(d)           In connection with any transfer of a portion of the beneficial interests in the U.S. Global Note or Permanent Offshore Global Note to beneficial owners pursuant to paragraph (b) of this Section, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the U.S. Global Note or Permanent Offshore Global Note in an amount equal to the principal amount of the beneficial interest in the U.S. Global Note or Permanent Offshore Global Note to be transferred, and Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP shall execute, and the Trustee shall authenticate and deliver, one or more U.S. Physical Notes or Offshore Physical Notes, as the case may be, of like tenor and amount.

(e)           In connection with the transfer of the entire U.S. Global Note or Offshore Global Note to beneficial owners pursuant to paragraph (b) of this Section, the U.S. Global Note or Offshore Global Note, as the case may be, shall be deemed to be surrendered to the Trustee for cancellation, and Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the U.S. Global Note or Offshore Global Note, as the case may be, an equal aggregate principal amount of U.S. Physical Notes or Offshore Physical Notes, as the case may be, of authorized denominations.

(f)           Any U.S. Physical Note delivered in exchange for an interest in the U.S. Global Note pursuant to paragraph (b), (d) or (e) of this Section shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the legend regarding transfer restrictions applicable to the U.S. Physical Note set forth in Section 2.02.

(g)           Any Offshore Physical Note delivered in exchange for an interest in the Temporary Offshore Global Note pursuant to paragraph (b), (d) or (e) of this Section shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the legend regarding transfer restrictions applicable to the Offshore Physical Note set forth in Section 2.02.

(h)           The registered Holder of a Global Note may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

Unless and until a Note is exchanged for an Exchange Note or sold in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, the following provisions shall apply:

 

 

 

 

The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.07 or this Section 2.08.  FelCor LP shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

 

 

Assumption and thereafter FelCor LP shall issue and the Trustee shall authenticate a replacement Note of like tenor and amount and bearing a number not contemporaneously outstanding; provided that the requirements of this Section 2.09 are met.  If required by the Trustee or Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP, an indemnity bond must be furnished that is sufficient in the judgment of both the Trustee and FelCor LP to protect Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP, the Guarantors, the Trustee or any Agent from any cost, expense or loss that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment.  FelCor LP may charge such Holder for its expenses and the expenses of the Trustee in replacing a Note.  In case any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, FelCor LP in its discretion may pay such Note instead of issuing a new Note in replacement thereof.

Every replacement Note is an additional obligation of Escrow Subsidiary, prior to the date of the Assumption and thereafter FelCor LP and shall be entitled to the benefits of this Indenture.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.10 as not outstanding.

If a Note is replaced pursuant to Section 2.09, it ceases to be outstanding unless and until the Trustee and Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser.

If the Paying Agent (other than FelCor, FelCor LP or an Affiliate of FelCor or FelCor LP) holds on the maturity date money sufficient to pay Notes payable on that date, then on and after that date such Notes cease to be outstanding and interest on them shall cease to accrue.

A Note does not cease to be outstanding because FelCor or FelCor LP or one of their Affiliates holds such Note; provided that, in determining whether the Holders of the requisite principal amount of the outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by FelCor, FelCor LP, the Guarantors or any other obligor upon the Notes or any Affiliate of FelCor LP or the Guarantors or of such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which the Trustee knows to be so owned shall be so disregarded.  Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not FelCor LP or the Guarantors or any other obligor upon the Notes or any Affiliate of FelCor LP or the Guarantors or of such other obligor.

Until definitive Notes are ready for delivery, Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP may prepare and the Trustee shall authenticate temporary Notes.  Temporary Notes shall be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary Notes, as evidenced by their execution of such temporary Notes.  If temporary Notes are issued, Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP will cause definitive Notes to be prepared without unreasonable delay.  After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of FelCor LP designated for such purpose pursuant to Section 4.02, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Notes Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall be entitled to the same benefits under this Indenture as definitive Notes.

FelCor LP at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which FelCor LP may have acquired in any manner what

 

 

soever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which Escrow Subsidiary prior to the date of the Assumption and thereafter FelCor LP has not issued and sold.  The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment.  The Trustee shall cancel all Notes surrendered for transfer, exchange, payment or cancellation in accordance with its normal procedure.

If FelCor LP or the Guarantors default in a payment of interest on the Notes, FelCor LP or the Guarantors shall pay, or shall deposit with the Paying Agent money in immediately available funds sufficient to pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date.  A special record date, as used in this Section 2.14 with respect to the payment of any defaulted interest, shall mean the 15th day next preceding the date fixed by FelCor LP for the payment of defaulted interest, whether or not such day is a Business Day.  At least 15 days before the subsequent special record date, FelCor LP (or, upon the written request of FelCor LP, the Trustee in the name and at the expense of FelCor LP) shall mail to each Holder and to the Trustee a notice that states the subsequent special record date, the payment date and the amount of defaulted interest to be paid.

FelCor LP may, subject to compliance with Article Four of this Indenture, issue additional Notes under this Indenture.  The Notes issued on the Closing Date and any additional Notes subsequently issued shall be treated as a single class for all purposes under this Indenture.

ARTICLE THREE

REDEMPTION

(a)           Except as provided in this Section 3.01(a) and in Section 3.01(b), FelCor LP will not have the right to redeem any of the Notes prior to October 1, 2014.  At any time and from time to time prior to October 1, 2014, FelCor LP and FelCor may, at their option, redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to the notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the redemption date.

(b)           Notwithstanding the foregoing, at any time, or from time to time, on or prior to October 1, 2012, FelCor LP may, at its option, use the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the principal amount of the Notes issued under this Indenture at a Redemption Price (expressed as a percentage of the principal amount thereof) equal to 110%, together with accrued and unpaid interest thereon, if any, to the Redemption Date; provided that (i) at least 65% of the aggregate principal amount of the Notes issued under this Indenture remains outstanding immediately aft