exv10w12w4






Exhibit 10.12.4




WAIVER NO. 2 AND AMENDMENT NO. 3




          WAIVER NO. 2 AND AMENDMENT NO. 3, dated as of March 30, 2009 (this “Amendment”), by
and among INTERSTATE OPERATING COMPANY, LP, a Delaware limited partnership (the
“Borrower”), LEHMAN COMMERCIAL PAPER INC. (the “Administrative Agent”), and the
Lenders party hereto to the Credit Agreement (as defined below).




W I T N E S S E T H:




          WHEREAS, the Borrower, the Administrative Agent, Lehman Brothers Inc., as sole lead arranger
and sole bookrunner, Société Générale, as syndication agent, Calyon New York Branch and Merrill
Lynch Capital, a division of Merrill Lynch Business Financial Services, Inc., as co-documentation
agents and the Lenders have entered into that certain Senior Secured Credit Agreement, dated as of
March 9, 2007, as amended pursuant to that certain Amendment No. 1, dated as of May 24, 2007 and
Amendment No. 2, dated as of July 2, 2008 (as amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”);




          WHEREAS, pursuant to Section 5.02 of the Credit Agreement, it is a requirement that the common
stock of Parent (as defined in the Credit Agreement) be at all times duly listed on the New York
Stock Exchange, Inc. (“NYSE”) (the “Listing Requirement”);




          WHEREAS, (i) the trading of the common stock of Parent has been suspended by the NYSE on March
12, 2009 (the “Suspension”) and (ii) the common stock of Parent shall not be traded on the
NYSE until the Suspension has been successfully appealed by Parent (the “Appeal”);




          WHEREAS, in the event the Appeal is unsuccessful, the common stock of Parent shall be
de-listed from the NYSE (a “Delisting”);




          WHEREAS, the Borrower desires that the Administrative Agent and Lenders waive any Event of
Default that shall arise under Section 8.01(m) of the Credit Agreement in connection with the
Suspension or the Delisting, in each case until June 30, 2009 (collectively, the “Delisting
Waiver”);




          WHEREAS, pursuant to Section 5.05(b), it is a requirement that Parent furnish to
Administrative Agent an audit from KPMG, L.L.P. or other independent certified public accounts of
nationally recognized standing reasonably acceptable to the Administrative Agent an opinion without
qualification as to scope or any other material qualification or exception (the “Audit
Requirement”);




          WHEREAS, KPMG, L.L.P. has advised Parent that, in connection with its audit for the fiscal
year ending December 31, 2008, it may deliver an audit opinion which expresses doubt about the
Parent’s ability to continue as a “going concern” opinion as a result of the Delisting and a
potential inability to comply with the Leverage Ratio for the Parent’s fourth quarter 2009
calculation period (the “Specified Audit”), and such Specified Audit may not comply with
the Audit Requirement;




          WHEREAS, Borrower desires that the Administrative Agent and the Lenders waive the Audit
Requirement and the Event of Default that shall arise under Section 8.01(d) of the Credit Agreement
in connection with the delivery of the Specified Audit, in each case until June 30, 2009
(collectively, the “Audit Requirement Waiver”, and together with the Delisting Waiver, the
“Specified Waivers”);




 









 








          WHEREAS, the Administrative Agent and the Lenders party hereto (constituting the Required
Lenders) have agreed, subject to the terms and conditions hereinafter set forth, to waive and amend
certain provisions of the Credit Agreement as set forth below;




          NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:




          1. Defined Terms. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.




          2. Waiver. The Administrative Agent and the Lenders party hereto hereby agree to
grant each of the Specified Waivers until June 30, 2009, 5:00 p.m. (New York Time) (the “Waiver
Termination Date”), at which time each Specified Waiver shall expire without the further action
by any party and any remedy period or cure period provided for under the Credit Agreement in
connection with the breach of any of the Listing Requirement and the Audit Requirement shall be
deemed to have lapsed.




          3. Forbearance. Subject to the satisfaction of the terms and conditions set forth
herein, until the Waiver Termination Date, the Administrative Agent and Lenders party hereto shall
not, except as otherwise provided herein, exercise or enforce any remedy provided for in any Credit
Document by reason of any breach of the Listing Requirement or the Audit Requirement;
provided, however, that such forbearance is not and shall not be deemed to be a
waiver of the Administrative Agent’s or any Lender’s right to enforce any other claims, rights or
remedies at any time and from time to time on or after the Forbearance Termination Date or with
respect to Events of Defaults other than any Event of Default in connection with the Listing
Requirement or the Audit Requirement.




          4. Amendment. Effective as of the Effective Date (as defined below) and subject to
the terms and conditions set forth herein, the Credit Agreement is hereby amended as follows:




          (a) The definition of Applicable Margin in Section 1.01(a) (Certain Defined Terms) is hereby
deleted in its entirety and the following definition is inserted in lieu thereof:





“Applicable Margin” means, (a) with respect to any Advance at any date, the
applicable percentage per annum set forth below based upon the Status then in effect
under the column for such Class and Type of Advance, and (b) with respect to the
letter of credit fee payable under Section 2.03(b) at any date, the applicable
percentage per annum set forth below based upon the Status then in effect under the
column for Revolving Advances which are Eurodollar Rate Advances.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Revolving Advances	 	Term Advances
	 	 	Adjusted	 	Eurodollar	 	Adjusted	 	Eurodollar
	 	 	Base Rate	 	Rate	 	Base Rate	 	Rate
	 	 	Advances	 	Advances	 	Advances	 	Advances
	Level I Status
	 	 	2.25	%	 	 	3.25	%	 	 	2.25	%	 	 	3.25	%
	Level II Status
	 	 	2.50	%	 	 	3.50	%	 	 	2.50	%	 	 	3.50	%






          (b) The definition of Revolving Commitment in Section 1.01(a) (Certain Defined Terms) is
hereby deleted in its entirety and the following definition is inserted in lieu thereof:





“Revolving Commitment” means, for each Lender, the Revolving Commitment set
forth for such Lender as its Revolving Commitment in the Register maintained by the



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Administrative Agent pursuant to Section 10.06(c). As of the Amendment No. 3
Effective Date, the aggregate amount of the Revolving Commitments under this
Agreement is $60,327,456.24; provided, however, that during the
Waiver Period, the aggregate amount of all Revolving Advances made pursuant to
Section 2.01(b) shall not exceed $6,000,000.



        
  (c) Section 1.01(a) (Certain Defined Terms) is hereby amended by inserting the following
definitions in the appropriate alphabetical order:





““Amendment No. 3” means that certain Waiver No. 2 and Amendment No. 3,
dated as of March 30, 2009, between Borrower, Administrative Agent and the Lenders
party thereto.




“Amendment No. 3 Effective Date” has the meaning ascribed to the term
“Effective Date” in Amendment No. 3.




“Waiver Period” means the period commencing on the date that is the
Amendment No. 3 Effective Date and ending on June 30, 2009.”



          (d) Section 2.01(b) (The Advances) is hereby amended by inserting the proviso at the end of
the first sentence thereof:





“provided, further, that during the Waiver Period, the aggregate
amount of all Revolving Advances made pursuant to this Section 2.01(b) shall not
exceed $6,000,000”



          (e) Section 4.08(a) (Use of Proceeds) is hereby deleted in its entirety and the following is
inserted in lieu thereof





“(a) Advances. The proceeds of the Advances shall be used by the Borrower
for (i) working capital and general corporate purposes, (ii) the making of Permitted
New Investments pursuant to the provisions of Section 6.06, (iii) the repayment of
the Existing Credit Facility, and (iv) costs incurred in connection with the
incurrence of Indebtedness incurred in compliance with this Agreement;
provided, however, that after the Amendment No. 3 Effective Date,
the proceeds of the Advances shall not be used to (x) repay or prepay any
Indebtedness except for any Advance in accordance with the terms of the Credit
Agreement or (y) make any Permitted New Investments pursuant to the provisions of
Section 6.06 other than such Permitted New Investments as may be required pursuant
to agreements entered into prior to the Amendment No. 3 Effective Date.”



          5. Conditions to Effectiveness of this Amendment. This Amendment shall become
effective as of the date (the “Effective Date”) each of the following conditions precedent
shall have been satisfied:




          (a) The Administrative Agent shall have received a duly executed counterpart of this
Amendment, executed by the Borrower, the Administrative Agent and the Required Lenders.




          (b) There shall have been paid to the Administrative Agent, for the account of itself and the
Lenders, as applicable, all fees and expenses (including reasonable fees and expenses of counsel)
due and payable on or before the Effective Date, including a fifty (50) basis point waiver fee for
each



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consenting Lender that has executed and delivered this Amendment on or prior to 5:00 p.m. (New
York Time) Friday March 27, 2009 on the full amount of such Lender’s Commitment on such date.




          6. Representations and Warranties. The Borrower hereby represents and warrants to the
Administrative Agent and the Lenders, on and as of the date hereof, that:




          (a) (i) The Borrower has taken all necessary action to authorize the execution, delivery and
performance of this Amendment, (ii) this Amendment has been duly executed and delivered by the
Borrower and (iii) this Amendment is the legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles.




          (b) After giving effect to this Amendment, each of the representations and warranties made by
any Loan Party in or pursuant to the Credit Documents is true and correct in all material respects
on and as of the date hereof, as if made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, in which case such
representations and warranties are true and correct in all material respects as of such earlier
date.




          (c) After giving effect to this Amendment, no Default or Event of Default has occurred and is
continuing as of the date hereof.




     7. Reaffirmation.



          (a) Each Loan Party hereby consents to the execution, delivery and performance of this
Amendment and agrees that each reference to the Credit Agreement in the Credit Documents shall, on
and after the Effective Date, be deemed to be a reference to the Credit Agreement as amended by
this Amendment.




          (b) Each Loan Party hereby acknowledges and agrees that, after giving effect to this
Amendment, all of its respective obligations and liabilities under the Credit Documents to which it
is a party are reaffirmed, and remain in full force and effect.




          8. Continuing Effect. Except as expressly set forth in this Amendment, all of the
terms and provisions of the Credit Agreement are and shall remain in full force and effect and the
Borrower and Lenders shall continue to be bound by all of such terms and provisions. The waiver
provided for in Section 2 and the amendment provided in Section 4 herein is limited to the specific
provisions of the Credit Agreement specified herein and shall not constitute a waiver or amendment
of, or an indication of the Administrative Agent’s or the Lenders’ willingness to waive or amend,
any other provisions of the Credit Agreement or the same sections for any other date or purpose.
This Amendment is a Credit Document.




          9. Expenses. The Borrowers agree to pay and reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment, and other documents prepared in connection
herewith, and the transactions contemplated hereby, including, without limitation, reasonable fees
and disbursements and other charges of counsel to the Administrative Agent relating to the
Amendment.




          10. Choice of Law. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED, AND
ANY DISPUTE BETWEEN THE BORROWER, THE ADMINISTRATIVE AGENT, ANY LENDER, OR ANY INDEMNITEE ARISING
OUT OF,



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CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL
BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF
THE STATE OF NEW YORK; PROVIDED THAT THE PERFECTION OF THE LIENS OF THE ADMINISTRATIVE AGENT ON THE
COLLATERAL AND THE EXERCISE OF REMEDIES AGAINST THE COLLATERAL SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE APPLICABLE JURISDICTION.




          11. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties and separate counterparts, each of which when so executed and delivered, shall be
deemed an original, and all of which, when taken together, shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile
or e-mail shall be effective as delivery of a manually executed counterpart of this Amendment.




          12. Integration. This Amendment, together with the other Credit Documents,
incorporates all negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the subject matter
hereof.




          13. Severability. In case any provision in this Amendment shall be invalid, illegal
or unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.




          14. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.




[Signature Pages Follow]




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          IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.




	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	INTERSTATE OPERATING COMPANY, LP,

a Delaware Limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Interstate Hotels & Resorts, Inc., 	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Bruce Riggins
 

	 	 
	 

	 	 	 	Name:
	 	Bruce Riggins	 	 
	 

	 	 	 	Title:
	 	Chief Financial Officer	 	 






[Signature Page to Waiver]




 









 








	 	 	 	 	 
	 	LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

 	 
	 	By:  	/s/ Gerald D. Pietroforte
 	 
	 	 	Name:  	Gerald D. Pietroforte, 	 
	 	 	Title:  	Authorized Signatory 	 
	 



[Signature Page to Waiver]