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EXHIBIT 10.6
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CREDIT AGREEMENT
among
DOUBLETREE CORPORATION,
VARIOUS BANKS,
MORGAN STANLEY SENIOR FUNDING, INC.,
as SYNDICATION AGENT and as ARRANGER,
and
THE BANK OF NOVA SCOTIA,
as ADMINISTRATIVE AGENT
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Dated as of November __, 1996
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.12 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.13 Replacement of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.02 Maximum Letter of Credit Outstandings; Final Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.03 Letter of Credit Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.05 Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.06 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3. Commitment Commission; Fees; Reductions of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.02 Voluntary Termination of Unutilized Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4. Prepayments; Payments; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.02 Mandatory Repayments and Commitment Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5. Conditions Precedent to Initial Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.01 Execution of Agreement; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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5.02 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.04 Corporate Documents; Proceedings; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.05 Employee Benefit Plans; Shareholders' Agreements; Management Agreements; Collective Bargaining
Agreements; Existing Indebtedness Agreements; Tax Sharing Agreements; Joint Venture Agreements;
Property Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.06 Equity Financing; Equity Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.07 Consummation of Acquisition; Cash on Hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.08 Refinancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.09 Adverse Change, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.11 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.12 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.13 Subsidiaries Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.14 Mortgages; Title Insurance; Survey; etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.15 Projections; Pro Forma Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.16 Solvency Opinion; Insurance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.17 Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6. Conditions Precedent to All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.01 No Default; Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.02 Notice of Borrowing; Letter of Credit Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.01 Corporate and Other Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.02 Corporate and Other Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.04 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc. . . . . . . . . . . . 51
7.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.07 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.09 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.11 The Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.12 Representations and Warranties in Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.13 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.14 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.15 Subsidiaries and Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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7.16 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.17 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.18 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.19 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.20 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.21 Patents, Licenses, Franchises and Formulas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.22 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.23 Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.03 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.06 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.08 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.09 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.10 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.11 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.12 Additional Security; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.13 Foreign Subsidiaries Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.14 Joint Venture Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.15 Maintenance of Corporate Separateness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 9. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.03 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.05 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.06 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.07 Capital Expenditures; Permitted Hotel Acquisitions; Permitted Hotel Investments . . . . . . . . . . . . . . 84
9.08 Consolidated Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.09 Consolidated Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.10 Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.11 Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
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9.12 Limitation on Voluntary Payments and Modifications of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc. . . . . . . . . . . . . . . . . . . . . . . 89
9.13 Limitation on Certain Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.14 Limitation on Issuance of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.15 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.16 Limitation on Creation of Subsidiaries and Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 10. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.07 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.08 Subsidiaries Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.10 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.11 Certain Master Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 11. Definitions and Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 12. The Administrative Agent and the Syndication Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
12.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
12.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
12.03 Lack of Reliance on the Administrative Agent and the Syndication Agent . . . . . . . . . . . . . . . . . . 133
12.04 Certain Rights of the Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
12.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
12.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
12.07 The Administrative Agent and the Syndication Agent in their Individual Capacity . . . . . . . . . . . . . . 134
12.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
12.09 Resignation by the Administrative Agent and the Syndication Agent . . . . . . . . . . . . . . . . . . . . . 135
SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
13.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
13.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
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13.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
13.04 Benefit of Agreement; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
13.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
13.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
13.07 Calculations; Computations; Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 141
13.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
13.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
13.15 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
13.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
13.17 Limitation on Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property
SCHEDULE IV Indebtedness to be Refinanced
SCHEDULE V Capitalization
SCHEDULE VI Subsidiaries and Joint Ventures
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Additional Capital Expenditures
SCHEDULE XII Base Case EBITDA
SCHEDULE XIII Designated Hotel Properties
SCHEDULE XIV ERISA
SCHEDULE XV Subsidiary Restrictions
SCHEDULE XVI Existing Doubletree Investments
SCHEDULE XVII Existing Red Lion Investments
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Tranche A Term Note
EXHIBIT B-2 Tranche B Term Note
(v)
7
EXHIBIT B-3 Revolving Note
EXHIBIT B-4 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Dewey Ballantine, counsel to the Credit
Parties
EXHIBIT E-2 Opinion of Wolf, Block, Schorr and Solis-Cohen,
counsel to the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Solvency Certificate
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Intercompany Note
(vi)
8
CREDIT AGREEMENT, dated as of November __, 1996, among
DOUBLETREE CORPORATION, a Delaware corporation (the "Borrower"), the Banks
party hereto from time to time, MORGAN STANLEY SENIOR FUNDING, INC., as
Syndication Agent and as Arranger, and THE BANK OF NOVA SCOTIA, as
Administrative Agent (all capitalized terms used herein and defined in Section
11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Tranche A Term Loan Commitment
severally agrees to make a term loan or term loans (each a "Tranche A Term
Loan" and, collectively, the "Tranche A Term Loans") to the Borrower, which
Tranche A Term Loans (i) only may be incurred by the Borrower (x) on the
Initial Borrowing Date and (y) on the Second Term Loan Borrowing Date, (ii)
shall, at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that (A) except
as otherwise specifically provided in Section 1.10(b), all Tranche A Term Loans
comprising the same Borrowing shall at all times be of the same Type and (B) no
more than three Borrowings of Tranche A Term Loans maintained as Eurodollar
Loans may be incurred prior to the earlier of (1) the 90th day after the
Initial Borrowing Date or, if an Interest Period relating to any then
outstanding Tranche A Term Loans beginning before such 90th day extends
thereafter, the last day of such Interest Period, and (2) that date (the
"Syndication Date") upon which the Agents shall have determined in their sole
discretion (and shall have notified the Borrower) that the primary syndication
(and resultant addition of institutions as Banks pursuant to Section 13.04(b))
has been completed (each of which Borrowings of Eurodollar Loans may only have
an Interest Period of one month, and the first of which Borrowings may only be
made on a single date on or after the Initial Borrowing Date and on or prior to
the sixth Business Day following the Initial Borrowing Date, and the second and
third of which Borrowings may only be made on the last day of
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the immediately preceding Interest Period) and (iii) shall be made by each such
Bank on any Term Loan Borrowing Date in that aggregate principal amount which
equals the Tranche A Term Loan Commitment of such Bank on such Term Loan
Borrowing Date (before giving effect to any reductions thereto on such date
pursuant to Section 3.03(b)(i) or (ii) but after giving effect to any
reductions thereto on or prior to such date pursuant to Section 3.03(b)(iii));
provided, however, that until all Indebtedness to be Refinanced has been repaid
in full, the Borrower will not be permitted to incur Tranche A Term Loans if,
after giving effect to the incurrence thereof and the application of the
proceeds therefrom, the remaining Total Tranche A Term Loan Commitment would be
less than the aggregate outstanding principal amount of the remaining
Indebtedness to be Refinanced. Once repaid, Tranche A Term Loans incurred
hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth
herein, each Bank with a Tranche B Term Loan Commitment severally agrees to
make, on the Initial Borrowing Date, a term loan or term loans (each a "Tranche
B Term Loan" and, collectively, the "Tranche B Term Loans") to the Borrower,
which Tranche B Term Loans (i) shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that (A) except as otherwise specifically provided
in Section 1.10(b), all Tranche B Term Loans comprising the same Borrowing
shall at all times be of the same Type and (B) no more than three Borrowings of
Tranche B Term Loans maintained as Eurodollar Loans may be incurred prior to
the earlier of (1) the 90th day after the Initial Borrowing Date or, if an
Interest Period relating to any then outstanding Tranche B Term Loans beginning
before such 90th day extends thereafter, the last day of such Interest Period,
and (2) the Syndication Date (each of which Borrowings of Eurodollar Loans may
only have an Interest Period of one month, and the first of which Borrowings
may only be made on the same day as the first day of the first Interest Period
of the Tranche A Term Loans that are maintained as Eurodollar Loans, and the
second and third of which Borrowings may only be made on the last day of the
immediately preceding Interest Period) and (ii) shall be made by each such Bank
in that aggregate principal amount which equals the Tranche B Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect to
the termination thereof on such date pursuant to Section 3.03(c)(i) but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section 3.03(c)(ii)). Once repaid, Tranche B Term Loans incurred hereunder may
not be reborrowed.
(c) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees, at any
time and from time to time on and after the Initial Borrowing Date and prior to
the Revolving Loan Maturity Date, to make a revolving loan or revolving loans
(each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that (A) except as otherwise specifically provided
in Section 1.10(b),
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all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type and (B) no more than three Borrowings of Revolving Loans maintained
as Eurodollar Loans may be incurred prior to the earlier of (1) the 90th day
after the Initial Borrowing Date or, if an Interest Period relating to any then
outstanding Revolving Loans beginning before such 90th day extends thereafter,
the last day of such Interest Period, and (2) the Syndication Date (each of
which Borrowings of Eurodollar Loans may only have an Interest Period of one
month, and the first of which Borrowings may only be made on the same day as
the first day of the first Interest Period of the Tranche A Term Loans that are
maintained as Eurodollar Loans, and the second and third of which Borrowings
may only be made on the last day of the immediately preceding Interest Period),
(ii) may be repaid and reborrowed in accordance with the provisions hereof,
(iii) shall not exceed for any such Bank at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Bank's Adjusted
RL Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Bank at such time and (iv) shall not exceed for all Banks at
any time outstanding that aggregate principal amount which, when added to (I)
the amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline Loans
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) then outstanding, equals the
Total Revolving Loan Commitment at such time.
(d) Subject to and upon the terms and conditions set forth
herein, the Swingline Bank agrees to make, at any time and from time to time on
and after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks then
outstanding and the Letter of Credit Outstandings at such time, an amount equal
to the Adjusted Total Revolving Loan Commitment at such time (after giving
effect to any reductions to the Adjusted Total Revolving Loan Commitment on
such date), and (iv) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. Notwithstanding anything to the
contrary contained in this Section 1.01(d), the Swingline Bank shall not make
any Swingline Loan after it has received written notice from the Borrower or
the Required Banks stating that a Default or an Event of Default exists and is
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11
continuing until such time as the Swingline Bank shall have received written
notice (i) of rescission of all such notices from the party or parties
originally delivering such notice, (ii) of the waiver of such Default or Event
of Default by the Required Banks or (iii) that the Agents in good faith believe
that such Default or Event of Default has ceased to exist.
(e) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans shall
be funded with one or more Borrowings of Revolving Loans (provided that such
notice shall be deemed to have been automatically given upon the occurrence of
a Default or an Event of Default under Section 10.05 or upon the exercise of
any of the remedies provided in the last paragraph of Section 10), in which
case one or more Borrowings of Revolving Loans constituting Base Rate Loans
(each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all Banks with a Revolving Loan Commitment (without
giving effect to any reductions thereto pursuant to the last paragraph of
Section 10) pro rata based on each such Bank's Adjusted RL Percentage
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 10) and the proceeds
thereof shall be applied directly by the Swingline Bank to repay the Swingline
Bank for such outstanding Swingline Loans. Each such Bank hereby irrevocably
agrees to make Revolving Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by the Swingline Bank
notwithstanding (i) the amount of the Mandatory Borrowing may not comply with
the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 6 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) the date of such Mandatory Borrowing
and (v) the amount of the Total Revolving Loan Commitment or the Adjusted Total
Revolving Loan Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each such Bank
hereby agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Bank such participations in the outstanding Swingline Loans as shall
be necessary to cause such Banks to share in such Swingline Loans ratably based
upon their respective Adjusted RL Percentages (determined before giving effect
to any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Bank until the date
as of which the respective participation is required to be purchased and, to
the extent attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay the Swingline Bank interest on the principal amount of
participation purchased for each day from and including the day upon which the
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12
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Loans under a respective Tranche shall
not be less than the Minimum Borrowing Amount for such Tranche. More than one
Borrowing may occur on the same date, but at no time shall there be outstanding
more than sixteen Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to incur Loans hereunder (excluding Swingline Loans and Revolving Loans
incurred pursuant to a Mandatory Borrowing), the Borrower shall give the
Administrative Agent at its Notice Office at least one Business Day's prior
notice of each Base Rate Loan and at least three Business Days' prior notice of
each Eurodollar Loan to be incurred hereunder, provided that any such notice
shall be deemed to have been given on a certain day only if given before 1:00
P.M. (New York time) on such day. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in writing, or by telephone
promptly confirmed in writing, in the form of Exhibit A, appropriately
completed to specify the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), whether the Loans being incurred pursuant to such Borrowing
shall constitute Tranche A Term Loans, Tranche B Term Loans or Revolving Loans
and whether the Loans being incurred pursuant to such Borrowing are to be
initially maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Bank which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing, notice of
such proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Bank no later than 2:00 P.M.
(New York time) on the date that a Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed in writing of each Swingline
Loan to be incurred hereunder. Each such notice shall be irrevocable and
specify in each case (A) the date of Borrowing (which shall be a Business Day)
and (B) the aggregate principal amount of the Swingline Loans to be incurred
pursuant to such Borrowing.
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13
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(e).
(c) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing or
prepayment of Loans, the Administrative Agent or the Swingline Bank, as the
case may be, may act without liability upon the basis of telephonic notice of
such Borrowing or prepayment, believed by the Administrative Agent or the
Swingline Bank, as the case may be, in good faith to be from the Chief
Executive Officer, the President, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer or the Controller of the Borrower, or from any other
authorized person of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the
right to dispute the Administrative Agent's or the Swingline Bank's record of
the terms of such telephonic notice of such Borrowing or prepayment of Loans
(absent manifest error).
1.04 Disbursement of Funds. No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing (or (x) in the
case of Swingline Loans, no later than 3:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, no later than 1:00 P.M. (New York time) on the date specified in
Section 1.01(e)), each Bank with a Commitment of the respective Tranche will
make available its pro rata portion (determined in accordance with Section
1.07) of each such Borrowing requested to be made on such date (or, in the case
of Swingline Loans, the Swingline Bank will make available the full amount
thereof). All such amounts will be made available in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Banks (other than
in respect of Mandatory Borrowings). Unless the Administrative Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such Bank or the Borrower, as
the case may be, interest on such corresponding
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14
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Bank, at the customary rate set by
the Administrative Agent for the correction of errors among banks for each day
during the period consisting of the first three Business Days following such
date of availability and thereafter at the Base Rate as in effect from time to
time and (ii) if recovered from the Borrower, the rate of interest applicable
to the respective Borrowing, as determined pursuant to Section 1.08. Nothing
in this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made by each Bank shall be evidenced
(i) if Tranche A Term Loans, by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B- 1, with blanks
appropriately completed in conformity herewith (each a "Tranche A Term Note"
and, collectively, the "Tranche A Term Notes"), (ii) if Tranche B Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-2, with blanks appropriately completed in conformity
herewith (each a "Tranche B Term Note" and, collectively, the "Tranche B Term
Notes"), (iii) if Revolving Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith (each a "Revolving Note" and,
collectively, the "Revolving Notes") and (iv) if Swingline Loans, by a
promissory note duly executed and delivered by the Borrower substantially in
the form of Exhibit B-4, with blanks appropriately completed in conformity
herewith (the "Swingline Note").
(b) The Tranche A Term Note issued to each Bank that has a
Tranche A Term Loan Commitment or outstanding Tranche A Term Loans shall (i) be
executed by the Borrower, (ii) be payable to such Bank or its registered
assigns and be dated the Initial Borrowing Date (or, if issued after the
Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be in
a stated principal amount equal to the Tranche A Term Loan Commitment of such
Bank on the Initial Borrowing Date (before giving effect to the making of any
Tranche A Term Loans on such date by such Bank) (or, if issued after the
Initial Borrowing Date, be in a stated principal amount equal to any
outstanding Tranche A Term Loan Commitment of such Bank at such time plus the
outstanding principal amount of any Tranche A Term Loans of such Bank at such
time) and be payable in the outstanding principal amount of Tranche A Term
Loans evidenced thereby, (iv) mature on the Tranche A Term Loan Maturity Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and
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mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) The Tranche B Term Note issued to each Bank that has a
Tranche B Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be
executed by the Borrower, (ii) be payable to such Bank or its registered
assigns and be dated the Initial Borrowing Date (or, if issued after the
Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be in
a stated principal amount equal to the Tranche B Term Loans made by such Bank
and be payable in the outstanding principal amount of Tranche B Term Loans
evidenced thereby, (iv) mature on the Tranche B Term Loan Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01,
and mandatory repayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank that has a
Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank (or, if
issued after the termination thereof, be in a stated principal amount equal to
the outstanding Revolving Loans of such Bank at such time) and be payable in
the outstanding principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in
the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(e) The Swingline Note issued to the Swingline Bank shall (i)
be executed by the Borrower, (ii) be payable to the Swingline Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be payable in
the outstanding principal amount of the Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evi-
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denced thereby. Failure to make any such notation or any error in such
notation shall not affect (i.e., will not increase or decrease) the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day occurring after the Initial Borrowing Date, all or
a portion equal to at least the Minimum Borrowing Amount of the outstanding
principal amount of Loans (other than Swingline Loans, which may not be
converted pursuant to this Section 1.06) made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into
a Borrowing (of the same Tranche) of another Type of Loan, provided that, (i)
except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, (iii) unless the Agents otherwise shall have determined
that the Syndication Date has occurred, prior to the 90th day after the Initial
Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans may only
be made if the conversion is effective on the first day of the first, second or
third Interest Period referred to in clause (B) of the proviso of each of
Sections 1.01(a)(ii), 1.01(b)(i) and 1.01(c)(i) and so long as such conversion
does not result in a greater number of Borrowings of Eurodollar Loans prior to
the 90th day after the Initial Borrowing Date than are permitted under Sections
1.01(a), 1.01(b) and 1.01(c) and (iv) no conversion pursuant to this Section
1.06 shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02. Each such conversion shall be effected by the
Borrower by giving the Administrative Agent at its Notice Office prior to 1:00
P.M. (New York time) at least three Business Days' prior notice (each a "Notice
of Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans. Upon any such conversion the proceeds
thereof will be deemed to be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Tranche A Term
Loans, Tranche B Term Loans and Revolving Loans under this Agreement shall be
incurred from the Banks pro rata on the basis of their Tranche A Term Loan
Commitments, Tranche B Term Loan Commitments or Revolving Loan Commitments, as
the case may be, provided, that all Borrowings of Revolving Loans made pursuant
to a Mandatory Borrowing shall be incurred from the Banks with Revolving Loan
Commitments pro rata on the basis of their Adjusted RL Percentages. It is
understood that no Bank shall be responsible for any default
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17
by any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to the Borrower until the earlier of (i)
the maturity thereof (whether by acceleration or otherwise) and (ii) the
conversion of such Base Rate Loan into a Eurodollar Loan pursuant to Section
1.06, at a rate per annum which shall be equal to the sum of the Applicable
Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the
maturity thereof (whether by acceleration or otherwise) and (ii) the conversion
of such Eurodollar Loan into a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10, as applicable, at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Margin plus
the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to 2%
per annum in excess of the rate otherwise applicable to Base Rate Loans of the
respective Tranche of Loans from time to time with such interest to be payable
on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect of
each Loan, on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for each Interest Period applicable
to Eurodollar Loans and shall promptly notify the Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case
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of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower (but otherwise subject to the limitation
set forth in clause (B) of the proviso in each of Sections 1.01(a)(ii),
1.01(b)(i) and 1.01(c)(i)), be a one, two, three or six-month period or, if
available to all Banks with Loans of the respective Tranche at such time, a
nine or twelve-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Loan of a
different Type) and each Interest Period occurring thereafter in
respect of such Eurodollar Loan shall commence on the day on which the
next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided,
however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default or an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of
Tranche A Term Loans or Tranche B Term Loans, as the case may be,
shall be selected which extends beyond any date upon which a mandatory
repayment of such Tranche of Term Loans will be required to be made
under Section 4.02(b) or (c), as the case may be, if the aggregate
principal amount of Tranche A Term Loans or Tranche B Term Loans, as
the case may be, which have Interest Periods which will expire after
such
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date will be in excess of the aggregate principal amount of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, then
outstanding less the aggregate amount of such required repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan because of (x) any change since
the date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located
or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting the New York interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force
of law) or (z) impracticable as a result of a
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contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall, subject to the provisions of Section 13.17 (to the extent applicable),
pay to such Bank, within 5 Business Days after such Bank's written request
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Bank in its sole
discretion shall determine (but without duplication of any amounts that may be
payable to such Bank under Section 1.10(c)) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
such Bank, showing in reasonable detail the basis for the calculation thereof,
submitted to the Borrower by such Bank shall, absent manifest error, be final
and conclusive and binding on all the parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that the
Borrower was notified by the affected Bank or the Administrative Agent pursuant
to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days' written notice to the
Administrative Agent, require the affected Bank to convert such Eurodollar Loan
into a Base Rate Loan, provided that, if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change (which introduction or change
shall have occurred after the date of this Agreement) in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital
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adequacy, or any change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency, will have the effect
of increasing the amount of capital required or expected to be maintained by
such Bank or any corporation controlling such Bank based on the existence of
such Bank's Commitments hereunder or its obligations hereunder, then the
Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to such Bank, within 5 Business Days after its written demand
therefor, such additional amounts as shall be required to compensate such Bank
or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital (but without duplication of
any amounts that may be payable to such Bank under Section 1.10(a)). In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Bank's determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Bank,
within 5 Business Days after its written request (which request shall set forth
in reasonable detail the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Bank to fund its
Eurodollar Loans but excluding loss of anticipated profits) which such Bank may
sustain: (i) if for any reason (other than a default by such Bank or the
Administrative Agent) a Borrowing of, or conversion from or into, Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including any
repayment made pursuant to Section 4.01, 4.02 or as a result of an acceleration
of the Loans pursuant to Section 10) or conversion of any of its Eurodollar
Loans occurs on a date which is not the last day of an Interest Period with
respect thereto; (iii) if any prepayment of any of its Eurodollar Loans is not
made on any date specified in a notice of prepayment given by the Borrower; or
(iv) as a consequence of (x) any other default by the Borrower to repay its
Loans when required by the terms of this Agreement or any Note held by such
Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no
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economic, legal or regulatory disadvantage which such Bank determines, in its
sole discretion, to be adverse in any material respect, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections 1.10,
2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Loans or fund
Unpaid Drawings, (y) upon the occurrence of an event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or
Section 4.04 with respect to any Bank which results in such Bank charging to
the Borrower increased costs in excess of those being generally charged by the
other Banks or (z) in the case of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower shall have the right, if no Default
or Event of Default then exists (or, in the case of preceding clause (z), no
Default or Event of Default will exist immediately after giving effect to such
replacement), to either (1) replace such Bank (the "Replaced Bank") with one or
more other Eligible Transferees, none of whom shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank") and
each of whom shall be required to be reasonably acceptable to the
Administrative Agent or (2) at the option of the Borrower, replace only (a) the
Revolving Loan Commitment (and outstandings pursuant thereto) of the Replaced
Bank with an identical Revolving Loan Commitment provided by the Replacement
Bank or (b) in the case of a replacement as provided in Section 13.12(b) where
the consent of the respective Bank is required with respect to less than all
Tranches of its Loans or Commitments, the Commitments and/or outstanding Term
Loans of such Bank in respect of each Tranche where the consent of such Bank
would otherwise be individually required, with identical Commitments and/or
Term Loans of the respective Tranche provided by the Replacement Bank, provided
that (i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans
(or, in the case of the replacement of only (a) the Revolving Loan Commitment,
the Revolving Loan Commitment and outstanding Revolving Loans and
participations in outstanding Letters of Credit and/or (b) the outstanding Term
Loans of the respective Tranche or Tranches) of, and in each case
participations in Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect thereof an amount
equal to the sum of (I) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans (or of the Loans of the respective Tranche
or Tranches being replaced) of the Replaced Bank, (II) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such time
and (III) an amount equal to all accrued, but thereto-
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fore unpaid, Fees owing to the Replaced Bank (but only with respect to the
relevant Tranche, in the case of the replacement of less than all Tranches of
Loans then held by the respective Replaced Bank) pursuant to Section 3.01, (y)
except in the case of the replacement of only the outstanding Term Loans of one
or both Tranches of a Replaced Bank, each Issuing Bank an amount equal to such
Replaced Bank's Adjusted RL Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Bank) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Bank to such Issuing Bank and (z) except in
the case of the replacement of only the outstanding Term Loans of one or both
Tranches of a Replaced Bank, the Swingline Bank an amount equal to such
Replaced Bank's Adjusted RL Percentage of any Mandatory Borrowing to the extent
such amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations of the Borrower due and owing to the Replaced Bank at such time
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreement, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the Borrower, (x) the Replacement Bank
shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans or a Commitment hereunder, the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect
to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such Replaced Bank and (y) except in the case of the replacement
of only outstanding Term Loans of one or both Tranches of a Replaced Bank, the
Adjusted RL Percentages of the Banks shall be automatically adjusted at such
time to give effect to such replacement (and to give effect to the replacement
of a Defaulting Bank with one or more Non-Defaulting Banks). It is understood
and agreed that replacements pursuant to this Section 1.13 shall be effected by
means of assignments which otherwise meet the applicable requirements of
Section 13.04(b).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing
Date and prior to the 30th day prior to the Revolving Loan Maturity Date, (x)
for the account of the Borrower and for the benefit of any holder (or any
trustee, agent or other similar representative for any such holders) of L/C
Supportable Obligations of the Borrower or any of its Subsidiaries or Joint
Ventures, an irrevocable standby letter of credit, in a form customarily used
by such Issuing Bank or in such other form as has been approved by such Issuing
Bank (each such standby letter of credit, a "Standby Letter of Credit") in
support of such L/C Supportable
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Obligations and (y) for the account of the Borrower and for the benefit of
sellers of goods and materials used in the ordinary course of business of the
Borrower or any of its Subsidiaries or Joint Ventures an irrevocable sight
commercial letter of credit in a form customarily used by such Issuing Bank or
in such other form as has been approved by such Issuing Bank (each such
commercial letter of credit, a "Trade Letter of Credit", and each such Trade
Letter of Credit and each Standby Letter of Credit, a "Letter of Credit") in
support of commercial transactions of the Borrower and its Subsidiaries and
Joint Ventures. All Letters of Credit shall be denominated in Dollars.
(b) Subject to and upon the terms and conditions set forth
herein, each Issuing Bank hereby agrees that it will, at any time and from time
to time on and after the Initial Borrowing Date and prior to the 30th day prior
to the Revolving Loan Maturity Date, following its receipt of the respective
Letter of Credit Request, issue for the account of the Borrower, one or more
Letters of Credit (x) in the case of Standby Letters of Credit, in support of
such L/C Supportable Obligations of the Borrower or any of its Subsidiaries or
Joint Ventures as are permitted to remain outstanding without giving rise to a
Default or an Event of Default and (y) in the case of Trade Letters of Credit,
in support of sellers of goods or materials used in the ordinary course of
business of the Borrower or any of its Subsidiaries or Joint Ventures as
referenced in Section 2.01(a), provided that the respective Issuing Bank shall
be under no obligation to issue any Letter of Credit of the types described
above if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Bank shall
prohibit, or request that such Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon such Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
such Issuing Bank is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date
hereof and which such Issuing Bank reasonably and in good faith deems
material to it; or
(ii) such Issuing Bank shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the
type described in the penultimate sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (ex-
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clusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time would exceed either
(x) $20,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks then outstanding and the aggregate
principal amount of all Swingline Loans then outstanding, an amount equal to
the Adjusted Total Revolving Loan Commitment at such time and (ii) each Letter
of Credit shall by its terms terminate on or before (A) in the case of Standby
Letters of Credit, the earlier of (x) the date which occurs 12 months after the
date of the issuance thereof (although any such Standby Letter of Credit may be
extendable for successive periods of up to 12 months, but not beyond the third
Business Day prior to the Revolving Loan Maturity Date, on terms acceptable to
the Issuing Bank thereof) and (y) the third Business Day prior to the Revolving
Loan Maturity Date and (B) in the case of Trade Letters of Credit, the earlier
of (x) the date which occurs 360 days after the date of issuance thereof and
(y) 30 days prior to the Revolving Loan Maturity Date.
2.03 Letter of Credit Requests. (a) Whenever the Borrower
desires that a Letter of Credit be issued for its account, the Borrower shall
give the Administrative Agent and the respective Issuing Bank at least five
Business Days' (or such shorter period as is acceptable to the respective
Issuing Bank) written notice thereof. Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request"). The Administrative Agent shall
promptly transmit copies of each Letter of Credit Request to each Bank with a
Revolving Loan Commitment.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the respective Issuing Bank has received notice from
the Required Banks before it issues a Letter of Credit that one or more of the
conditions specified in Section 5 are not satisfied on the Initial Borrowing
Date or Section 6 are not then satisfied, or that the issuance of such Letter
of Credit would violate Section 2.02, then, subject to the terms and conditions
of this Agreement, such Issuing Bank shall issue the requested Letter of Credit
for the account of the Borrower in accordance with such Issuing Bank's usual
and customary practices. Upon the issuance of or amendment or modification to
a Letter of Credit, the respective Issuing Bank shall promptly notify the
Borrower and the Administrative Agent of such issuance, amendment or
modification and such notification shall be accompanied by a copy of the issued
Letter of Credit or amendment or modification.
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by the respective Issuing Bank of any Letter of Credit, such
Issuing Bank shall be deemed to have sold and transferred to each Bank with a
Revolving Loan Commitment, other than such Issuing Bank (each such Bank, in its
capacity under this Section 2.04, a "Participant"), and each such Participant
shall be deemed irrevocably and unconditionally to have
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purchased and received from such Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted RL Percentage in such Letter of Credit, each drawing or payment made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto.
Upon any change in the Revolving Loan Commitments or Adjusted RL Percentages of
the Banks pursuant to Section 1.13 or 13.04, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall
be an automatic adjustment to the participations pursuant to this Section 2.04
to reflect the new Adjusted RL Percentages of the assignor and assignee Bank,
as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the respective Issuing Bank shall have no obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing Bank
any resulting liability to the Borrower, any other Credit Party, any Bank or
any other Person.
(c) In the event that any Issuing Bank makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Issuing Bank pursuant to Section 2.05(a), such Issuing
Bank shall promptly notify the Administrative Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly
and unconditionally pay to such Issuing Bank the amount of such Participant's
Adjusted RL Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to such Issuing Bank in
Dollars such Participant's Adjusted RL Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Adjusted RL Percentage of the amount of such payment
available to such Issuing Bank, such Participant agrees to pay to such Issuing
Bank, forthwith on demand such amount, together with interest thereon, for each
day from such date until the date such amount is paid to such Issuing Bank at
the overnight Federal Funds Rate for the first three days and at the interest
rate applicable to Revolving Loans maintained as Base Rate Loans for each day
thereafter. The failure of any Participant to make available to such Issuing
Bank its Adjusted RL Percentage of any payment under any Letter of Credit shall
not relieve any other Participant of its obligation hereunder to make available
to such Issuing Bank its Adjusted RL Percentage of any Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to such Issuing Bank
such other Participant's Adjusted RL Percentage of any such payment.
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(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to each
Participant which has paid its Adjusted RL Percentage thereof, in Dollars and
in same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing Bank
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries or Joint Ventures
may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Administrative Agent, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower or any Subsidiary or Joint Venture of the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
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2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Issuing Bank, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by such Issuing Bank under
any Letter of Credit issued by it (each such amount, so paid until reimbursed,
an "Unpaid Drawing"), immediately after, and in any event on the date of, such
payment or disbursement, with interest on the amount so paid or disbursed by
such Issuing Bank, to the extent not reimbursed prior to 1:00 P.M. (New York
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but excluding the date such Issuing Bank was reimbursed by
the Borrower therefor at a rate per annum which shall be the Base Rate in
effect from time to time plus the Applicable Margin for Revolving Loans
maintained as Base Rate Loans; provided, however, to the extent such amounts
are not reimbursed prior to 1:00 P.M. (New York time) on the third Business Day
following the receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default under Section
10.05, interest shall thereafter accrue on the amounts so paid or disbursed by
such Issuing Bank (and until reimbursed by the Borrower) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Margin for Revolving Loans maintained as Base Rate Loans plus 2%, in each such
case, with interest to be payable on demand. The respective Issuing Bank shall
give the Borrower prompt written notice of each Drawing under any Letter of
Credit, provided that the failure to give any such notice shall in no way
affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05
to reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as issuer of the Letter of Credit or as
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit (each a "Drawing") to conform to the
terms of the Letter of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing; provided, however, that the
Borrower shall not be obligated to reimburse any Issuing Bank for any wrongful
payment made by such Issuing Bank under a Letter of Credit as a result of acts
or omissions constituting willful misconduct or gross negligence on the part of
such Issuing Bank.
2.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by any
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Issuing Bank or participated in by any Participant, or (ii) impose on any
Issuing Bank or any Participant any other conditions relating, directly or
indirectly, to this Agreement; and the result of any of the foregoing is to
increase the cost to any Issuing Bank or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by any Issuing Bank or any Participant hereunder
or reduce the rate of return on its capital with respect to Letters of Credit
(except for changes in the rate of tax on, or determined by reference to, the
net income or profits of such Issuing Bank or such Participant pursuant to the
laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, within 5 Business Days of the delivery of the certificate
referred to below to the Borrower by such Issuing Bank or any Participant (a
copy of which certificate shall be sent by such Issuing Bank or such
Participant to the Agent), the Borrower shall, subject to the provisions of
Section 13.17 (to the extent applicable), pay to such Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. Any Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 2.06, will give prompt written notice thereof to the Borrower, which
notice shall include a certificate submitted to the Borrower by such Issuing
Bank or such Participant (a copy of which certificate shall be sent by such
Issuing Bank or such Participant to the Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Bank or such Participant. In determining
such additional amounts, each Issuing Bank and each Participant will act
reasonably and in good faith, provided that the certificate required to be
delivered pursuant to this Section 2.06 shall, absent manifest error, be final
and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Bank with a Term
Loan Commitment, a commitment commission (the "Term Loan Commitment
Commission") for the period from and including the Effective Date to but
excluding the date on which the Total Term Loan Commitment shall have been
terminated, computed at a rate for each day equal to the Applicable Commitment
Commission Percentage on the daily average Term Loan Commitment of such Bank.
Accrued Term Loan Commitment Commission shall be due and payable on the Initial
Borrowing Date, quarterly in arrears on each Quarterly Payment Date and on the
date on which the Total Term Loan Commitment shall have been terminated.
(b) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Revolving Loan Commitment Commission") for the
period from and including
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the Effective Date to but excluding the Revolving Loan Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate for each day equal to the Applicable Commitment
Commission Percentage on the daily average Unutilized Revolving Loan Commitment
of such Non-Defaulting Bank. Accrued Revolving Loan Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the Revolving Loan Maturity Date or such earlier date upon which the
Total Revolving Loan Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment
(based on each such Non-Defaulting Bank's respective Adjusted RL Percentage) a
fee in respect of each Letter of Credit issued hereunder (the "Letter of Credit
Fee"), for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin for
Revolving Loans maintained as Eurodollar Loans on the daily Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower agrees to pay to each Issuing Bank, for its
own account, a facing fee in respect of each Letter of Credit issued by such
Issuing Bank (the "Facing Fee"), for the period from and including the date of
issuance of such Letter of Credit to and including the date of the termination
of such Letter of Credit, computed at a rate equal to 1/4 of 1% per annum of
the daily Stated Amount of such Letter of Credit. Accrued Facing Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and upon
the first day after the termination of the Total Revolving Loan Commitment upon
which no Letters of Credit remain outstanding.
(e) The Borrower agrees to pay, upon each drawing under,
issuance of, or amendment to, any Letter of Credit, such amount as shall at the
time of such event be the administrative charge and the reasonable expenses
which the applicable Issuing Bank is generally imposing in connection with such
occurrence with respect to letters of credit.
(f) The Borrower agrees to pay to the Agents, for their own
account, such other fees as have been agreed to in writing by the Borrower and
the Agents.
3.02 Voluntary Termination of Unutilized Commitments. (a)
Upon at least one Business Day's prior written notice to the Administrative
Agent at its Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Banks), the Borrower shall have the right, at
any time or from time to time, without premium or penalty, to terminate the
Total Unutilized Revolving Loan Commitment, in whole or in part, in integral
multiples of $1,000,000 in the case of partial reductions to the Total
Unutilized
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Revolving Loan Commitment, provided that (i) each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each
Bank with such a Commitment and (ii) the reduction to the Total Unutilized
Revolving Loan Commitment shall in no case be in an amount which would cause
the Revolving Loan Commitment of any Bank to be reduced (as required by
preceding clause (i)) by an amount which exceeds the remainder of (x) the
Unutilized Revolving Loan Commitment of such Bank as in effect immediately
before giving effect to such reduction minus (y) such Bank's Adjusted RL
Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
(b) (i) On the Initial Borrowing Date (but before giving
effect to the incurrence of any Term Loans on such date) and upon notice to the
Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks), the Borrower shall have
the right, without premium or penalty, to reduce the Total Term Loan Commitment
up to an amount equal to the amount of the Retained Net Equity Proceeds from
the Equity Financing in excess of $250,000,000 so long as the Borrower utilizes
such Retained Net Equity Proceeds on the Initial Borrowing Date to make
payments owing in connection with the Transaction. The reduction to the Total
Term Loan Commitment pursuant to this Section 3.02(b)(i) shall be applied pro
rata to the Total Tranche A Term Loan Commitment (in an amount equal to the
Tranche A Term Loan Percentage of such reduction) and to the Total Tranche B
Term Loan Commitment (in an amount equal to the Tranche B Term Loan Percentage
of such reduction), provided that the first $36,000,000 of reductions pursuant
to this Section 3.02(b)(i) (less any amount by which the outstanding Tranche B
Term Loans have been repaid or the Total Tranche B Term Loan Commitment has
been reduced pursuant to the proviso of the first sentence of Section 4.02(k))
shall only be applied to reduce the Total Tranche B Term Loan Commitment. The
amount of each reduction to the Total Term Loan Commitment pursuant to this
Section 3.02(b)(i) shall be applied to reduce the then remaining Scheduled
Repayments of the respective Tranche of Term Loans pro rata based upon the then
remaining amount of each Scheduled Repayment of the respective Tranche of Term
Loans after giving effect to all prior reductions thereto, provided that the
first $36,000,000 of reductions pursuant to this Section 3.02(b)(i) (less any
amount by which the outstanding Tranche B Term Loans have been repaid or the
Total Tranche B Term Loan Commitment has been reduced pursuant to the proviso
of the first sentence of Section 4.02(k)) shall be applied only to reduce the
final six Tranche B Term Loans Scheduled Repayments pro rata based upon the
then remaining amount of each such Tranche B Term Loan Scheduled Repayment
after giving effect to all prior reductions thereto. Any reduction to the
Total Tranche A Term Loan Commitment and the Total Tranche B Term Loan
Commitment pursuant to this Section 3.02(b)(i) shall be applied proportionately
to permanently reduce the Tranche A Term Loan Commitment or the Tranche B Term
Loan Commitment, as the case may be, of each Bank with such a Commitment.
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(ii) At any time after the Initial Borrowing Date and prior
to the termination of the Total Tranche A Term Loan Commitment and upon notice
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate the
remaining Total Tranche A Term Loan Commitment in the event that the Borrower
has determined after the Initial Borrowing Date to keep the Existing Glendale
Debt outstanding and not have it be part of the Indebtedness to be Refinanced.
The amount by which the Total Tranche A Term Loan Commitment is terminated
pursuant to this Section 3.02(b)(ii) shall be applied to reduce the then
remaining Tranche A Term Loan Scheduled Repayments pro rata based upon the then
remaining amount of each such Tranche A Term Loan Scheduled Repayment. The
termination of the Total Tranche A Term Loan Commitment pursuant to this
Section 3.02(b)(ii) shall be applied to terminate the Tranche A Term Loan
Commitment of each Bank with such a Commitment.
(c) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower may, subject to its compliance with
the requirements of Section 13.12(b), upon five Business Days' prior written
notice to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks) terminate
all of the Revolving Loan Commitment of such Bank, so long as all Loans,
together with accrued and unpaid interest, Fees and all other amounts, owing to
such Bank (other than amounts owing in respect of any Tranche of Loans
maintained by such Bank which are not being repaid pursuant to Section
13.12(b)) are repaid concurrently with the effectiveness of such termination
pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified
to reflect such changed amounts), and at such time, unless the respective Bank
continues to have outstanding Loans of one or more Tranches hereunder, such
Bank shall no longer constitute a "Bank" for purposes of this Agreement, except
with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitments (and the Tranche A Term Loan Commitment, the Tranche B Term Loan
Commitment and the Revolving Loan Commitment of each Bank) shall terminate in
their entirety on January 31, 1997 unless the Initial Borrowing Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche A Term Loan Commitment (and
the Tranche A Term Loan Commitment of each Bank) shall (i) be reduced on each
Term Loan Borrowing Date (after giving effect to the making of Tranche A Term
Loans on such date), in an amount equal to the aggregate principal amount of
Tranche A Term Loans incurred on such date, (ii) terminate in its entirety (to
the extent not theretofore terminated) at 5:00 P.M. (New
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York time) on the Tranche A Term Loan Commitment Termination Date, whether or
not any Tranche A Term Loans are incurred on such date and (iii) prior to the
termination of the Total Tranche A Term Loan Commitment, be reduced from time
to time to the extent required by Section 4.02. In the event that the Total
Tranche A Term Loan Commitment is terminated on the Tranche A Term Loan
Commitment Termination Date and no Tranche A Term Loans are incurred on such
date, the amount by which the Total Tranche A Term Loan Commitment is
terminated shall be applied to reduce the then remaining Tranche A Term Loan
Scheduled Repayments pro rata based upon the then remaining amount of each such
Tranche A Term Loan Scheduled Repayment.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment (and
the Tranche B Term Loan Commitment of each Bank) shall (i) terminate in its
entirety on the Initial Borrowing Date (after giving effect to the making of
the Tranche B Term Loans on such date) and (ii) prior to the termination of the
Total Tranche B Term Loan Commitment, be reduced from time to time to the
extent required by Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Effective Date upon which
a mandatory repayment of Term Loans or a mandatory reduction to the Total Term
Loan Commitment pursuant to any of Sections 4.02(d) through (i), inclusive, is
required (and exceeds in amount the aggregate principal amount of Term Loans
then outstanding and the Total Term Loan Commitment was then in effect) or
would be required if Term Loans were then outstanding or the Total Term Loan
Commitment was then in effect, the Total Revolving Loan Commitment shall be
permanently reduced by the amount, if any, by which the amount required to be
applied pursuant to said Sections (determined as if an unlimited amount of Term
Loans were actually outstanding) exceeds the aggregate principal amount of Term
Loans then outstanding and the Total Term Loan Commitment then in effect.
(f) Each reduction to the Total Tranche A Term Loan
Commitment, the Total Tranche B Term Loan Commitment and the Total Revolving
Loan Commitment pursuant to this Section 3.03 (or pursuant to Section 4.02)
shall be applied proportionately to permanently reduce the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment or the Revolving Loan
Commitment, as the case may be, of each Bank with such a Commitment.
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SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 1:00 P.M. (New York time)
at its Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, whether Tranche A Term Loans, Tranche B Term Loans, Revolving
Loans or Swingline Loans shall be prepaid, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $500,000 (or
$100,000 in the case of Swingline Loans), provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding principal amount of Eurodollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans and any election of an Interest Period with respect thereto given by the
Borrower shall have no force or effect; (iii) prepayments of Eurodollar Loans
made pursuant to this Section 4.01(a) may only be made on the last day of an
Interest Period applicable thereto except that the Borrower may make
prepayments of Eurodollar Loans on a day which is not the last day of an
Interest Period applicable to the Loans being prepaid so long as the Borrower
shall compensate each Bank for any breakage costs and any other amounts due
such Bank in accordance with Section 1.11; (iv) each prepayment in respect of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans; (v) except as provided below in this clause (v), each voluntary
prepayment of Term Loans pursuant to this Section 4.01(a) shall be applied pro
rata to each Tranche of Term Loans (with each Tranche of Term Loans to be
allocated its respective Term Loan Percentage of the amount to be applied), and
(a) in the case of repayments of Tranche A Term Loans, such repayments shall be
applied to reduce the then remaining Tranche A Term Loan Scheduled Repayments
pro rata based upon the then remaining amount of each Tranche A Term Loan
Scheduled Repayment after giving effect to all prior reductions thereto, and
(b) in the case of repayments of Tranche B Term Loans, such repayments shall be
applied to reduce the then remaining Tranche B Scheduled Term Loan Scheduled
Repayments pro rata based upon the then remaining amount of each Tranche B Term
Loan Scheduled Repayment after giving effect to all prior reductions thereto,
provided that (A) any voluntary prepayment of Term Loans pursuant to this
Section 4.01(a) which are made with proceeds of the Retained Excess Cash Flow
Amount or with proceeds of the Retained Net Equity Proceeds Amount may be
applied, at the Borrower's option (and upon written notice to the
Administrative Agent at the time notice of such prepayment is given by the
Borrower), to prepay only one Tranche of Term Loans, and with
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each such prepayment to reduce the then remaining Scheduled Repayments of such
Tranche of Term Loans pro rata based upon the then remaining amount of each
such Scheduled Repayment after giving effect to all prior reductions thereto
and (B) no more than $10,000,000 (or $15,000,000 commencing on January 1, 2000)
of Term Loans may be applied in any calendar year in accordance with this
proviso; and (vi) at the Borrower's election in connection with any prepayment
of Revolving Loans pursuant to this Section 4.01(a), such prepayment shall not
be applied to any Revolving Loan of a Defaulting Bank.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower may, upon five Business Days' prior
written notice to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks) repay
all Loans, together with accrued and unpaid interest, Fees, and other amounts
owing to such Bank (or owing to such Bank with respect to each Tranche which
gave rise to the need to obtain such Bank's individual consent) in accordance
with, and subject to the requirements of, said Section 13.12(b) so long as (A)
in the case of the repayment of Revolving Loans of any Bank pursuant to this
clause (b) the Revolving Loan Commitment of such Bank is terminated
concurrently with such repayment pursuant to Section 3.02(c) (at which time
Schedule I shall be deemed modified to reflect the changed Revolving Loan
Commitments), and (B) the consents, if any, required by Section 13.12(b) in
connection with the repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i)
On any day on which the sum of the aggregate outstanding principal amount of
the Revolving Loans made by Non-Defaulting Banks, Swingline Loans and the
Letter of Credit Outstandings exceeds the Adjusted Total Revolving Loan
Commitment as then in effect, the Borrower shall prepay on such day principal
of Swingline Loans and, after all Swingline Loans have been repaid in full,
Revolving Loans of Non-Defaulting Banks in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans of Non-Defaulting Banks, the aggregate amount of the Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as
then in effect, the Borrower shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash or Cash Equivalents equal to the
amount of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the Borrower to the Issuing Banks and the
Non-Defaulting Banks hereunder in a cash collateral account to be established
by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal
amount of the Revolving Loans made by any Defaulting Bank exceeds the Revolving
Loan Commitment
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of such Defaulting Bank, the Borrower shall prepay on such day principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(iii) If on December 1 of each year commencing on December 1,
1997, a Clean-Down Period shall not have occurred since January 30 of such
year, the Borrower shall repay Revolving Loans and/or Swingline Loans in an
amount necessary to reduce the aggregate outstanding principal amount of
Revolving Loans and Swingline Loans to $50,000,000, which amount may not be
exceeded until the Clean-Down Period for such year has ended.
(b) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, the Borrower shall be required to repay that principal amount of Tranche
A Term Loans, to the extent then outstanding, as is set forth opposite such
date (each such repayment, as the same may be reduced as provided in Sections
4.01(a) and 4.02(k), a "Tranche A Term Loan Scheduled Repayment," and each such
date, a "Tranche A Term Loan Scheduled Repayment Date"):
Tranche A Term Loan
Scheduled Repayment Date Amount
------------------------ ------
March 31, 1997 $ 1,250,000
June 30, 1997 $ 1,250,000
September 30, 1997 $ 1,250,000
December 31, 1997 $ 1,250,000
March 31, 1998 $12,500,000
June 30, 1998 $12,500,000
September 30, 1998 $12,500,000
December 31, 1998 $12,500,000
March 31, 1999 $16,000,000
June 30, 1999 $16,000,000
September 30, 1999 $16,000,000
December 31, 1999 $16,000,000
March 31, 2000 $18,500,000
June 30, 2000 $18,500,000
September 30, 2000 $18,500,000
December 31, 2000 $18,500,000
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March 31, 2001 $22,250,000
June 30, 2001 $22,250,000
September 30, 2001 $22,250,000
December 31, 2001 $22,250,000
March 31, 2002 $23,500,000
June 30, 2002 $23,500,000
September 30, 2002 $23,500,000
Tranche A Term Loan Maturity Date $23,500,000
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, the Borrower shall be required to repay that principal amount of Tranche
B Term Loans, to the extent then outstanding, as is set forth opposite such
date (each such repayment, as the same may be reduced as provided in Sections
4.01(a) and 4.02(k), a "Tranche B Term Loan Scheduled Repayment," and each such
date, a "Tranche B Term Loan Scheduled Repayment Date," and the Tranche A Term
Loan Scheduled Repayments and the Tranche B Term Loan Scheduled Repayments are
collectively referred to as the "Scheduled Repayments"):
Tranche B Term Loan
Scheduled Repayment Date Amount
------------------------ ------
March 31, 1997 $ 500,000
June 30, 1997 $ 500,000
September 30, 1997 $ 500,000
December 31, 1997 $ 500,000
March 31, 1998 $ 500,000
June 30, 1998 $ 500,000
September 30, 1998 $ 500,000
December 31, 1998 $ 500,000
March 31, 1999 $ 500,000
June 30, 1999 $ 500,000
September 30, 1999 $ 500,000
December 31, 1999 $ 500,000
March 31, 2000 $ 500,000
June 30, 2000 $ 500,000
September 30, 2000 $ 500,000
December 31, 2000 $ 500,000
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March 31, 2001 $ 500,000
June 30, 2001 $ 500,000
September 30, 2001 $ 500,000
December 31, 2001 $ 500,000
March 31, 2002 $ 500,000
June 30, 2002 $ 500,000
September 30, 2002 $ 500,000
December 31, 2002 $ 500,000
March 31, 2003 $33,833,333
June 30, 2003 $33,833,333
September 30, 2003 $33,833,333
December 31, 2003 $33,833,333
March 31, 2003 $33,833,334
Tranche B Term Loan Maturity Date $33,833,334
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after on or
the Effective Date upon which the Borrower or any of its Wholly-Owned
Subsidiaries or Joint Ventures receives any cash proceeds from any capital
contribution or any sale or issuance of its equity (other than (i) the first
$250,000,000 of gross cash proceeds received by the Borrower as part of the
Equity Financing, (ii) cash proceeds received from capital contributions to, or
equity investments in, any Wholly-Owned Subsidiary or Joint Venture of the
Borrower to the extent made by the Borrower, any other Subsidiary of the
Borrower or the respective joint venture partner of such Joint Venture and
(iii) cash proceeds received from sales or issuances of equity to officers or
directors of the Borrower or any of its Subsidiaries in an aggregate amount not
to exceed $1,000,000 in any fiscal year of the Borrower), an amount equal to
50% of the Net Equity Proceeds of such capital contribution or sale or issuance
shall be applied as a mandatory repayment of principal of outstanding Term
Loans (and/or, if the Total Term Loan Commitment has not yet been terminated,
as a mandatory reduction to the Total Term Loan Commitment) in accordance with
the requirements of Sections 4.02(j) and (k) (or in the case of any capital
contribution to, or any sale or issuance of equity by, any Joint Venture, an
amount equal to 50% of the Borrower's Allocable Share of such Net Equity
Proceeds shall be applied as provided above in this Section 4.02(d), but such
amount shall be applied only as, when and to the extent such Net Equity
Proceeds are distributed by such Joint Venture to the Borrower or a
Wholly-Owned Subsidiary thereof).
(e) (i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Effective Date upon which the Borrower or any of its Wholly-Owned
Subsidiaries or Joint Ventures receives any cash proceeds from any incurrence
by the Borrower or any of its Wholly-Owned Subsidiaries or Joint Ventures of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04 as such Section is in effect
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on the Effective Date), an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Indebtedness shall be applied as a mandatory repayment
of principal of outstanding Term Loans (and/or, if the Total Term Loan
Commitment has not yet been terminated, as a mandatory reduction to the Total
Term Loan Commitment) in accordance with the requirements of Sections 4.02(j)
and (k) (or in the case of any incurrence of Indebtedness for borrowed money by
any Joint Venture, an amount equal to 100% of the Borrower's Allocable Share of
such Net Debt Proceeds shall be applied as provided above in this Section
4.02(e), but such amount shall be applied only as, when and to the extent such
Net Debt Proceeds are distributed by such Joint Venture to the Borrower or a
Wholly-Owned Subsidiary thereof).
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, (x) on the Initial
Borrowing Date (but before giving effect to the incurrence of any Term Loans on
such date), the Total Term Loan Commitment shall be reduced in an amount equal
to $40,000,000 in the event that the Existing Glendale Debt is to remain
outstanding after the Initial Borrowing Date and has been designated by the
Borrower as not being part of the Indebtedness to be Refinanced pursuant to
Section 5.08, with such reduction to be effected in accordance with the
requirements of Section 4.02(k) and (y) on any date after the Initial Borrowing
Date and prior to the termination of the Total Tranche A Term Loan Commitment
on which the Existing Glendale Debt is refinanced with proceeds of a loan made
by any Person (other than the Borrower, any Subsidiary thereof or any Bank
under this Agreement), the Total Tranche A Term Loan Commitment shall be
reduced in accordance with the requirements of Section 4.02(k) in an amount
equal to the principal amount of such loan.
(f) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Effective Date upon which the Borrower or any of its Wholly-Owned
Subsidiaries or Joint Ventures receives cash proceeds from any Asset Sale or
any Specified Red Lion Event, an amount equal to the Applicable Recapture
Percentage of the Net Sale Proceeds from the respective Asset Sale or the
Applicable Recapture Percentage of the Specified Existing Red Lion Investment
Proceeds from the respective Specified Red Lion Event shall be applied as a
mandatory repayment of principal of outstanding Term Loans (and/or, if the
Total Term Loan Commitment has not yet been terminated, as a mandatory
reduction to the Total Term Loan Commitment) in accordance with the
requirements of Sections 4.02(j) and (k) (or in the case of any Asset Sale by
any Joint Venture, an amount equal to the Applicable Recapture Percentage of
the Borrower's Allocable Share of the Net Sale Proceeds therefrom shall be
applied as provided above in this Section 4.02(f), but such amount shall be
applied only as, when and to the extent such Net Sale Proceeds are distributed
by such Joint Venture to the Borrower or a Wholly-Owned Subsidiary thereof);
provided that, so long as no Default or Event of Default then exists, up to
$75,000,000 in the aggregate over any three-year period (but no more than
$35,000,000 in any fiscal year of the Borrower) of Net Sale Proceeds
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from Asset Sales (other than proceeds from an Asset Sale pursuant to Section
9.02(xiv), which proceeds shall be applied as provided above in this Section
4.02(f) without regard to this proviso) and of Specified Existing Red Lion
Investment Proceeds from Specified Red Lion Events may be used to purchase like
assets pursuant to Section 9.07(h) within 360 days following the date of the
respective Asset Sale or Specified Red Lion Event (and the Applicable Recapture
Percentage therefrom shall not be required to be applied on the date of receipt
of such Net Sale Proceeds or Specified Existing Red Lion Investment Proceeds
pursuant to this Section 4.02(f)) so long as (x) the Borrower delivers a
certificate to the Agents on or prior to such date stating that such Net Sale
Proceeds or Specified Existing Red Lion Investment Proceeds shall be used to
purchase like assets within 360 days following the date of such Asset Sale or
Specified Red Lion Event (which certificate shall set forth the estimates of
the proceeds to be so expended) and (y) within 180 days following the date of
such Asset Sale or Specified Red Lion Event, the Borrower or the applicable
Wholly-Owned Subsidiary or Joint Venture has entered into a binding commitment
to purchase such replacement assets, and, provided further, that if all or any
portion of such Net Sale Proceeds or Specified Existing Red Lion Investment
Proceeds are not so reinvested in like assets within such 360 day period (or
committed to be so reinvested within such 180-day period), the Applicable
Recapture Percentage of such remaining portion shall be applied on the last day
of such applicable period as a mandatory repayment of principal of outstanding
Term Loans as provided above in this Section 4.02(f) without regard to this
proviso. Notwithstanding the foregoing provisions of this Section 4.02(f), in
the case of an Asset Sale by Red Lion Properties at a time when Red Lion
Properties is subject to the minimum net worth requirement described in
Schedule XV, the Applicable Recapture Percentage of the Net Sale Proceeds from
the respective Asset Sale, to the extent not reinvested as permitted by the
first proviso of the immediately preceding sentence, shall only be required to
be applied to the Obligations to the extent that Red Lion Properties can
distribute the Applicable Recapture Percentage of such Net Sale Proceeds to the
Borrower without violating such minimum net worth covenant.
(g) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of
the Excess Cash Flow for the relevant Excess Cash Payment Period shall be
applied as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Sections 4.02(j) and (k).
(h) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days following
each date on or after the Effective Date upon which the Borrower or any of its
Wholly-Owned Subsidiaries or Joint Ventures receives any cash proceeds from any
Recovery Event, an amount equal to 100% of the Net Insurance Proceeds of such
Recovery Event shall be applied as a mandatory repayment of principal of
outstanding Term Loans (and/or, if the Total Term Loan Commitment has not yet
been terminated, as a mandatory reduction to the Total Term Loan
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Commitment) in accordance with the requirements of Sections 4.02(j) and (k) (or
in the case of any Recovery Event by any Joint Venture, an amount equal to 100%
of the Borrower's Allocable Share of such Net Insurance Proceeds shall be
applied as provided above in this Section 4.02(h), but such amount shall be
applied only as, when and to the extent such Net Insurance Proceeds are
distributed by such Joint Venture to the Borrower or a Wholly-Owned Subsidiary
thereof); provided that, so long as no Default or Event of Default then exists,
such proceeds shall not be required to be so applied on such date to the extent
that the Borrower has delivered a certificate to the Agents on or prior to such
date stating that such proceeds shall be used or shall be contractually
committed to be used to replace or restore any properties or assets in respect
of which such proceeds were paid within one year following the date of the
receipt of such proceeds (which certificate shall set forth the estimates of
the proceeds to be so expended), and provided further, that if all or any
portion of such proceeds not required to be applied to the repayment of
outstanding Term Loans (and/or as a reduction to the Total Term Loan
Commitment) are either (A) not so used or contractually committed to be used
within one year after the date of the receipt of such proceeds or (B) if
contractually committed to be used within one year after the date of receipt of
such proceeds and not so used within three years after the date of receipt of
such proceeds (so long as the Borrower or such Wholly-Owned Subsidiary or Joint
Venture is diligently proceeding with such replacement or restoration in
accordance with the terms of the contractual arrangements applicable thereto)
then, in either such case, such remaining portion not used or contractually
committed to be used in the case of preceding clause (A) and not used in the
case of preceding clause (B) shall be applied on the date which is the first
anniversary of the date of the receipt of such proceeds in the case of clause
(A) above or the date occurring three years after the date of the receipt of
such proceeds (or such earlier date on which the Borrower or such Wholly-Owned
Subsidiary or Joint Venture is no longer diligently proceeding with such
replacement or restoration) in the case of clause (B) above as a mandatory
repayment of principal of outstanding Term Loans as provided above in this
Section 4.02(h) without regard to the preceding proviso.
(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Effective Date upon which the Borrower or any of its Wholly-Owned
Subsidiaries receives cash proceeds from any Designated Event, an amount equal
to 100% of the cash proceeds therefrom shall be applied as a mandatory
repayment of principal of outstanding Term Loans (and/or, if the Total Term
Loan Commitment has not yet been terminated, as a mandatory reduction to the
Total Term Loan Commitment) in accordance with the requirements of Section
4.02(j) and (k); provided that, so long as no Default or Event of Default then
exists, up to $25,000,000 in the aggregate of such cash proceeds in any fiscal
year of the Borrower shall not be required to be applied pursuant to this
Section 4.02(i). Notwithstanding the foregoing provisions of this Section
4.02(i), in the event that RFS or RFS Sub sells the RFS Equity at a time when
RFS and/or RFS Sub are subject to the minimum net worth requirement described
above on Schedule XV, the cash proceeds from the respective sale, to the extent
that same would
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otherwise be required to be applied as provided above in this Section 4.02(i),
shall only be required to be so applied to the extent that RFS and/or RFS Sub
can distribute such cash proceeds to the Borrower without violating such
minimum net worth covenant.
(j) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings of the respective Tranche pursuant to which
made, provided that: (i) repayments of Eurodollar Loans pursuant to this
Section 4.02 may only be made on the last day of an Interest Period applicable
thereto unless all Eurodollar Loans of the respective Tranche with Interest
Periods ending on such date of required repayment and all Base Rate Loans of
the respective Tranche have been paid in full; (ii) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion. Notwithstanding the foregoing provisions of this Section
4.02(j), if at any time a mandatory repayment of Loans pursuant to this Section
4.02(j) would result, after giving effect to the procedures set forth above in
this Section 4.02(j), in the Borrower incurring breakage costs under Section
1.11 as a result of Eurodollar Loans being prepaid other than on the last day
of an Interest Period applicable thereto (the "Affected Eurodollar Loans"),
then the Borrower may in its sole discretion, and upon notice to the
Administrative Agent, initially deposit a portion (up to 100%) of the amount
that otherwise would have been paid in respect of the Affected Eurodollar Loans
with the Administrative Agent (which deposit must be equal in amount to the
amount of the Affected Eurodollar Loans not immediately repaid) to be held as
security for the Obligations of the Borrower pursuant to a cash collateral
arrangement satisfactory to the Administrative Agent and the Borrower which
shall permit investments in Cash Equivalents reasonably satisfactory to the
Administrative Agent, with such cash collateral to be directly applied upon the
earlier of (x) the first occurrence (or occurrences) thereafter of the last day
of an Interest Period applicable to the relevant Affected Eurodollar Loans of
the respective Tranche or Tranches that were initially required to be repaid
(or such earlier date or dates as shall be requested by the Borrower) and (y)
the date which is 180 days after such initial deposit, to repay an aggregate
principal amount of such Loans equal to the Affected Eurodollar Loans not
initially repaid pursuant to this sentence. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, all amounts deposited
as cash collateral pursuant to the immediately preceding sentence shall be held
first for the sole benefit of the Banks whose Loans would otherwise have been
immediately repaid with the amounts deposited and upon the taking of any action
by the Administrative Agent or the Banks pursuant to the remedial provisions of
Section 10, any
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amounts held as cash collateral pursuant to this Section 4.02(j) shall first be
immediately applied to such Loans and thereafter to the other Obligations of
the Borrower.
(k) Each amount required to be applied to Term Loans (and/or
to the Total Term Loan Commitment) pursuant to Sections 4.02(d), (e) (other
than clause (ii)(y) thereof), (f), (g), (h) and (i) shall be applied pro rata
to each Tranche of Term Loans (in an amount equal to the Tranche A Term Loan
Percentage and/or the Tranche B Term Loan Percentage, as the case may be, of
such prepayment or reduction), provided that the first $36,000,000 of Net
Equity Proceeds from the Equity Financing in excess of $250,000,000 that are
required to be applied pursuant to this Section 4.02(k) (less any amount by
which the Total Tranche B Term Loan Commitment has been, or is concurrently
being, reduced pursuant to Section 3.02(b)(i)) shall be applied only to the
Tranche B Term Loans and/or the Total Tranche B Term Loan Commitment. Any
amount required to be applied to either Tranche of Term Loans pursuant to
Sections 4.02(d), (e) (other than clause (ii)(y) thereof), (f), (g), (h) and
(i) shall be applied (i) first, to repay the outstanding principal amount of
Term Loans of the respective Tranche and (ii) second, to the extent in excess
thereof, to reduce the Total Tranche A Term Loan Commitment or the Total
Tranche B Term Loan Commitment, as the case may be). The amount of each
principal repayment of Term Loans (and the amount of each reduction to the Term
Loan Commitments) made as required by said Sections 4.02(d), (e) (other than
clause (ii)(y) thereof), (f), (g), (h) and (i) shall be applied to reduce the
then remaining Scheduled Repayments of the respective Tranche of Term Loans pro
rata based upon the then remaining amount of each Scheduled Repayment of the
respective Tranche after giving effect to all prior reductions thereto,
provided that the first $36,000,000 of Net Equity Proceeds from the Equity
Financing in excess of $250,000,000 that are required to be applied pursuant to
this Section 4.02(k) (less any amount by which the Total Tranche B Term Loan
Commitment has been, or is concurrently being, reduced pursuant to Section
3.02(b)(i)) shall be applied only to reduce the final six Tranche B Term Loan
Scheduled Repayments pro rata based upon the then remaining amount of each such
Tranche B Term Loan Scheduled Repayment after giving effect to all prior
reductions thereto. Notwithstanding anything to the contrary contained above
in this Section 4.02(k), any amount required to be applied to reduce the Total
Tranche A Term Loan Commitment pursuant to clause (y) of Section 4.02(e)(ii)
shall be applied to reduce the then remaining Tranche A Term Loan Scheduled
Repayments pro rata based upon the then remaining amount of each such Tranche A
Term Loan Scheduled Repayment after giving effect to all prior reductions
thereto.
(l) Notwithstanding anything to the contrary contained in
this Agreement or in any other Credit Document, all then outstanding Loans of
any Tranche shall be repaid in full on the respective Maturity Date for such
Tranche of Loans.
(m) Notwithstanding anything to the contrary contained in
Section 4.02(k), with respect to any mandatory repayments of Tranche A Term
Loans or Tranche B Term
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Loans required pursuant to Sections 4.02(d), (e) (other than clause (ii)(y)
thereof), (f), (g), (h) and (i), but only so long as both Tranche A Term Loans
and Tranche B Term Loans are outstanding on the date of any such mandatory
repayment, if on or prior to the date the respective mandatory repayment is
otherwise required to be made pursuant to such Sections, the Borrower has given
the Agents written notification that the Borrower has elected to give each Bank
with a Tranche A Term Loan or each Bank with a Tranche B Term Loan, as the case
may be, the right to waive such Bank's rights to receive such repayment (the
"Waivable Mandatory Repayment") (it being understood that with respect to any
particular Waivable Mandatory Repayment, the Borrower shall only be entitled to
exercise its rights pursuant to this Section 4.02(m) with respect to a single
Tranche of Term Loans), the Administrative Agent shall notify such Banks of
such receipt and the amount of the repayment required to be applied to each
such Bank's Tranche A Term Loans or Tranche B Term Loans, as the case may be.
In the event any such Bank with a Tranche A Term Loan or a Tranche B Term Loan,
as the case may be, desires to waive such Bank's right to receive any such
Waivable Mandatory Repayment in whole or in part, such Bank shall so advise the
Administrative Agent no later than 5:00 P.M. (New York time) five Business Days
after the date of such notice from the Administrative Agent which notice shall
also include the amount such Bank desires to receive. If any such Bank does
not reply to the Administrative Agent within the five Business Day period, such
Bank will be deemed to have accepted the total payment. If any such Bank does
not specify the amount that such Bank wishes to receive, such Bank will be
deemed to have accepted 100% of the total payment. In the event that any such
Bank waives such Bank's right (in whole or in part) to any such Waivable
Mandatory Repayment, the Administrative Agent shall apply 100% of the amount so
waived by such Banks (i) first, to repay the other Tranche of Term Loans in
accordance with Sections 4.02(j) and (k), (ii) second, to the extent such other
Tranche of Term Loans have been (or are concurrently being) repaid in full, any
excess amount shall be applied to repay such Tranche of Term Loans (including
the Term Loans of any Bank or Banks that have initially waived their right to
receive such repayment), and (iii) third, to the extent in excess of the amount
required to be applied pursuant to the preceding clauses (i) and (ii), to
reduce the Total Revolving Loan Commitment as provided in Section 3.03(e) (as
if no Term Loans were then outstanding). If the Borrower elects to give the
notice described above in this Section 4.02(m) with respect to the applicable
mandatory repayment, the amount of the respective Waivable Mandatory Repayment
shall be deposited with the Administrative Agent on the date the mandatory
repayment would otherwise be required pursuant to the relevant provisions of
Section 4.02(d), (e) (other than clause (ii)(y) thereof), (f), (g), (h) or (i),
as the case may be (and held by the Administrative Agent as cash collateral for
the Tranche A Term Loans or the Tranche B Term Loans, as the case may be, and,
but only to the extent Banks with Tranche A Term Loans or Tranche B Term Loans,
as the case may be, waive their right to receive their share of the Waivable
Mandatory Repayment, for the benefit of the other Tranche of Term Loans, in a
cash collateral account which shall permit the investment thereof in Cash
Equivalents reasonably satisfactory to the Administrative Agent until the
proceeds are applied to the secured
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obligations), and the respective mandatory repayment shall not be required to
be made until the eighth Business Day occurring after the date the respective
mandatory repayment would otherwise have been required to be made pursuant to
any such Section (and with interest continuing to accrue on such Loans during
such period at the rate otherwise provided for herein with respect to such
Loans). Notwithstanding anything to the contrary contained above, if one or
more Banks waives its right to receive all or any part of any Waivable
Mandatory Repayment, but less than all the Banks holding Tranche A Term Loans
or Tranche B Term Loans, as the case may be, waive in full their right to
receive 100% of the total payment otherwise required with respect to the
Tranche A Term Loans or Tranche B Term Loans, as the case may be, then of the
amount actually applied to the repayment of Tranche A Term Loans or Tranche B
Term Loans, as the case may be, of Banks which have waived in part, but not in
full, their right to receive 100% of such repayment, such amount shall be
applied to each then outstanding Borrowing of Tranche A Term Loans or Tranche B
Term Loans, as the case may be, on a pro rata basis (so that each Bank holding
Tranche A Term Loans or Tranche B Term Loans, as the case may be, shall, after
giving effect to the application of the respective repayment, maintain the same
percentage (as determined for such Bank, but not the same percentage as the
other Banks hold and not the same percentage held by such Bank prior to
repayment) of each Borrowing of Tranche A Term Loans or Tranche B Term Loans,
as the case may be, which remains outstanding after giving effect to such
application).
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 1:00 P.M. (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or profits of a Bank
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
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levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes (other than Taxes or
other amounts deducted or withheld pursuant to the third sentence of Section
4.04(b)) are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any such Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, the Borrower
agrees to reimburse each Bank, upon the written request of such Bank, for taxes
imposed on or measured by the net income or profits of such Bank pursuant to
the laws of the jurisdiction in which such Bank is organized or in which the
principal office or applicable lending office of such Bank is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Bank is organized or in which the principal office
or applicable lending office of such Bank is located and for any withholding of
taxes as such Bank shall determine are payable by, or withheld from, such Bank,
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless
each Bank, and reimburse such Bank upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Bank. All amounts payable
pursuant to this Section 4.04(a) shall be subject to the provisions of Section
13.17 (to the extent applicable).
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04 (unless the respective Bank was already a Bank hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Bank, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001 (or successor forms) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any
Note, or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate substantially
in the form of Exhibit D (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note (the Internal Revenue Service forms
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described in preceding clauses (i) and (ii) are hereinafter referred to as the
"U.S. Internal Revenue Service Forms"). In addition, each Bank agrees that
from time to time after the Effective Date as required by applicable U.S.
Federal income tax law, when a lapse in time or change in circumstances renders
the previous certification obsolete or inaccurate in any material respect, such
Bank will deliver to the Borrower and the Administrative Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other certifications or forms as may be required by U.S. Federal
income tax law and timely requested by the Borrower in writing in order to
confirm or establish the entitlement of such Bank to a continued exemption from
or reduction in United States withholding tax with respect to payments under
this Agreement and any Note, or such Bank shall immediately notify the Borrower
and the Administrative Agent of its inability under applicable law to deliver
any such Form or Certificate, in which case such Bank shall not be required to
deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Bank has
not provided to the Borrower U.S. Internal Revenue Service Forms and such other
certifications or forms that establish a complete exemption from such deduction
or withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to a Bank in respect of income
or similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) if (I) such Bank has not provided to the
Borrower the Internal Revenue Service Forms and such other certifications or
forms as are required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish
a complete exemption from the deduction or withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay any additional amounts and to indemnify each Bank in the
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
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SECTION 5. Conditions Precedent to Initial Credit Events.
The obligation of each Bank to make Loans, and the obligation of any Issuing
Bank to issue Letters of Credit, on the Initial Borrowing Date, is subject at
the time of the making of such Loans or the issuance of such Letters of Credit
to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the
Initial Borrowing Date, (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Agents for the account of each of the
Banks the appropriate Tranche A Term Note, Tranche B Term Note and/or Revolving
Note executed by the Borrower and to the Swingline Bank, the Swingline Note
executed by the Borrower, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date,
the Agents shall have received a certificate, dated the Initial Borrowing Date
and signed on behalf of the Borrower by the President or any Vice President of
the Borrower, stating that all of the conditions in Sections 5.05, 5.06, 5.07,
5.08, 5.09, 5.10 and 6.01 have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Agents shall have received from (i) Dewey Ballantine and Wolf, Block, Schorr
and Solis-Cohen, each counsel to the Credit Parties, opinions addressed to the
Administrative Agent, the Syndication Agent, the Collateral Administrative
Agent and each of the Banks and dated the Initial Borrowing Date, covering the
matters set forth in Exhibits E-1 and E-2, respectively, and such other matters
incident to the transactions contemplated herein as any Agent may reasonably
request and (ii) local counsel (reasonably satisfactory to the Agents),
opinions each of which (x) shall be addressed to the Administrative Agent, the
Syndication Agent, the Collateral Administrative Agent and each of the Banks
and dated the Initial Borrowing Date, (y) shall be in form and substance
reasonably satisfactory to the Agents and (z) shall cover the perfection of the
security interests granted pursuant to the Security Documents and such other
matters incident to the transactions contemplated herein as any Agent may
reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Initial Borrowing Date, the Agents shall have received a certificate from each
Credit Party, dated the Initial Borrowing Date, signed by the President or any
Vice President of such Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the certificate of
incorporation (or equivalent organizational document) and by-laws of such
Credit Party and the resolutions of such Credit Party referred to in such
certificate, and each such certificate of incorporation and by-laws shall be in
the form provided to the Agents prior to the Effective Date or in such other
form as is reasonably acceptable to the Agents, and the foregoing resolutions
shall be in form and substance reasonably acceptable to the Agents.
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(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Documents shall be reasonably satisfactory in form and
substance to the Agents, and the Agents shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and (in the case of the
Borrower, Merger Sub and Red Lion) bring-down telegrams or facsimiles, if any,
which any Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Tax Sharing Agreements; Joint Venture Agreements; Property
Management Agreements; Material Leases. On or prior to the Initial Borrowing
Date, there shall have been made available for review by the Agents true and
correct copies of the following documents:
(i) all Plans (and for each Plan that is required to file
an annual report on Internal Revenue Service Form 5500-series, a copy
of the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in
Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees
of the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan)(collectively, the "Employee Benefit Plans");
(ii) all material agreements entered into by the Borrower
or any of its Subsidiaries or any of the Existing Red Lion Joint
Ventures governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such
entity with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(iii) all material agreements with members of, or with
respect to, the senior management and management of the Borrower or
any of its Subsidiaries or any of the Existing Red Lion Joint Ventures
(collectively, the "Management Agreements");
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(iv) all collective bargaining agreements applying or
relating to any employee of the Borrower or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
(v) all agreements evidencing or relating to Indebtedness
of the Borrower or any of its Subsidiaries or any of its Existing Red
Lion Joint Ventures which is to remain outstanding after giving effect
to the incurrence of Loans on the Initial Borrowing Date to the extent
such Indebtedness exceeds (or upon the utilization of any unused
commitments may exceed) $1,000,000 (collectively, the "Existing
Indebtedness Agreements");
(vi) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any of its Subsidiaries or
any of its Existing Red Lion Joint Ventures (collectively, the "Tax
Sharing Agreements");
(vii) all articles of incorporation, joint venture
agreements and/or partnership agreements relating to all Joint
Ventures in existence on the Initial Borrowing Date (collectively, the
"Joint Venture Agreements");
(viii) without duplication of the Management Agreements
referred to in clause (iii) above, all material Hotel Property
property management agreements (including the Red Lion Master Property
Management Agreement) under which the Borrower or any of its
Subsidiaries is the hotel manager (collectively, the "Hotel Property
Management Agreements"); and
(ix) all material leases (including the Red Lion Master
Lease and the Doubletree Master REIT Lease) under which the Borrower
or any of its Subsidiaries lease (as lessee) any Hotel Property
(collectively, the "Material Leases");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Existing Indebtedness Agreements,
Tax Sharing Agreements, Joint Venture Agreements, Hotel Property Management
Agreements and Material Leases shall be in full force and effect on the Initial
Borrowing Date.
5.06 Equity Financing; Equity Rollover. (a) On or prior to
the Initial Borrowing Date, (i) the Borrower shall have received at least
$250,000,000 of gross cash proceeds from the Equity Financing and (ii) the
Borrower shall have utilized at least $250,000,000 of gross cash proceeds from
the Equity Financing to make payments owing in connection with the Transaction
prior to utilizing any proceeds of Loans for such purpose.
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(b) On or prior to the Initial Borrowing Date, (i) the Agents
shall have received true and correct copies of the Equity Financing Documents,
all of which shall be required to be in form and substance (including as to all
of the terms and conditions thereof) reasonably satisfactory to the Agents and
the Required Banks and (ii) each of the conditions precedent set forth in the
Equity Financing Documents shall have been satisfied and not waived (unless
waived with the consent of the Agents and the Required Banks).
(c) On or prior to the Initial Borrowing Date, the Borrower
shall have issued for the account of the selling shareholders of Red Lion
shares of the Borrower's common stock having an implied value of $283,000,000
(subject to adjustment as set forth in the Acquisition Agreement), and the
Agents shall have received true and correct copies of the Acquisition Agreement
and all SEC filings made in connection with the Transaction, each of which
shall be in full force and effect and shall be in form and substance reasonably
satisfactory to the Agents and the Required Banks.
5.07 Consummation of Acquisition; Cash on Hand. (a) On the
Initial Borrowing Date, (i) the Acquisition shall have been consummated in
accordance with the Acquisition Documents and all applicable laws and (ii) each
of the conditions precedent set forth in the Acquisition Documents shall have
been satisfied in all material respects, and not waived except with the
reasonable consent of the Agents and the Required Banks, to the reasonable
satisfaction of the Agents and the Required Banks, (iii) the Agents shall have
received true and complete copies of all Acquisition Documents, and with those
Acquisition Documents which were delivered to the Agents on or before September
12, 1996 to be in the form so delivered with such changes thereto or waivers
therefrom to be reasonably satisfactory to the Agents and the Required Banks,
and with all other Acquisition Documents to be in form and substance reasonably
satisfactory to the Agents and the Required Banks and (iv) the Agents shall
have received copies of the "comfort letters" referred to in Sections 6.2(f)
and 6.3(e) of the Acquisition Agreement.
(b) On the Initial Borrowing Date, the Agents shall have
received evidence satisfactory to them that the Borrower and/or Red Lion have
cash on hand, when added to the amount of the Total Term Loan Commitment, up to
$15,0000,000 of the Total Revolving Loan Commitment and the amount received (or
to be received on the Initial Borrowing Date) from the Equity Financing, that
is sufficient to consummate the Acquisition and the Refinancing and to pay the
fees and expenses incurred in connection with the Transaction.
5.08 Refinancing. On the Initial Borrowing Date and after
giving effect to the Acquisition and the Loans incurred on the Initial
Borrowing Date, neither the Borrower nor any of its Subsidiaries shall have any
Indebtedness outstanding except for (x) the Obligations and (y) the Existing
Indebtedness. Schedule IV sets forth a true and complete list of all
Indebtedness to be Refinanced, in each case showing the aggregate principal
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amount thereof and accrued interest thereon (immediately before giving effect
to the Initial Borrowing Date) and the name of the respective borrower thereof.
On the Initial Borrowing Date, all Indebtedness to be Refinanced (other than
the Existing Glendale Debt to the extent that same is to be refinanced after
the Initial Borrowing Date) shall have been repaid in full and all commitments
in respect thereof shall have been terminated and all Liens and guaranties in
connection therewith shall have been terminated (and all appropriate releases,
termination statements or other instruments of assignment with respect thereto
shall have been obtained) to the reasonable satisfaction of the Agents. The
Agents shall have received evidence, in form and substance reasonably
satisfactory to them, that the matters set forth in the immediately preceding
sentence have been satisfied as of the Initial Borrowing Date. In addition, on
or prior to the Initial Borrowing Date, the Borrower shall have informed the
Agents in writing as to whether the Borrower intends to refinance the Existing
Glendale Debt as part of the Refinancing.
5.09 Adverse Change, etc. (a) On or prior to the Initial
Borrowing Date, nothing shall have occurred (and (x) neither the Agents nor the
Banks shall have become aware of any facts or conditions not previously
disclosed to them and (y) no information previously submitted by or on behalf
of the Borrower to the Agents (including, without limitation, financial,
accounting and tax information) shall be inaccurate, incomplete or misleading)
which (in any such case) has had, or could reasonably be expected to have, a
material adverse effect on the Transaction or on the business, property,
assets, operations, liabilities or financial condition of the Borrower, Red
Lion and their respective Subsidiaries taken as a whole.
(b) All necessary governmental approvals and/or consents
(other than approvals and/or consents required to effect the transfer of liquor
licenses), all necessary shareholder and board of director approvals and/or
consents and the approval of the lenders to Red Lion Inns Operating, L.P. (or
the written acknowledgment by such lenders that such approval is not necessary
or the issuance of an opinion of counsel of the Borrower, satisfactory in form
and substance to the Agents, that no such approval is necessary), in each case
in connection with the Transaction and the other transactions contemplated by
the Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods with respect
thereto shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon, the consummation of the Transaction or the other transactions
contemplated by the Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Transaction or the other transactions contemplated by the
Documents.
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(c) On or prior to the Initial Borrowing Date, there shall
not have occurred and be continuing a material disruption of or a material
adverse change in financial, banking or capital markets that would have a
material adverse effect on the successful syndication of the Commitments as
determined by the Agents in their reasonable discretion. The Borrower and Red
Lion shall have fully cooperated in the Agents' syndication efforts, including,
without limitation, by promptly providing the Agents with all information
deemed necessary by the Agents to successfully complete such syndication.
5.10 Litigation. On the Initial Borrowing Date, no material
litigation by any entity (private or governmental) shall be pending or
threatened with respect to the Transaction or any Document.
5.11 Pledge Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Pledge
Agreement in the form of Exhibit G (as amended, modified or supplemented from
time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Administrative Agent, as Pledgee thereunder, all of the Pledged
Securities, if any, referred to therein then owned by such Credit Party, (x)
endorsed in blank in the case of promissory notes constituting Pledged
Securities and (y) together with executed and undated stock powers in the case
of capital stock constituting Pledged Securities.
5.12 Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit H (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the
equivalent) fully executed for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be necessary
or, in the reasonable opinion of the Collateral Administrative Agent,
desirable to perfect the security interests purported to be created by
the Security Agreement;
(ii) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, listing all effective
financing statements that name any Credit Party or any of its
Subsidiaries as debtor and that are filed in the jurisdictions
referred to in clause (i) above, together with copies of such other
financing statements that name any Credit Party or any of its
Subsidiaries as debtor (none of which shall cover the Collateral
except to the extent evidencing Permitted Liens or in respect of which
the Collateral Administrative Agent shall have received termination
statements (Form UCC-3) or such other termination statements as shall
be required by local law fully executed for filing); and
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(iii) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Administrative Agent, desirable
to perfect and protect the security interests purported to be created
by the Security Agreement have been (or within 10 days following the
Initial Borrowing Date will be) taken.
5.13 Subsidiaries Guaranty. On the Initial Borrowing Date,
each Subsidiary Guarantor shall have duly authorized, executed and delivered
the Subsidiaries Guaranty in the form of Exhibit I (as amended, modified or
supplemented from time to time, the "Subsidiaries Guaranty").
5.14 Mortgages; Title Insurance; Survey; etc. On the Initial
Borrowing Date, the Collateral Administrative Agent shall have received:
(i) fully executed counterparts of Mortgages, in form and
substance reasonably satisfactory to the Agents, which Mortgages shall
cover the Mortgaged Properties owned or leased by the Credit Parties
on the Initial Borrowing Date as designated on Schedule III, together
with evidence that counterparts of such Mortgages have been delivered
to the title insurance company insuring the Lien of such Mortgages for
recording in all places to the extent necessary or, in the reasonable
opinion of the Collateral Administrative Agent, desirable, to
effectively create a valid and enforceable first priority mortgage
lien on each such Mortgaged Property in favor of the Collateral
Administrative Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Secured Creditors;
(ii) a mortgagee title insurance policy on each such
Mortgaged Property issued by a title insurer reasonably satisfactory
to the Agents (the "Mortgage Policies") in amounts satisfactory to the
Agents assuring the Collateral Administrative Agent that the Mortgages
on such Mortgaged Properties are valid and enforceable first priority
mortgage liens on the respective Mortgaged Properties, free and clear
of all defects and encumbrances except Permitted Encumbrances and such
Mortgage Policies shall otherwise be in form and substance reasonably
satisfactory to the Agents and shall include, as appropriate, an
endorsement for future advances under this Agreement and the Notes and
for any other matter that any Agent in its reasonable discretion may
reasonably request, shall not include (to the extent permissible under
applicable state law) an exception for mechanics' liens, and shall
provide for affirmative insurance and such reinsurance as any Agent in
its discretion may reasonably request;
(iii) a survey, in form and substance reasonably
satisfactory to the Agents, of each such Mortgaged Property, certified
by a licensed professional surveyor reasonably satisfactory to the
Agents;
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(iv) such landlord waivers and/or estoppel certificates as
any Agent may have reasonably required, which landlord waivers and/or
estoppel certificates shall be in form and substance reasonably
satisfactory to the Agents; and
(v) fully executed counterparts of Collateral
Assignments, in form and substance reasonably satisfactory to the
Agents, which Collateral Assignments shall be executed in respect of
those Pledged Notes issued by any Joint Venture or other Persons that
are required to be delivered pursuant to the Pledge Agreement to the
extent that such Pledged Notes are secured by all or a portion of the
assets of such Joint Venture or other Person.
5.15 Projections; Pro Forma Balance Sheet. On or prior to
the Initial Borrowing Date, the Agents shall have received copies of the
financial statements (including the pro forma financial statements) and
Projections referred to in Sections 7.05(a) and (d).
5.16 Solvency Opinion; Insurance Certificates. On the
Initial Borrowing Date, the Borrower shall have delivered to the Agents:
(i) a solvency certificate from the Chief Financial
Officer of the Borrower in the form of Exhibit J; and
(ii) certificates of insurance complying with the
requirements of Section 8.03 for the business and properties of the
Borrower and its Subsidiaries, in form and substance satisfactory to
the Agents and naming the Collateral Administrative Agent as an
additional insured and as loss payee, and stating that such insurance
shall not be cancelled without at least 30 days prior written notice
by the insurer to the Collateral Administrative Agent (or such shorter
period of time as a particular insurance company generally provides).
5.17 Fees, etc. On the Initial Borrowing Date, the Borrower
shall have paid to the Agents and each Bank all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the Agents
and such Bank to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the Initial
Borrowing Date), and the obligation of any Issuing Bank to issue any Letter of
Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit
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Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the date
of such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Loan (other than a Swingline Loan or a Revolving
Loan made pursuant to a Mandatory Borrowing), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section
1.03(a). Prior to the making of each Swingline Loan, the Swingline Bank shall
have received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
The acceptance of the proceeds of each Loan and the making of
each Letter of Credit Request shall constitute a representation and warranty by
the Borrower to the Agents and each of the Banks that all the conditions
specified in Section 5 (with respect to Credit Events on the Initial Borrowing
Date) and in this Section 6 (with respect to Credit Events on and after the
Initial Borrowing Date) and applicable to such Credit Event exist as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 5 and in this Section 6, unless otherwise
specified, shall be delivered to the Administrative Agent at the Notice Office
for the account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be in form and substance
reasonably satisfactory to the Agents and the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans,
and issue (or participate in) the Letters of Credit as provided herein, the
Borrower makes the following representations, warranties and agreements, in
each case after giving effect to the Transaction, all of which shall survive
the execution and delivery of this Agreement and the Notes and the making of
the Loans and issuance of the Letters of Credit, with the occurrence of each
Credit Event on or after the Initial Borrowing Date being deemed to constitute
a representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on and as of the Initial Borrowing
Date and on the date of each such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date).
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7.01 Corporate and Other Status. Each Credit Party and each
of its Subsidiaries (i) is a duly organized and validly existing corporation or
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate or partnership power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such qualifications except for failures to be
so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit
Party has the corporate or partnership power and authority to execute, deliver
and perform the terms and provisions of each of the Documents to which it is
party and has taken all necessary corporate or partnership action to authorize
the execution, delivery and performance by it of each of such Documents. Each
Credit Party has duly executed and delivered each of the Documents to which it
is party, and each of such Documents constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality (other than
contraventions relating to an Acquisition Document which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect (x) on the Acquisition or the Transaction or (y) on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole), (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Borrower or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation, by-laws or partnership agreement (or
equivalent organizational documents) of the Borrower or any of its Subsidiaries
(other than violations of immaterial partnership agreements existing on the
Initial Borrowing Date by reason of the Acquisition).
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7.04 Approvals. (a) No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with ((x)
other than those required to effect the transfer of liquor licenses as part of
the Acquisition and (y) except for those that have otherwise been obtained or
made on or prior to the Initial Borrowing Date and which remain in full force
and effect on the Initial Borrowing Date, or to the extent not required to be
obtained or made on or prior to the Initial Borrowing Date pursuant to the
Documents, as will be obtained or made on or prior to the required date
therefor), or exemption by, any governmental or public body or authority, or
any subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Document or (ii) the
legality, validity, binding effect or enforceability of any such Document.
(b) All necessary shareholder and board of director approvals
and/or consents and all material third party non-governmental approvals and/or
consents, in each case in connection with the Transaction and the execution,
delivery and performance of any Document have been obtained and remain in full
force and effect on the Initial Borrowing Date.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries at December 31, 1995 and September 30, 1996 and
the related consolidated statements of operations, cash flows and shareholders'
equity of the Borrower and its Subsidiaries for the fiscal year and nine-month
period ended on such date, as the case may be, copies of which have been
furnished to the Banks prior to the Initial Borrowing Date, present fairly the
financial position of the Borrower and its Subsidiaries at the date of such
balance sheets and the results of the operations of the Borrower and its
Subsidiaries for the periods covered thereby. The consolidated balance sheet
of Red Lion and its Subsidiaries at December 31, 1995 and September 30, 1996
and the related consolidated statements of income, cash flows and shareholders'
equity of Red Lion and its Subsidiaries for the fiscal year and nine- month
period ended on such date, as the case may be, copies of which have been
furnished to the Banks prior to the Initial Borrowing Date, present fairly the
financial position of Red Lion and its Subsidiaries at the date of such balance
sheets and the results of the operations of Red Lion and its Subsidiaries for
the periods covered thereby. The pro forma consolidated balance sheet of the
Borrower and its Subsidiaries (including Red Lion and its Subsidiaries) at June
30, 1996 and the pro forma income statements of the Borrower and its
Subsidiaries (including Red Lion and its Subsidiaries) for the periods ended
December 31, 1995 and June 30, 1996, copies of which have been furnished to the
Banks prior to the Initial Borrowing Date, present fairly the pro forma
financial position of the Borrower and its Subsidiaries (including Red Lion and
its Subsidiaries) at June 30, 1996 and the results of the operations of the
Borrower and its Subsidiaries (including Red Lion and its Subsidiaries) for the
periods ended December 31, 1995 and June 30, 1996 and, in the case of the pro
forma income statements, have been prepared on the assumption that the
Transaction had
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been consummated on January 1, 1995. All such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied, subject to normal year-end audit adjustments in the case
of the nine-month financial statements referred to above. After giving effect
to the Transaction (but for this purpose assuming that the Transaction had
occurred prior to December 31, 1995), since December 31, 1995, there has been
no material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole (it being understood and agreed, however,
that the representation and warranty made pursuant to this sentence is only
being made in connection with Credit Events that occur after the Initial
Borrowing Date).
(b) (i) On and as of the Initial Borrowing Date and after
giving effect to the Transaction and to all Indebtedness (including the Loans)
being incurred or assumed and Liens created by the Credit Parties in connection
therewith, (a) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand alone basis and of the Borrower and its Subsidiaries taken
as a whole will exceed its debts; (b) each of the Borrower on a stand alone
basis and the Borrower and its Subsidiaries taken as a whole has not incurred
and does not intend to incur, and does not believe that they will incur, debts
beyond their ability to pay such debts as such debts mature; and (c) each of
the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken
as a whole will have sufficient capital with which to conduct its business.
For purposes of this Section 7.05(b), "debt" means any liability on a claim,
and "claim" means (i) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole. As of the Initial Borrowing Date, the Borrower
does not know of any basis for the assertion against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is
not fully disclosed in the financial statements delivered pursuant to Section
7.05(a) which, either individually or in the aggregate, could reasonably be
expected to be material to the Borrower and its Subsidiaries taken as a whole.
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(d) On and as of the Initial Borrowing Date, the Projections
delivered to the Agents and the Banks prior to the Initial Borrowing Date have
been prepared in good faith and are based on reasonable assumptions, and there
are no statements or conclusions in the Projections which are based upon or
include information known to the Borrower to be misleading in any material
respect or which fail to take into account material information known to the
Borrower regarding the matters reported therein. On the Initial Borrowing
Date, the Borrower believes that the Projections are reasonable, it being
understood that the Projections include assumptions as to future event that are
not to be viewed as facts and that actual results may differ from the projected
results and such differences may be material.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened (i) with respect
to any Document or (ii) that are reasonably likely to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole (it being understood and agreed, however, that the
representation and warranty made pursuant to this Section 7.06 is only being
made in connection with Credit Events that occur after the Initial Borrowing
Date).
7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by any Credit Party in writing to any Agent or any
Bank (including, without limitation, all information contained in the Documents
and in the Confidential Information Memorandum) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any Credit Party in
writing to any Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds
of the Term Loans will be used by the Borrower (i) to effect the Acquisition
and the Refinancing and (ii) to pay fees and expenses related to the
Transaction.
(b) (i) Up to $15,000,000 of proceeds of Revolving Loans may
be used on the Initial Borrowing Date for the purposes described in Section
7.08(a) and (ii) the proceeds of all other Revolving Loans and all Swingline
Loans will be used for the Borrower's and its Subsidiaries' general corporate
and working capital purposes.
(c) No part of any Credit Event (or the proceeds thereof)
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds
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thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of the Borrower and each
of its Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of the Borrower and its Subsidiaries
in accordance with generally accepted accounting principles. The Borrower and
each of its Subsidiaries have at all times paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to date. There is no
material (to the Borrower and its Subsidiaries taken as a whole) action, suit,
proceeding, investigation, audit, or claim now pending or, to the knowledge of
the Borrower threatened, by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries. As of the Initial Borrowing Date, neither
the Borrower nor any of its Subsidiaries has entered into an agreement or
waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of the
Borrower or any of its Subsidiaries, or is aware of any circumstances that
would cause the taxable years or other taxable periods of the Borrower or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations.
7.10 Compliance with ERISA. (i) Except as disclosed on
Schedule XIV, each Plan and to the knowledge of the Borrower each Multiemployer
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; except as disclosed on Schedule XIV, each Plan
and to the knowledge of the Borrower each Multiemployer Plan (and each related
trust, if any) which is intended to be qualified under Section 401(a) of the
Code has received a determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Sections 401(a) and 501(a) of the
Code; no Reportable Event has occurred with respect to a Plan; to the knowledge
of the Borrower, no Multiemployer Plan is insolvent or in reorganization; no
Plan has an Unfunded Current Liability; no Plan and to the knowledge of the
Borrower no Multiemployer Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all material contributions required to be made by the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate with respect to a Plan or a
Multiemployer Plan have been timely made; neither the Borrower nor any
Subsidiary of the Borrower nor any ERISA Affiliate has incurred any material
liability (including any indirect or secondary liability) to or on
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account of a Plan pursuant to Section 409, 502(i), 502(l), 4062, 4063, 4064 or
4069 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to
incur any such material liability under any of the foregoing sections with
respect to any Plan; to the knowledge of the Borrower, no condition exists
which presents a material risk to the Borrower or any Subsidiary of the
Borrower or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims
for benefits) is pending or, to the knowledge of the Borrower, threatened;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and
its Subsidiaries and its ERISA Affiliates to all Multiemployer Plans in the
event of a complete withdrawal therefrom, as of the close of the most recent
fiscal year of each such Plan ended prior to the date of this Agreement, would
not exceed $2,000,000 and with respect to fiscal years ended prior to the date
of each Credit Event would not be material; each group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or
has covered employees or former employees of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA
on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has
incurred any material liability (including any indirect or secondary liability)
under Sections 515, 4201, 4202 or 4212 of ERISA with respect to any
Multiemployer Plan; to the knowledge of the Borrower, no condition exists which
presents a material risk to the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate of incurring a material liability to or on account of a
Multiemployer Plan pursuant to the foregoing provisions of ERISA; to the
knowledge of the Borrower, no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Multiemployer Plan (other than routine claims for benefits)
that could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole is pending or threatened; and the Borrower and
its Subsidiaries do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA), which provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any Plan or Multiemployer Plan, the obligations with respect to which
could reasonably be expected to have a material adverse effect on the ability
of the Borrower and its Subsidiaries to perform their obligations under the
Credit Documents.
(ii) To the knowledge of the Borrower, each Foreign Pension
Plan has been maintained in substantial compliance with its terms and with the
requirements of any and
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all applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All material contributions required to be made with respect to a
Foreign Pension Plan have been timely made. Neither the Borrower nor any of
its Subsidiaries has incurred any material obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The Borrower and
its Subsidiaries do not maintain or contribute to any Foreign Pension Plan the
obligations with respect to which could reasonably be expected to have a
material adverse effect on the ability of the Borrower and its Subsidiaries to
perform their obligations under the Credit Documents.
7.11 The Security Documents. (a) The provisions of the
Security Agreement are effective to create in favor of the Collateral
Administrative Agent for the benefit of the Secured Creditors a legal, valid
and enforceable security interest in all right, title and interest of the
Credit Parties party thereto in the Security Agreement Collateral described
therein, and the Collateral Administrative Agent, for the benefit of the
Secured Creditors, has a fully perfected lien on, and security interest in, all
right, title and interest in all of the Security Agreement Collateral described
therein, subject to no other Liens other than Permitted Liens. The recordation
of the Assignment of Security Interest in U.S. Patents and Trademarks in the
form attached to the Security Agreement in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will create, as may be perfected by such filing and
recordation, a perfected security interest granted to the Collateral
Administrative Agent in the trademarks and patents covered by the Security
Agreement and the recordation of the Assignment of Security Interest in U.S.
Copyrights in the form attached to the Security Agreement with the United
States Copyright Office together with filings on Form UCC-1 made pursuant to
the Security Agreement will create, as may be perfected by such filing and
recordation, a perfected security interest granted to the Collateral
Administrative Agent in the copyrights covered by the Security Agreement.
(b) The security interests created in favor of the Collateral
Administrative Agent, as Pledgee, for the benefit of the Secured Creditors,
under the Pledge Agreement constitute first priority perfected security
interests in the Pledged Securities described in the Pledge Agreement, subject
to no security interests of any other Person. No filings or recordings are
required in order to perfect (or maintain the perfection or priority of) the
security interests created in the Pledged Securities under the Pledge
Agreement.
(c) The Mortgages create, for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Administrative Agent (or such other trustee as may be required or desired under
local law) for the benefit of the Secured Creditors, superior to and prior to
the rights of all third persons (except that the security interest and mortgage
lien created in the Mortgaged Properties may be subject to the Per-
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mitted Encumbrances related thereto) and subject to no other Liens (other than
Liens permitted under Section 9.01). Schedule III contains a true and complete
list of each parcel of Real Property owned or leased by the Borrower and its
Subsidiaries on the Initial Borrowing Date, and the type of interest therein
held by the Borrower or such Subsidiary. The Borrower and each of its
Subsidiaries have good and marketable title to all fee-owned Real Property and
valid leasehold title to all Leaseholds, in each case free and clear of all
Liens except those described in the first sentence of this subsection (c).
(d) The provisions of the Collateral Assignments are
effective to create in favor of the Collateral Administrative Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties party thereto
in the Collateral Assignment Collateral described therein, and the Collateral
Administrative Agent, for the benefit of the Secured Creditors, has a fully
perfected lien on, and security interest in, all right, title and interest in
all of the Collateral Assignment Collateral described therein, subject to no
other Liens other than Permitted Liens.
7.12 Representations and Warranties in Acquisition Documents.
All representations and warranties set forth in the other Documents were true
and correct in all material respects at the time as of which such
representations and warranties were (or are) made (or deemed made).
7.13 Properties. The Borrower and each of its Subsidiaries
have good and marketable title to all material properties owned by them,
including all material property reflected in the balance sheets referred to in
Section 7.05(a) and all property acquired pursuant to the Acquisition (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or in compliance with the terms of this Agreement),
free and clear of all Liens, other than Liens permitted by Section 9.01.
7.14 Capitalization. On the Initial Borrowing Date, the
authorized capital stock of the Borrower shall consist of (i) 100,000,000
shares of common stock, $.01 par value per share and (ii) 5,000,000 shares of
preferred stock, $.01 par value per value, of which no shares of such preferred
stock are issued or outstanding. All outstanding shares of capital stock of
the Borrower have been duly and validly issued, are fully paid and
nonassessable. Except (i) as set forth on Schedule V and (ii) for options or
warrants to purchase shares of common stock of the Borrower, as of the Initial
Borrowing Date, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries and Joint Ventures. As of the Initial
Borrowing Date, the Borrower has no Subsidiaries or Joint Ventures other than
those Subsidiaries and Joint
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Ventures listed on Schedule VI. Schedule VI correctly sets forth, as of the
Initial Borrowing Date, (i) the percentage ownership (direct or indirect) of
the Borrower in each class of capital stock or other equity of each of its
Subsidiaries and Joint Ventures and also identifies the direct owner thereof
and (ii) which Joint Venture Agreements prohibit the assignment by a Credit
Party of its equity interest in the respective Joint Venture.
7.16 Compliance with Statutes, etc. Each of the Borrower and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
7.17 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) The Borrower and each of
its Subsidiaries have complied with, and on the date of such Credit Event are
in compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws. There are no pending or, to
the best knowledge of the Borrower, threatened Environmental Claims against the
Borrower or any of its Subsidiaries (including any such claim arising out of
the ownership or operation by the Borrower or any of its Subsidiaries of any
Real Property no longer owned or operated by the Borrower or any of its
Subsidiaries) or any Real Property owned or operated by the Borrower or any of
its Subsidiaries. There are no facts, circumstances, conditions or occurrences
with respect to any Real Property owned or operated by the Borrower or any of
its Subsidiaries (including any Real Property formerly owned or operated by the
Borrower or any of its Subsidiaries but no longer owned or operated by the
Borrower or any of its Subsidiaries) or, to the best knowledge of the Borrower,
any property adjoining or adjacent to any such Real Property that could
reasonably be expected (i) to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries, or (ii) to cause any Real Property
owned or operated
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by the Borrower or any of its Subsidiaries to be subject to any restrictions on
the ownership, occupancy or transferability of such Real Property by the
Borrower or any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by the Borrower or any of its Subsidiaries where such generation,
use, treatment or storage has violated or could reasonably be expected to
violate any Environmental Law. Hazardous Materials have not at any time been
Released on or from any Real Property owned or operated by the Borrower or any
of its Subsidiaries where such Release has violated or could reasonably be
expected to violate any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 shall not be untrue unless
the aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole.
7.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the Borrower and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of the Borrower or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises,
proprietary information (including but not limited to rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
and has obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights
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of others which, or the failure to obtain which, as the case may be, could
reasonably be expected to result in a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule VII sets forth a true and
complete list of all Indebtedness (including Contingent Obligations) of the
Borrower and its Subsidiaries as of the Initial Borrowing Date and which is to
remain outstanding after giving effect to the Transaction (excluding the Loans
and the Letters of Credit (but including the Existing Glendale Debt to the
extent that same is to be refinanced after the Initial Borrowing Date as part
of the Refinancing or is to remain outstanding without being so refinanced),
the "Existing Indebtedness"), in each case showing the aggregate principal
amount thereof and the name of the respective borrower and any Credit Party or
any of its Subsidiaries which directly or indirectly guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all material consents and approvals of, and filings and registrations
with, and all other actions in respect of, all governmental agencies,
authorities or instrumentalities required in order to make or consummate the
Transaction to the extent then required have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained). All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction, or the occurrence of any Credit Event or the performance by any
Credit Party of its obligations under the Documents to which it is party. All
actions taken by each Credit Party pursuant to or in furtherance of the
Transaction have been taken in compliance in all material respects with the
respective Documents and all applicable laws.
SECTION 8. Affirmative Covenants. The Borrower hereby
covenants and agrees that on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to
each Bank:
(a) Quarterly Financial Statements. Within 50 days after the
close of the first three quarterly accounting periods in each fiscal year of
the Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly
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accounting period and the related consolidated statements of income and
retained earnings and statement of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last day
of such quarterly accounting period, in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which shall be
certified by the Chief Financial Officer of the Borrower or another senior
financial officer of the Borrower, subject to normal year-end audit adjustments
and (ii) management's discussion and analysis of the important operational and
financial developments during the quarterly and year-to-date periods, it being
understood that the delivery by the Borrower of its Form 10-Q as filed with the
SEC shall satisfy the requirements of this Section 8.01(a).
(b) Annual Financial Statements. (A) Within 95 days after
the close of each fiscal year of the Borrower, (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income and retained earnings and of
cash flows for such fiscal year setting forth comparative figures for the
preceding fiscal year and certified by KPMG Peat Marwick LLP, any other "Big
Six" independent certified public accountants or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Agents and (ii) management's discussion and analysis of the
important operational and financial developments during the respective fiscal
year, it being understood that the delivery by the Borrower of its Form 10-K as
filed with the SEC shall satisfy the requirements of this Section 8.01(b)(A).
(B) At the time of the delivery of the annual financial
statements pursuant to clause (A) above, a report of the applicable accounting
firm stating that in the course of its regular audit of the financial
statements of the Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has occurred and
is continuing under any of Sections 9.07 through 9.11, inclusive, or, if in the
opinion of such accounting firm such a Default or an Event of Default has
occurred and is continuing under any such Sections, a statement as to the
nature thereof.
(c) Management Letters. Promptly after the Borrower's or any
of its Subsidiaries' receipt thereof, a copy of any "management letter"
received from its certified public accountants.
(d) Budgets. No later than the 30th day of each fiscal year
of the Borrower, a budget in form satisfactory to the Agents (including
budgeted statements of income and sources and uses of cash and balance sheets)
prepared by the Borrower for each of the months of such fiscal year prepared in
detail, setting forth, with appropriate discussion, the principal assumptions
upon which such budget was based.
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(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 8.01(a) and (b), a
certificate of the Chief Financial Officer of the Borrower or another senior
financial officer of the Borrower to the effect that, to the best of such
officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth in reasonable detail the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 9.08 through 9.11, inclusive, at the end of such fiscal
quarter or year, as the case may be, (y) if delivered with the financial
statements required by Section 8.01(b), set forth in reasonable detail the
calculations required to establish whether the Borrower and its Subsidiaries
were in compliance with the provisions of Sections 4.02(g) and 9.07 as at the
end of such fiscal year and the amount of (and the calculations required to
establish the amount of) Excess Cash Flow for the respective Excess Cash
Payment Period and (z) set forth the amount of the Retained Net Equity Proceeds
Amount and the Retained Excess Cash Flow Amount at the end of such fiscal
quarter or year, as the case may be.
(f) Notice of Default or Litigation. Promptly upon, and in
any event within three Business Days (or five Business Days in the case of
clause (ii) below) after, an officer of the Borrower obtains knowledge thereof,
notice of (i) the occurrence of any event which constitutes a Default or an
Event of Default and (ii) any litigation or governmental investigation or
proceeding pending (x) against the Borrower or any of its Subsidiaries which
could reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole or (y) with
respect to the Transaction or any Document.
(g) Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials and
reports, if any, which the Borrower or any of its Subsidiaries shall publicly
file with the Securities and Exchange Commission or any successor thereto (the
"SEC") or deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(h) Environmental Matters. Promptly upon, and in any event
within ten Business Days after, an officer of the Borrower obtains knowledge
thereof, notice of one or more of the following environmental matters, unless
such environmental matters could not, individually or when aggregated with all
other such environmental matters, be reasonably expected to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole:
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(i) any pending or threatened Environmental Claim against
the Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or any
of its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such owned or
operated Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by the Borrower or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability
by the Borrower or any of its Subsidiaries of such Real Property under
any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency; provided, that in any event the
Borrower shall deliver to each Bank all notices received by the
Borrower or any of its Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA which identify the
Borrower or any of its Subsidiaries as potentially responsible parties
for remediation costs or which otherwise notify the Borrower or any of
its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Borrower's or such Subsidiary's response thereto.
(i) Certain Pro Forma Financial Information. For each Test
Period which ends on or before September 30, 1997, the consolidated
income statement of the Borrower and its Subsidiaries for such Test
Period which shall contain historical financial information for that
portion of the Test Period which occurs on and after the Initial
Borrowing Date and pro forma financial information for that portion of
the Test Period which occurs prior to the Initial Borrowing Date,
which pro forma financial information shall be calculated as if the
Transaction, the related financing thereof and the other transactions
contemplated hereby had been consummated on the first day of such Test
Period (and shall exclude any extraordinary adjustments as a result of
the Transaction), shall be calculated and presented in a manner
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consistent with the pro forma income statements referred to in Section
7.05(a) which were furnished to the Banks on or prior to the Initial
Borrowing Date, and shall be delivered at the same time as the annual
financial statements are delivered pursuant to Section 8.01(b).
(j) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to the
Borrower or any of its Subsidiaries or Joint Ventures as any Agent or
any Bank may reasonably request.
8.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and
accounts in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Upon
reasonable notice to the Borrower, the Borrower will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of any
Agent or any Bank to visit and inspect, under guidance of officers of the
Borrower or such Subsidiary, any of the properties owned or leased by the
Borrower or such Subsidiary, and to examine the books of account of the
Borrower or such Subsidiary and discuss the affairs, finances and accounts of
the Borrower or such Subsidiary with, and be advised as to the same by, its and
their officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as such Agent or such Bank may
reasonably request (provided that the Borrower shall have the right to take
part in any discussions with its independent accountants).
8.03 Maintenance of Property; Insurance. (a) Schedule VIII
sets forth a true and complete listing of all insurance maintained by the
Borrower and its Subsidiaries as of the Initial Borrowing Date. The Borrower
will, and will cause each of its Subsidiaries to, (i) keep all property owned
or leased by the Borrower and its Subsidiaries necessary to the business of the
Borrower and its Subsidiaries in reasonably good working order and condition,
ordinary wear and tear excepted, (ii) maintain, with financially sound and
reputable insurers, insurance on all such property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice for companies similarly situated owning similar properties in the same
general areas in which the Borrower or any of its Subsidiaries operates, and
(iii) furnish to any Agent or any Bank, upon written request, full information
as to the insurance carried.
(b) The Borrower will, and will cause each of the other
Credit Parties to, at all times keep its property insured in favor of the
Collateral Administrative Agent, and all policies (including Mortgage Policies)
or certificates (or certified copies thereof) with respect to such insurance
(and any other insurance maintained by the Borrower and/or such other Credit
Parties) (i) shall be endorsed to the Collateral Administrative Agent's
satisfaction for the benefit of the Collateral Administrative Agent (including,
without limita-
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tion, by naming the Collateral Administrative Agent as loss payee and/or
additional insured), (ii) shall state that such insurance policies shall not be
cancelled without at least 30 days' prior written notice thereof by the
respective insurer to the Collateral Administrative Agent (or such shorter
period of time as a particular insurance company policy generally provides),
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Administrative Agent and
the Secured Creditors, (iv) shall contain the standard non-contributing
mortgage clause endorsement in favor of the Collateral Administrative Agent
with respect to hazard liability insurance, (v) shall, except in the case of
public liability insurance, provide that any losses shall be payable
notwithstanding (A) any act or neglect of the Borrower or any such other Credit
Party, (B) the occupation or use of the properties for purposes more hazardous
than those permitted by the terms of the respective policy if such coverage is
obtainable at commercially reasonable rates and is of the kind from time to
time customarily insured against by Persons owning or using similar property
and in such amounts as are customary, (C) any foreclosure or other proceeding
relating to the insured properties or (D) any change in the title to or
ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Administrative Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if the Borrower or
any of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Administrative Agent shall
have the right (but shall be under no obligation), after giving the Borrower
prior written notice, to procure such insurance and the Borrower agrees to
reimburse the Collateral Administrative Agent for all costs and expenses of
procuring such insurance.
8.04 Corporate Franchises. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent (i) sales of assets and other transactions by
the Borrower or any of its Subsidiaries in accordance with Section 9.02 or (ii)
the withdrawal by the Borrower or any of its Subsidiaries of its qualification
as a foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards
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and controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) The Borrower
will com-ply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by the Borrower or any of its Subsidiaries
(except such noncompliance, as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole), will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws.
Neither the Borrower nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of Hazardous Materials on any Real Property now or
hereafter owned or operated by the Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except to the extent that any such generation, use,
treatment, storage, release or disposal could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
(b) At the reasonable written request of the Agents or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at the
sole expense of the Borrower, an environmental site assessment report
concerning any Real Property owned or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Agents, indicating the presence or absence of Hazardous Materials and
the potential cost of any removal or remedial action in connection with such
Hazardous Materials on such Real Property, provided that in no event shall such
request be made more often than once every two years for any particular Real
Property unless either (i) the Obligations have been declared (or have become)
due and payable pursuant to Section 10 or (ii) the Banks receive notice under
Section 8.01(h) of any event for which notice is required to be delivered for
any such Real Property. If the Borrower fails to provide the same within
ninety days after such request was made, the Agents may order the same, the
cost of which shall be borne by the Borrower, and the Borrower shall grant and
hereby grants to the Agents and the Banks and their agents access to such Real
Property and specifically grants the Agents and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time
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upon reasonable notice to the Borrower, all at the sole and reasonable expense
of the Borrower.
8.07 ERISA. As soon as possible and, in any event, within
ten (10) Business Days after the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of the
Chief Financial Officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency, within the meaning of Section 412 of the
Code or Section 302 of ERISA, has been incurred or an application may be or has
been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of
ERISA with respect to a Plan or a Multiemployer Plan; that a contribution for a
material amount required to be made with respect to a Plan, a Multiemployer
Plan or a Foreign Pension Plan has not been timely made; that a Plan or a
Multiemployer Plan has been or may be terminated under Section 4041(c) or 4042
of ERISA, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be
or have been instituted to terminate or appoint a trustee to administer a Plan
or a Multiemployer Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Multiemployer Plan; that the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate will or may incur any
material liability (including any indirect or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064 or 4069 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
under Section 4980B(a) of the Code with respect to a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code or with respect to a Multiemployer Plan under
Sections 4201, 4204 or 4212 of ERISA; or that the Borrower or any Subsidiary of
the Borrower may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan which is subject to Title IV of ERISA, any
Multiemployer Plan or any Foreign Pension Plan. Upon written request of any
Agent, the Borrower will deliver to each of the Banks a complete copy of the
annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service or any other material financial information the Borrower or any
Subsidiary has with
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respect to any Plan. In addition to any certificates or notices delivered to
the Banks pursuant to the first sentence hereof, copies of any material notices
pertaining to the foregoing events received by the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate with respect to any Plan, Multiemployer
Plan or Foreign Pension Plan shall be delivered to the Banks no later than ten
(10) Business Days after the date such notice has been received by the
Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31, and (ii) each of its, and each of its Subsidiaries', fiscal
quarters to end on March 31, June 30, September 30 and December 31.
8.09 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement, loan agreement or credit
agreement and each other material agreement, contract or instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 9.01(i); provided, that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance with
generally accepted accounting principles.
8.11 Interest Rate Protection. No later than 90 days
following the Initial Borrowing Date, the Borrower will enter into, and shall
for 2 years thereafter maintain, Interest Rate Protection Agreements acceptable
to the Agents establishing a fixed or maximum interest rate acceptable to the
Agents for an aggregate amount equal to at least 40% of the aggregate principal
amount of all Term Loans then outstanding and the amount of the Total Tranche A
Term Loan Commitment then in effect.
8.12 Additional Security; Further Assurances. (a) The
Borrower will, and will cause each of the Subsidiary Guarantors to, grant to
the Collateral Administrative Agent security interests and mortgages in such
assets and properties (including Real Property) of the Borrower and such
Subsidiary Guarantors which are of the type required
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to be pledged or assigned pursuant to the original Security Documents and as
are not covered by such original Security Documents, and as may be requested
from time to time by the Agents or the Required Banks (collectively, the
"Additional Security Documents"). All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Agents and shall constitute valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of all
third Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the
Collateral Administrative Agent required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall have been paid in full.
(b) The Borrower will, and will cause each of the Subsidiary
Guarantors to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Administrative Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or
instruments and take such further steps relating to the collateral covered by
any of the Security Documents as the Collateral Administrative Agent may
reasonably require. Furthermore, the Borrower will cause to be delivered to
the Collateral Administrative Agent such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the Agents to
assure itself that this Section 8.12 has been complied with.
(c) The Borrower agrees that each action required above by
this Section 8.12 shall be completed within 90 days after such action is either
requested to be taken by the Agents or the Required Banks or required to be
taken by the Borrower and the Subsidiary Guarantors pursuant to the terms of
this Section 8.12; provided that in no event will the Borrower or any
Subsidiary Guarantor be required to take any action, other than using its
reasonable efforts, to obtain consents from third parties with respect to its
compliance with this Section 8.12.
8.13 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder, counsel for
the Borrower reasonably acceptable to the Agents does not within 30 days after
a request from the Agents or the Required Banks deliver evidence, in form and
substance mutually satisfactory to the Agents and the Borrower, with respect to
any Foreign Subsidiary of the Borrower which has not already had all of its
stock pledged pursuant to the Pledge Agreement that (i) a pledge of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign
Subsidiary of a security agreement in substantially the form of the Security
Agreement and (iii) the entering into by
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such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiaries Guaranty, in any such case would cause the undistributed earnings
of such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for Federal income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Administrative Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in the
case of a failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary (to the extent that same is a Wholly-Owned Foreign
Subsidiary and would otherwise constitute a Subsidiary Guarantor) will execute
and deliver the Security Agreement (or another security agreement in
substantially similar form, if needed), granting the Collateral Administrative
Agent for the benefit of the Secured Creditors a security interest in all of
such Foreign Subsidiary's assets and securing the Obligations of the Borrower
under the Credit Documents and under any Interest Rate Protection Agreement or
Other Hedging Agreement and, in the event the Subsidiaries Guaranty shall have
been executed by such Foreign Subsidiary, the obligations of such Foreign
Subsidiary thereunder, and in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary (to the extent that
same is a Wholly- Owned Foreign Subsidiary and would otherwise constitute a
Subsidiary Guarantor) will execute and deliver the Subsidiaries Guaranty (or
another guaranty in substantially similar form, if needed), guaranteeing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement, in each case to the
extent that the entering into such Security Agreement or Subsidiaries Guaranty
is permitted by the laws of the respective foreign jurisdiction and with all
documents delivered pursuant to this Section 8.13 to be in form and substance
reasonably satisfactory to the Agents.
8.14 Joint Venture Distributions. To the extent any Joint
Venture receives any proceeds from any of the events specified in Sections
4.02(d), (e), (f) and (h) then, to the extent the Net Equity Proceeds, Net Debt
Proceeds, Net Sale Proceeds or Net Insurance Proceeds, as the case may be, from
any such event would have to be applied to repay outstanding Term Loans or
outstanding Revolving Loans (as a result of a reduction to the Total Revolving
Loan Commitment), if received by the Borrower or a Wholly-Owned Subsidiary of
the Borrower, the Borrower will use its best efforts to cause such Joint
Venture to distribute to the Borrower or a Wholly-Owned Subsidiary thereof,
concurrently with or as soon after the respective event as is practicable, the
Borrower's Allocable Share of such proceeds received by such Joint Venture,
provided that the Borrower's obligations under this Section 8.14 are subject to
(i) the ability of the Borrower or a Wholly-Owned Subsidiary thereof to control
the timing of distributions by such Joint Venture, (ii) any applicable
contractual restrictions, (iii) any fiduciary responsibility that the Borrower
or such Wholly-Owned Subsidiary may have to the other joint venture partner,
(iv) in the case of any Non-
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Subsidiary Joint Venture (other than an Existing Red Lion Joint Venture), the
right of such Non-Subsidiary Joint Venture to use such proceeds in the ordinary
course of its business (including to repay any Indebtedness of such
Non-Subsidiary Joint Venture) and (v) in the case of Net Equity Proceeds
received by any non-Wholly-Owned Subsidiary of the Borrower, the right of such
Subsidiary to use such Net Equity Proceeds for the purpose or purposes for
which such Net Equity Proceeds were initially received.
8.15 Maintenance of Corporate Separateness. The Borrower
will, and will cause each of its Subsidiaries and Unrestricted Subsidiaries to,
satisfy customary corporate formalities, including the holding of regular board
of directors' and shareholders' meetings or action by directors or shareholders
without a meeting and the maintenance of corporate offices and records.
Neither the Borrower nor any of its Subsidiaries shall make any payment to a
creditor of any Unrestricted Subsidiaries in respect of any liability of any
Unrestricted Subsidiaries, and no bank account of any Unrestricted Subsidiary
shall be commingled with any bank account of the Borrower or any of its
Subsidiaries. Any financial statements distributed to any creditors of any
Unrestricted Subsidiaries shall clearly establish or indicate the corporate
separateness of such Unrestricted Subsidiary from the Borrower and its
Subsidiaries. Finally, neither the Borrower nor any of its Subsidiaries shall
take any action, or conduct its affairs in a manner, which is likely to result
in the corporate existence of the Borrower or any of its Subsidiaries or
Unrestricted Subsidiaries being ignored, or in the assets and liabilities of
the Borrower or any of its Subsidiaries being substantively consolidated with
those of any other such Person or any Unrestricted Subsidiary in a bankruptcy,
reorganization or other insolvency proceeding.
SECTION 9. Negative Covenants. The Borrower hereby covenants
and agrees that on and after the Effective Date and until the Total Commitments
and all Letters of Credit have terminated and the Loans, Notes and Unpaid
Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to the
Borrower or any of its Subsidiaries), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute; provided that the
provisions of this Section 9.01 shall not prevent the creation, incurrence,
assumption or existence of the following (Liens described below are herein
referred to as "Permitted Liens"):
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(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower
or any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's property
or assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property
or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which
are listed, and the property subject thereto described, in Schedule
IX, but only to the respective date, if any, set forth in such
Schedule IX for the removal, replacement and termination of any such
Liens, plus renewals, replacements and extensions of such Liens to the
extent set forth on Schedule IX, provided that (x) except to the
extent specifically set forth on Schedule IX, the aggregate principal
amount of the Indebtedness, if any, secured by such Liens does not
increase from that amount outstanding at the time of any such renewal,
replacement or extension and (y) any such renewal, replacement or
extension does not encumber any additional assets or properties of the
Borrower or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not
materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section 9.04(iv),
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any
Subsidiary of the Borrower;
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(viii) Liens placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any of its Subsidiaries
at the time of acquisition thereof by the Borrower or any such
Subsidiary or within 90 days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such equipment or machinery or extensions, renewals
or replacements of any of the foregoing for the same or a lesser
amount, provided that (x) the aggregate outstanding principal amount
of all Indebtedness secured by Liens permitted by this clause (viii)
shall not at any time exceed $10,000,000 and (y) in all events, the
Lien encumbering the equipment or machinery so acquired does not
encumber any other asset of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing
statement filings regarding operating leases;
(xi) Liens arising out of judgments or awards in respect of
which the Borrower or any of its Subsidiaries shall in good faith be
prosecuting an appeal or proceedings for review in respect of which
there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of such
judgments and the aggregate amount of any cash and the fair market
value of any property subject to consensual security interests
securing such Liens does not exceed $10,000,000 at any time
outstanding;
(xii) statutory and common law landlords' liens under leases
to which the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than Liens imposed under ERISA) incurred
in the ordinary course of business in connection with workers
compensation claims, unemployment insurance and social security
benefits and Liens securing the performance of bids, tenders, leases
and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business (exclusive
of obligations in respect of the payment for borrowed money), provided
that the aggregate value of all cash and property encumbered by
consensual Liens permitted pursuant to this clause (xiii) shall not at
any time exceed $10,000,000;
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(xiv) Liens on property or assets acquired pursuant to a
Hotel Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Hotel Investment, provided that (x) any Indebtedness that is
secured by such Liens is permitted to exist under Section 9.04(xiii),
(y) the aggregate amount of Indebtedness secured by such Liens, when
added to the aggregate amount of Indebtedness secured by Liens
permitted under clause (xvii) of this Section 9.01, does not exceed
$25,000,000 and (z) such Liens are not incurred in connection with, or
in contemplation or anticipation of, such Hotel Acquisition or Hotel
Investment and do not attach to any other asset of the Borrower or any
of its Subsidiaries;
(xv) Liens securing any Indebtedness incurred by a
non-Wholly-Owned Subsidiary of the Borrower to refinance any unsecured
Existing Indebtedness of such non-Wholly-Owned Subsidiary owing to the
Borrower or any Wholly-Owned Subsidiary thereof, provided that (x)
such Existing Indebtedness is permitted to be refinanced pursuant to
Section 9.04(ii) and (y) in all events, the Lien securing such
Indebtedness does not encumber any assets or property other than the
assets or property of the non-Wholly-Owned Subsidiary incurring such
Indebtedness;
(xvi) Liens securing Non-Recourse Indebtedness of Specified
Subsidiaries, provided that (x) such Non-Recourse Indebtedness is
permitted to be incurred under Section 9.04(xi) and (y) in all events,
the Lien securing such Non-Recourse Indebtedness does not encumber any
assets or property other than the assets or property of the Specified
Subsidiary incurring such Non-Recourse Indebtedness;
(xvii) Liens securing Indebtedness of Subsidiaries of the
Borrower incurred under Section 9.04(xiii), provided that (x) the
aggregate amount of Indebtedness secured by such Liens, when added to
the aggregate amount of Indebtedness secured by Liens permitted under
clause (xiv) of this Section 9.01, does not exceed $25,000,000 and (y)
in all events, the Lien securing such Indebtedness only encumbers
property or assets acquired after the Initial Borrowing Date and does
not encumber any Collateral or any assets or property other than the
assets or property of the Subsidiary incurring such Indebtedness; and
(xviii) preferences that arise solely by reason of the Borrower
or any of its Subsidiaries agreeing to contractually subordinate any
management fees payable to them as required by any lender to a hotel
property managed by the Borrower or any of its Subsidiaries.
In connection with the granting of Liens of the type described in clauses
(vii), (viii) and (xiv) of this Section 9.01 by the Borrower or any of its
Subsidiaries, the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate
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by it in connection therewith (including, without limitation, by executing
appropriate lien releases or lien subordination agreements in favor of the
holder or holders of such Liens, in either case solely with respect to the item
or items of equipment or other assets subject to such Liens).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
The Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part
of its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of
Section 9.07;
(ii) each of the Borrower and its Subsidiaries may in the
ordinary course of business sell, lease or otherwise dispose of any
equipment or materials which, in the reasonable judgment of such
Person, are obsolete or worn out;
(iii) each of the Borrower and its Subsidiaries may sell
assets (other than the capital stock of any Subsidiary Guarantor and
any Designated Hotel Property), so long as (i) no Default or Event of
Default then exists or would result therefrom, (ii) each such sale is
in an arm's-length transaction and the Borrower or the respective
Subsidiary receives at least fair market value (as determined in good
faith by the Borrower or such Subsidiary, as the case may be), (iii)
at least 75% of the total consideration received by the Borrower or
such Subsidiary is cash and is paid at the time of the closing of such
sale, (iv) the Net Sale Proceeds therefrom are applied as (and to the
extent) required by Section 4.02(f) and (v) the aggregate amount of
the proceeds received from all assets sold pursuant to this clause
(iii) shall not exceed $20,000,000 in any fiscal year of the Borrower;
(iv) each of the Borrower and its Subsidiaries may sell
the Designated Hotel Properties (other than pursuant to a sale-
leaseback transaction), so long as (i) no Default or Event of Default
then exists or would result therefrom, (ii) each such sale is in an
arms'-length transaction and the Borrower or the respective Subsidiary
receives at least fair market value (as determined in good faith by
the Borrower or such Subsidiary, as the case may be), (iii) at least
75% of the total consideration received by the Borrower or such
Subsidiary is cash and is paid at the time of the closing of such
sale, (iv) the Net Sale Proceeds therefrom are applied as (and to the
extent) required by Section 4.02(f) and (v) (I) based on calculations
made by the
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Borrower on a Pro Forma Basis after giving effect to the respective
sale, no Default or Event of Default will exist under, or would have
existed during the Test Period last reported (or required to be
reported pursuant to Section 8.01(a) or (b), as the case may be) prior
to the date of the respective sale pursuant to, the financial
covenants contained in Sections 9.08 through 9.11, inclusive and (II)
the Borrower shall have delivered to the Agents an officer's
certificate executed by the Chief Financial Officer of the Borrower,
certifying to the best of such officer's knowledge, compliance with
the requirements of this clause (v) and containing the calculations
(in reasonable detail) required by this clause (v);
(v) RFS and RFS Subsidiary may sell the RFS REIT Equity
back to the RFS REIT on terms and conditions no less favorable to RFS
than those that exist on the Initial Borrowing Date so long as the Net
Sale Proceeds therefrom are applied as (and to the extent) required by
Section 4.02(i);
(vi) each of the Borrower and its Subsidiaries may sell
all or a portion of their equity interests in the Existing Red Lion
Joint Ventures, so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) each such sale is in an
arms'-length transaction and the Borrower or the respective Subsidiary
receives at least fair market value (as determined in good faith by
the Borrower or such Subsidiary, as the case may be), (iii) at least
75% of the total consideration received by the Borrower or such
Subsidiary is cash and is paid at the time of the closing of such
sale, (iv) the Net Sale Proceeds therefrom are applied as (and to the
extent) required by Section 4.02(f) and (v) (I) based on calculations
made by the Borrower on a Pro Forma Basis after giving effect to the
respective sale, no Default or Event of Default will exist under, or
would have existed during the Test Period last reported (or required
to be reported pursuant to Section 8.01(a) or (b), as the case may be)
prior to the date of the respective sale pursuant to, the financial
covenants contained in Sections 9.08 through 9.11, inclusive and (II)
the Borrower shall have delivered to the Agents an officer's
certificate executed by the Chief Financial Officer of the Borrower,
certifying to the best of such officer's knowledge, compliance with
the requirements of this clause (v) and containing the calculations
(in reasonable detail) required by this clause (v);
(vii) each of the Borrower and its Subsidiaries may sell
Hotel Properties acquired by them after the Initial Borrowing Date
pursuant to a Hotel Acquisition (except to the extent that such Hotel
Property constitutes a newly acquired Designated Hotel Property), and
each of the Borrower and its Subsidiaries may sell all or any portion
of their equity interest in a Joint Venture acquired by them after the
Initial Borrowing Date pursuant to a Hotel Investment, in either case,
so long as (i) no Default or Event of Default then exists or would
result therefrom, (ii) each such sale is in an arm's-length
transaction and the Borrower or the respective
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Subsidiary receives at least fair market (as determined in good faith
by the Borrower or such Subsidiary, as the case may be), (iii) at
least 75% of the total consideration received by the Borrower or such
Subsidiary is cash and is paid at the time of the closing of such sale
and (iv) in the case of a sale of an equity interest in a Joint
Venture, the cash proceeds therefrom are applied as (and to the
extent) required by Section 4.02(i);
(viii) each of the Borrower and its Subsidiaries may sell
Hotel Properties as part of a Temporary Hotel Acquisition Transaction;
(ix) Investments may be made to the extent permitted by
Section 9.05;
(x) each of the Borrower and its Subsidiaries may lease
(as lessee) real or personal property (so long as any such lease does
not create a Capitalized Lease Obligation except to the extent
permitted by Section 9.04(iv));
(xi) each of the Borrower and its Subsidiaries may make
sales of inventory in the ordinary course of business;
(xii) the Transaction shall be permitted;
(xiii) Hotel Acquisitions shall be permitted to the extent
provided in Section 9.07;
(xiv) each of the Borrower and its Subsidiaries may enter
into sale-leaseback transactions with respect to owned Hotel
Properties (including the Designated Hotel Properties), so long as
each such transaction (w) is for at least 75% in cash and is paid at
the time of the closing of such transaction, (x) is at fair market
value (as determined in good faith by the Borrower or such Subsidiary,
as the case may be), (y) all of the Net Sale Proceeds therefrom are
applied as required by Section 4.02(f) and (z) no Default or Event of
Default then exists or would result therefrom;
(xv) any Subsidiary of the Borrower may merge or
consolidate with and into, or be liquidated into, or transfer any of
its assets to, the Borrower or any Subsidiary Guarantor, in each case,
so long as (i) the Borrower or the respective Subsidiary Guarantor is
the surviving corporation of any such transaction, (ii) in the case of
any such transaction involving a non-Wholly-Owned Subsidiary, the only
consideration paid to third parties in connection therewith are shares
of common stock of the Borrower and cash in an aggregate amount for
all such transactions not to exceed the amount permitted to be spent
on Hotel Investments at such time pursuant to Section 9.07 (and with
the amount of cash paid pursuant to this Section
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9.02(xv) to constitute a Hotel Investment pursuant to Section 9.07)
and (iii) in the case of any transaction between or among the Borrower
and the Subsidiary Guarantors, all Liens granted pursuant to the
Security Documents on any property or assets involved shall remain in
full force and effect (with at least the same priority as such Lien
would have had if such transfer pursuant to the clause (xv) had not
occurred);
(xvi) each of the Borrower and its Subsidiaries may grant
leases or subleases to other Persons not materially interfering with
the conduct of the business of the Borrower or any of its
Subsidiaries;
(xvii) each of the Borrower and its Subsidiaries may sell
Cash Equivalents permitted to be held by them pursuant to Section
9.05(ii) so long as each such sale is for cash and at fair market
value (as determined in good by the Borrower or such Subsidiary, as
the case may be); and
(xviii) each of the Borrower and its Subsidiaries may, in the
ordinary course of business, license, as licensor or licensee,
patents, trademarks, copyrights and know-how to or from third Persons
and to one another so long as any such license by the Borrower or any
other Credit Party in its capacity as licensor is permitted to be
assigned pursuant to the Security Agreement (to the extent that the
security interest in such patents, trademarks, copyrights and know-how
is granted thereunder) and does not otherwise prohibit the granting of
a Lien by the Borrower or any other Credit Party pursuant to the
Security Agreement in the intellectual property covered by such
license.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 9.02 (other than to the Borrower or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect the
foregoing.
9.03 Dividends. The Borrower will not, and will not permit
any of its Subsidiaries to, authorize, declare or pay any Dividends with
respect to the Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends
to the Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may
pay cash Dividends to its shareholders or partners generally so long
as the Borrower or its respective Subsidiary which owns the equity
interest or interests in the Subsidiary
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paying such Dividends receives at least its proportionate share
thereof (based upon either its relative holdings of equity interests
in the Subsidiary paying such Dividends and taking into account the
relative preferences, if any, of the various classes of equity
interests in such Subsidiary or the terms of any agreements applicable
thereto); and
(iii) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
the Borrower may repurchase outstanding shares of its common stock (or
options to purchase such common stock) following the death, disability
or termination of employment of employees of the Borrower or any of
its Subsidiaries, provided that the aggregate amount of Dividends paid
by the Borrower pursuant to this clause (iii) shall not exceed
$3,500,000 in any fiscal year of the Borrower.
9.04 Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Initial
Borrowing Date and listed on Schedule VII, without giving effect to
any subsequent extension, renewal or refinancing thereof except to the
extent set forth on Schedule VII, provided that (x) except to the
extent specifically set forth on Schedule VII, the aggregate principal
amount of the Indebtedness to be extended, renewed or refinanced does
not increase from that amount outstanding at the time of any such
extension, renewal or refinancing and (y) to the extent that the
Existing Glendale Debt is to be refinanced as part of the Refinancing
after the Initial Borrowing Date, such Debt shall only be permitted to
remain outstanding through the Tranche A Term Loan Commitment
Termination Date (although the Borrower shall have the right at any
time prior to the Tranche A Term Loan Commitment Termination Date to
notify the Administrative Agent that the Existing Glendale Debt shall
no longer constitute Indebtedness to be Refinanced);
(iii) Indebtedness under Interest Rate Protection
Agreements entered into with respect to other Indebtedness permitted
under this Section 9.04;
(iv) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations to the extent permitted
pursuant to Section 9.07, provided that in no event shall the
aggregate principal amount of Capitalized Lease Obligations permitted
by this clause (iv) exceed $10,000,000 at any time outstanding;
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(v) Indebtedness subject to Liens permitted under Section
9.01(viii);
(vi) intercompany Indebtedness to the extent permitted by
Sections 9.05(viii), (ix) and (x);
(vii) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
the Borrower's or any of its Subsidiaries' ordinary course of business
operations so long as management of the Borrower or such Subsidiary,
as the case may be, has determined in good faith that the entering
into of such Other Hedging Agreements are bona fide hedging
activities;
(viii) Indebtedness of the Borrower consisting of guaranties
of Indebtedness of franchises of Candlewood, so long as (i) the
Borrower's maximum exposure on any single Candlewood property or
franchise does not exceed $2,000,000 and (ii) the Borrower's maximum
exposure under all such guaranties does not exceed $30,000,000;
(ix) Contingent Obligations of the Borrower and its
Subsidiaries to maintain the net worth of those Persons listed on
Schedule XV in accordance with the terms of the applicable agreements
with respect thereto as in effect on the Initial Borrowing Date,
provided that any payments made by the Borrower or a Subsidiary
thereof to satisfy such obligations shall count as a Hotel Investment
made pursuant to Section 9.07;
(x) unsecured subordinated Indebtedness of the Borrower
(the "New Subordinated Notes"), so long as (i) the aggregate
outstanding principal amount thereof does not exceed $150,000,000
(less any repayments of principal thereof), (ii) at least 20 Business
Days prior to the issuance thereof, the Borrower shall have delivered
to each of the Banks substantially final drafts of the documents
pursuant to which the New Subordinated Notes are to be issued and with
any changes thereto made after the initial delivery of such documents
to be delivered to the Agents and with any significant changes thereto
made after such initial delivery to be delivered to each of the Banks
at least five days prior to the issuance of such New Subordinated
Notes, (iii) the final maturity date thereof is at least 270 days
beyond the Tranche B Term Loan Maturity Date, (iv) there are no
required amortization, mandatory redemption or sinking fund provisions
or similar provisions prior to the 270th day after the Tranche B Term
Loan Maturity Date, (v) all other terms and conditions thereof
(including, without limitation, interest rates, covenants, defaults,
remedies and subordination provisions) are reasonably satisfactory to
the Agents, (vi) no Default or Event of Default then exists or would
result therefrom and (vii) (I) based on calculations made by the
Borrower on a Pro Forma Basis after giving
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effect to the respective incurrence, no Default or Event of Default
will exist under, or would have existed during the Test Period last
reported (or required to be reported pursuant to Section 8.01(a) or
(b), as the case may be) prior to the date of the respective
incurrence pursuant to, the financial covenants contained in Sections
9.08 through 9.11, inclusive, and (II) the Borrower shall have
delivered to the Agents an officer's certificate executed by the Chief
Financial Officer of the Borrower, certifying to the best of such
officer's knowledge, compliance with the requirements of this clause
(vii) and containing the calculations (in reasonable detail) required
by this clause (vii);
(xi) Non-Recourse Indebtedness of a Specified Subsidiary
incurred to finance the development or acquisition (and the related
working capital requirements) of a Hotel Property developed or
acquired after the Initial Borrowing Date, so long as (i) the
aggregate principal amount of all such Non-Recourse Indebtedness does
not exceed $100,000,000 at any time outstanding, (ii) no Default or
Event of Default then exists or would result therefrom and (iii) (I)
based on calculations made by the Borrower on a Pro Forma Basis after
giving effect to the respective incurrence, no Default or Event of
Default will exist under, or would have existed during the Test Period
last reported (or required to be reported pursuant to Section 8.01(a)
or (b), as the case may be) prior to the date of the respective
incurrence pursuant to, the financial covenants contained in Sections
9.08 through 9.11, inclusive, and (II) the Borrower shall have
delivered to the Agents an officer's certificate executed by the Chief
Financial Officer of the Borrower, certifying to the best of such
officer's knowledge, compliance with the requirements of this clause
(iii) and containing the calculations (in reasonable detail) required
by this clause (iii); ;
(xii) to the extent that the Existing Glendale Debt is
refinanced with the proceeds of Loans as part of the Refinancing,
Indebtedness of the Joint Venture that originally incurred such
Existing Glendale Debt, so long as the proceeds thereof are used to
refinance the intercompany loan made by the Borrower to such Joint
Venture to refinance the Existing Glendale Debt, provided that the
aggregate principal amount of the Indebtedness so incurred by such
Joint Venture pursuant to this clause (xii) does not exceed the amount
of the intercompany loan owing to the Borrower; and
(xiii) additional Indebtedness of the Borrower and its
Subsidiaries not to exceed $50,000,000 in aggregate principal amount
at any time outstanding, provided that no more than $25,000,000 of
such Indebtedness may be secured and then only to the extent permitted
by Sections 9.01(xiv) and (xvii).
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9.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or hold
any cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and
hold accounts receivables owing to any of them, if created or acquired
in the ordinary course of business and payable or dischargeable in
accordance with customary terms, and the Borrower and its Subsidiaries
may own Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(ii) the Borrower and its Subsidiaries may acquire and
hold or invest in cash and Cash Equivalents;
(iii) the Borrower and its Subsidiaries may receive
non-cash consideration in connection with any asset sale permitted by
Sections 9.02(iii), (iv), (vi), (vii) and (xiv) but only to the extent
set forth in such Sections 9.02(iii), (iv), (vi), (vii) and (xiv);
(iv) the Borrower and its Subsidiaries may hold the
Investments held by them on the Initial Borrowing Date and described
on Schedule X, provided that any additional Investments made with
respect thereto shall be permitted only if independently justified
under the other provisions of this Section 9.05;
(v) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $2,000,000;
(vi) the Borrower may enter into Interest Protection
Agreements to the extent permitted by Section 9.04(iii);
(vii) the Borrower and its Subsidiaries may enter into
Other Hedging Agreements to the extent permitted by Section 9.04(vii);
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(viii) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another
(collectively, "Intercompany Loans"), so long as each Intercompany
Loan shall be evidenced by an Intercompany Note that is pledged to the
Collateral Administrative Agent pursuant to the Pledge Agreement, and
the Borrower and the Subsidiary Guarantors may make cash Investments
to their Subsidiaries to the extent that such Subsidiaries are
Subsidiary Guarantors;
(ix) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances to non-Wholly-Owned Subsidiaries and
other Persons to the extent permitted by Section 9.07, so long as any
such intercompany loan or advance that is evidenced by a note shall be
pledged to the Collateral Administrative Agent pursuant to (and to the
extent required by) the Pledge Agreement;
(x) to the extent that the Existing Glendale Debt is to
be refinanced (in whole or in part) with proceeds of Loans made on or
prior to the Tranche A Term Loan Commitment Termination Date, the
Borrower may make an intercompany loan to the Joint Venture that has
incurred the Existing Glendale Debt in an amount not to exceed the
amount of such Existing Glendale Debt, so long as such intercompany
loan shall be evidenced by a note that is pledged to the Collateral
Administrative Agent pursuant to the Pledge Agreement;
(xi) RFS may contribute to a newly-formed Wholly-Owned
Subsidiary of RFS ("RFS Sub") one or more of the leasehold interests
held by RFS in the RFS REIT Leases, together with a corresponding
portion of the RFS REIT Equity held by RFS, in each case in connection
with the securitization of RFS REIT's fee interest in the hotels
leased to RFS pursuant to such RFS Leases; and
(xii) the Borrower and its Subsidiaries may make additional
Hotel Investments to the extent permitted by Section 9.07.
9.06 Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of the Borrower or any of its Subsidiaries, other
than in the ordinary course of business and on terms and conditions
substantially as favorable to the Borrower or such Subsidiary as would
reasonably be obtained by the Borrower or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted: (i) Dividends may
be paid to the extent provided in Section 9.03, (ii) loans may be made and
other transactions may be entered into by the Borrower and its Subsidiaries to
the extent permitted by Sections 9.02, 9.04 and 9.05, (iii) customary fees may
be paid to non-officer directors of the Borrower and (iv) Subsidiaries and
Joint
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Ventures of the Borrower may pay management and similar fees to the Borrower or
any Wholly-Owned Subsidiary of the Borrower.
9.07 Capital Expenditures; Permitted Hotel Acquisitions;
Permitted Hotel Investments. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, Hotel Acquisitions
or Hotel Investments, except that (x) during the period from the Effective Date
through and including December 31, 1996, the Borrower and its Subsidiaries may
make Capital Expenditures, Hotel Acquisitions and Hotel Investments in an
aggregate amount not to exceed $25,000,000 and (y) during any fiscal year set
forth below (taken as one accounting period), the Borrower and its Subsidiaries
may make Capital Expenditures, Hotel Acquisitions and Hotel Investments so long
as the aggregate amount of all such Capital Expenditures, Hotel Acquisitions
and Hotel Investments does not exceed in any fiscal year set forth below the
amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ ------
December 31, 1997 $40,000,000
December 31, 1998 $45,000,000
December 31, 1999 $50,000,000
and each fiscal year
thereafter
; provided that during each fiscal year set forth in the table above, at least
3% of the aggregate gross revenues from Hotel Properties owned or leased by Red
Lion and its Wholly-Owned Subsidiaries for such fiscal year shall be used to
make maintenance Capital Expenditures pursuant to this clause (a).
(b) (i) In addition to the foregoing, in the event that the
amount of Capital Expenditures, Hotel Acquisitions and Hotel Investments
permitted to be made by the Borrower and its Subsidiaries pursuant to clause
(a) above in any fiscal year set forth in the table above (before giving effect
to any increase in such permitted expenditure amount pursuant to this clause
(b)(i) but after giving effect to any reduction in such amount as a result of
Capital Expenditures, Hotel Acquisitions and Hotel Investments made pursuant to
clause (b)(ii) below) is greater than the amount of such Capital Expenditures,
Hotel Acquisitions and Hotel Investments made by the Borrower and its
Subsidiaries during such fiscal year, such excess may be carried forward and
utilized to make Capital Expenditures, Hotel Acquisitions and Hotel Investments
in the immediately succeeding fiscal year, provided, that (x) any amount
carried forward from the immediately preceding fiscal year may not be utilized
during the current fiscal year unless and until the relevant amount for such
current fiscal year shall have been utilized in full to make Capital
Expenditures, Hotel Acquisitions and/or Hotel Investments during such current
fiscal year, (y) in no event shall the aggregate
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amount of Capital Expenditures, Hotel Acquisitions and Hotel Investments made
by the Borrower and its Subsidiaries during any fiscal year pursuant to Section
9.07(a), this clause (b)(i) and clause (b)(ii) below exceed 115% of the amount
set forth opposite such fiscal year as set forth in the table in such Section
9.07(a) (before giving effect to any reduction in such amount pursuant to
clause (b)(ii) below as a result of Capital Expenditures, Hotel Acquisitions
and Hotel Investments made pursuant to clause (b)(ii) below) and (z) no amounts
once carried forward to the next fiscal year may be carried forward to fiscal
years thereafter.
(ii) In addition to the foregoing, commencing in the
Borrower's fiscal year beginning January 1, 1997, in the event that the
Borrower and its Subsidiaries have made Capital Expenditures, Hotel
Acquisitions and Hotel Investments in any fiscal year pursuant to clauses (a)
and (b)(i) above in an amount equal to the maximum amount permitted to be made
in such fiscal year pursuant to such clauses and so long as no Default or Event
of Default then exists, the Borrower and its Subsidiaries may make Capital
Expenditures, Hotel Acquisitions and Hotel Investments in such fiscal year by
utilizing expenditure amounts permitted to be made in the immediately
succeeding fiscal year pursuant to clause (a) above, and with any Capital
Expenditures, Hotel Acquisitions and Hotel Investments made pursuant to this
clause (b)(ii) in such current fiscal year to reduce the amount of Capital
Expenditures, Hotel Acquisitions and Hotel Investments permitted to be made in
the immediately succeeding fiscal year, provided that in no event shall the
aggregate amount of Capital Expenditures, Hotel Acquisitions and Hotel
Investments made by the Borrower and its Subsidiaries during any fiscal year
pursuant to Section 9.07(a), clause (b)(i) above and this clause (b)(ii) exceed
115% of the amount set forth opposite such fiscal year as set forth in the
table in such Section 9.07(a) (before giving effect to any reduction in such
amount pursuant to the clause (b)(ii) as a result of Capital Expenditures,
Hotel Acquisitions and Hotel Investments made pursuant to this clause (b)(ii)).
(c) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net Insurance
Proceeds received by the Borrower or any of its Subsidiaries from any Recovery
Event so long as such Net Insurance Proceeds are used to replace or restore any
properties or assets in respect of which such Net Insurance Proceeds were paid
within the applicable time periods set forth in Section 4.02(h) but only to the
extent such Net Insurance Proceeds are not required to be applied pursuant to
Section 4.02(h) (or Section 3.03(e), as the case may be).
(d) In addition to the foregoing and so long as no Default or
Event of Default then exists, the Borrower and its Subsidiaries may make
Capital Expenditures, Hotel Acquisitions and Hotel Investments in an amount not
to exceed the Retained Net Equity Proceeds Amount at such time.
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(e) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures, Hotel Acquisitions and Hotel
Investments in fiscal year 1997 as and to the extent set forth in Schedule XI.
(f) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures, Hotel Acquisitions and Hotel
Investments in any fiscal year of the Borrower in an amount equal to the
remainder of (1) the Retained Excess Cash Flow Amount for the immediately
preceding fiscal year of the Borrower less (2) the amount of all voluntary
prepayment of Term Loans made during such current fiscal year or during the
immediately succeeding fiscal year, in either case pursuant to the proviso of
Section 4.01(a)(v) and utilizing such Retained Excess Flow Amount, provided
that (x) no Capital Expenditures, Hotel Acquisitions or Hotel Investments may
be made pursuant to this clause (f) during any fiscal year of the Borrower
unless the Borrower's EBITDA for the immediately preceding fiscal year exceeded
90% of the Borrower's Base Case EBITDA for such fiscal year and (y) in the
event that the amount of Capital Expenditures, Hotel Acquisitions and Hotel
Investments permitted to be made by the Borrower and its Subsidiaries pursuant
to this clause (f) in any fiscal year of the Borrower is greater than the
amount of such Capital Expenditures, Hotel Acquisitions and Hotel Investments
made by the Borrower and its Subsidiaries during such fiscal year, such excess
may be carried forward and utilized to make Capital Expenditures, Hotel
Acquisitions and Hotel Investments in the immediately succeeding fiscal year,
provided further, (i) that any amount carried forward from the immediately
preceding fiscal year may not be utilized during the current fiscal year unless
and until the relevant amount for such current fiscal year as set forth in the
table in Section 9.07(a) shall have been utilized in full to make Capital
Expenditures, Hotel Acquisitions and/or Hotel Investments during such current
fiscal year, and (ii) that no amounts once carried forward to the next fiscal
year may be carried forward to fiscal years thereafter.
(g) In addition to the foregoing, commencing with the
Borrower's fiscal year beginning January 1, 1998, the Borrower and its
Subsidiaries may make Capital Expenditures, Hotel Acquisitions and Hotel
Investments in an aggregate amount not to exceed $20,000,000, provided that no
more than $10,000,000 of such Capital Expenditures, Hotel Acquisitions and
Hotel Investments may be made in any fiscal year of the Borrower.
(h) In addition to the foregoing and so long as no Default or
Event of Default then exists, the Borrower and its Subsidiaries may make
Capital Expenditures, Hotel Acquisitions and Hotel Investments with the Net
Sale Proceeds received from any Asset Sale and with the Specified Existing Red
Lion Investment Proceeds from any Specified Red Lion Event so long as (i) such
Net Sale Proceeds or Specified Existing Red Lion Investment Proceeds are used
to purchase like assets within the applicable time periods set forth in Section
4.02(f), (ii) the aggregate amount of Capital Expenditures, Hotel Acquisitions
and Hotel Investments made pursuant to this Section 9.07(h) does not exceed
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that amount permitted by Section 4.02(f), (iii) such Net Sale Proceeds or
Specified Existing Red Lion Investment Proceeds are not required to be applied
pursuant to Section 4.02(f) (or Section 3.03(e), as the case may be) and (iv)
to the extent that the asset so sold constitutes Collateral, the Collateral
Administrative Agent is granted a first priority perfected security interest in
the like asset acquired at least to the same extent (and with at least the same
rights) as the Collateral Administrative Agent's security interest in the
Collateral so sold.
(i) In addition to the foregoing and as long as no Default or
Event of Default then exists, the Borrower and its Wholly-Owned Subsidiaries
may make Capital Expenditures, Hotel Acquisitions and Hotel Investments with
cash proceeds received from a Designated Event so long as such proceeds are
not required to be applied pursuant to Section 4.02(i) (or Section 3.03(e), as
the case may be).
(j) In addition to the foregoing and so long as no Default or
Event of Default then exists, the Borrower and its Subsidiaries may make
Capital Expenditures, Hotel Acquisitions and Hotel Investments with the Net
Sale Proceeds received from the sale of those Hotel Properties acquired by the
Borrower and its Subsidiaries after the Initial Borrowing Date (except to the
extent that such Hotel Property constitutes a newly acquired Designated Hotel
Property).
(k) In addition to the foregoing and so long as no Default or
Event of Default then exists, the Borrower and its Wholly-Owned Subsidiaries
may effect Hotel Acquisitions as part of a Temporary Hotel Acquisition
Transaction, provided that, to the extent the Borrower or such Wholly-owned
Subsidiary consummates a Hotel Acquisition and fails to sell the Hotel Property
as part of the Temporary Hotel Acquisition Transaction within 120 days after
the acquisition thereof or fails to sell the Hotel Property for at least the
same purchase price as originally paid by the Borrower or such Wholly-Owned
Subsidiary, such Hotel Acquisition (or such portion thereof to the extent that
the Borrower or such Wholly-Owned Subsidiary fails to receive at least the same
purchase price originally paid by the Borrower or such Wholly-Owned Subsidiary)
shall constitute a Hotel Acquisition effected under one of the other provisions
of this Section 9.07 and shall be required to be independently justified under
such other provisions.
Notwithstanding anything to the contrary contained above in this Section 9.07,
in the case of any Hotel Acquisition or Hotel Investment in which the total
consideration equals or exceeds $25,000,000 (other than a Hotel Acquisition
pursuant to Section 9.07(k)), (I) based on calculations made by the Borrower on
a Pro Forma Basis after giving effect to the respective Hotel Acquisition or
Hotel Investment, no Default or Event of Default will exist under, or would
have existed during the Test Period last reported (or required to be reported
pursuant to Section 8.01(a) or (b), as the case may be) prior to the date of
the respective Hotel Acquisition or Hotel Investment pursuant to, the financial
covenants con-
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tained in Sections 9.08 through 9.11, inclusive and (II) the Borrower shall
have delivered to the Agents an officer's certificate executed by the Chief
Financial Officer of the Borrower, certifying to the best of such officer's
knowledge, compliance with the requirements of this paragraph and containing
the calculations (in reasonable detail) required by this paragraph. For
purposes of determining the amount of any Capital Expenditures, Hotel
Acquisitions and Hotel Investments made at any time, such amount shall include
the amount of any Indebtedness assumed by the Borrower or any of its
Subsidiaries in connection therewith.
9.08 Consolidated Fixed Charge Coverage Ratio. The Borrower
will not permit the Consolidated Fixed Charge Coverage Ratio for the Test
Period ending on June 30, 1997 and for each Test Period ending thereafter to be
less than 1.00:1:00.
9.09 Consolidated Interest Coverage Ratio. The Borrower will
not permit the Consolidated Interest Coverage Ratio for any Test Period ending
on the last day of a fiscal quarter set forth below to be less than the ratio
set forth opposite such fiscal quarter below:
Fiscal Quarter Ratio
-------------- -----
March 31, 1997 2.50:1.00
June 30, 1997 2.75:1.00
September 30, 1997 2.75:1.00
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 3.00:1.00
September 30, 1998 3.00:1.00
December 31, 1998 3.50:1.00
March 31, 1999 3.50:1.00
June 30, 1999 3.50:1.00
September 30, 1999 3.50:1.00
December 31, 1999 4.00:1.00
and thereafter
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9.10 Maximum Leverage Ratio. The Borrower will not permit
the Leverage Ratio at any time during a period set forth below to be greater
than the ratio set forth opposite such period below:
Period Ratio
------ -----
Initial Borrowing Date through and including
December 30, 1997 4.75:1.00
December 31, 1997 through and including
December 30, 1998 4.50:1.00
December 31, 1998 through and including
December 30, 1999 4.00:1.00
December 31, 1999 through and including 3.50:1.00
December 30, 2000
December 31, 2000 and thereafter 3.00:1.00
9.11 Minimum Consolidated Net Worth. The Borrower will not
permit Consolidated Net Worth at any time to be less than the Minimum
Consolidated Net Worth at such time.
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By- Laws and
Certain Other Agreements; etc. The Borrower will not, and will not permit any
of its Subsidiaries to, (i) make (or give any notice in respect of) any
voluntary or optional payment or prepayment on or redemption or acquisition for
value of, or make any prepayment or redemption as a result of any asset sale,
change of control or similar event of (including, in each case, without
limitation, by way of depositing with the trustee with respect thereto or any
other Person, money or securities before due for the purpose of paying when
due) any New Senior Subordinated Notes or the Existing Glendale Debt, except
that the Existing Glendale Debt may be refinanced as part of the Refinancing or
as otherwise permitted under Section 9.04, (ii) amend or modify, or permit the
amendment or modification of, any provision of the New Senior Subordinated
Notes or any New Senior Subordinated Note Documents or any provision of the
Existing Glendale Debt, except for any amendments or modifications to the
documentation for the Existing Glendale Debt which could not reasonably be
expected to be adverse to the interests of the Banks in any material respect,
(iii) amend, modify or change its certificate of incorporation (including,
without limitation, by the filing or modification of any certificate of
designation) or by-laws (or the equivalent organizational documents) or any
agreement entered into by it with respect to its capital stock (including any
Shareholders' Agreement), or enter into any new agreement with respect to its
capital stock, unless such amendment, modification, change or other action
contemplated by this clause (iii) could not reasonably be expected to be
adverse to the interests of the Banks in any material respect, (iv) amend,
modify or change any provision of any Tax Sharing Agreement or enter into
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any new tax sharing agreement, tax allocation agreement or similar agreement,
unless such amendment, modification, change or other action contemplated by
this clause (iv) cannot reasonably be expected to be adverse to the interests
of the Banks in any material respect, (v) amend, modify or change any Joint
Venture Agreement, unless such amendment, modification or change could not
reasonably be expected to be adverse to the interests of the Banks in any
material respect, (vi) amend, modify, change or terminate the Red Lion Master
Lease or the Doubletree Master REIT Lease, unless such amendment, modification
or change could not reasonably be expected to be adverse to the interests of
the Banks in any material respect or (vii) amend, modify, change or terminate
the Red Lion Master Property Management Agreement, unless such amendment,
modification or change could not reasonably be expected to be adverse to the
interests of the Banks in any material respect.
9.13 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any
Subsidiary the Borrower, or pay any Indebtedness owed to the Borrower or any
Subsidiary of the Borrower, (b) make loans or advances to the Borrower or any
Subsidiary of the Borrower or (c) transfer any of its properties or assets to
the Borrower or any Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Borrower or any Subsidiary of the Borrower, (iv) customary
provisions restricting assignment of any licensing agreement, management
agreement or franchise agreement entered into by the Borrower or any Subsidiary
of the Borrower in the ordinary course of business, (v) restrictions on the
transfer of any asset subject to a Lien permitted by this Agreement and (vi)
restrictions set forth on Schedule XV and similar net worth restriction imposed
on RFS Sub and any other Subsidiary of the type described in clause (v) of the
definition of Subsidiary Guarantor.
9.14 Limitation on Issuance of Capital Stock. (a) The
Borrower will not, and will not permit any of its Subsidiaries to, issue (i)
any preferred stock (other than Qualified Preferred Stock issued by the
Borrower) or (ii) any redeemable common stock (other than at the sole option of
the Borrower).
(b) The Borrower will not permit any of its Subsidiaries to
issue any capital stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, capital stock,
except (i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any
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class of the capital stock of such Subsidiary, (iii) to qualify directors to
the extent required by applicable law or (iv) for issuances by newly created or
acquired Subsidiaries in accordance with the terms of this Agreement.
9.15 Business. The Borrower will not, and will not permit
any of its Subsidiaries to, engage (directly or indirectly) in any business
other than the businesses in which the Borrower and its Subsidiaries are
engaged on the Initial Borrowing Date and reasonable extensions thereof and
those reasonably related thereto.
9.16 Limitation on Creation of Subsidiaries and Joint
Ventures. (a) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower will not, and will not permit any of its Subsidiaries
to, establish, create or acquire after the Initial Borrowing Date any
Subsidiary, Unrestricted Subsidiary or Joint Venture, provided that the
Borrower and its Wholly-Owned Subsidiaries shall be permitted to establish or
create (x) non-Wholly-Owned Subsidiaries, Unrestricted Subsidiaries and Joint
Ventures as provided in Section 9.16(b) and (y) Wholly-Owned Subsidiaries so
long as (i) the capital stock of such new Wholly-Owned Subsidiary that is owned
by any Credit Party is pledged pursuant to, and to the extent required by, the
Pledge Agreement and the certificates representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent for
the benefit of the Secured Creditors, (ii) the partnership interests of such
new Wholly-Owned Subsidiary (to the extent that same is a partnership) are
pledged and assigned pursuant to, and to the extent required by, the Pledge
Agreement, (iii) such new Wholly-Owned Subsidiary (to the extent that same
constitutes a Subsidiary Guarantor as described in the definition) executes a
counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the Security
Agreement, and (iv) such new Wholly- Owned Subsidiary (to the extent that same
constitutes a Subsidiary Guarantor as described in the definition thereof), to
the extent requested by the Agents or the Required Banks, takes all actions
required pursuant to Section 8.12. In addition, each new Subsidiary Guarantor
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5 as such new
Subsidiary Guarantor would have had to deliver if such new Subsidiary Guarantor
were a Credit Party on the Initial Borrowing Date.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, establish, create or acquire any non-Wholly-Owned
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures after the Initial
Borrowing Date, except that the Borrower or any Wholly-Owned Subsidiary of the
Borrower may establish, create or acquire non-Wholly-Owned Subsidiaries,
Unrestricted Subsidiaries and Joint Ventures to the extent that the Investment
in such Person is permitted by Section 9.07 from time to time, in each case so
long as (x) no Default or Event of Default exists at the time of the
establishment, creation or acquisition of the respective non-Wholly-Owned
Subsidiary, Unrestricted Subsidiary or Joint Venture or shall exist immediately
after giving effect thereto, (y) all Hotel Investments therein are permitted
pursuant to Section 9.07 and (z) all equity interests of such
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non-Wholly-Owned Subsidiary, Unrestricted Subsidiary or Joint Venture, to the
extent owned by any Credit Party, are pledged pursuant to, and to the extent
required by, the Pledge Agreement.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or (ii) default, and
such default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Loan or Note, any Unpaid Drawing or any
Fees or any other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to any Agent or any Bank pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made
or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(f)(i), 8.08 or 8.11 or Section 9 or (ii) default in
the due performance or observance by it of any other term, covenant or
agreement contained in this Agreement or any other Credit Document (other than
those set forth in Sections 10.01 and 10.02) and such default shall continue
unremedied for a period of 30 days after written notice thereof to the
defaulting party by any Agent or the Required Banks; or
10.04 Default Under Other Agreements. (i) The Borrower or
any of its Subsidiaries shall (x) default in any payment of any Indebtedness
(other than the Notes and/or the Austin Obligations) beyond the period of grace
or cure, if any, provided in the instrument or agreement under which such
Indebtedness was created or (y) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the Notes
and/or the Austin Obligations) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required, but beyond the period of grace or cure, if
any, provided in the instrument or agreement under which such Indebtedness was
created), any such Indebtedness to become due prior to its stated maturity, or
(ii) any Indebtedness (other than the Notes and/or the Austin Obligations) of
the Borrower or any of its Subsidiaries shall be declared to be (or shall
become) due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof, provided
that it shall not be a Default or an
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Event of Default under this Section 10.04 unless the aggregate principal amount
of all Indebtedness as described in preceding clauses (i) and (ii) is at least
$10,000,000; or
10.05 Bankruptcy, etc. The Borrower or any of its
Subsidiaries (excluding Immaterial Subsidiaries) shall commence a voluntary
case concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against the Borrower or
any of its Subsidiaries (excluding Immaterial Subsidiaries), and the petition
is not controverted within 15 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries (excluding Immaterial Subsidiaries), or
the Borrower or any of its Subsidiaries (excluding Immaterial Subsidiaries)
commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to the Borrower or any of its Subsidiaries (excluding Immaterial Subsidiaries),
or there is commenced against the Borrower or any of its Subsidiaries
(excluding Immaterial Subsidiaries) any such proceeding which remains
undismissed for a period of 60 days, or the Borrower or any of its Subsidiaries
(excluding Immaterial Subsidiaries) is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or the Borrower or any of its Subsidiaries (excluding Immaterial
Subsidiaries) suffers any appointment of any custodian or the like for it or
any substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any of its Subsidiaries (excluding
Immaterial Subsidiaries) makes a general assignment for the benefit of
creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries (excluding Immaterial Subsidiaries) for the purpose of effecting
any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any
Plan or Multiemployer Plan which is subject to Title IV of ERISA shall have had
or is likely to have a trustee appointed to administer such Plan or
Multiemployer Plan, any Plan or Multiemployer Plan which is subject to Title IV
of ERISA is, shall have been or is likely to be terminated or to be the subject
of termination proceedings under ERISA, any Plan or Multiemployer Plan shall
have an Unfunded Current Liability, a contribution required to be made with
respect to a Plan, a Multiemployer Plan or a Foreign Pension Plan has not been
timely made, the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate has incurred or is likely to incur any liability to or on account of
a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or
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Section 4980B(g)(2) of the Code) under Section 4980B(a) of the Code, or the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or Plans or
Foreign Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the
Required Banks, has had, or could reasonably be expected to have, a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution
and delivery thereof, any of the Security Documents shall cease to be in full
force and effect, or shall cease to give the Collateral Administrative Agent
for the benefit of the Secured Creditors the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
perfected security interest in, and Lien on, all of the Collateral, in favor of
the Collateral Administrative Agent, superior to and prior to the rights of all
third Persons (except as permitted by Section 9.01), and subject to no other
Liens (except as permitted by Section 9.01); or
10.08 Subsidiaries Guaranty. At any time after the execution
and delivery thereof, the Subsidiaries Guaranty or any provision thereof shall
cease to be in full force or effect as to any Subsidiary Guarantor, or any
Subsidiary Guarantor or any Person acting by or on behalf of such Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under
the Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any Subsidiary of the Borrower (excluding any
Immaterial Subsidiary) involving in the aggregate for the Borrower and its
Subsidiaries (excluding Immaterial Subsidiaries) a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $10,000,000; or
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10.10 Change of Control. A Change of Control shall occur; or
10.11 Certain Master Leases. An Event of Default under, and
as defined in, the Red Lion Master Lease or the Doubletree Master REIT Lease
shall occur and be continuing (after giving effect to any applicable cure and
grace periods), or the Red Lion Master Lease or the Doubletree Master REIT
Lease (or any material provision thereof) shall cease to be in full force and
effect; or
10.12 The Red Lion Master Property Management Agreement. The
Red Lion Master Property Management Agreement shall terminate or any material
provision thereof shall cease to be in full force and effect or the Borrower or
any of its Subsidiaries shall default in a due performance or observance by it
of any term, covenant or condition required to be performed by it after the
expiration of any applicable cure and grace periods;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of any
Agent, any Bank or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses
(i) and (ii) below shall occur automatically without the giving of any such
notice): (i) declare the Total Commitments terminated, whereupon all
Commitments of each Bank shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to
the Borrower, it will pay) to the Collateral Administrative Agent at the
Payment Office such additional amount of cash, to be held as security by the
Collateral Administrative Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Administrative Agent, all of the Liens
and security interests created pursuant to the Security Documents; and (vi)
apply any cash collateral held by the Administrative Agent pursuant to Section
4.02 to the repayment of the Obligations.
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SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" shall mean the merger of Merger Sub with and
into Red Lion pursuant to, and in accordance with the terms of, the Acquisition
Documents and as a result of which Red Lion shall be a Wholly-Owned Subsidiary
of the Borrower.
"Acquisition Agreement" shall mean the Agreement and Plan of
Merger, dated as of September 12, 1996, by and among the Borrower, Merger Sub
and Red Lion.
"Acquisition Documents" shall mean the Acquisition Agreement
and all other agreements and documents entered into in connection with the
Acquisition.
"Additional Security Documents" shall have the meaning
provided in Section 8.12.
"Adjusted Consolidated Cash Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense, non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Adjusted RL Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank, such Bank's RL Percentage and (y) at a time when
a Bank Default exists, (i) for each Bank that is a Defaulting Bank, zero and
(ii) for each Bank that is a Non-Defaulting Bank, the percentage determined by
dividing such Bank's Revolving Loan Commitment at such time by the Adjusted
Total Revolving Loan Commitment at such time, it being understood that all
references herein to Revolving Loan Commitments and the Adjusted Total
Revolving Loan Commitment at a time when the Total Revolving Loan Commitment or
Adjusted Total Revolving Loan Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments or Adjusted
Total Revolving Loan Commitment, as the case may be, in effect immediately
prior to such termination, provided that (A) a Bank's Adjusted RL Percentage
shall only change upon the occurrence of a Bank Default from that in effect
immediately prior to such Bank Default to the extent that after giving effect
to such Bank Default, and any repayment of Revolving
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Loans and Swingline Loans at such time pursuant to Section 4.02(a) or
otherwise, the sum of (i) the aggregate outstanding principal amount of
Revolving Loans of such Bank plus (ii) such Bank's new Adjusted RL Percentage
of the aggregate outstanding principal amount of Swingline Loans and the Letter
of Credit Outstandings, would not exceed the Revolving Loan Commitment of such
Bank at such time; (B) the changes to the Adjusted RL Percentage that would
have become effective upon the occurrence of a Bank Default but that did not
become effective as a result of the preceding clause (A) shall become effective
on the first date after the occurrence of the relevant Bank Default on which
the sum of (i) the aggregate outstanding principal amount of the Revolving
Loans of all Non-Defaulting Banks, plus (ii) the aggregate outstanding
principal amount of Swingline Loans, plus (iii) the Letter of Credit
Outstandings, is equal to or less than the Adjusted Total Revolving Loan
Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted RL Percentage is
changed pursuant to the preceding clause (B) and (ii) any repayment of such
Bank's Revolving Loans or of Unpaid Drawings or of Swingline Loans that were
made during the period commencing after the date of the relevant Bank Default
and ending on the date of such change to its Adjusted RL Percentage must be
returned to the Borrower as a preferential or similar payment in any bankruptcy
or similar proceeding of the Borrower, then the change to such Non-Defaulting
Bank's Adjusted RL Percentage effected pursuant to said clause (B) shall be
reduced to that positive change, if any, as would have been made to its
Adjusted RL Percentage if (x) such repayments had not been made and (y) the
maximum change to its Adjusted RL Percentage would have resulted in the sum of
the outstanding principal of Revolving Loans made by such Bank plus such Bank's
new Adjusted RL Percentage of the outstanding principal amount of Swingline
Loans and of Letter of Credit Outstandings equalling such Bank's Revolving Loan
Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any
time the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
"Administrative Agent" shall mean Scotiabank, in its capacity
as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(j).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agent" shall mean and include the Administrative Agent and
the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Allocable Share" shall mean, for any Person with respect to
any Joint Venture and event or circumstance under this Agreement that requires
the determination thereof, that percentage of such Joint Venture's equity
interests that are owned (directly or indirectly) by such Person.
"Applicable Commitment Commission Percentage" shall mean a
percentage per annum equal to 1/2 of 1%, provided that so long as no Default
of the type described in Section 10.01 or 10.05 shall exist, or no Event of
Default shall exist, the Applicable Commitment Commission Percentage shall be
3/8 of 1% at any time (and for so long as) the Interest Reduction Discount is
determined by clauses (C), (D), (E) or (F) of clause (i) of the definition
thereof.
"Applicable Margin" shall mean a percentage per annum equal to
(i) in the case of Tranche A Term Loans and Revolving Loans which (in either
case) are maintained as Base Rate Loans and in the case of Swingline Loans,
1.125%, less the then applicable Interest Reduction Discount, if any, (ii) in
the case of Tranche A Term Loans and Revolving Loans which are maintained as
Eurodollar Loans, 2.125%, less the then applicable Interest Reduction Discount,
if any, (iii) in the case of Tranche B Term Loans which are maintained as Base
Rate Loans, 1.500%, less the then applicable Interest Reduction Discount, if
any, and (iv) in the case of Tranche B Term Loans which are maintained as
Eurodollar Loans, 2.500%, less the then applicable Interest Reduction Discount,
if any. Notwithstanding the foregoing, (x) in the event that the Borrower
receives gross cash proceeds in excess of $350,000,000 from the Equity
Financing and 100% of the Net Equity Proceeds therefrom in excess of
$250,000,000 are applied to reduce the Total Term Loan Commitment and/or repay
outstanding Term Loans in accordance with the requirements of Sections
3.02(b)(i) and/or 4.02(d), the Applicable Margin for Tranche A Term Loans,
Revolving Loans and Swingline Loans set forth in clauses (i) and (ii) above
shall be permanently decreased by 0.125% and (y) in the event that the Borrower
issues any New Senior Subordinated Notes, the Applicable Margin for Tranche A
Term Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans set forth
above shall be permanently increased by 0.125% (after giving effect to any
decrease thereof as provided in preceding clause (x)).
"Applicable Recapture Percentage" shall mean 100%, provided
that if on the date of any Asset Sale (other than an Asset Sale under Section
9.02(xiv)) or on the date of
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any Specified Red Lion Event, (x) no Default under Section 10.01 or 10.05 then
exists, or no Event of Default then exists, and (y) the Leverage Ratio for the
Test Period then most recently ended calculated on a Pro Forma Basis shall be
less than 3.00:1.00 (as evidenced (in reasonable detail) by a certificate of
the Chief Financial Officer of the Borrower submitted to the Agents on such
date), the Borrower shall be entitled to retain 50% of the Net Sale Proceeds
from such Asset Sale and 50% of the Specified Existing Red Lion Investment
Proceeds from such Specified Red Lion Event up to an aggregate (for all such
Asset Sales and Specified Red Lion Events) of $250,000,000.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Wholly-Owned Subsidiaries or Joint
Ventures to any Person (including by-way-of redemption by such Person) other
than to the Borrower or a Wholly-Owned Subsidiary of the Borrower of any asset
(including, without limitation, any capital stock or other securities of, or
equity interests in, another Person) of the Borrower or any of its Wholly-Owned
Subsidiaries or Joint Ventures other than any sale, transfer or disposition
permitted by Sections 9.02(ii), (v), (vii), (viii), (xi), (xvi), (xvii) and
(xviii), provided that in no event shall a Designated Event constitute an Asset
Sale.
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Austin Obligations" shall mean the Indebtedness outstanding
on the Initial Borrowing Date relating to, and only secured by, the Borrower's
Hotel Property in Austin, Texas, but only so long as recourse in respect of
such Indebtedness is limited solely to such Hotel Property and not to the
Borrower or any of its Subsidiaries or any of the other assets of the Borrower
or any of its Subsidiaries.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant to
Section 1.13 or 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in
writing the Borrower and/or the Administrative Agent that such Bank does not
intend to comply with its obligations under Section 1.01(a), 1.01(b), 1.01(c),
1.01(e) or 2, in the case of either clause (i) or (ii) as a result of any
takeover or control (including, without limitation, as a result of the
occurrence of any event of the type described in Section 10.05 with respect to
such Bank) of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
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"Base Case EBITDA" shall mean, with respect to any Test Period
set forth on Schedule XII, the number set forth opposite such Test Period on
such Schedule XII.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1%
in excess of the Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
each other Loan designated or deemed designated as such by the Borrower at the
time of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective Tranche
(or from Scotiabank in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City, New York and Atlanta, Georgia a legal holiday or a
day on which banking institutions are authorized or required by law or other
government action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day for trading by and between banks in the New York
interbank Eurodollar market.
"Calculation Period" shall mean the period of four consecutive
fiscal quarters of the Borrower last ended before the date of the respective
Hotel Acquisition, Hotel Investment, Asset Sale, Redesignation Event and/or
incurrence of New Senior Subordinated Notes or Non- Recourse Indebtedness which
requires calculations to be made on a Pro Forma Basis.
"Candlewood" shall mean Candlewood Hotel Company, L.L.C.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount
of Capitalized Lease Obligations incurred by such Person.
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"Capitalized Lease Obligations" of any Person shall mean all
rental obligations which, under generally accepted accounting principles, are
or will be required to be capitalized on the books of such Person, in each case
taken at the amount thereof accounted for as indebtedness in accordance with
such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii) Dollar
denominated time deposits and certificates of deposit of any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
having, a long-term unsecured debt rating of at least "A" or the equivalent
thereof from Standard & Poor's Ratings Services or "A2" or the equivalent
thereof from Moody's Investors Service, Inc. with maturities of not more than
one year from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc. and in each case maturing
not more than 270 days after the date of acquisition by such Person and (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv)
above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) any Person or "group"
(within the meaning of Rules 13d-3 or 13d-5 under the Securities Exchange Act
(as in effect on the Effective Date)), other than the Permitted Holders, shall
(A) have acquired beneficial ownership of 25% or more on a fully diluted basis
of the voting and/or economic interest in the Borrower's capital stock or (B)
have obtained the power (whether or not exercised) to elect a majority of the
Borrowers' directors or (ii) the Board of Directors of the Borrower shall cease
to consist of a majority of Continuing Directors.
"Clean-Down Period" shall mean a period of 30 consecutive days
during which no more than $50,000,000 in aggregate principal amount of the sum
of Revolving Loans and Swingline Loans is outstanding at any time during such
period.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any
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subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purport to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security Agreement Collateral,
the Mortgaged Properties, all Collateral Assignment Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to Section 4.02 or 10.
"Collateral Administrative Agent" shall mean the
Administrative Agent acting as collateral administrative agent for the Secured
Creditors pursuant to the Security Documents.
"Collateral Assignment" shall mean each Collateral Assignment
of Mortgage and other Loan Documents pursuant to which any Credit Party shall
have granted to the Collateral Administrative Agent a security interest in the
Collateral Assignment Collateral described therein.
"Collateral Assignment Collateral" shall mean all of the
applicable Credit Party's right, title and interest in and to the "Pledged Loan
Documents" as defined in the respective Collateral Assignment.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Commitment" shall mean any of the commitments of any Bank,
i.e., whether the Tranche A Term Loan Commitment, the Tranche B Term Loan
Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall mean the Revolving Loan
Commitment Commission and the Term Loan Commitment Commission.
"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum, dated October 1996, prepared by the Agents
and distributed to the Banks prior to the Initial Borrowing Date.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of the Borrower and its Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of the Borrower and its Subsidiaries at
such time, but excluding the cur-
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rent portion of and accrued but unpaid interest on any Indebtedness under this
Agreement and any other long-term Indebtedness which would otherwise be
included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income before Consolidated Interest Expense and before provision for taxes
for such period and without giving effect (x) to any extraordinary gains or
losses, (y) to any gains or losses from sales of assets other than from (i)
sales of inventory sold in the ordinary course of business and (ii) sales or
liquidations of equity interests in Joint Ventures in the ordinary course of
business (provided that no more than $5,000,000 shall be included in
Consolidated EBIT for any Test Period in connection with such sales or
liquidations referred to in this clause (ii)) and (z) to any expenses related
to or incurred by the Borrower in connection with the Transaction.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto the amount of all amortization
and depreciation expense of the Borrower and its Subsidiaries that were
deducted in arriving at Consolidated EBIT for such period, it being understood
and agreed, however, that for purposes of determining compliance with Sections
9.09 and 9.10 and for purposes of calculating the Interest Reduction Discount,
Consolidated EBITDA for the Borrower's fiscal quarter ended on (i) March 31,
1996 shall be $28,163,000, (ii) June 30, 1996 shall be $42,687,000, (iii)
September 30, 1996 shall be $__________ and (iv) December 31, 1996 shall be
based on the financial statements delivered pursuant to Section 8.01(i).
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any
period the ratio of (x) Consolidated EBITDA for such period less the amount of
all Capital Expenditures, Hotel Acquisitions and Hotel Investments made by the
Borrower and its Subsidiaries during such period pursuant to Sections 9.07(a),
(b) and (g) to (y) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the
sum, without duplication, of (i) Consolidated Interest Expense for such period,
(ii) the amount of all cash payments made by the Borrower and its Subsidiaries
in respect of taxes or tax liabilities during such period (net of any cash
refunds actually received during such period), and (iii) the scheduled
principal amount of all amortization payments made (or required to be made and
not made) on all Indebtedness (including, without limitation, the principal
component of all Capitalized Lease Obligations) of the Borrower and its
Subsidiaries for such period plus the amount of all voluntary repayments of
such Indebtedness during such period to the extent that any such repayment
reduced the amount of such scheduled amortization payment.
"Consolidated Indebtedness" shall mean, at any time, the
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such time determined on a con-
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solidated basis to the extent that such Indebtedness would be accounted for as
debt in accordance with generally accepted accounting principles plus, without
duplication, (i) the maximum amount available to be drawn under all letters of
credit (including any Letters of Credit) issued for the account of the Borrower
and its Subsidiaries and all unpaid drawings (including any Unpaid Drawings) in
respect of such letters of credit, (ii) the principal amount of all bonds
issued by the Borrower and its Subsidiaries in connection with workers'
compensation obligations, lease obligations and similar obligations, (iii) all
Indebtedness set forth on Schedule VII designated as being part of Consolidated
Indebtedness and (iv) the amount of all Contingent Obligations of the Borrower
and its Subsidiaries determined on a consolidated basis in respect of
Indebtedness of other Persons of the type described above in this definition.
"Consolidated Interest Coverage Ratio" shall mean, for any
period the ratio of (x) Consolidated EBITDA for such period to (y) (i) in the
case of the Test Period ending on March 31, 1997, Consolidated Interest Expense
for such Test Period multiplied by 4, (ii) in the case of the Test Period
ending on June 30, 1997, Consolidated Interest Expense for such Test Period
multiplied by 2, (iii) in the case of the Test Period ending September 30,
1997, Consolidated Interest Expense for such Test Period multiplied by a
fraction the numerator of which is 4 and the denominator of which is 3 and (iv)
in the case of each Test Period ending thereafter, Consolidated Interest
Expense for the Test Period then most recently ended (in each case taken as one
accounting period).
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the Borrower and its Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period; provided that the amortization of deferred financing
costs with respect to this Agreement or the Indebtedness incurred hereunder
shall be excluded from Consolidated Interest Expense to the extent same would
otherwise have been included therein.
"Consolidated Joint Venture" shall mean any Joint Venture in
which the Borrower, either directly or through one or more Wholly-Owned
Subsidiaries has a 50% equity interest and whose debt is included, in
accordance with generally accepted accounting principles, on the consolidated
balance sheet of the Borrower (whether or not directly assumed or guaranteed by
the Borrower of any of its other Subsidiaries).
"Consolidated Net Income" shall mean, for any Person and
period, the net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis (after deduction for minority
interests), provided that (i) in determining Consolidated Net Income of the
Borrower, the net income (or loss) of any other Person which is not a
Subsidiary of the Borrower (including any Unrestricted Subsidiary) or is
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accounted for by the Borrower by the equity method of accounting shall be
included only to the extent of the payment of dividends or distributions by
such other Person to the Borrower or a Subsidiary thereof during such period
and (ii) the net income (or loss) of any other Person acquired by such
specified Person or a Subsidiary of such Person in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded.
"Consolidated Net Worth" shall mean on any date of
determination thereof the consolidated net worth of the Borrower and its
Subsidiaries determined as of such date of determination.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Continuing Directors" shall mean the directors of the
Borrower on the Initial Borrowing Date, the two directors of the Borrower
selected by KKR within sixty days following the Initial Borrowing Date and each
other director, if such other director's nomination for election to the Board
of Directors of the Borrower is recommended by a majority of the then
Continuing Directors or is recommended by a committee of the Board of Directors
a majority of which is composed of the then Continuing Directors.
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"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Designated Event" shall mean the receipt of cash proceeds by
the Borrower or any of its Wholly-Owned Subsidiaries from (i) any termination
payment or liquidated damages under, or in connection with, the termination of
any lease, management contract or franchise agreement, (ii) any sale or
liquidation by the Borrower or a Wholly-Owned Subsidiary thereof of any
Existing Doubletree Investment, (iii) any sale or liquidation by the Borrower
or a Wholly-Owned Subsidiary thereof of any Hotel Investment made after the
Initial Borrowing Date, (iv) any principal repayment of any loan or advance
made to the Borrower or a Wholly-Owned Subsidiary thereof by any Joint Venture
or other Person (other than the Borrower or a Subsidiary Guarantor) (except for
regularly occurring repayments made in the ordinary course of business and
except to the extent that same constitutes a Specified Red Lion Event), or (v)
any redemptions, distributions or dividends made by a Joint Venture to the
Borrower or a Wholly-Owned Subsidiary thereof (other than regularly occurring
distributions or dividends made in the ordinary course of business);
"Designated Hotel Properties" shall mean the Hotel Properties
owned by the Borrower and its Wholly-Owned Subsidiaries as set forth on
Schedule XII, and any replacement Hotel Properties purchased by the Borrower
and its Wholly-Owned Subsidiaries with the Net Sale Proceeds from any sale of
one or more of the Hotel Properties set forth on such Schedule XIII and/or from
the sale of one or more of such replacement Hotel Properties.
"Determination Date" shall have the meaning provided in the
definition of "Pro Forma Basis."
"Dividend" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than com-
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mon stock of such Person) or cash to its stockholders or partners as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock or any partnership
interests outstanding on or after the Initial Borrowing Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock or any partnership interests of such Person
outstanding on or after the Initial Borrowing Date (or any options or warrants
issued by such Person with respect to its capital stock). Without limiting the
foregoing, "Dividends" with respect to any Person shall also include all
payments made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any
similar plans or setting aside of any funds for the foregoing purposes.
"Documents" shall mean the Credit Documents, the Equity
Financing Documents, the Acquisition Documents and the Refinancing Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower incorporated or organized in the United States or any State or
territory thereof.
"Doubletree Master REIT Lease" shall mean the Consolidated
Lease Amendment, dated as of February 27, 1996, between RFS Partnership, L.P.,
as lessor, and RFS, Inc., as lessee.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in
Section 5.05.
"End Date" shall mean, for any Margin Reduction Period, the
last day of such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environ-
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mental Law (hereafter, "Claims"), including, without limitation, (a) any and
all Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"Equity Financing" shall mean, collectively, (i) the Public
Equity Offering and (ii) the Private Equity Offering.
"Equity Financing Documents" shall mean each of the documents
and other agreements entered into in connection with the Equity Financing.
"Equity Rollover" shall mean the issuance by the Borrower of
shares of its common stock for the account of the selling shareholders of Red
Lion as part of the Acquisition.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
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"Eurodollar Loan" shall mean each Loan designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the arithmetic average
(rounded upward to the nearest 1/100th of 1%) of the offered quotation to
first-class banks in the New York interbank Eurodollar market determined by
each Reference Bank for Dollar deposits of amounts in immediately available
funds comparable to the outstanding principal amount of the Eurodollar Loan of
such Reference Bank with maturities comparable to the Interest Period
applicable to such Eurodollar Loan commencing two Business Days thereafter as
of 11:00 A.M. (New York time) on the date which is two Business Days prior to
the commencement of such Interest Period, divided (and rounded upward to the
nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D); provided that if one
or more of the Reference Banks fail to provide the Administrative Agent with
its aforesaid rate, then the Eurodollar Rate shall be determined based on the
rate or rates provided to the Administrative Agent by the other Reference Bank
or Reference Banks.
"Event of Default" shall have the meaning provided in Section
10.
"Excess Cash Flow" shall mean, for any period, the remainder
of (i) Adjusted Consolidated Cash Income for such period minus (ii) the sum of
(a) the amount of all Capital Expenditures, Hotel Acquisitions and Hotel
Investments made by the Borrower and its Subsidiaries pursuant to Sections
9.07(a), (b), (e) and (g) during such period, (b) the aggregate principal
amount of permanent principal payments of Indebtedness for borrowed money of
the Borrower and its Subsidiaries (other than repayments pursuant to which any
other Indebtedness is being refinanced with proceeds of Indebtedness, equity or
asset sales, and repayments of Loans, provided that repayments of Loans shall
be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Scheduled Repayment under Section 4.02(b) or (c) or
(y) made as a voluntary prepayment (other than a voluntary prepayment made
pursuant to the proviso in Section 4.01(a)(v)) (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment))
during such period and (c) any amount by which Adjusted Consolidated Cash
Income was increased during such period as a result of the portion of any
Designated Event that required a repayment pursuant to Section 4.02(i).
"Excess Cash Payment Date" shall mean the date occurring 100
days after the last day of each fiscal year of the Borrower (beginning with its
fiscal year ending December 31, 1997).
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"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.
"Existing Doubletree Investments" shall mean those Investments
of the Borrower and its Subsidiaries (other than Red Lion and its Subsidiaries)
existing on the Initial Borrowing Date and set forth on Schedule XVI.
"Existing Glendale Debt" shall mean the $40,000,000 in
aggregate principal amount of loans that remain outstanding to the Borrower's
Joint Venture in Glendale, California on the Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in
Section 7.22.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"Existing Red Lion Investments" shall mean those Investments
of Red Lion and its Subsidiaries existing on the Initial Borrowing Date and set
forth on Schedule XVII.
"Existing Red Lion Joint Ventures" shall mean the eight Red
Lion Joint Ventures designated as such on Schedule VI.
"Facing Fee" shall have the meaning provided in Section
3.01(d).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees
of the Borrower or such Subsidiaries residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of
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retirement or payments to be made upon termination of employment, and which
plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower other than a Domestic Subsidiary.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, the Release of which is
prohibited, limited or regulated by any governmental authority.
"Hotel Acquisition" shall mean an acquisition of a fee or
leasehold interest in a Hotel Property.
"Hotel Investment" shall mean an Investment by means of (i)
the acquisition of all or portion of the equity interest of a Person that
directly or indirectly owns, leases, manages or franchises one or more hotel or
motel properties or is otherwise engaged in the hotel or hospitality business,
(ii) the making of a loan, capital contribution or other advance or investment
in, to or for the benefit of a Subsidiary, an Unrestricted Subsidiary or a
Joint Venture of the Borrower that owns, leases, manages or franchises one or
more Hotel Properties, (iii) the making of an Investment in any Person in
consideration for the obtaining or retaining by Borrower or a Subsidiary of the
Borrower of the right to manage, lease or franchise one or more hotel or motel
properties, or in the reasonable expectation that such Investment will
materially enhance the ability of the Borrower or a Subsidiary of the Borrower
to obtain or to retain the right to manage, lease or franchise one or more
hotel or motel properties, (iv) the acquisition by the Borrower or a Subsidiary
of the Borrower of one or more existing management agreements, leases or
licensing or franchise rights with respect to a hotel or motel property or
properties, (v) any cash consideration paid by the Borrower or a Subsidiary
thereof to any Person (other than to the Borrower or a Wholly-Owned Subsidiary
thereof) in connection with any transaction permitted under Section 9.02(xv),
(vi) any drawing under a letter of credit (including any Letter of Credit)
issued for the account of the Borrower or any Subsidiary thereof and for the
benefit of any Person other than the Borrower or a Wholly-Owned Subsidiary
thereof or (vii) the payment by the Borrower or a Subsidiary thereof in respect
of any Contingent Obligation incurred by the Borrower or such Subsidiary for
the benefit of any Person not a Subsidiary Guarantor.
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"Hotel Property" shall mean each hotel or motel owned or
leased by the Borrower or any of its Subsidiaries or Joint Ventures (including
the furniture, fixtures and equipment thereon).
"Hotel Property Management Agreements" shall have the meaning
provided in Section 5.05.
"Immaterial Subsidiary" shall mean any Subsidiary of the
Borrower which (x) accounted for less than $2,500,000 of Consolidated EBITDA of
the Borrower for the Test Period then last ended and which, if aggregated with
all other Subsidiaries of the Borrower with respect to which an event described
under Section 10.05 or 10.09 has occurred and is continuing, would have
accounted for less than $2,500,000 of Consolidated EBITDA of the Borrower for
the Test Period then last ended and (y) would not constitute a "significant
subsidiary" as defined in Regulation S-X under the Securities Act and the
Securities Exchange Act and which, if aggregated with all other Subsidiaries of
the Borrower with respect to which an event described under Section 10.05 or
10.09 has occurred and is continuing, would not constitute a "significant
subsidiary" as defined in the Securities Act and the Securities Exchange Act.
"Inactive Subsidiary" shall mean any Wholly-Owned Subsidiary
of the Borrower that does not conduct any business activities.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the maximum amount available to be drawn under
all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (provided, that, if the
Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (iv) the aggregate amount required to be
capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the
foregoing, Indebtedness shall not include trade payables and accrued expenses
incurred by any Person in accordance with customary practices and in the
ordinary course of business of such Person.
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"Indebtedness to be Refinanced" shall mean all Indebtedness
set forth on Schedule IV which is to be repaid in full as part of the
Refinancing.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Loans occurs.
"Intercompany Loan" shall have the meaning provided in Section
9.05(viii).
"Intercompany Note" shall mean a promissory note, in the form
of Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean (i) in the case of
Tranche A Term Loan, Revolving Loans and Swingline Loans, initially zero, and
from and after any Start Date occurring after the last day of the first fiscal
quarter of the Borrower ended after the Initial Borrowing Date to and including
the corresponding End Date:
(A) 1/4 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 4.50:1.00 and none of the conditions set forth
in clauses (B), (C), (D), (E) and (F) below are satisfied;
(B) 3/8 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 4.25:1.00 and none of the conditions set forth
in clauses (C), (D), (E) and (F) below are satisfied;
(C) 1/2 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 4.00:1.00 and none of the conditions set forth
in clauses (D), (E) and (F) below are satisfied;
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(D) 5/8 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 3.75:1.00 and none of the conditions set forth
in clauses (E) and (F) below are satisfied;
(E) 3/4 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 3.50:1.00 and the condition set forth in
clause (F) below is not satisfied; or
(F) 7/8 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 3.25:1.00; and
(ii) in the case of Tranche B Term Loans, initially zero, and from and after
any Start Date occurring after the last day of the first fiscal quarter of the
Borrower ended after the Initial Borrowing Date to and including the
corresponding End Date:
(A) 1/4 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 4.50:1.00.
Notwithstanding anything to the contrary above in this definition, (i) for the
period from the Initial Borrowing Date to but not including the first Start
Date after the Initial Borrowing Date, the Interest Reduction Discount shall be
____ of 1% and (ii) the Interest Reduction Discount for all Loans shall be
reduced to zero at all times when a Default of the type described in Section
10.01 or 10.05 shall exist, or any Event of Default shall exist.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean Scotiabank and any other Bank which at
the request of the Borrower and with the consent of the Agents (which consent
shall not be unreasonably withheld) agrees, in such Bank's sole discretion, to
become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2. The sole Issuing Bank on the Initial Borrowing Date is Scotiabank.
"Joint Venture" shall mean any Person in which the Borrower or
any Subsidiary of the Borrower owns, directly or indirectly, more than .1% but
less than 100% of the voting or equity interests or in which the Borrower or a
Subsidiary of the Borrower has general partnership liability.
"Joint Venture Agreements" shall have the meaning provided in
Section 5.05.
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"KKR" shall mean Kohlberg Kravis Roberts & Co., L.P., a Delaware
limited partnership.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries or Joint Ventures with respect to workers
compensation, surety bonds and other similar statutory obligations and (ii)
such other obligations of the Borrower or any of its Subsidiaries or Joint
Ventures as are otherwise permitted to exist pursuant to (or otherwise not
restricted by) the terms of this Agreement.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the then
most recently ended Test Period.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Liquor License Subsidiary" shall mean any Wholly-Owned
Subsidiary of the Borrower the only business of which is to hold one or more
liquor licenses for hotels owned or leased by the Borrower and/or any of its
Subsidiaries.
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term
Loan, each Revolving Loan and each Swingline Loan.
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"Majority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 8.01(a) or (b), as the case may be, and which shall end on the earlier
of (i) the date of actual delivery of the next financial statements pursuant to
Section 8.01(a) or (b), as the case may be, and (ii) the latest date on which
the next financial statements are required to be delivered to Section 8.01(a)
or (b), as the case may be, provided that the first Margin Reduction Period
shall commence no earlier than the date of delivery of the first set of
financial statements pursuant to Section 8.01(b) after the Initial Borrowing
Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Leases" shall have the meaning provided in Section
5.05.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date,
the Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may
be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Merger Sub" shall mean RLH Acquisition Corp., a Delaware
corporation and a Wholly-Owned Subsidiary of the Borrower.
"Minimum Borrowing Amount" shall mean (i) for Term Loans,
$5,000,000, (ii) for Revolving Loans, $2,500,000 and (iii) for Swingline Loans,
$250,000.
"Minimum Consolidated Net Worth" shall mean, at any time, the sum
of (i) $680,000,000 plus (ii) 50% of Consolidated Net Income of the Borrower,
if positive, for each fiscal year of the Borrower (commencing with the fiscal
year ending December 31, 1997), it being understood that any increase to
Minimum Consolidated Net Worth shall be effective as of the last day of each
fiscal year of the Borrower.
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"Mortgage" shall mean each mortgage, deed to secure debt or deed
of trust pursuant to which any Credit Party shall have granted to the
Collateral Agent a mortgage lien on such Credit Party's Mortgaged Property.
"Mortgage Policy" shall have the meaning provided in Section
5.14.
"Mortgaged Property" shall mean each Real Property owned or
leased by any Credit Party and designated as a Mortgaged Property on Schedule
III or pursuant to Section 8.12.
"MSSF" shall mean Morgan Stanley Senior Funding, Inc., in its
individual capacity.
"Multiemployer Plan" shall mean a plan as defined in Section
4001(a)(3) of ERISA with respect to which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate has an obligation to contribute to or any
liability.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance
or sale of any equity by any Person or any capital contribution to such Person,
the cash proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) received by such Person from the
respective sale of issuance of its equity or from the respective capital
contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents or any Indebtedness
owed to the Borrower or a Subsidiary thereof) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable
as a result of such Asset Sale.
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"New Subordinated Note Documents" shall mean the New Subordinated
Notes, any indenture or purchase agreement related thereto and each of the
other documents entered into in connection therewith.
"New Subordinated Notes" shall have the meaning provided in
Section 9.04(x).
"Non-Defaulting Bank" shall mean and include each Bank other than
a Defaulting Bank.
"Non-Recourse Indebtedness" shall mean, with respect to any
Specified Subsidiary, Indebtedness incurred by such Specified Subsidiary which
is (i) secured only by the Hotel Property being developed or acquired by such
Specified Subsidiary, including any fixtures, furniture and equipment related
thereto and (ii) is non-recourse to the Borrower and its other Subsidiaries and
in which neither the Borrower nor any of its other Subsidiaries have provided
any credit support.
"Non-Subsidiary Joint Venture" shall mean any Joint Venture of
the Borrower that is not also a Subsidiary of the Borrower.
"Note" shall mean each Tranche A Term Note, each Tranche B Term
Note, each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 600 Peachtree Street, N.E., Suite 2700, Atlanta, Georgia 30308,
Attention: ____________, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to any Agent, the
Collateral Administrative Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Other Creditor" shall have the meaning provided in the Security
Documents.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
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"Payment Office" shall mean the office of the Administrative
Agent located at 600 Peachtree Street, N.E., Suite 2700, Atlanta, Georgia
30308, or such other office as the Administrative Agent may hereafter designate
in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be reasonably acceptable to the Agents in their reasonable
discretion.
"Permitted Holders" shall mean GE Investment Management
Incorporated and its Affiliates and KKR, its general partners and/or its
Affiliates.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, other than a multiemployer plan as defined in Section 4001(a)(3) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate or with respect to which any such entity has liability.
"Pledge Agreement" shall have the meaning provided in Section
5.11.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Notes" shall have the meaning provided in the Pledge
Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer.
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The Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Private Equity Offering" shall mean the issuance by the Borrower
of shares of its common stock to General Electric Pension Trust or an affiliate
thereof pursuant to the respective Equity Financing Documents.
"Pro Forma Basis" shall mean, with respect to any Hotel
Acquisition, Hotel Investment, Asset Sale, Redesignation Event or incurrence of
Indebtedness, the calculation of the consolidated results of the Borrower and
its Subsidiaries otherwise determined in accordance with this Agreement as if
the respective Hotel Acquisition, Hotel Investment, Asset Sale, Redesignation
Event or Indebtedness (and all other Indebtedness incurred or Hotel
Acquisitions, Hotel Investments, Redesignation Event and/or Asset Sales
effected during the respective Calculation Period or thereafter and on or prior
to the date of determination) (each such date, a "Determination Date") had been
effected on the first day of the respective Calculation Period; provided that
all such calculations shall be made on a basis consistent with the requirements
of Regulation S-X under the Securities Act and the Exchange Act and shall take
into account the following assumptions:
(i) interest expense attributable to interest on any
Indebtedness (whether existing or being incurred) bearing a floating
interest rate shall be computed as if the rate in effect on the date
of computation (taking into account any Interest Rate Protection
Agreement applicable to such Indebtedness if such Interest Rate
Protection Agreement has a remaining term in excess of 12 months) had
been the applicable rate for the entire period; and
(ii) pro forma effect shall be given to all Asset Sales,
Redesignation Events, Hotel Acquisitions and Hotel Investments (by
excluding or including, as the case may be, the historical financial
results for the respective Hotel Properties) that occur during such
Calculation Period or thereafter and on or prior to the Determination
Date (including any Indebtedness assumed or acquired in connection
therewith) as if they had occurred on the first day of such
Calculation Period.
"Projections" shall mean the projections prepared by the
Borrower and set forth in the Confidential Information Memorandum.
"Public Equity Offering" shall mean the issuance by the
Borrower of shares of its common stock through a registered public offering
pursuant to the respective Equity Financing Documents (including as a result of
the exercise by the respective underwriters of their over-allotment option).
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"Qualified Preferred Stock" shall mean any preferred stock of
the Borrower, the express terms of which shall provide that Dividends thereon
shall not be required to be paid in cash at any time that such cash payment
would be prohibited by the terms of this Agreement (and any refinancings,
replacements or extensions hereof) and in either case which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (including an event which
would constitute a Change of Control), cannot mature (excluding any maturity as
the result of an optional redemption by the issuer thereof) and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, and
is not redeemable, or required to be repurchased (including, without
limitation, upon the occurrence of an event which would constitute a Change of
Control), in whole or in part, on or prior to the first anniversary of the
Tranche B Term Loan Maturity Date.
"Quarterly Payment Date" shall mean each March 31, June 30,
September 30 and December 31 occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any
of its Subsidiaries or Joint Ventures of any cash insurance proceeds or
condemnation awards payable (i) by reason of theft, loss, physical destruction,
damage, taking or any other similar event with respect to any property or
assets of the Borrower or any of its Subsidiaries or Joint Ventures and (ii)
under any policy of insurance required to be maintained under Section 8.03.
"Redesignation Event" shall mean the designation by the
Borrower of a Specified Subsidiary as an Unrestricted Subsidiary in accordance
with the definition of Unrestricted Subsidiary and so long as (i) the Borrower
gives the Agents prior written notice thereof, (ii) no Default or Event of
Default then exists or would result therefrom, (iii) all transactions between
the Specified Subsidiary to be so designated and its Affiliates remaining in
effect are permitted pursuant to Section 9.06, (iv) any Investment made by the
Borrower or any Subsidiary thereof to such Specified Subsidiary shall
thereafter be considered as having been a Hotel Investment (to the extent not
previously included as a Hotel Investment) made on the day such Specified
Subsidiary is designated an Unrestricted Subsidiary in the amount of the
greater of (x) the fair market value (as determined by the Board of Directors
of the Borrower in good faith) of the equity interests of such Specified
Subsidiary held by the Borrower and its Subsidiaries on such date, and (y) the
amount of the Investments made by the Borrower and any of its Subsidiaries in
such Specified Subsidi-
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ary and (v) (I) based on calculations made by the Borrower on a Pro Forma Basis
after giving effect to the respective designation, no Default or Event of
Default will exist under, or would have existed during the Test Period last
reported (or required to be reported pursuant to Section 8.01(a) or (b), as the
case may be) prior to the date of the respective designation pursuant to, the
financial covenants contained in Sections 9.08 through 9.11, inclusive, and
(II) the Borrower shall have delivered to the Agents an officer's certificate
executed by the Chief Financial Officer of the Borrower, certifying to the best
of such officer's knowledge, compliance with the requirements of this clause
(v) and containing the calculations (in reasonable detail) required by this
clause (v).
"Red Lion" shall mean Red Lion Hotels, Inc., a Delaware
corporation.
"Red Lion Master Lease" shall mean the Lease, dated as of
August 1, 1995, between RLH Partnership, L.P., as landlord, and Red Lion, as
tenant.
"Red Lion Master Property Management Agreement" shall mean the
Management Agreement, dated April 6, 1987, between Red Lion Inns Operating L.P.
and RL Acquisition Company.
"Red Lion Properties" shall mean Red Lion Properties, Inc., a
Delaware corporation.
"Reference Banks" shall mean Scotiabank, Bankers Trust Company
and Societe Generale.
"Refinancing" shall mean the repayment in full of, and the
termination of all commitments in respect of, the Indebtedness to be
Refinanced.
"Refinancing Documents" shall mean all of the documents and
agreements entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
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"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans (and, if prior to the termination thereof, Term
Loan Commitments) and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Adjusted RL Percentage of Swingline
Loans and Letter of Credit Outstandings) represent an amount greater than 50%
of the sum of all outstanding Term Loans (and, if prior to the termination
thereof, the Term Loan Commitments) of Non-Defaulting Banks and the Adjusted
Total Revolving Loan Commitment (or after the termination thereof, the sum of
the then total outstanding Revolving Loans of Non-Defaulting Banks, and the
aggregate Adjusted RL Percentages of all Non-Defaulting Banks of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such time).
"Retained Excess Cash Flow Amount" shall mean, for each Excess
Cash Payment Period, an amount equal to 50% of Excess Cash Flow for such Excess
Cash Payment Period less the amount of all Capital Expenditures, Hotel
Acquisitions and Hotel Investments previously made pursuant to Section 9.07(f).
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"Retained Net Equity Proceeds" shall mean the 50% of all Net
Equity Proceeds not required to be applied pursuant to Section 4.02(d).
"Retained Net Equity Proceeds Amount" shall mean, at any time,
an amount equal to 50% of all Net Equity Proceeds theretofore received (other
than the first $250,000,000 of Net Equity Proceeds received from the Equity
Fiancning) less (i) the amount of all voluntary prepayments previously made
pursuant to the proviso of Section 4.01(a)(v) utilizing the Retained Net Equity
Proceeds Amount, (ii) the amount of all Retained Net Equity Proceeds from the
Equity Financing used to make payments owing in connection with the Transaction
and (iii) the amount of all Capital Expenditures, Hotel Acquisitions and Hotel
Investments previously made pursuant to Section 9.07(d).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 13.04(b).
"Revolving Loan Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"Revolving Loan Maturity Date" shall mean November 15, 2002.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RFS" shall mean RFS, Inc., a Tennessee corporation.
"RFS REIT" shall mean RFS Hotel Investors, Inc., a Tennessee
corporation.
"RFS REIT Equity" shall mean the 973,684 shares of convertible
preferred stock in the RFS REIT and the limited partnereship (less than 1%) in
RFS Partnership, L.P., in each case owned by RFS on the Initial Borrowing Date.
"RFS REIT Leases" shall mean the master lease arrangement
pursuant to which RFS leases, as tenant, 49 hotels for RFS REIT, as landlord.
"RFS Sub" shall have the meaning provided in Section 9.05(xi).
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"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"Scheduled Repayments" shall have the meaning provided in
Section 4.02(c).
"Scotiabank" shall mean The Bank of Nova Scotia, in its
individual capacity.
"SEC" shall have the meaning provided in Section 8.01(g).
"Second Term Loan Borrowing Date" shall mean a single date
occurring after the Initial Borrowing Date and on or prior to the Tranche A
Term Loan Commitment Termination Date on which Tranche A Term Loans are
incurred to refinance the outstanding Existing Glendale Debt to the extent that
same constitutes Indebtedness to be Refinanced.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 5.12.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean and include each of the
Security Agreement, the Pledge Agreement and each Mortgage and, after the
execution and delivery thereof, each Additional Security Document.
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"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Specified Existing Red Lion Investment Proceeds" shall mean
cash proceeds received by the Borrower or a Subsidiary thereof from a Specified
Red Lion Event.
"Specified Red Lion Event" shall mean (i) any sale or
liquidation of an Existing Red Lion Investment, (ii) any principal repayment of
any loan or advance in respect of an Existing Red Lion Investment (except for
regularly occurring repayments made in the ordinary course of business), (iii)
any redemption, distribution or dividend made in respect of an Existing Red
Lion Investment (other than any regularly occurring distribution or dividend
made in the ordinary course of business) or (iv) any repayment of principal of
any loan or advance made to the Borrower or a Subsidiary thereof by the Joint
Venture holding the Existing Glendale Debt to the extent that the proceeds in
the original loan or advance were used to refinance the Existing Glendale Debt
and were made with proceeds of Loans.
"Specified Subsidiary" shall mean any Subsidiary of the
Borrower created after the Initial Borrowing Date, so long as such Subsidiary
has no assets other than the Hotel Property to be developed and/or acquired by
such Subsidiary with Non-Recourse Indebtedness incurred pursuant to Section
9.04(xi).
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall mean, with respect to any Margin Reduction
Period, the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall, at any time,
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person, (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest at the time and
(iii) any Consolidated Joint Venture. Notwithstanding the foregoing (x) (and
except for purposes of the definition of Unrestricted Subsidiary contained
herein), an Unrestricted Subsidiary shall be deemed not to be a Subsidiary of
the Borrower or any of its other Subsidiaries for purposes of this
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Agreement and (y) Arlington Hotel Corp. shall not be considered a Subsidiary of
the Borrower for purposes of this Agreement so long as neither the Borrower nor
any of its Subsidiaries own directly (and not by pledge), in the aggregate,
more than 30% of the total equity interest in Arlington Hotel Corp. and at
least 70% of the voting rights in Arlington Hotel Corp. reside with the
existing lender to Arlington Hotel Corp. or an assignee of such lender.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic
Subsidiary of the Borrower and, to the extent required by Section 8.13, each
Wholly-Owned Foreign Subsidiary of the Borrower, in either case other than (i)
any Liquor License Subsidiary, (ii) any Inactive Subsidiary, (iii) any
Specified Subsidiary that has incurred Non-Recourse Indebtedness, (iv) any
Wholly-Owned Subsidiary designated as not being a Subsidiary Guarantor on
Schedule VI so long as such Wholly-Owned Subsidiary does not have any
additional material assets other than those assets held by it on the Initial
Borrowing Date, (v) any Wholly-Owned Subsidiary of the Borrower established
after the Initial Borrowing Date for the sole purpose of holding a joint
venture interest in a Joint Venture to the extent that (and for so long as)
such Wholly-Owned Subsidiary is contractually required to maintain a minimum
net worth and (vi) Red Lion Properties, RFS and RFS Sub.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.13.
"Supermajority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained therein
were changed to "66-2/3%."
"Swingline Bank" shall mean Scotiabank.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(d).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Agent" shall mean MSSF, in its capacity as
Syndication Agent and Arranger for the Banks hereunder.
"Syndication Date" shall have the meaning provided in Section
1.01(a).
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
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"Taxes" shall have the meaning provided in Section 4.04(a).
"Temporary Hotel Acquisition Transaction" shall mean the
acquisition by the Borrower or a Wholly-Owned Subsidiary thereof of a Hotel
Property with the intention of selling such Hotel Property to a third Person
(other than to the Borrower or a Subsidiary thereof) within 120 days following
the date of such acquisition, so long as (i) at the time of such acquisition,
the Borrower delivers a certificate to the Agents stating that the Borrower or
such Wholly-Owned Subsidiary is entering into a Temporary Hotel Acquisition
Transaction and setting forth in such certificate all material information
relating thereto (including the purchase price of such Hotel Property) and (ii)
the sale to such third Person occurs within 120 days of the initial acquisition
of such Hotel Property and for a purchase price at least equal to the original
purchase price paid by the Borrower or the respective Wholly-Owned Subsidiary
for such Hotel Property.
"Term Loan" shall mean each Tranche A Term Loan and each
Tranche B Term Loan.
"Term Loan Borrowing Date" shall mean the Initial Borrowing
Date and the Second Term Loan Borrowing Date.
"Term Loan Commitment" shall mean each Tranche A Term Loan
Commitment and each Tranche B Term Loan Commitment, with the Term Loan
Commitment of any Bank at any time to equal the sum of its Tranche A Term Loan
Commitment and Tranche B Term Loan Commitment as then in effect.
"Term Loan Commitment Commission" shall have the meaning
provided in Section 3.01(a).
"Term Loan Percentage" shall mean the Tranche A Term Loan
Percentage or the Tranche B Term Loan Percentage, as applicable.
"Test Date" shall mean, with respect to any Start Date, the
last day of the most recent fiscal quarter or year, as the case may be, of the
Borrower ended immediately prior to such Start Date.
"Test Period" shall mean (i) for purposes of calculating
Consolidated EBITDA under Sections 9.09 and 9.10 and under the definition of
Interest Reduction Discount, the period of four consecutive fiscal quarters of
the Borrower then last ended (in each case taken as one accounting period, and
(ii) for all other purposes of this Agreement, (x) for any determination made
on and prior to December 30, 1997, the period from January 1, 1997 to the last
day of the fiscal quarter of the Borrower the last ended (in each case taken as
one accounting period) and (y) for any determination made thereafter, the
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period of four consecutive fiscal quarters of the Borrower then last ended (in
each case taken as one accounting period).
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum
of the Total Tranche A Term Loan Commitment and the Total Tranche B Term Loan
Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any
time, the sum of the Tranche A Term Loan Commitments of each of the Banks.
"Total Tranche B Term Loan Commitment" shall mean, at any
time, the sum of the Tranche B Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect, less (y) the sum of the aggregate principal amount
of Revolving Loans and Swingline Loans then outstanding plus the then aggregate
amount of Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being four separate Tranches,
i.e., Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and Swingline
Loans.
"Tranche A Term Loan" shall have the meaning provided in
Section 1.01(a).
"Tranche A Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Tranche A Term Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Tranche A Term Loan Commitment Termination Date" shall mean
the earlier of (x) March 17, 1997 and (y) the Second Term Loan Borrowing Date.
"Tranche A Term Loan Maturity Date" shall mean November 15,
2002.
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"Tranche A Term Loan Percentage" shall mean, at any time, a
fraction (expressed as a percentage) the numerator of which is equal to the sum
of the aggregate principal amount of all Tranche A Term Loans outstanding at
such time plus the Total Tranche A Term Loan Commitment at such time and the
denominator of which is equal to the sum of the aggregate principal amount of
all Term Loans outstanding at such time plus the Total Term Loan Commitment at
such time.
"Tranche A Term Loan Scheduled Repayment" shall have the
meaning provided in Section 4.02(b).
"Tranche A Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b).
"Tranche A Term Note" shall have the meaning provided in
Section 1.05(a).
"Tranche B Term Loan" shall have the meaning provided in
Section 1.01(b).
"Tranche B Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Tranche B Term Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 13.04(b).
"Tranche B Term Loan Maturity Date" shall mean May 15, 2004.
"Tranche B Term Loan Percentage" shall mean, at any time, a
fraction (expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of all B Term Loans outstanding at such time (or
prior to the Initial Borrowing Date, the Total Tranche B Term Loan Commitment
at such time) and the denominator of which is equal to the sum of the aggregate
principal amount of all Term Loans outstanding at such time plus the Total Term
Loan Commitment at such time.
"Tranche B Term Loan Scheduled Repayment" shall have the
meaning provided in Section 4.02(c).
"Tranche B Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(c).
"Tranche B Term Note" shall have the meaning provided in
Section 1.05(a).
"Transaction" shall mean, collectively, (i) the Acquisition,
(ii) the Equity Financing, (iii) the Equity Rollover, (iv) the incurrence of
Loans on the Initial Borrowing
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Date, (v) the Refinancing and (vi) the payment of fees and expenses owing in
connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, $5,000,000 or greater, by which the actuarial present value of the
accumulated plan benefits under the Plan as of the close of its most recent
plan year exceeds the fair market value of the assets allocable thereto, each
determined in accordance with Statement of Financial Accounting Standards No.
87, based upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank, at any time, shall mean such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of
Revolving Loans made by such Bank and (ii) such Bank's Adjusted RL Percentage
of the Letter of Credit Outstandings.
"Unrestricted Subsidiary" shall mean any Subsidiary of the
Borrower that is acquired or created after the Initial Borrowing Date and is
designated by the Borrower at the time of the acquisition or creation thereof
as an Unrestricted Subsidiary hereunder by written notice to the Agents and
shall include any Subsidiary of such Unrestricted Subsidiary; provided that the
Borrower shall only be permitted to designate a Subsidiary as an Unrestricted
Subsidiary so long as (i) no Default or Event of Default then exists or would
result therefrom, (ii) such Unrestricted Subsidiary shall be capitalized (to
the extent capitalized by the Borrower or any of its Subsidiaries) through cash
Hotel Investments as permitted by, and in compliance with, Section 9.07, (iii)
such Unrestricted Subsidiary does not own any capital stock of or other equity
interests in, or have any Lien on any property of, the Borrower or any
Subsidiary of the Borrower other than a Subsidiary of the Unrestricted
Subsidiary and (iv) any Indebtedness of such Unrestricted Subsidiary is
expressly made non-recourse to the Borrower or any of its other Subsidiaries.
Notwithstanding the foregoing, the Borrower may designate any Specified
Subsidiary that has incurred Non-Recourse Indebtedness as an Unrestricted
Subsidiary so long as (x) clauses (iii) and (iv) of the proviso in the
preceding sentence are satisfied with respect to
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such Specified Subsidiary and (y) the conditions in the definition of
Redesignation Event are satisfied.
"U.S. Internal Revenue Service Forms" shall have the meaning
provided in Section 4.04(b).
"Waivable Mandatory Repayment" shall have the meaning provided
in Section 4.02(m).
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Domestic
Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Foreign
Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Administrative Agent and the Syndication
Agent.
12.01 Appointment. The Banks hereby designate Scotiabank as
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" also shall include Scotiabank in its capacity as Collateral
Administrative Agent pursuant to the Security Documents) to act as specified
herein and in the other Credit Documents. The Banks hereby designate MSSF as
Syndication Agent (for purposes of this Section 12, the term "Syndication
Agent" also shall include MSSF in its capacity as Arranger) to act as specified
herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent and the Syndication
Agent to take such action on its behalf under the provisions of this Agreement,
the other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent and the Syndication Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. The Administrative
Agent and the Syndication Agent may perform any of their duties hereunder by or
through its respective officers, directors, agents, employees or affiliates.
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12.02 Nature of Duties. Neither the Administrative Agent nor
the Syndication Agent in their capacity as such shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither the Administrative Agent, the Syndication
Agent in their capacity as such nor any of their respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Administrative Agent and
the Syndication Agent shall be mechanical and administrative in nature; neither
the Administrative Agent nor the Syndication Agent shall have by reason of this
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank or the holder of any Note; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Administrative Agent or the Syndication Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent and the
Syndication Agent. Independently and without reliance upon the Administrative
Agent or the Syndication Agent, each Bank and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the
Borrower and its Subsidiaries and Joint Ventures in connection with the making
and the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and Joint Ventures and, except as expressly
provided in this Agreement, neither the Administrative Agent nor the
Syndication Agent shall have any duty or responsibility, either initially or on
a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
Neither the Administrative Agent nor the Syndication Agent shall be responsible
to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or any of its Subsidiaries
or Joint Ventures or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of the
Borrower or any of its Subsidiaries or Joint Ventures or the existence or
possible existence of any Default or Event of Default.
12.04 Certain Rights of the Agents. If any Agent shall
request instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, such Agent shall be entitled
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to refrain from such act or taking such action unless and until such Agent
shall have received instructions from the Required Banks; and such Agent shall
not incur liability to any Person by reason of so refraining. Without limiting
the foregoing, no Bank or the holder of any Note shall have any right of action
whatsoever against any Agent as a result of such Agent acting or refraining
from acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks.
12.05 Reliance. The Administrative Agent and the Syndication
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that the Administrative
Agent or the Syndication Agent believed to be the proper Person, and, with
respect to all legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent or the Syndication Agent, as the case may
be.
12.06 Indemnification. To the extent the Administrative
Agent or the Syndication Agent is not reimbursed and indemnified by the
Borrower or any of its Subsidiaries, the Banks will reimburse and indemnify the
Administrative Agent and the Syndication Agent, in proportion to their
respective "percentages" as used in determining the Required Banks, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent or the Syndication Agent in performing its respective
duties hereunder or under any other Credit Document, in any way relating to or
arising out of this Agreement or any other Credit Document; provided that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's or the Syndication Agent's gross
negligence or willful misconduct.
12.07 The Administrative Agent and the Syndication Agent in
their Individual Capacity. With respect to its obligation to make Loans, or
issue or participate in Letters of Credit, under this Agreement, the
Administrative Agent and the Syndication Agent shall have the rights and powers
specified herein for a "Bank" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "Majority Banks," "Supermajority Banks," "holders of
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent and the Syndication Agent in their
individual capacity. The Administrative Agent and the Syndication Agent and
their affiliates may accept deposits from, lend money to, and generally engage
in any kind of banking, investment banking, trust or other business with, or
provide debt financing, equity capital or other services (including financial
advisory services) to, any Credit Party or any Affiliate of any Credit
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Party (or any Person engaged in a similar business with any Credit Party or any
Affiliate thereof) as if they were not performing the duties specified herein,
and may accept fees and other consideration from any Credit Party or any
Affiliate of any Credit Party for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.
12.08 Holders. Any Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent and the
Syndication Agent. (a) The Administrative Agent and/or the Syndication Agent
may resign from the performance of all their respective functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days' prior written notice to the Banks and the Borrower (provided
that no such notice shall be required to be given to the Borrower if a Default
or an Event of Default of the type described in Section 10.05 exists with
respect to the Borrower). Such resignation, in the case of the Administrative
Agent, shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below, and
such resignation, in the case of the Syndication Agent, shall take effect
immediately.
(b) Upon any such notice of resignation by the Administrative
Agent, the Required Banks shall appoint a successor Administrative Agent
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower (it being understood and agreed that any
Non-Defaulting Bank is deemed to be acceptable to the Borrower).
(c) If a successor Administrative Agent shall not have been
so appointed within such 15 Business Day period, the Administrative Agent with
the consent of the Borrower (which consent shall not be unreasonably withheld
or delayed), shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent hereunder or thereunder until such time, if any,
as the Required Banks appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 60th day after the date such notice
of resignation was given by the Administrative Agent, Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent
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hereunder and/or under any other Credit Document until such time, if any, as
the Required Banks appoint a successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case and of the
Agents's local counsel and consultants) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Agents in connection with
its syndication efforts with respect to this Agreement and of the Agents and,
after the occurrence of an Event of Default, each of the Banks in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agents
and, after the occurrence of an Event of Default, for each of the Banks); (ii)
pay and hold each of the Banks harmless from and against any and all present
and future stamp, excise and other similar documentary taxes with respect to
the foregoing matters and save each of the Banks harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Bank) to pay such taxes; and
(iii) indemnify each Agent and each Bank, and each of their respective
officers, directors, employees, representatives and agents from and hold each
of them harmless against any and all liabilities, obligations (including
removal or remedial actions), losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses and disbursements (including reasonable
attorneys' and consultants' fees and disbursements) incurred by, imposed on or
assessed against any of them as a result of, or arising out of, or in any way
related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not any Agent or any Bank is a party thereto) related to
the entering into and/or performance of this Agreement or any other Credit
Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of the Transaction or any other transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned
or at any time operated by the Borrower or any of its Subsidiaries or Joint
Ventures, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Borrower or any of its Subsidiaries or Joint Ventures, the non-compliance of
any Real Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries or Joint Ventures or any Real Property owned or at any time
operated by the
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Borrower or any of its Subsidiaries or Joint Ventures, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless any Agent or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized (to the extent not prohibited by applicable law) at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held
or owing by such Bank (including, without limitation, by branches and agencies
of such Bank wherever located) to or for the credit or the account of any
Credit Party against and on account of the Obligations and liabilities of the
Credit Parties to such Bank under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Bank pursuant to Section 13.06(b), and all other claims of
any nature or description arising out of or connected with this Agreement or
any other Credit Document, irrespective of whether or not such Bank shall have
made any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured. Notwithstanding anything to
the contrary contained in this Section 13.02, no Bank shall exercise any such
right of set-off without the prior consent of the Agents or the Required Banks
so long as the Obligations shall be secured by any Real Property located in the
State of California, it being understood and agreed, however, that this
sentence is for the sole benefit of the Banks and (notwithstanding anything to
the contrary contained in Section 13.12) may be amended, modified or waived in
any respect by the Required Banks without the requirement of prior notice to or
consent by any Credit Party and does not constitute a waiver of any right
against any Credit Party or against any Collateral.
13.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any
Credit Party, at the address specified opposite its signature below or in the
other relevant Credit Documents; if to any Bank, at its address specified on
Schedule II; if to the Syndication Agent, at the address specified on Schedule
II; and if to the Administrative Agent, at its Notice Office; or, as to any
Credit Party or any Agent, at such other address as shall be designated by such
party in a written notice to the other
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parties hereto and, as to each Bank, at such other address as shall be
designated by such Bank in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to any Agent or any Credit
Party shall not be effective until received by such Agent or such Credit Party.
13.04 Benefit of Agreement; Assignments; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
Banks and, provided further, that, although any Bank may transfer, assign or
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion
of its Commitments hereunder except as provided in Sections 1.13 and 13.04(b))
and the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment, shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided in
the Credit Documents) supporting the Loans hereunder in which such participant
is participating. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit Documents
(the participant's rights against such Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitments and related
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outstanding Obligations hereunder to its parent company and/or any affiliate of
such Bank which is at least 50% owned by such Bank or its parent company or to
one or more Banks or (y) assign all, or if less than all, a portion equal to at
least $5,000,000 in the aggregate for the assigning Bank or assigning Banks, of
such Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that, (i) at such time Schedule I shall be deemed modified to reflect
the Commitments (or outstanding Term Loans, as the case may be) of such new
Bank and of the existing Banks, (ii) upon the surrender of the relevant Notes
by the assigning Bank (or, upon such assigning Bank's indemnifying the Borrower
for any lost Note pursuant to a customary indemnification agreement) new Notes
will be issued, at the Borrower's expense, to such new Bank and to the
assigning Bank upon the request of such new Bank or assigning Bank, such new
Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments (or outstanding Term Loans, as the case may be), (iii) the consent
of each Agent shall be required in connection with any assignment to an
Eligible Transferee pursuant to clause (y) above (which consent shall not be
unreasonably withheld or delayed), (iv) so long as no Default or Event of
Default exists, the consent of the Borrower shall be required in connection
with any assignment to an Eligible Transferee pursuant to clause (y) above
(which consent shall not be unreasonably withheld or delayed), (v) the
Administrative Agent shall receive at the time of each such assignment, from
the assigning or assignee Bank, the payment of a non-refundable assignment fee
of $3,500 and (vi) no such transfer or assignment will be effective until
recorded by the Administrative Agent on the Register pursuant to Section 13.15.
To the extent of any assignment pursuant to this Section 13.04(b), the
assigning Bank shall be relieved of its obligations hereunder with respect to
its assigned Commitments. At the time of each assignment pursuant to this
Section 13.04(b) to a Person which is not already a Bank hereunder and which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee Bank shall,
to the extent legally entitled to do so, provide to the Borrower the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b) (ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, at the time of such assignment, result in increased costs under Section
1.10, 2.06 or 4.04 from those being charged by the respective assigning Bank
prior to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
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(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Syndication Agent, the Collateral
Agent or any Bank in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower
or any other Credit Party and the Administrative Agent, the Syndication Agent,
the Collateral Agent or any Bank shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights, powers and remedies herein or in any other Credit Document
expressly provided are cumulative and not exclusive of any rights, powers or
remedies which the Administrative Agent, the Syndication Agent, the Collateral
Agent or any Bank would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent, the Syndication Agent, the Collateral Agent
or any Bank to any other or further action in any circumstances without notice
or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to waive its pro rata share of any
such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by
all the Banks in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
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(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 13.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
13.07 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, (i) except as otherwise specifically
provided herein, all computations of Excess Cash Flow and Interest Reduction
Discount, and all computations and all definitions used in determining
compliance with Sections 9.08 through 9.11, inclusive, shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements of the Borrower delivered to the Banks pursuant to Section
7.05(a), but adjusted for periods after the Initial Borrowing Date to give
effect to purchase accounting adjustments required under generally accepted
accounting principles in the United States as a result of the Acquisition (and
the valuation of the assets being acquired pursuant to the Acquisition as a
result thereof), (ii) notwithstanding anything to the contrary contained in
preceding clause (i), for each Test Period which ends on or prior to September
30, 1997, the calculation of Consolidated EBITDA will be based on, and in
accordance with, the relevant pro forma income statements delivered pursuant to
Section 8.01(i) and (iii) so long as recourse in respect of the Austin
Obligations is limited solely to the Borrower's Hotel Property in Austin,
Texas, for purposes of the computations described in preceding clause (i),the
Austin Obligations shall be treated as if same did not exist and as if there
were no interest expense applicable thereto.
(b) All computations of interest in respect of Eurodollar
Loans, and all computation of Commitment Commission and other Fees hereunder,
shall be made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day (except that in the case of
Letter of Credit Fees, the last day shall be included) occurring in the period
for which such interest, Commitment Commission or Fees are payable. All
computations of interest in respect of Base Rate Loans hereunder shall be made
on the basis of a year of 365/366 days for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such interest is payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL,
EXCEPT AS OTHERWISE PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
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AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE
BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE
BORROWER. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF ANY AGENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE BORROWER IN ANY OTHER JURISDICTION.
(B) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
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(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective
on the date (the "Effective Date") on which the Borrower, the Administrative
Agent, the Syndication Agent and each of the Banks shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered the same to the Administrative Agent at its Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it. The Administrative
Agent will give the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank) (with Obligations being directly affected in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated expiration date of any Letter of Credit beyond the Revolving Loan
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof (except to the extent
repaid in cash) (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 13.07(a) shall not
constitute a reduction in the rate of interest or any Fees for purposes of this
clause (i)), (ii) release all or substantially all of the Collateral (except as
expressly provided in the Credit Documents) under all the Security Documents,
(iii) amend, modify or waive any provision of this Section 13.12, (iv) reduce
the percentage specified in the definition of Required Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determina-
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tion of the Required Banks on substantially the same basis as the extensions of
Term Loans and Revolving Loan Commitments are included on the Effective Date)
or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall (t) increase the Commitments of
any Bank over the amount thereof then in effect without the consent of such
Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitments shall not constitute an increase of the Commitment of
any Bank, and that an increase in the available portion of any Commitment of
any Bank shall not constitute an increase of the Commitment of such Bank), (u)
without the consent of each Issuing Bank, amend, modify or waive any provision
of Section 2 or alter its rights or obligations with respect to Letters of
Credit, (v) without the consent of each Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of the Agents, (x) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent, (y) without the consent of the Majority Banks of each
Tranche which is being allocated a lesser prepayment, repayment or commitment
reduction as a result of the actions described below (or without the consent of
the Majority Banks of each Tranche in the case of an amendment to the
definition of Majority Banks), amend the definition of Majority Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determination of
the Majority Banks on substantially the same basis as the extensions of Term
Loans and Revolving Loan Commitments are included on the Effective Date) or
alter the required application of any prepayments or repayments (or commitment
reductions), as between the various Tranches, pursuant to Section 4.01(a) or
4.02 (excluding Sections 4.02(b) and (c)) (although the Required Banks may
waive, in whole or in part, any such prepayment, repayment or commitment
reduction, so long as the application, as amongst the various Tranches, of any
such prepayment, repayment or commitment reduction which is still required to
be made is not altered) or (z) without the consent of the Supermajority Banks
of the respective Tranche, reduce the amount of, or extend the date of, any
Tranche A Term Loan Scheduled Repayment or Tranche B Term Loan Scheduled
Repayment, as the case may be, or without the consent of the Supermajority
Banks of each Tranche, amend the definition of Supermajority Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determination of
the Supermajority Banks on substantially the same basis as the extensions of
Term Loans and Revolving Loan Commitments are included on the Effective Date).
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as all non-consenting Banks
-144-
152
whose individual consent is required are treated as described in either clauses
(A) or (B) below, to either (A) replace each such non- consenting Bank or Banks
(or, at the option of the Borrower if the respective Bank's consent is required
with respect to less than all Tranches of Loans (or related Commitments), to
replace only the respective Tranche or Tranches of Commitments and/or Loans of
the respective non- consenting Bank which gave rise to the need to obtain such
Bank's individual consent) with one or more Replacement Banks pursuant to
Section 1.13 so long as at the time of such replacement, each such Replacement
Bank consents to the proposed change, waiver, discharge or termination or (B)
terminate such non-consenting Bank's Commitments (if such Bank's consent is
required as a result of its Commitments) and/or repay each Tranche of
outstanding Term Loans of such Bank which gave rise to the need to obtain such
Bank's consent, in accordance with Sections 3.02(c) and/or 4.01(b), provided
that, unless the Commitments that are terminated, and Loans repaid, pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Commitments and/or outstanding
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B) the Required
Banks (determined after giving effect to the proposed action) shall
specifically consent thereto, provided further, that in any event the Borrower
shall not have the right to replace a Bank, terminate its Commitments or repay
its Loans solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second
proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06
or 4.04 from those being charged by the respective Bank prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 13.15, to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the Banks, the Loans made
by each of the Banks and each repayment in respect of the principal amount of
the Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower's obligations in respect of such
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153
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of
any Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the Agent in
performing its duties under this Section 13.15.
13.16 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 13.16, each Bank agrees that it will use its
reasonable best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, advisors or counsel or to
another Bank if the Bank or such Bank's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Bank) any information with respect to
the Borrower or any of its Subsidiaries or Joint Ventures which is now or in
the future furnished pursuant to this Agreement or any other Credit Document
and which is designated by the Borrower to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public other than by virtue of a breach
of this Section 13.16(a) by the respective Bank, (b) as may be required or
reasonably appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or reasonably
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agents or the Collateral Agent and (f) to
any prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or
any interest therein by such Bank, provided that such prospective transferee
agrees to be bound by the confidentiality provisions contained in this Section
13.16.
-146-
154
(b) The Borrower hereby acknowledges and agrees that each
Bank may share with any of its affiliates any information related to the
Borrower or any of its Subsidiaries or Joint Ventures (including, without
limitation, any nonpublic customer information regarding the creditworthiness
of the Borrower and its Subsidiaries and Joint Ventures, provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Bank).
13.17 Limitation on Increased Costs. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless
a Bank gives notice to the Borrower that it is obligated to pay an amount under
any such Section within 180 days after the later of (x) the date such Bank
incurs the respective increased costs, Taxes, loss, expense or liability, or
reduction in amounts received or receivable or reduction in return on capital
or (y) the date such Bank has actual knowledge of its incurrence of the
respective increased costs, Taxes, loss, expense or liability, or reductions in
amounts received or receivable or reduction in return on capital, then such
Bank shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the
extent the costs, Taxes, loss, expense or liability, or reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs 180 days prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This
Section 13.17 shall have no applicability to any Section of this Agreement or
any other Credit Document other than said Sections 1.10, 1.11, 2.06 and 4.04.
-147-
155
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- -------
410 North 44th Street DOUBLETREE CORPORATION
Suite 700
Phoenix, Arizona 85008
Telephone No.: (602) 220-6666
Telecopier No.: (602) 220-6753 By
---------------------------------
Attention: Chief Financial Officer Title:
MORGAN STANLEY SENIOR FUNDING,
INC., Individually and as
Syndication Agent
and Arranger
By
---------------------------------
Title:
THE BANK OF NOVA SCOTIA,
Individually and as
Administrative Agent
By
---------------------------------
Title:
CIBC, INC.,
Individually and as a Managing
Agent
By
---------------------------------
Title:
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156
CREDIT LYONNAIS NEW YORK BRANCH,
Individually and as a Managing
Agent and as Collateral Agent
By_________________________________
Title:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, Individually and as a
Managing Agent
By_________________________________
Title:
SOCIETE GENERALE, Individually and
as a Managing Agent
By_________________________________
Title:
-149-
157
ALLIED IRISH
By:
--------------------------------
Title
ALLSTATE
By:
--------------------------------
Title
APPALOOSA MANAGEMENT
By:
--------------------------------
Title
BANK OF BOSTON
By:
--------------------------------
Title
BANKERS TRUST COMPANY
By:
--------------------------------
Title
-150-
158
BANQUE NATIONALE DE PARIS
By:
--------------------------------
Title
THE BANK OF HAWAII
By:
--------------------------------
Title
THE BANK OF NEW YORK
By:
--------------------------------
Title
CHANCELLOR CAPITAL MANAGEMENT, INC.
By:
--------------------------------
Title
CHL HIGH YIELD
By:
--------------------------------
Title
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159
CHANG HWA COMMERCIAL BANK
By:
--------------------------------
Title
CITIBANK, N.A.
By:
--------------------------------
Title
DEAN WITTER
By:
--------------------------------
Title
DONALDSON LUFKIN & JENRETTE
By:
--------------------------------
Title
DRESDNER BANK AG, NEW YORK BRANCH
By:
--------------------------------
Title
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160
EATON VANCE
By:
--------------------------------
Title
FIRST HAWAIIAN
By:
--------------------------------
Title
THE FUJI BANK LIMITED
By:
--------------------------------
Title
GIROCREDIT BANK AG DER SPARKASSEN
By:
--------------------------------
Title
HARCH CAPITAL MANAGEMENT
By:
--------------------------------
Title
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161
HIBERNIA
By:
--------------------------------
Title
INDUSTRIAL BANK OF JAPAN, LIMITED
By:
--------------------------------
Title
IMPERIAL BANK
By:
--------------------------------
Title
INDOSUEZ CAPITAL FUNDING II, LIMITED
By:
------------------------------
Title
ING CAPITAL ADVISERS
By:
------------------------------
Title
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162
KEY BANK OF WASHINGTON
By:
------------------------------
Title
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By:
------------------------------
Title
MASSACHUSETTS MUTUAL LIFE INSRANCE
COMPANY
By:
------------------------------
Title
MELLON BANK
By:
------------------------------
Title
MERRILL LYNCH
By:
------------------------------
Title
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163
MIDLAND
By:
------------------------------
Title
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
------------------------------
Title
MITSUI LEASING (U.S.A.) INC.
By:
------------------------------
Title
NATIONSBANK, N.A.
By:
--------------------------------
Title
THE NIPPON CREDIT BANK, LTD., LOS
ANGELES AGENCY
By:
--------------------------------
Title
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164
NORTHERN LIFE INSURANCE
By:
--------------------------------
Title
OAK HILL SECURITIES
By:
--------------------------------
Title
ORIX USA CORPORATION
By:
--------------------------------
Title
PILGRIM PRIME RATE TRUST
By:
--------------------------------
Title
PPM AMERICA, INC.
By:
--------------------------------
Title
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165
PROTECTIVE ASSET
MANAGEMENT, L.L.C.
By:
--------------------------------
Title
THE ROYAL BANK OF SCOTLAND PLC
By:
--------------------------------
Title
THE SAKURA BANK, LIMITED
By:
--------------------------------
Title
SANWA BUSINESS CREDIT CORPORATION
By:
--------------------------------
Title
SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By:
--------------------------------
Title
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166
THE SUMITOMO BANK, LIMITED
By:
--------------------------------
Title
SUN AMERICA
By:
--------------------------------
Title
TCW ASSET MANAGEMENT
By:
--------------------------------
Title
TOYO TRUST & BANKING
By:
--------------------------------
Title
THE TRAVELERS INSURANCE COMPANY
By:
--------------------------------
Title
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167
WELLS FARGO BANK, N.A.
By:
--------------------------------
Title
-160-
168
SCHEDULE I
COMMITMENTS
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
Morgan Stanley
Senior Funding, Inc.
The Bank of Nova Scotia
Allied Irish
AllState
Appaloosa Management
Bank of Boston
Bankers Trust Company
The Bank of Hawaii
The Bank of New York
169
SCHEDULE I
Page 162
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
Chancellor Capital Management, Inc.
CHL High Yield
Chang Hwa Commercial Bank
CIBC Inc.
Citibank, N.A.
Credit Lyonnais New York Branch
Dresdner Bank AG, New York Branch
Eaton Vance
First Union National Bank of North Carolina
GiroCredit Bank Ag Der Sparkassen
Harch Capital Management
170
SCHEDULE I
Page 163
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
Industrial Bank of Japan, Limited
Imperial Bank
ING Capital Advisers
Key Bank of Washington
The Long-Term Credit Bank of Japan, LTD.
Massachusetts Mutual Life Insrance Company
Mellon Bank
Merrill Lynch
The Mitsubishi Trust and Banking Corporation
Mitsui Leasing (U.S.A.) Inc.
NationsBank, N.A.
171
SCHEDULE I
Page 164
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
The Nippon Credit Bank, Ltd. Los Angeles Agency
Northern Life Insurance
Oak Hill Securities
Orix USA Corporation
Pilgrim Prime Rate Trust
PPM America, Inc.
Protective Asset Management, L.L.C.
The Royal Bank of Scotland plc
Societe Generale
Southern Pacific Thrift & Loan Association
The Sumitomo Bank, Limited
172
SCHEDULE I
Page 165
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
The Travelers Insurance Company
Wells Fargo Bank, N.A.
Dean Witter
Indosuez Capital Funding II, Limited
TCW Asset Management
Toyo Trust & Banking
The Sakura Bank, Limited
Banque Nationale de Paris
Sun America
The Fuji Bank Limited
Sanwa Business Credit Corporation
173
SCHEDULE I
Page 166
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- --------------
First Hawaiian
Midland
Hibernia
Donaldson Lufkin & Jenrette
______________ ______________ ______________
TOTAL: $376,000,000 $215,000,000 $100,000,000
174
SCHEDULE II
BANK ADDRESSES
Allied Irish 405 Park Avenue
New York, NY 10022
Attn: Bill Murray
Tel: (212) 339-8021
AllState 3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
Attn: Chris Guergen
Tel: (847) 402-3095
Appaloosa Management 51 John F. Kennedy Parkway
Short Hill, NJ 07078
Attn: James Bolin
Tel: (201) 376-5400
Bank of Boston 100 Federal Street
Boston, MA 02110
Attn: Timothy Barns
Tel: (617) 434-7976
Bankers Trust Company One Bankers Trust Plaza
New York, NY 10006
Attn: Peter Nolan
Tel: (212) 775-2272
The Bank of Hawaii 1850 North Central Avenue, Suite 400
Phoenix, AZ 85004
Attn: Joseph Donaldson
Tel: (602) 257-2432
The Bank of New York 10990 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90024
Attn: Bruce Miller
Tel: (310) 996-5650
Banque Nationale de Paris 725 South Figueroa, 20th FL
Los Angeles, CA 90017
Attn: Margaret Mudd
Tel: (213) 688-6423
175
Chancellor Capital Management, Inc. 1166 Avenue of Americas, 27th Floor
New York, NY 10036
Attn: Greg Smith
Tel: (212) 278-9404
CHL High Yield 380 Madison Avenue
New York, NY 10017
Attn: Jim Ferguson
Tel: (212) 622-3070
Chang Hwa Commercial Bank One World Trade Center
Suite 3211, 32nd Floor
New York, NY
Attn: Teddy Mou
Tel: (212) 390-7040
CIBC Inc. 350 South Grand Avenue, Suite 2800
Los Angeles, CA 90071
Attn: Paul Chakmak
Tel: (213) 617-6226
Citibank, N.A. 399 Park Avenue
New York, NY 10017
Attn: Ken Ostmann
Tel: (212) 559-0378
Credit Lyonnais New York Branch 1901 Avenue of Americas
New York, NY 10019-6022
Attn: Jo Asciolla
Tel: (212) 261-7834
Dean Witter 2 World Trade Center
New York, NY 10048
Attn: Ralph Scolari
Tel: (212) 892-2403
Donaldson Lufkin & Jenrette 277 Park Avenue, 9th FL
New York, N.Y. 10172
Attn: Steve Hickey
Tel: (212) 892-2403
Dresdner Bank AG, New York Branch 75 Wall Street
New York, NY 10005
Attn: Sid Jordan
Tel: (212) 574-0100
176
Eaton Vance 24 Federal Street
Boston, MA 02110
Attn: Scott Paige
Tel: (617) 482-8260
First Union National Bank of North Carolina One First Union Center
Charlotte, NC 28288-0737
Attn: B. Bragg Commer
Tel: (704) 374-2610
First Hawaiian 999 Bishop Street, 11th FL
Honolulu, HI 96813
Attn: Robert Wheeler
Tel: (808) 525-6367
The Fuji Bank Limited 333 South Hope Street, 39th FL
Los Angeles, CA 900071
Attn: Ching Lim
Tel: (213) 253-4179
Girocredit Bank AG Der Sparkassen Park Avenue Tower
65 East 55th Street, 29th Floor
New York, NY 10022
Attn: John Redding
Tel: (212) 909-0624
Harch Capital Management One Park Place
621 NW 53rd Street, Suite 620
Boca Raton, FL 93487
Attn: James DiDonato
Tel: (407) 995-4900
Hibernia 313 Carondelet Street, 12th FL
New Orleans, LA 70130
Attn: Troy Villafara
Tel: (504) 533-5490
Indosuez capital Funding II, Limite 1211 Avenue of Americas, 7th FL
New York, NY 10036
Attn: Andrew Marshak
Tel: (212) 278-2232
Industrial Bank of Japan, Limited 350 South Grand Avenue, Suite 1500
Los Angeles, CA 90071
Attn: Mr. Sugano
Tel: (213) 893-6436
177
Imperial Bank P.O. Box 92991
Los Angeles, CA 90090
Attn: Ray Valdama
Tel: (310) 417-5710
ING Capital Advisers 333 South Grand Avenue
Suite 400
Los Angeles, CA 90071
Attn: Mike Hatley
Tel: (213) 621-9062
Key Bank of Washington 1325 Fourth Avenue, Floor 12
Seattle, WA 98101
Attn: John Brock
Tel: (206) 684-6031
The Long-Term Credit Bank of Japan, LTD. 350 South Grand Avenue
Suite 3000
Los Angeles, CA 90071
Attn: Brian Reed
Tel: (213) 689-6350
Lyonnais 1901 Avenue of Americas
New York, N.Y. 10019-6022
Attn: Jo Asciolla
Tel: (212) 261-7834
Massachussets Mutual Life Insurance 1295 State Street, Mail Suite F457
Company Springfield, MA 01111
Attn: John Wheeler
Tel: (413) 744-6228
Mellon Bank 300 South Grand Avenue
Suite 3800
Los Angeles, CA 90071
Attn: Lawrence Ivey
Tel: (213) 680-7354
Merrill Lynch 800 Scudders Mill Road
Plainsboro, NJ 08536
Attn: Gilles Marchand
Tel: (609) 282-2000
178
Midland 140 Broadway, 5th FL
New York, NY 10005
Attn: Chris French
Tel: (212) 658-2742
The Mitsubishi Trust and Banking 520 Madison Avenue
Corporation New York, NY 10022
Attn: Patricia Loret De Moia
Tel: (212) 891-8418
Mitsui Leasing (U.S.A.) Inc. 200 Park Avenue, Suite 3214
New York, NY 10166
Attn: Jerry Parisi
Tel: (212) 883-3061
NationsBank, N.A. 444 South Flower, Suite 1500
Los Angeles, CA 90071
Attn: Scott Nichelson
Tel: (213) 236-4908
The Nippon Credit Bank, Ltd., 550 South Hope Street, Suite 2500
Los Angeles Agency Los Angeles, CA 90071
Attn: Julien Michaels
Tel: (213) 243-5720
Northern Life Insurance c/o Reliastar Investment Research
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401
Attn: Jim Tobin
Tel: (612) 342-3204
Oak Hill Securities 65 East 55th Street
New York, NY 10022
Attn: Scott Krase
Tel: (212) 326-1500
Orix USA Corporation 780 Third Avenue, 18th Floor
New York, NY 10017
Attn: Hiro Miyauchi
Tel: (212) 418-8300
179
Pilgrim Prime Rate Trust Two Renaissance Square
40 North Central Avenue, Suite 1200
Phoenix, AZ 85004
Attn: Howard Tiffen
Tel: (602) 417-8259
PPM America, Inc. 225 West Wacker, Suite 1200
Chicago, IL 60606
Attn: Michael Dire
Tel: (312) 634-2509
Protective Asset Management, L.L.C. 1150 Two Galleria Tower
13455 Noel Road LB #45
Dallas, TX 75240
Attn: James Dondero
Tel: (972) 233-4300
The Royal Bank of Scotland plc 88 Pine Street
Wall Street Plaza, 26th Floor
New York, NY 10005
Attn: Shona Pryor/Derek Bonnar
Tel: (212) 269-1718
The Sakura Bank, Limited 515 South Figueroa Suite 400
Los Angeles, CA 90071
Attn: Mike Ross
Tel: (213) 489-6756
SANWA BUSINESS CREDIT CORPORATION 601 South Figueroa Street
Los Angeles, CA 90017
Attn: John Meshautt
Tel: (213) 896-7285
Societe Generale 1221 Avenue of the Americas
New York, NY 10020
Attn: Catherine Scaillier-Loiseau
Tel: (212) 276-6469
Southern Pacific Thrift & Loan 12300 Wilshire Boulevard
Association Los Angeles, CA 90025
Attn: Chris Kelleher
Tel: (310) 442-3300
180
The Sumitomo Bank, Limited 777 South Figueroa Street, Suite 2600
Los Angeles, CA 90017
Attn: Mickey Jannol
Tel: (213) 955-0800
Sun America 1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attn: Sabur Moini
Tel: (310) 772-6078
TCW Asset Management 200 Park Avenue, Suite 220
New York, NY 10166
Attn: Justin Driscole
Tel: (212) 297-4137
Toyo Trust & Banking 444 South Flower Street, Suite 1550
Los Angeles, CA 90071
Attn: Jeffrey King
Tel: (213) 624-2424
The Travelers Insurance Company One Tower Square
Hartford, CT 06183-2030
Attn: Teresa M. Torrey
Tel: (860) 277-5952
Wells Fargo Bank, N.A. 555 Montgomery Street, 17th Floor
San Francisco, CA 94111
Attn: Shawn Flannery/Mark Myers
Tel: (415) 396-3741
181
SCHEDULE III
REAL PROPERTY
182
SCHEDULE IV
INDEBTEDNESS TO BE REFINANCED
183
SCHEDULE V
CAPITALIZATION
184
SCHEDULE VI
SUBSIDIARIES AND JOINT VENTURES
185
SCHEDULE VII
EXISTING INDEBTEDNESS
186
SCHEDULE VIII
INSURANCE
187
SCHEDULE IX
EXISTING LIENS
188
SCHEDULE X
EXISTING INVESTMENTS
189
SCHEDULE XI
ADDITIONAL CAPITAL EXPENDITURES
190
SCHEDULE XII
BASE CASE EBITDA
Test Period Ending Amount
- ------------------ ------
December 31, 1997 $189,000,000
December 31, 1998 $215,000,000
December 31, 1999 $245,000,000
December 31, 2000 $279,000,000
December 31, 2001 $289,000,000
December 31, 2002 $300,000,000
December 31, 2003 $313,000,000
191
SCHEDULE XIII
DESIGNATED HOTEL PROPERTIES
192
SCHEDULE XIV
ERISA
193
SCHEDULE XV
SUBSIDIARY RESTRICTIONS
194
SCHEDULE XVI
EXISTING DOUBLETREE INVESTMENTS
195
SCHEDULE XVII
EXISTING RED LION INVESTMENTS
196
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
The Bank of Nova Scotia,
as Administrative Agent
for the Banks party to the
Credit Agreement referred
to below
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention:
Ladies and Gentlemen:
The undersigned, Doubletree Corporation (the "Borrower"),
refers to the Credit Agreement, dated as of November __, 1996 (as amended from
time to time, the "Credit Agreement," the terms defined therein being used
herein as therein defined), among the Borrower, certain lenders from time to
time party thereto (the "Banks"), Morgan Stanley Senior Funding, Inc., as
Syndication Agent and as Arranger and you, as Administrative Agent for such
Banks, and hereby gives you notice, irrevocably, pursuant to Section 1.03(a) of
the Credit Agreement, that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
____________.1/
(ii) The aggregate principal amount of the Proposed Borrowing
is $____________.
____________________
1/ Shall be a Business Day at least one Business Day in the case of
Base Rate Loans and three Business Days in the case of
Eurodollar Loans, in each case, after the date hereof.
197
EXHIBIT A
Page 2
(iii) The Proposed Borrowing shall consist of [Tranche A Term
Loans] [Tranche B Term Loans] [Revolving Loans].
(iv) The Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar Loans].
[(v) The initial Interest Period for the Proposed Borrowing
is _______ month(s).]2/
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
Proposed Borrowing:
(A) the representations and warranties contained in the
Credit Agreement and in the other Credit Documents are and will be
true and correct in all material respects, both before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date, unless stated to relate
to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
DOUBLETREE CORPORATION
By:_________________________
Title:
____________________
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
198
EXHIBIT B-1
TRANCHE A TERM NOTE
$___________________ New York, New York
[Date]
FOR VALUE RECEIVED, DOUBLETREE CORPORATION (the "Borrower"), a
Delaware corporation, hereby promises to pay to ________________
_______________ or its registered assigns (the "Bank"), in lawful money of the
United States of America in immediately available funds, at the office of The
Bank of Nova Scotia (the "Administrative Agent") located at 600 Peachtree
Street, N.E., Suite 2700, Atlanta, Georgia 30308 on the Tranche A Term Loan
Maturity Date (as defined in the Agreement referred to below) the principal sum
of _______________ DOLLARS ($____________) or, if less, the unpaid principal
amount of all Tranche A Term Loans (as defined in the Agreement) made by the
Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche A Term Notes referred to in
the Credit Agreement, dated as of November __, 1996, among the Borrower, the
lenders from time to time party thereto (including the Bank), Morgan Stanley
Senior Funding, Inc., as Syndication Agent and as Arranger, and the
Administrative Agent (as amended, modified or supplemented from time to time,
the "Agreement") and is entitled to the benefits thereof and of the other
Credit Documents (as defined in the Agreement). This Note is secured by the
Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Subsidiaries Guaranty (as defined in the Agreement). This Note
is subject to voluntary prepayment and mandatory repayment prior to the Tranche
A Term Loan Maturity Date, in whole or in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
199
EXHIBIT B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_________________________
Title:
200
EXHIBIT B-2
TRANCHE B TERM NOTE
$_________________ New York, New York
[Date]
FOR VALUE RECEIVED, DOUBLETREE CORPORATION (the "Borrower"), a
Delaware corporation, hereby promises to pay to ________________
_______________ or its registered assigns (the "Bank"), in lawful money of the
United States of America in immediately available funds, at the office of The
Bank of Nova Scotia (the "Administrative Agent") located at 600 Peachtree
Street, N.E., Suite 2700, Atlanta, Georgia 30308 on the Tranche B Term Loan
Maturity Date (as defined in the Agreement referred to below) the principal sum
of ______________ DOLLARS ($______________) or, if less, the unpaid principal
amount of all Tranche B Term Loans (as defined in the Agreement) made by the
Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche B Term Notes referred to in
the Credit Agreement, dated as of November __, 1996, among the Borrower, the
lenders from time to time party thereto (including the Bank), Morgan Stanley
Senior Funding, Inc., as Syndication Agent and as Arranger, and the
Administrative Agent (as amended, modified or supplemented from time to time,
the "Agreement") and is entitled to the benefits thereof and of the other
Credit Documents (as defined in the Agreement). This Note is secured by the
Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Subsidiaries Guaranty (as defined in the Agreement). This Note
is subject to voluntary prepayment and mandatory repayment prior to the Tranche
B Term Loan Maturity Date, in whole or in part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
201
EXHIBIT B-2
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_________________________
Title:
202
EXHIBIT B-3
REVOLVING NOTE
$ __________ New York, New York
[Date]
FOR VALUE RECEIVED, DOUBLETREE CORPORATION (the "Borrower"), a
Delaware corporation, hereby promises to pay to _______________ or its
registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The Bank of Nova
Scotia (the "Administrative Agent") located at 600 Peachtree Street, N.E.,
Suite 2700, Atlanta, Georgia 30308 on the Revolving Loan Maturity Date (as
defined in the Agreement referred to below) the principal sum of
_____________________ DOLLARS ($___________) or, if less, the unpaid principal
amount of all Revolving Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the
Credit Agreement, dated as of November __, 1996, among the Borrower, the
lenders from time to time party thereto (including the Bank), Morgan Stanley
Senior Funding, Inc., as Syndication Agent and as Arranger, and the
Administrative Agent (as amended, modified or supplemented from time to time,
the "Agreement") and is entitled to the benefits thereof and of the other
Credit Documents (as defined in the Agreement). This Note is secured by the
Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Subsidiaries Guaranty (as defined in the Agreement). This Note
is subject to voluntary prepayment and mandatory repayment prior to the
Revolving Loan Maturity Date, in whole or in part, as provided in the
Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
203
EXHIBIT B-3
Page 2
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_________________________
Title:
204
EXHIBIT B-4
SWINGLINE NOTE
$5,000,000 New York, New York
[Date]
FOR VALUE RECEIVED, DOUBLETREE CORPORATION (the "Borrower"), a
Delaware corporation, hereby promises to pay to THE BANK OF NOVA SCOTIA or its
registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The Bank of Nova
Scotia (the "Administrative Agent") located at 600 Peachtree Street, N.E.,
Suite 2700, Atlanta, Georgia 30308 on the Swingline Expiry Date (as defined in
the Agreement referred to below) the principal sum of FIVE MILLION DOLLARS
($5,000,000) or, if less, the unpaid principal amount of all Swingline Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrowers promise also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit
Agreement, dated as of November __, 1996, among the Borrower, the lenders from
time to time party thereto (including the Bank), Morgan Stanley Senior Funding,
Inc., as Syndication Agent and as Arranger, and the Administrative Agent (as
amended, modified or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined
in the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty
(as defined in the Agreement). This Note is subject to voluntary prepayment
and mandatory repayment prior to the Swingline Expiry Date, in whole or in
part, as provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
205
EXHIBIT B-4
Page 2
The Borrowers hereby waive presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_________________________
Title:
206
EXHIBIT C
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
--- ---
The Bank of Nova Scotia,
as Administrative Agent under the
Credit Agreement (the "Credit
Agreement"), dated as of November __,
1996 among Doubletree
Corporation, the lenders from
time to time party thereto,
Morgan Stanley Senior Funding,
Inc., as Syndication Agent and as
Arrangers, and The Bank of Nova
Scotia, as Administrative Agent
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
[Name and address of applicable Issuing Bank]
Dear Sirs:
We hereby request that [name of proposed Issuing Bank], in its
individual capacity, issue a [Standby][Trade] Letter of Credit for the account
of the undersigned on (3) (the "Date of Issuance") in the aggregate stated
amount of (4) .
__________________________________
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least five Business Days from the date
hereof (or such shorter period as is acceptable to the respective Issuing
Bank).
(4) Aggregate initial Stated Amount of Letter of Credit.
207
EXHIBIT C
Page 2
For purposes of this Letter of Credit Request, unless
otherwise defined herein, all capitalized terms used herein which are defined
in the Credit Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be
(5) , and such Letter of Credit will be in support of (6) and
will have a stated expiration date of (7) .
We hereby certify that:
(1) The representations and warranties contained in the
Credit Agreement are and will be true and correct in all material
respects, both before and after giving effect to the issuance of the
Letter of Credit requested hereby, on the Date of Issuance (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
(2) No Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of
Credit requested hereby, would such a Default or Event of Default
occur.
__________________________________
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Obligation in the case of Standby
Letters of Credit and a description of the commercial transaction which is
being supported in the case of Trade Letters of Credit.
(7) Insert last date upon which drafts may be presented which may not be later
than (i) 12 months after the Date of Issuance or, if earlier, the third
Business Day prior to the Revolving Loan Maturity Date for Standby Letters of
Credit or (ii) 180 days after the Date of Issuance or, if earlier, 30 days
prior to the Revolving Loan Maturity Date in the case of Trade Letters of
Credit.
208
EXHIBIT C
Page 3
Copies of all documentation with respect to the supported
transaction are attached hereto.
DOUBLETREE CORPORATION
By_____________________________
Title:
209
EXHIBIT D
SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as
November __, 1996, among Doubletree Corporation, the lenders from time to time
party thereto, Morgan Stanley Senior Funding, Inc., as Syndication Agent and as
Arranger, and The Bank of Nova Scotia, as Administrative Agent (as amended from
time to time, the "Credit Agreement"). Pursuant to the provisions of Section
4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies that it
is not a "bank" as such term is used in Section 881(c)(3)(A) of the Internal
Revenue Code of 1986, as amended.
[NAME OF BANK]
By ____________________________
Title:
Date: _______________, ____
210
EXHIBIT F
OFFICERS' CERTIFICATE
I, the undersigned, [President/Vice President] of [Name of Credit
Party], a [corporation] [partnership] organized and existing under the laws of
the State of ________ (the "Company"), do hereby certify on behalf of the
Company that:
1. This Certificate is furnished pursuant to Section ___ of the
Credit Agreement, dated as November __, 1996, among [Doubletree Corporation]
[the Company] the lenders from time to time party thereto, Morgan Stanley
Senior Funding, Inc., as Syndication Agent and as Arranger, and The Bank of
Nova Scotia, as Administrative Agent (such Credit Agreement, as in effect on
the date of this Certificate, being herein called the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this Certificate
shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since _________ __, 19__.(1) The signature written
opposite the name and title of each such officer is his genuine signature.
Name(2) Office Signature
-------------- ----------- ------------
______________ ___________ _____________
______________ ___________ _____________
______________ ___________ _____________
3. Attached hereto as Exhibit A is a certified copy of the
[Certificate of Incorporation] [Describe applicable Partnership Documents] of
the Company, as filed in the Office of the Secretary of State of the State of
________ on ___________, 19__, together with all amendments thereto adopted
through the date hereof.
__________________________________
(1) Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
(2) Include name, office and signature of each officer who will sign
any Credit Document, including the officer who will sign the certification
at the end of this Certificate or related documentation.
211
EXHIBIT F
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company which were duly adopted, are in full force and
effect on the date hereof, and have been in effect since _____________, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the [Board of Directors of the Company] [by a meeting of the Board
of Directors of the Company at which a quorum was present and acting
throughout], [Describe appropriate Partnership actions] and said resolutions
have not been rescinded, amended or modified. Except as attached hereto as
Exhibit C, no resolutions have been adopted by the [Board of Directors]
[Describe Partnership body] of the Company which deal with the execution,
delivery or performance of any of the Documents to which the Company is party.
[6. On the date hereof, all of the applicable conditions set
forth in Sections 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 and 6.01 have been
satisfied.
7. Attached hereto as Exhibit D are true and correct copies
of all Acquisition Documents and Equity Financing Documents.](3)
[6][8.] On the date hereof, the representations and
warranties contained in the Credit Agreement and in the other Credit Documents
are true and correct in all material respects with the same effect as though
such representations and warranties had been made on the date hereof, both
before and after giving effect to the incurrence of Loans on the date hereof
and the application of the proceeds thereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
[7][9.] On the date hereof, no Default or Event of Default
has occurred and is continuing or would result from the Borrowing to occur on
the date hereof or from the application of the proceeds thereof.
__________________________________
(3) Insert in Officers' Certificate of the Borrower.
212
EXHIBIT F
Page 3
[8][10.] There is no proceeding for the dissolution or
liquidation of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of __________, 1996.
[NAME OF CREDIT PARTY]
______________________________
Name:
Title:
213
EXHIBIT F
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Vice President] of the Company and the
signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4, 5 and [8][10] above
are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day
of _________, 1996.
[NAME OF CREDIT PARTY]
____________________________
Name:
Title:
214
EXHIBIT G
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of November ___, 1996, made by each
of the undersigned pledgors (each a "Pledgor" and, together with any other
entity that becomes a pledgor hereunder pursuant to Section 24 hereof, the
"Pledgors"), to THE BANK OF NOVA SCOTIA, as Collateral Administrative Agent
(the "Pledgee"), for the benefit of the Secured Creditors (as defined below).
Except as otherwise defined herein, capitalized terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
W I T N E S S E T H :
WHEREAS, Doubletree Corporation (the "Borrower"), the lenders
from time to time party thereto (the "Banks"), Morgan Stanley Senior Funding,
Inc., as Syndication Agent and as Arranger (the "Syndication Agent"), and The
Bank of Nova Scotia, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of November ___, 1996 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), providing for the making of Loans
and the issuance of, and participation in, Letters of Credit as contemplated
therein (the Banks, the Syndication Agent, the Administrative Agent and the
Pledgee are herein called the "Bank Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may
at any time and from time to time enter into one or more Interest Rate
Protection Agreements or Other Hedging Agreements with one or more Banks or any
affiliate thereof (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors," and together with the Bank Creditors, the
"Secured Creditors");
215
EXHIBIT G
Page 2
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;
WHEREAS, it is a condition to the making of Loans and the
issuance of Letters of Credit under the Credit Agreement that each Pledgor
shall have executed and delivered to the Pledgor this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence
of Loans and the issuance of Letters of Credit under the Credit Agreement and
the entering into of Interest Rate Protection Agreements or Other Hedging
Agreements and, accordingly, each Pledgor desires to enter into this Agreement
in order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Pledgor, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor hereby makes the following representations
and warranties to the Pledgee for the benefit of the Secured Creditors and
hereby covenants and agrees with the Pledgee for the benefit of the Secured
Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of such Pledgor to the Bank Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Credit Documents to which such
Pledgor is a party (including, in the case of the Subsidiary
Guarantors, all such obligations and indebtedness of such Subsidiary
Guarantors under the Subsidiaries Guaranty) and the due performance
and compliance by such Pledgor with all of the terms, conditions and
agreements contained in the Credit Agreement and such other Credit
Documents (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging
Agreements, being herein collectively called the "Credit Document
Obligations");
216
EXHIBIT G
Page 3
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
liabilities owing by such Pledgor to the Other Creditors under, or
with respect to (including by reason of the Subsidiaries Guaranty),
any Interest Rate Protection Agreement or Other Hedging Agreement,
whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained therein (all such obligations and
liabilities described in this clause (ii) being herein collectively
called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Pledgor referred to in clauses (i) and (ii) above, after an Event of
Default (which term to mean and include any Event of Default under,
and as defined in, the Credit Agreement or any payment default under
any Interest Rate Protection Agreement or Other Hedging Agreement)
shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable attorneys'
fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement.
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, PARTNERSHIP
INTEREST, ETC. (a) As used herein, (i) the term "Stock" shall mean (x) with
respect to corporations incorporated under the laws of the United States or any
State or territory thereof (each a "Domestic Corporation"), all of the issued
and outstanding shares of capital stock, and all warrants and options to
purchase any such capital stock, of any Domestic Corporation at any time owned
by any Pledgor, provided that the term "Stock" shall not include any capital
stock to the extent that same constitutes RFS REIT Equity, and (y) with
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respect to corporations not Domestic Corporations (each a "Foreign
Corporation"), all of the issued and outstanding shares of capital stock, and
all warrants and options to purchase any such capital stock, at any time owned
by any Pledgor of any Foreign Corporation, provided that, except as set forth
in Section 8.13 of the Credit Agreement, no Pledgor shall be required to pledge
hereunder, and nothing herein shall be deemed to constitute a pledge hereunder
of, more than 65% of the total combined voting power of all classes of capital
stock of any Foreign Corporation entitled to vote, (ii) the term "Notes" shall
mean in the case of each Pledgor, all Intercompany Notes and all other
promissory notes or other evidences of indebtedness (other than promissory
notes that are in a principal amount of less than $1,000,000) from time to time
issued to, or held by, any such Pledgor and (iii) the term "Securities" shall
mean all of the Stock and Notes. Each Pledgor represents and warrants, that on
the date hereof, (a) the Stock held by such Pledgor consists of the number and
type of shares of the stock of the corporations as described in Annex A hereto
for such Pledgor, (b) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex A
hereto, (c) the Notes held by such Pledgor consist of the promissory notes
described in Annex B hereto for such Pledgor, (d) such Pledgor is the holder of
record and sole beneficial owner of the Stock and the Notes held by such
Pledgor and (e) on the date hereof, such Pledgor owns no other Securities.
(b) As used herein, the term "Partnership Interest" shall
mean the entire partnership interests (whether general and/or limited
partnership interests) at any time owned by each Pledgor in any Person (each a
"Pledged Partnership"), provided that the term "Partnership Interest" shall not
include the partnership units to the extent that same constitute RFS REIT
Equity. Each Pledgor represents and warrants that, on the date hereof, (x) the
Partnership Interests held by such Pledgor constitutes that percentage of the
entire partnership interest of the respective Pledged Partnership as is set
forth on Annex C hereto for such Pledgor and (y) such Pledgor owns no other
Partnership Interests.
(c) Notwithstanding anything to the contrary contained in
clause (a) or (b) above, the terms "Stock" and "Partnership Interest" shall not
include any equity interests in a Joint Venture of any Pledgor (whether such
equity interests are in the form of partnership interests, capital stock or
otherwise) to the extent that some are not permitted to be assigned or a
security interest therein granted without the consent of the other joint
venture partner (but only to the extent that such other joint venture partner
is not a Subsidiary of a Pledgor).
(d) All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock;" all Notes at any time
pledged or required to be
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pledged hereunder are hereinafter called the "Pledged Notes;" all Pledged Stock
and Pledged Notes together are called the "Pledged Securities;" all Partnership
Interests at any time pledged or required to be pledged hereunder are
hereinafter called the "Pledged Partnership Interests", and the Pledged
Securities and the Pledged Partnership Interests, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. (a) To secure the Obligations of such Pledgor
and for the purposes set forth in Section 1 hereof, each Pledgor hereby (i)
grants to the Pledgee a security interest in all of the Collateral owned by
such Pledgor, (ii) pledges and deposits as security with the Pledgee, the
Securities owned by such Pledgor on the date hereof, and delivers to the
Pledgee certificates or instruments therefor, duly endorsed in blank by such
Pledgor in the case of Notes and accompanied by undated stock powers duly
executed in blank by such Pledgor (and accompanied by any transfer tax stamps
required in connection with the pledge of such Securities) in the case of
Stock, or such other instruments of transfer as are reasonably acceptable to
the Pledgee, (iii) assigns, transfers, hypothecates, mortgages, charges and
sets over to the Pledgee a continuing security interest in all of such
Pledgor's right, title and interest in and to such Securities (and in and to
the certificates or instruments evidencing such Securities), to be held by the
Pledgee upon the terms and conditions set forth in this Agreement and (iv)
transfers and assigns to the Pledgee such Pledgor's Partnership Interests (and
delivers any certificates or instruments evidencing such partnership interests,
duly endorsed in blank) and all of such Pledgor's right, title and interest in
each Pledged Partnership including, without limitation:
(i) all of the capital thereof and its interest in all
profits, losses, Partnership Assets (as defined below) and other
distributions to which such Pledgor shall at any time be entitled in
respect of any such Collateral;
(ii) all other payments due or to become due to such Pledgor
in respect of any such Collateral, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under any
partnership or other agreement or at law or otherwise in respect of
any such Collateral;
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(iv) all present and future claims, if any, of such Pledgor
against any Pledged Partnership for moneys loaned or advanced, for
services rendered or otherwise;
(v) all of such Pledgor's rights under any partnership
agreement or at law to exercise and enforce every right, power,
remedy, authority, option and privilege of such Pledgor relating to
any Partnership Interest, including any power, if any, to terminate,
cancel or modify any general or limited partnership agreement, to
execute any instruments and to take any and all other action on behalf
of and in the name of such Pledgor in respect of such Partnership
Interest and any Pledged Partnership, to make determinations, to
exercise any election (including, but not limited to, election of
remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and authority
to demand, receive, enforce, collect, or receipt for any of the
foregoing or for any Partnership Asset, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take
any action in connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any
or all of the foregoing.
(b) As used herein, the term "Partnership Assets" shall mean
all assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all partnership capital and interests in other
partnerships), at any time owned by any Pledged Partnership or represented by
any Partnership Interest.
3.2. Subsequently Acquired Securities and/or Partnership
Interests. (a) If any Pledgor shall acquire (by purchase, stock dividend or
otherwise) any additional Securities at any time or from time to time after the
date hereof, such Pledgor will promptly thereafter deposit such Securities (or
certificates or instruments representing Securities) as security with the
Pledgee and deliver to the Pledgee certificates or instruments therefor, duly
endorsed in blank in the case of such Notes, and accompanied by undated stock
powers duly executed in blank by such Pledgor (and accompanied by any transfer
tax stamps required in connection with the pledge of such Securities) in the
case of such Stock,
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or such other instruments of transfer as are reasonably acceptable to the
Pledgee, and will promptly thereafter deliver to the Pledgee a certificate
executed by a principal executive officer of such Pledgor describing such
Securities and certifying that the same has been duly pledged with the Pledgee
hereunder.
(b) If any Pledgor shall acquire (by purchase, distribution
or otherwise) any additional Partnership Interest at any time or from time to
time after the date hereof, and, to the extent such Partnership Interest is
certificated, forthwith deliver to the Pledgee certificates therefor,
accompanied by such instruments of transfer as are acceptable to the Pledgee,
and shall promptly thereafter deliver to the Pledgee a certificate executed by
a principal executive officer of such Pledgor describing such Partnership
Interest and certifying that the same has been duly pledged with the Pledgee
hereunder.
3.3. Uncertificated Securities and Partnership Interests.
Notwithstanding anything to the contrary contained in Sections 3.1 and 3.2
hereof, if any Securities (whether now owned or hereafter acquired) or
Partnership Interests are uncertificated securities, the relevant Pledgor shall
promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the New York
Uniform Commercial Code, if applicable). Each Pledgor further agrees to take
such actions as the Pledgee deems necessary or reasonably desirable to effect
the foregoing and to permit the Pledgee to exercise any of its rights and
remedies hereunder, and agrees to provide an opinion of counsel reasonably
satisfactory to the Pledgee with respect to any such pledge of uncertificated
Securities promptly upon the reasonable request of the Pledgee.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right, upon written notice to the Borrower (although no such
notice shall be required upon the occurrence of an Event of Default of the type
described in Section 10.05 of the Credit Agreement), to appoint one or more
sub-agents for the purpose of retaining physical possession of the Pledged
Securities or Pledged Partnership Interests, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all (i) voting and other consensual
rights pertaining to the Pledged Securities owned by it, and to give consents,
waivers or ratifications in respect thereof, and (ii) voting, consent,
administration, management and other rights and remedies
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under any partnership agreement or otherwise with respect to the Pledged
Partnership Interests of such Pledgor; provided, that, in each case, no vote
shall be cast or any consent, waiver or ratification given or any action taken
or omitted to be taken which would violate or be inconsistent with any of the
terms of this Agreement, the Credit Agreement, any other Credit Document or any
Interest Rate Protection Agreement or Other Hedging Agreement (collectively,
the "Secured Debt Agreements"), or which would have the effect of impairing the
value of the Collateral or any part thereof or the position or interests of the
Pledgee or any other Secured Creditor in the Collateral. All such rights of
each Pledgor to vote and to give consents, waivers and ratifications shall
cease in case an Event of Default has occurred and is continuing, and Section 7
hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, (i) all cash
dividends and distributions payable in respect of the Pledged Stock and all
payments in respect of the Pledged Notes shall be paid to the respective
Pledgor, (ii) all cash distributions and other payments in respect of the
Pledged Partnership Interests shall be paid to the respective Pledgor and (iii)
all cash payments for moneys loaned or advanced, for services rendered or
otherwise in respect of the Pledged Partnership Interests shall be paid to the
respective Pledgor (although the respective Pledgor may be required to apply
any such payments so received as described in preceding clauses (i), (ii) and
(iii) in the manner provided in the Credit Agreement). The Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock or other securities or
partnership interests (other than cash) paid or distributed by way of
dividend or otherwise in respect of the Collateral;
(ii) all other or additional stock or other securities or
partnership interests paid or distributed in respect of the Collateral
by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement;
(iii) all other property (other than cash) paid or distributed
by way of dividend or distribution in respect of the Collateral; and
(iv) all other property or additional stock or other
securities or partnership interests or property which may be paid in
respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar
reorganization.
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Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by any Pledgor contrary to the provisions of this
Section 6 and Section 7 hereof shall be received in trust for the benefit of
the Pledgee, shall be segregated from other property or funds of such Pledgor
and shall be forthwith paid over to the Pledgee as Collateral in the same form
as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If there
shall have occurred and be continuing an Event of Default, then and in every
such case, the Pledgee shall be entitled, upon written notice to the Borrower
(although no such notice shall be required upon the occurrence of any Event of
Default of the type described in Section 10.05 of the Credit Agreement), to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall
be entitled to exercise all the rights and remedies of a secured party under
the Uniform Commercial Code and also shall be entitled, without limitation, to
exercise the following rights, which each Pledgor hereby agrees to be
commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other lawful action to
collect upon any Pledged Note (including, without limitation, to make
any demand for payment thereon);
(d) to vote all or any part of the Pledged Stock or Pledged
Partnership Interests (whether or not transferred into the name of the
Pledgee) and give all consents, waivers and ratifications in respect
of the Collateral and otherwise act with respect thereto as though it
were the outright owner thereof (each Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and attorney-in-fact
of such Pledgor, with full power of substitution to do so); and
(e) at any time and from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of
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intention to sell or of the time or place of sale or adjournment
thereof or to redeem or otherwise (all of which are hereby waived by
each Pledgor), for cash, on credit or for other property, for
immediate or future delivery without any assumption of credit risk,
and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine, provided that at least 10 days'
written notice of the time and place of any such sale shall be given
to such Pledgor. The Pledgee shall not be obligated to make any such
sale of Collateral regardless of whether any such notice of sale has
theretofore been given. Each Pledgor hereby waives and releases to
the fullest extent permitted by law any right or equity of redemption
with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling the Collateral and
any other security for the Obligations or otherwise. At any such
sale, unless prohibited by applicable law, the Pledgee on behalf of
the Secured Creditors may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any other Secured Creditor shall be liable for
failure to collect or realize upon any or all of the Collateral or for
any delay in so doing nor shall any of them be under any obligation to
take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power
and remedy of the Pledgee provided for in this Agreement or any other Secured
Debt Agreement, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by the
Pledgee or any other Secured Creditor of any one or more of the rights, powers
or remedies provided for in this Agreement or any other Secured Debt Agreement
or now or hereafter existing at law or in equity or by statute or otherwise
shall not preclude the simultaneous or later exercise by the Pledgee or any
other Secured Creditor of all such other rights, powers or remedies, and no
failure or delay on the part of the Pledgee or any other Secured Creditor to
exercise any such right, power or remedy shall operate as a waiver thereof. No
notice to or demand on any Pledgor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Pledgee or any other Secured Creditor to any
other or further action in any circumstances without notice or demand. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Pledgee, in each case acting upon the
instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce
this Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
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Administrative Agent or the Pledgee or the holders of at least a majority of
the outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral hereunder and the aggregate amount of
the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the
Collateral by the Pledgee hereunder (whether by virtue of the power of sale
herein granted, pursuant to judicial process or otherwise), the receipt of the
Pledgee or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Pledgee or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees
(i) to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor and their respective successors, assigns, employees, agents
and servants (individually an "Indemnitee," and collectively the "Indemnitees")
from and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, in each case growing out of or resulting from this Agreement
or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement (but excluding any claims,
demands, losses, judgments and liabilities or expenses to the extent incurred
by reason of gross negligence or willful misconduct of such Indemnitee). In no
event shall the Pledgee be liable, in the absence of gross negligence or
willful misconduct on its part, for any matter or thing in connection with this
Agreement other than to account for monies actually received by it in
accordance with the terms hereof. If and to the extent that the obligations of
any Pledgor under this Section 11 are unenforceable for any reason, such
Pledgor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.
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12. PLEDGEE NOT BOUND. (a) Nothing herein shall be
construed to make the Pledgee or any other Secured Creditor liable as a general
partner or limited partner of any Pledged Partnership and the Pledgee or any
other Secured Creditor by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall not have any of the duties,
obligations or liabilities of a general partner or limited partner of any
Pledged Partnership. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of a Pledged Partnership Interest
pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured Creditor
and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a)
of this Section, the Pledgee, by accepting this Agreement, did not intend to
become a general partner or limited partner of any Pledged Partnership or
otherwise be deemed to be a co-venturer with respect to any Pledgor or any
Pledged Partnership either before or after an Event of Default shall have
occurred. The Pledgee shall have only those powers set forth herein and shall
assume none of the duties, obligations or liabilities of a general partner or
limited partner of any Pledged Partnership or of any Pledgor.
(c) The Pledgee shall not be obligated to perform or
discharge any obligation of any Pledgor as a result of the collateral
assignment hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee to appear in or defend any action or
proceeding relating to the Collateral to which it is not a party, or to take
any action hereunder or thereunder, or to expend any money or incur any
expenses or perform or discharge any obligation, duty or liability under the
Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary and wherever
required by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements and instruments as the Pledgee
may reasonably require or
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deem necessary to carry into effect the purposes of this Agreement or to
further assure and confirm unto the Pledgee its rights, powers and remedies
hereunder.
(b) Each Pledgor hereby appoints the Pledgee such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, to act from time to time
solely after the occurrence and during the continuance of an Event of Default
in the Pledgee's reasonable discretion to take any action and to execute any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by each Secured
Creditor that by accepting the benefits of this Agreement each such Secured
Creditor acknowledges and agrees that the obligations of the Pledgee as holder
of the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement. The Pledgee shall act hereunder on the terms and conditions
set forth herein and in Section 12 of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGORS. Each Pledgor represents, warrants and covenants that (i) it is the
legal, record and beneficial owner of all Pledged Securities and Pledged
Partnership Interests pledged by it hereunder, subject to no Lien (except the
Lien created by this Agreement and Liens permitted under Section 9.01(i)); (ii)
it has full corporate or partnership power, authority and legal right to pledge
all the Pledged Securities and Pledged Partnership Interests pledged by it
pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms
except to the extent that the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (iv) except
as have been obtained by the Pledgors as of the date hereof, no consent of any
other party (including, without limitation, any stockholder, partner or
creditor of such Pledgor or any of its Subsidiaries or any Pledged Partnership)
and no consent, license,
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permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required to be obtained by such Pledgor in connection with the execution,
delivery or performance of this Agreement, the validity or enforceability of
this Agreement, the perfection or enforceability of the Pledgee's security
interest in the Collateral or, except for compliance with or as may be required
by applicable securities or other laws, the exercise by the Pledgee of any of
its rights or remedies provided herein; (v) the execution, delivery and
performance of this Agreement by such Pledgor will not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or foreign,
applicable to such Pledgor, or of the certificate of incorporation or by-laws
(or equivalent organizational documents) of such Pledgor or of any securities
issued by such Pledgor or any of its Subsidiaries, or of any mortgage,
indenture, lease, deed of trust, loan agreement, credit agreement or other
material contract, agreement or instrument or undertaking to which such Pledgor
or any of its Subsidiaries is a party or which purports to be binding upon such
Pledgor or any of its Subsidiaries or upon any of their respective assets and
will not result in the creation or imposition of (or the obligation to create
or impose) any lien or encumbrance on any of the assets of such Pledgor or any
of its Subsidiaries except as contemplated by this Agreement; (vi) all the
shares of Stock have been duly and validly issued, are fully paid and non-
assessable and are subject to no options to purchase or similar rights; (vii)
each of the Pledged Notes constitutes, or when executed by the obligor thereof
will constitute, the legal, valid and binding obligation of such obligor,
enforceable in accordance with its terms except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law); (viii) the pledge, assignment and delivery to the Pledgee
of the Securities (other than uncertificated securities) pursuant to this
Agreement creates a valid and perfected first priority Lien in the Securities,
and the proceeds thereof, subject to no other Lien or to any agreement
purporting to grant to any third party a Lien on the property or assets of the
Pledgor which would include the Securities; (ix) each such Pledged Partnership
Interest has been validly acquired and is fully paid for (to the extent
applicable) and is duly and validly pledged hereunder; (x) each general or
limited partnership agreement delivered to the Pledgee is an original signed
counterpart (or a copy thereof) of the complete and entire such partnership
agreement in effect on the date hereof; (xi) each partnership agreement is the
legal, valid and binding obligation of each Pledgor, and to each Pledgor's
knowledge, the other parties thereto, enforceable in accordance with its terms
and, together with this Agreement, contains the entire agreement between the
Pledgors relating to the subject matter thereof; (xii) no Pledgor is in default
in the material payment of any portion of any mandatory capital contribution,
if any, required to be made under any material general or limited partnership
228
EXHIBIT G
Page 15
agreement to which such Pledgor is a party, and no Pledgor is in violation of
any other material provisions of any material partnership agreement to which
such Pledgor is a party, or otherwise in default or violation thereunder;
(xiii) no Pledged Partnership Interest is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any Person with respect thereto; (xiv) as of the Initial
Borrowing Date, there are no certificates, instruments, documents or other
writings (other than the general or limited partnership agreements and
certificates delivered to the Collateral Administrative Agent) which evidence
any Partnership Interest of such Pledgor; (xv) the pledge and assignment of
the Pledged Partnership Interests pursuant to this Agreement, together with the
relevant filings or recordings (which filings and recordings have been or will
be made), creates a valid, perfected and continuing first priority security
interest in such Partnership Interests and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any third
party a lien or encumbrance on the property or assets of such Pledgor which
would include the Collateral; (xvi) there are no currently effective financing
statements under the UCC covering any property which is now or hereafter may be
included in the Collateral and such Pledgor will not, without the prior written
consent of the Pledgee, execute and, until the Termination Date (as hereinafter
defined), there will not ever be on file in any public office any enforceable
financing statement or statements covering any or all of the Collateral, except
financing statements filed or to be filed in favor of the Pledgee as secured
party; (xvii) each Pledgor shall give the Pledgee prompt notice of any written
claim it receives relating to the Collateral; (xviii) each Pledgor shall
deliver to the Pledgee a copy of each other demand, notice or document received
by it which may adversely affect the Pledgee's interest in the Collateral
promptly upon, but in any event within 10 days after, such Pledgor's receipt
thereof; (xix) a notice in the form set forth in Annex D attached hereto and by
this reference made a part hereof (such notice the "Partnership Notice"),
appropriately completed, notifying each Pledged Partnership of the existence of
this Agreement and a certified copy of this Agreement have been delivered by
each Pledgor to the relevant Pledged Partnership, and each such Pledgor has
received and delivered to the Collateral Administrative Agent an acknowledgment
in the form set forth in Annex E attached hereto (such acknowledgement, the
"Partnership Acknowledgement"), duly executed by the relevant Pledged
Partnership; and (xx) the chief executive office of such Pledgor is set forth
on Annex F hereto or such other office as such Pledgor may establish in
accordance with the terms of the Security Agreement. Each Pledgor covenants
and agrees that it will defend the Pledgee's right, title and security interest
in and to the Collateral against the claims and demands of all persons
whomsoever; and such Pledgor covenants and agrees that it will have like title
to and right to pledge any other property at any time hereafter pledged to the
Pledgee as Collateral hereunder and will likewise defend the right thereto and
security interest therein of the Pledgee and the other Secured Creditors.
229
EXHIBIT G
Page 16
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever (except the indefeasible payment in full in cash of all
Obligations), including, without limitation: (i) any renewal, extension,
amendment or modification of or addition or supplement to or deletion from any
Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver,
consent, extension, indulgence or other action or inaction under or in respect
of any such agreement or instrument including, without limitation, this
Agreement; (iii) any furnishing of any additional security to the Pledgee or
its assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee; (iv) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; or (v) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing.
18. REGISTRATION, ETC. (a) If there shall have occurred and
be continuing an Event of Default then, and in every such case, upon receipt by
any Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the
Pledged Stock, such Pledgor as soon as practicable and at its expense will
cause such registration to be effected (and be kept effective) and will cause
such qualification and compliance to be declared effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale
and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933, as then in effect (or any
similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other government requirements, provided, that the Pledgee shall furnish to such
Pledgor such information regarding the Pledgee as such Pledgor may reasonably
request in writing and as shall be required in connection with any such
registration, qualification or compliance. Such Pledgor will cause the Pledgee
to be kept advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars or other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee, each other Secured Creditor and all others
participating in the distribution of such
230
EXHIBIT G
Page 17
Pledged Stock against all claims, losses, damages and liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to such Pledgor by the
Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities or Pledged
Partnership Interests pursuant to Section 7 hereof, and such Pledged Securities
or Pledged Partnership Interests or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or Pledged Partnership Interests, as the case may
be, or part thereof by private sale in such manner and under such circumstances
as the Pledgee may deem necessary or advisable in order that such sale may
legally be effected without such registration. Without limiting the generality
of the foregoing, in any such event the Pledgee, in its sole and absolute
discretion (i) may proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Securities
or Pledged Partnership Interests or part thereof shall have been filed under
such Securities Act, (ii) may approach and negotiate with a single possible
purchaser to effect such sale, and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of
such Pledged Securities or Pledged Partnership Interests or part thereof. In
the event of any such sale, the Pledgee shall incur no responsibility or
liability for selling all or any part of the Pledged Securities or Pledged
Partnership Interests at a price which the Pledgee, in its sole and absolute
discretion, in good faith deems reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.
19. TERMINATION; RELEASE. (a) After the Termination Date,
this Agreement and the security interest created hereby shall terminate
(provided that all indemnities set forth herein including, without limitation,
in Section 11 hereof shall survive any such termination), and the Pledgee, at
the request and expense of any Pledgor, will execute and deliver to such
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as has not theretofore been sold or otherwise applied or
released pursuant to this
231
EXHIBIT G
Page 18
Agreement, together with any moneys at the time held by the Pledgee or any of
its sub-agents hereunder. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Commitments and all Interest Rate Protection
Agreements or Other Hedging Agreements have been terminated, no Note under the
Credit Agreement is outstanding (and all Loans have been repaid in full), all
Letters of Credit have been terminated and all Obligations then owing have been
paid in full.
(b) In the event that any part of the Collateral is sold
in connection with a sale permitted by Section 9.02 of the Credit Agreement
(other than a sale to any Pledgor or any Subsidiary thereof) or is otherwise
released at the direction of the Required Banks (or all Banks if required by
Section 13.12 of the Credit Agreement) and the proceeds of such sale or sales
or from such release are applied in accordance with the provisions of Section
4.02(f) of the Credit Agreement, to the extent required to be so applied, the
Pledgee, at the request and expense of any Pledgor, will duly assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral (and releases therefor) as is then being (or
has been) so sold or released and has not theretofore been released pursuant to
this Agreement.
(c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as provided in
Section 19(a) or (b) hereof, it shall deliver to the Pledgee a certificate
signed by a principal executive officer of such Pledgor stating that the
release of the respective Collateral is permitted pursuant to such Section
19(a) or (b).
(d) If any Pledgor which is a Subsidiary of the Borrower
is released from its obligations under the Subsidiaries Guaranty, then such
Pledgor shall also be concurrently released herefrom.
(e) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with this Section 19.
20. NOTICES, ETC. All such notices and communications
hereunder shall be sent or delivered by mail, telegraph, telex, telecopy, cable
or overnight courier service and all such notices and communications shall,
when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier and when
mailed shall be effective three Business Days following deposit in the mail
with proper postage, except that notices and communications to the Pledgee
shall
232
EXHIBIT G
Page 19
not be effective until received by the Pledgee. All notices and other
communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at the address set forth opposite
its signature below:
(b) if to the Pledgee, at:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention:
(c) if to any Bank Creditor, either (x) to the
Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor at such address as such
Other Creditor shall have specified in writing to the Pledgors and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of either (x) the Required
Banks (or all of the Banks, to the extent required by Section 13.12 of the
Credit Agreement) at all times prior to the time on which all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time on which all
Credit Document Obligations have been paid in full); provided, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall also require the written consent of the
Requisite Creditors (as defined below) of such affected Class. For the purpose
of this Agreement, the term "Class" shall mean each class of Secured Creditors,
i.e., whether (i) the Bank Creditors as holders of the Credit Document
Obligations or (ii) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of
233
EXHIBIT G
Page 20
(i) with respect to the Credit Document Obligations, the Required Banks and
(ii) with respect to the Other Obligations, the holders of at least a majority
of all obligations outstanding from time to time under the Interest Rate
Protection Agreements or Other Hedging Agreements.
22. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.
23. RECOURSE. This Agreement is made with full recourse
to the Pledgors and pursuant to and upon all the representations, warranties,
covenants and agreements on the part of the Pledgors contained herein and in
the other Secured Debt Agreements and otherwise in writing in connection
herewith or therewith.
24. ADDITIONAL PLEDGORS. It is understood and agreed
that any Wholly-Owned Subsidiary of the Borrower that is required to execute a
counterpart of this Agreement after the date hereof pursuant to the Credit
Agreement shall automatically become a Pledgor hereunder by executing a
counterpart hereof and delivering the same to the Pledgee.
25. MISCELLANEOUS. Notwithstanding anything to the
contrary contained herein or in the Credit Agreement, each Pledgor hereby
covenants and agrees that with respect to any Pledged Partnership Interest
pledged by it hereunder, such Pledgor will use its reasonable best efforts to
deliver to the respective Pledged Partnerships (with copies to the Pledgee) a
Partnership Notice (appropriately completed) and such Pledgor will use its
reasonable best efforts to deliver to the Pledgee a Partnership Acknowledgement
signed by the respective Pledged Partnerships, in each case within forty-five
days following the pledge of any Pledged Partnership Interests hereunder.
* * *
234
EXHIBIT G
Page 21
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
DOUBLETREE CORPORATION
By:_________________
Title:
SAMANTHA HOTEL CORPORATION
By
------------------------
Title:
HARBOR HOTEL CORPORATION
By
-------------------------
Title:
DOUBLETREE PARTNERS
By
-------------------------
Title:
INNCO CORPORATION
By
------------------------
Title:
235
EXHIBIT G
Page 22
DOUBLETREE HOTELS CORPORATION
By
------------------------
Title:
DT MANAGEMENT, INC.
By
------------------------
Title:
ARIZONA DTM PASADENA, INC.
By
------------------------
Title:
DTM BURLINGAME, INC.
By
------------------------
Title:
DTM CAMBRIDGE, INC.
By
------------------------
Title:
DTM PALM SPRING, INC.
By
------------------------
Title:
236
EXHIBIT G
Page 23
DTM WALNUT CREEK, INC.
By
------------------------
Title:
DTM COCONUT GROVE, INC.
By
------------------------
Title:
DTM NASHVILLE, INC.
By
------------------------
Title:
DTM SANTA CLARA, INC.
By
------------------------
Title:
DTM VENTURA, INC.
By
------------------------
Title:
DTM ST. LOUIS, INC.
By
------------------------
Title:
237
EXHIBIT G
Page 24
DTM OKLAHOMA, INC.
By
------------------------
Title:
DTM TULSA, INC.
By
------------------------
Title:
DTR LIMITED PARTNERSHIP
By
------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
------------------------
Title:
HOSCO CORPORATION
By
------------------------
Title:
DOUBLETREE HOTEL SYSTEMS,INC.
By
------------------------
Title:
238
EXHIBIT G
Page 25
COMPRIS HOTEL CORPORATION
By
------------------------
Title:
DTR RFS LESSEE, INC.
By
------------------------
Title:
DOUBLETREE, INC. OF CALIFORNIA
By
------------------------
Title:
DT REAL ESTATE, INC.
By
------------------------
Title:
TUK INNS, INC.
By
------------------------
Title:
DT INVESTMENTS, INC.
By
------------------------
Title:
239
EXHIBIT G
Page 26
DTR CAMBRIDGE, INC.
By
------------------------
Title:
DTR SANTA CLARA, INC.
By
------------------------
Title:
DTR SONORAN HOLDING, INC.
By
------------------------
Title:
DTM ATLANTIC CITY, INC.
By
------------------------
Title:
DTR INDEPENDENCE, INC.
By
------------------------
Title:
DTR NORTH CANTON, INC.
By
------------------------
Title:
240
EXHIBIT G
Page 27
DTR SAN ANTONIO, INC.
By
------------------------
Title:
DTR WEST MONTROSE, INC.
By
------------------------
Title:
RED LION HOTELS, INC.
By
------------------------
Title:
Accepted and Agreed to:
THE BANK OF NOVA SCOTIA,
as Collateral Administrative Agent for the Banks
By:_________________________
Title:
241
ANNEX A
to
PLEDGE AGREEMENT
LIST OF STOCK
I. Doubletree Corporation
Percentage of
Outstanding
Name of Issuing Certificate Type of Number of Shares of
Corporation Number Shares Shares Capital Stock
--------------- ----------- ------- ------ -------------
II. Each Subsidiary Guarantor
Percentage of
Outstanding
Name of Issuing Certificate Type of Number of Shares of
Corporation Number Shares Shares Capital Stock
--------------- ----------- ------- ------ -------------
242
ANNEX B
to
PLEDGE AGREEMENT
LIST OF NOTES
I. Doubletree Corporation
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------------------- ---------------
II. [List Each Subsidiary Guarantor Individually]
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------------------- ---------------
243
ANNEX C
to
PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
A. Doubletree Corporation
Type of
Percentage Partnership
Pledged Entities Owned Interest
---------------- ---------- -----------
[TO BE PROVIDED BY PLEDGOR]
B. [List Each Subsidiary Guarantor Individually]
Type of
Percentage Partnership
Pledged Entities Owned Interest
---------------- ---------- -----------
244
ANNEX F
to
PLEDGE AGREEMENT
OFFICE LOCATIONS
A. Doubletree Corporation
Office Locations County
---------------- ------
B. [List Each Subsidiary Guarantor Individually]
Office Locations County
---------------- ------
245
ANNEX D
to
PLEDGE AGREEMENT
FORM OF PARTNERSHIP NOTICE
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Partnership]
Notice is hereby given that, pursuant to a Pledge Agreement (a
true and correct copy of which is attached hereto), dated as of November __,
1996 (as amended, modified or supplemented from time to time in accordance with
the terms thereof, the "Pledge Agreement"), among [NAME OF PLEDGOR] (the
"Pledgor"), the other pledgors from time to time party thereto and The Bank of
Nova Scotia (the "Pledgee"), as Collateral Administrative Agent on behalf of
the Secured Creditors described therein, the Pledgor has pledged and assigned
to the Pledgee for the benefit of the Secured Creditors, and granted to the
Pledgee for the benefit of the Secured Creditors, a continuing security
interest in, all right, title and interest of the Pledgor, whether now existing
or hereafter arising or acquired, as a [limited] [general] partner in [NAME OF
PLEDGED PARTNERSHIP] (the "Partnership"), and in, to and under the [TITLE OF
APPLICABLE PARTNERSHIP AGREEMENT] (the "Partnership Agreement"), including,
without limitation:
(i) the Pledgor's interest in all of the capital of the
Partnership and the Pledgor's interest in all profits, losses, Partnership
Assets (as defined in the Pledge Agreement) and other distributions to
which the Pledgor shall at any time be entitled in respect of such
partnership interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such partnership interest, whether under the Partnership
Agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of the Pledgor's claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any, under
the Partnership Agreement or at law or otherwise in respect of such
partnership interest;
(iv) all present and future claims, if any, of the Pledgor
against the Partnership for moneys loaned or advanced, for services
rendered or otherwise;
246
ANNEX D
Page 2
(v) all of the Pledgor's rights under the Partnership Agreement
or at law to exercise and enforce every right, power, remedy, authority,
option and privilege of the Pledgor relating to the partnership interest,
including any power to terminate, cancel or modify the Partnership
Agreement, to execute any instruments and to take any and all other action
on behalf of and in the name of the Pledgor in respect of the Partnership
Interest and the Partnership, to make determinations, to exercise any
election (including, but not limited, election of remedies) or option or
to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce,
collect or receipt for any of the foregoing or for any Partnership Asset,
to enforce or execute any checks, or other instruments or orders, to file
any claims and to take any action in connection with any of the foregoing;
(vi) all other property hereafter delivered to the Pledgor in
substitution for or in addition to any of the foregoing, all certificates
and instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at any
time and from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any
or all of the foregoing.
Pursuant to the Pledge Agreement, the Partnership is hereby
authorized and directed to register the Pledgor's pledge to the Pledgee on
behalf of the Secured Creditors of the interest of the Pledgor on the
Partnership's books.
The Pledgor hereby requests the Partnership to indicate the
Partnership's acceptance of this Notice and consent to and confirmation of its
terms and provisions by signing a copy hereof where indicated on the attached
page and returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By_________________________________
Title:
247
ANNEX E
to
PLEDGE AGREEMENT
FORM OF ACKNOWLEDGMENT
[NAME OF PLEDGED PARTNERSHIP] (the "Partnership") hereby
acknowledges receipt of a copy of the assignment by [NAME OF PLEDGOR]
("Pledgor") of its interest under the [TITLE OF APPLICABLE PARTNERSHIP
AGREEMENT] (the "Partnership Agreement") pursuant to the terms of the Pledge
Agreement, dated as of ____________, 1996 (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "Pledge
Agreement"), among the Pledgor, the other pledgors from time to time party
thereto and The Bank of Nova Scotia (the "Pledgee"), or Collateral
Administrative Agent on behalf of the Secured Creditors described therein. The
undersigned hereby further confirms the registration of the Pledgor's pledge of
its interest to the Pledgee on behalf of the Secured Creditors on the
Partnership's books.
Dated: ______________ __, ____
[NAME OF PLEDGED PARTNERSHIP]
By:____________________________
Title:
248
EXHIBIT H
SECURITY AGREEMENT
among
DOUBLETREE CORPORATION,
CERTAIN OF ITS SUBSIDIARIES
and
THE BANK OF NOVA SCOTIA,
as Collateral Administrative Agent
Dated as of November __, 1996
249
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Grant of Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1. Necessary Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Other Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Chief Executive Office; Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5. Location of Inventory and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6. Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7. Trade Names; Change of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1. Additional Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2. Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3. Direction to Account Debtors; Contracting Parties; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4. Modification of Terms; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5. Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6. Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7. Assignors Remain Liable Under Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8. Assignors Remain Liable Under Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9. Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1. Additional Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Licenses and Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4. Preservation of Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5. Maintenance of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.6. Future Registered Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.7. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(i)
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ARTICLE V
SPECIAL PROVISIONS CONCERNING PATENTS,
COPYRIGHTS AND TRADE SECRETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1. Additional Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2. Licenses and Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4. Maintenance of Patents or Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5. Prosecution of Patent Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6. Other Patents and Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1. Protection of Collateral Administrative Agent's Security . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2. Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3. Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1. Remedies; Obtaining the Collateral Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2. Remedies; Disposition of the Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3. Waiver of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.6. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VIII INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2. Indemnity Obligations Secured by Collateral; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IX DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2. Waiver; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.3. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5. Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.7. Assignor's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.8. Termination; Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(ii)
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10.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.13. Additional Assignors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patents
ANNEX F Schedule of Copyrights
ANNEX G Form of Assignment of Security Interest in Certain United
States Trademarks and Patents
ANNEX H Form of Assignment of Security Interest in United States Copyrights
(iii)
252
EXHIBIT H
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of November __, 1996, made by
each of the undersigned assignors (each an "Assignor" and, together with any
other entity that becomes an assignor hereunder pursuant to Section 10.13
hereof, the "Assignors") in favor of The Bank of Nova Scotia, as Collateral
Administrative Agent (the "Collateral Administrative Agent"), for the benefit
of the Secured Creditors (as defined below). Except as otherwise defined
herein, capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Doubletree Corporation, the lenders party from time
to time party thereto (the "Banks"), Morgan Stanley Senior Funding, Inc., as
Syndication Agent and as Arranger (the "Syndication Agent"), and The Bank of
Nova Scotia, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of November __, 1996, providing for the making of Loans and
the issuance of, and participations in, Letters of Credit as contemplated
therein (as amended, modified or supplemented from time to time, the "Credit
Agreement") (the Banks, the Administrative Agent, the Syndication Agent and the
Collateral Administrative Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may
at any time and from time to time enter into one or more Interest Rate
Protection Agreements or Other Hedging Agreements with one or more Banks or any
affiliate thereof (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors," and together with the Bank Creditors, are
herein called the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;
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EXHIBIT H
Page 2
WHEREAS, it is a condition precedent to the making of Loans
and the issuance of Letters of Credit under the Credit Agreement that each
Assignor shall have executed and delivered to the Collateral Administrative
Agent this Agreement;
WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans and the issuance of Letters of Credit under the Credit
Agreement and the entering into of Interest Rate Protection Agreements as Other
Hedging Agreements and, accordingly, each Assignor desires to enter into this
Agreement in order to satisfy the condition described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Administrative Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the Collateral Administrative Agent for the
benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of its Obligations,
each Assignor does hereby assign and transfer unto the Collateral
Administrative Agent, and does hereby pledge and grant to the Collateral
Administrative Agent for the benefit of the Secured Creditors, a continuing
security interest in, all of the right, title and interest of such Assignor in,
to and under all of the following, whether now existing or hereafter from time
to time acquired: (i) each and every Receivable, (ii) all Contracts, together
with all Contract Rights arising thereunder, (iii) all Inventory, (iv) all
Equipment, (v) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks, (vi) all Patents and Copyrights, (vii) all computer programs of
such Assignor and all intellectual property rights therein and all other
proprietary information of such Assignor, including, but not limited to, Trade
Secret Rights, (viii) all other Goods, General Intangibles, Permits, Chattel
Paper, Documents and Instruments, (ix) the Cash Collateral Account and all
monies, securities, instruments and other Cash Equivalents deposited or
required to be deposited in such Cash Collateral Account, (x) all revenues,
receipts, income, accounts, and other Receivables derived or to be derived from
the ownership or operation of any Hotel Property and related facilities located
thereon,
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EXHIBIT H
Page 3
including, without limitation of the generality of the foregoing, all room
revenues and room charges and charges for hotel services (including advance
deposits therefor) and other revenues and income derived or to be derived from
the sale or rental of hotel rooms and meeting rooms, the provision of hotel
services, the sale of food, beverages and merchandise, the rental of shops,
leasing of commercial or residential spaces, the granting of concessions
(including taxi concessions and concessions for the installation of
coin-operated machines to the extent of such Assignor's interest therein)
within or about any Hotel Property and related facilities, the rental or
operation of travel desks, the rental or operation of parking facilities and
the provision of services to guests of any Hotel Property and related
facilities located thereon and any other items of revenue, receipts or other
income, (xi) all books and records of each Assignor with respect to any and all
of the foregoing and (xii) all Proceeds and products of any and all of the
foregoing (all of each Assignor's right, title and interest in the above,
collectively, the "Collateral").
(b) Notwithstanding any thing to the contrary contained in
clause (a) above, the Collateral shall not include any asset that any Assignor
owns, as agent, for the benefit of a third party (other than a Subsidiary of
such Assignor) rather than for its own benefit.
(c) The security interest of the Collateral Administrative
Agent under this Agreement extends to all Collateral of the kind which is the
subject of this Agreement which any Assignor may acquire at any time during the
term of this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Administrative Agent its true and lawful attorney,
irrevocably, with full power after the occurrence of and during the continuance
of an Event of Default (in the name of such Assignor or otherwise) to act,
require, demand, receive, compound and give acquittance for any and all moneys
and claims for moneys due or to become due to such Assignor under or arising
out of the Collateral, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or take any action or institute any
proceedings which the Collateral Administrative Agent may deem to be necessary
or advisable to protect the interests of the Secured Creditors, which
appointment as attorney is coupled with an interest.
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EXHIBIT H
Page 4
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve and perfect the
security interest granted by such Assignor to the Collateral Administrative
Agent hereby in respect of the Collateral have been accomplished and the
security interest granted to the Collateral Administrative Agent pursuant to
this Agreement in and to the Collateral creates a perfected security interest
therein subject to no other Liens (other than Permitted Liens) and is entitled
to all the rights, priorities and benefits afforded by the Uniform Commercial
Code or other relevant law as enacted in any relevant jurisdiction to perfected
security interests, in each case to the extent that the Collateral consists of
the type of property in which a security interest may be perfected by filing a
financing statement under the Uniform Commercial Code as enacted in any
relevant jurisdiction or in the United States Patent and Trademark Office or in
the United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral
acquired by it from time to time after the date hereof such Assignor will be,
the owner of all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any Person (other than Permitted Liens),
and such Assignor shall defend the Collateral against all claims and demands of
all Persons at any time claiming the same or any interest therein adverse to
the Collateral Administrative Agent.
2.3. Other Financing Statements. As of the date hereof,
there is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Collateral (other than financing statements
filed in respect of Permitted Liens), and so long as the Termination Date has
not occurred, such Assignor will not execute or authorize to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or in
connection with Permitted Liens.
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EXHIBIT H
Page 5
2.4. Chief Executive Office; Records. The chief executive
office of such Assignor is located at the address indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights of such Assignor and the only
original books of account and records of such Assignor relating thereto are,
and will continue to be, kept at such chief executive office, at one or more of
the other locations set forth on Annex A hereto or at such new locations as
such Assignor may establish in accordance with the last sentence of this
Section 2.4. All Receivables and Contract Rights of such Assignor are, and
will continue to be, maintained at, and controlled and directed (including,
without limitation, for general accounting purposes) from, the office locations
described above or such new location established in accordance with the last
sentence of this Section 2.4. No Assignor shall establish new locations for
such offices until (i) it shall have given to the Collateral Administrative
Agent not less than 15 days' prior written notice of its intention to do so,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Administrative Agent may reasonably
request, (ii) with respect to such new location, it shall have taken all
action, reasonably satisfactory to the Collateral Administrative Agent, to
maintain the security interest of the Collateral Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new
location for Inventory and Equipment only if (i) it shall have given to the
Collateral Administrative Agent not less than 15 days' prior written notice of
its intention so to do, clearly describing such new location and providing such
other information in connection therewith as the Collateral Administrative
Agent may request, (ii) with respect to such new location, it shall have taken
all action reasonably satisfactory to the Collateral Administrative Agent to
maintain the security interest of the Collateral Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.6. Recourse. This Agreement is made with full recourse to
each Assignor (including, without limitation, with full recourse to all assets
of such Assignor) and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of
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EXHIBIT H
Page 6
such Assignor contained herein, in the other Secured Debt Agreements and
otherwise in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or
operates in any jurisdiction under, or in the preceding 12 months has had or
has operated in any jurisdiction under, any trade names, fictitious names or
other names except its legal name and such other trade or fictitious names as
are listed on Annex E hereto for such Assignor. No Assignor shall change its
legal name or assume or operate in any jurisdiction under any trade, fictitious
or other name except those names listed on Annex C hereto for such Assignor and
new names established in accordance with the last sentence of this Section 2.7.
No Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral
Administrative Agent not less than 15 days' prior written notice of its
intention so to do, clearly describing such new name and the jurisdictions in
which such new name shall be used and providing such other information in
connection therewith as the Collateral Administrative Agent may reasonably
request, (ii) with respect to such new name, it shall have taken all action
reasonably requested by the Collateral Administrative Agent to maintain the
security interest of the Collateral Administrative Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force
and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
3.1. Additional Representations and Warranties. As of the
time when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be, and such
Receivable will evidence true and valid obligations of the account debtor named
therein.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals or copies of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and
all other dealings therewith, and such Assignor will make the same available on
such Assignor's premises to the Collateral Administrative Agent for inspection,
at such Assignor's own cost and expense, at any and all reasonable times upon
prior notice to such
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EXHIBIT H
Page 7
Assignor. Upon the occurrence and during the continuance of an Event of
Default and at the request of the Collateral Administrative Agent, such
Assignor shall, at its own cost and expense, deliver all tangible evidence of
its Receivables and Contract Rights (including, without limitation, all
documents evidencing the Receivables and all Contracts) and such books and
records to the Collateral Administrative Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Administrative Agent so directs, such Assignor
shall legend, in form and manner satisfactory to the Collateral Administrative
Agent, the Receivables and the Contracts, as well as books, records and
documents (if any) of such Assignor evidencing or pertaining to such
Receivables and Contracts with an appropriate reference to the fact that such
Receivables and Contracts have been assigned to the Collateral Administrative
Agent and that the Collateral Administrative Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Administrative Agent so directs any Assignor, such Assignor
agrees (x) to cause all payments on account of the Receivables and Contracts to
be made directly to the Cash Collateral Account, (y) that the Collateral
Administrative Agent may, at its option, directly notify the obligors with
respect to any Receivables and/or under any Contracts to make payments with
respect thereto as provided in the preceding clause (x) and (z) that the
Collateral Administrative Agent may enforce collection of any such Receivables
and Contracts and may adjust, settle or compromise the amount of payment
thereof, in the same manner and to the same extent as such Assignor. Without
notice to or assent by any Assignor, the Collateral Administrative Agent may
apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account which application shall be effected in the manner provided
in Section 7.4 of this Agreement. The costs and expenses (including reasonable
attorneys' fees) of collection, whether incurred by an Assignor or the
Collateral Administrative Agent, shall be borne by the relevant Assignor. The
Collateral Administrative Agent shall deliver a copy of each notice referred to
in the preceding clause (y) to the relevant Assignor (although no such notice
shall be required upon the occurrence of an Event of Default of the type
described in Section 10.05 of the Credit Agreement).
3.4. Modification of Terms; etc. Except in accordance with such
Assignor's ordinary course of business, no Assignor shall rescind or cancel any
indebtedness evidenced by any Receivable or under any Contract, or modify any
term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of
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EXHIBIT H
Page 8
the Collateral Administrative Agent. Each Assignor will duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and Contracts (except to the extent that the failure to so perform,
either individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole) and will do nothing to impair the
security interest of the Collateral Administrative Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its Receivables or obligor under any Contract, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with generally accepted lawful collection
procedures) any and all amounts owing under or on account of such Receivable or
Contract, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable or under such Contract,
except that, prior to the occurrence of an Event of Default, any Assignor may
allow in the ordinary course of business adjustments to amounts owing under its
Receivables and Contracts. The reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees) of collection, whether incurred
by an Assignor or the Collateral Administrative Agent, shall be borne by the
relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any
Instruments constituting Collateral and having a face value of $1,000,000 or
greater, such Assignor will within 10 Business Days notify the Collateral
Administrative Agent thereof, and upon request by the Collateral Administrative
Agent will promptly deliver such Instrument (other than checks payable to any
Assignor and processed in the ordinary course of business) to the Collateral
Administrative Agent appropriately endorsed to the order of the Collateral
Administrative Agent as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each
of the Receivables to observe and perform all of the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise to such Receivables. Neither the Collateral
Administrative Agent nor any other Secured Creditor shall have any obligation
or liability under any Receivable (or any agreement giving rise thereto) by
reason of or arising out of this Agreement or the receipt by the Collateral
Administrative Agent or any other Secured Creditor of any payment relating to
such Receivable pursuant hereto, nor shall the Collateral Administrative Agent
or any other Secured Creditor be obligated in any manner to perform any of the
obligations of any
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Assignor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by them or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each
of the Contracts to observe and perform all of the conditions and obligations
to be observed and performed by them thereunder, all in accordance with and
pursuant to the terms and provisions of each Contract. Neither the Collateral
Administrative Agent nor any other Secured Creditor shall have any obligation
or liability under any Contract by reason of or arising out of this Agreement
or the receipt by the Collateral Administrative Agent or any other Secured
Creditor of any payment relating to such contract pursuant hereto, nor shall
the Collateral Administrative Agent or any other Secured Creditor be obligated
in any manner to perform any of the obligations of any Assignor under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any performance by any party under any Contract,
to present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to them or
to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Administrative Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to its Receivables, Contracts, Instruments and
other property or rights covered by the security interest hereby granted, as
the Collateral Administrative Agent may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise
has the right to use the registered Marks listed in Annex D hereto for such
Assignor and that said listed Marks include all material United States marks
and applications for United States marks registered in the United States Patent
and Trademark Office that such Assignor owns or uses in connection with its
business as of the date hereof. Each Assignor represents and warrants
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that it owns, is licensed to use or otherwise has the right to use all material
Marks that it uses. Each Assignor further warrants that it has no knowledge of
any third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe any trademark,
service mark or trade name (other than such infringements which, either
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole). Each Assignor represents and warrants
that it is the true and lawful owner of or otherwise has the right to use all
U.S. trademark registrations and applications listed in Annex D hereto and that
said registrations are valid, subsisting, have not been cancelled and that such
Assignor is not aware of any third-party claim that any of said registrations
is invalid or unenforceable, or is not aware that there is any reason that any
of said registrations is invalid or unenforceable, or is not aware that there
is any reason that any of said material applications will not pass to
registration. Each Assignor hereby grants to the Collateral Administrative
Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Mark, and record the same.
4.2. Licenses and Assignments. Except as otherwise permitted by
the Secured Debt Agreements, each Assignor hereby agrees not to divest itself
of any right under any Mark acquired after the date hereof absent prior written
approval of the Collateral Administrative Agent.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Administrative Agent in writing of
the name and address of, and to furnish such pertinent information that may be
available with respect to, any party who such Assignor believes is infringing
or diluting or otherwise violating in any material respect any of such
Assignor's rights in and to any material Mark, or with respect to any party
claiming that such Assignor's use of any material Mark violates in any material
respect any property right of that party. Each Assignor further agrees, unless
otherwise agreed by the Collateral Administrative Agent, to prosecute any
Person infringing any Mark in accordance with reasonable business practices.
4.4. Preservation of Marks. Each Assignor agrees to use its
Marks in interstate commerce during the time in which this Agreement is in
effect and to take all such other actions as are necessary to preserve such
Marks as trademarks or service marks under the laws of the United States;
provided, that no Assignor shall be obligated to preserve any such Mark in the
event such Assignor determines, in its reasonable business
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judgment, that the preservation of such Mark is no longer desirable in the
conduct of its business.
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents required to maintain trademark
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its registered Marks, and shall pay all fees and disbursements in
connection therewith and shall not abandon any such filing of affidavit of use
or any such application of renewal prior to the exhaustion of all
administrative and judicial remedies without prior written consent of the
Collateral Administrative Agent; provided, that no Assignor shall be obligated
to maintain any Mark in the event that such Assignor determines, in its
reasonable business judgment, that the maintenance of such Mark is no longer
necessary or material to or desirable in the conduct of its business.
4.6. Future Registered Marks. If any Mark registration is
issued hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office, within
30 days of receipt of such certificate, such Assignor shall deliver to the
Collateral Administrative Agent a copy of such certificate, and an assignment
for security in such Mark, to the Collateral Administrative Agent and at the
expense of such Assignor, confirming the assignment for security in such Mark
to the Collateral Administrative Agent hereunder, the form of such security to
be substantially the same as the form hereof or in such other form as may be
reasonably satisfactory to the Collateral Administrative Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Administrative Agent may, by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare the
entire right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same, vested
in the Collateral Administrative Agent for the benefit of the Secured
Creditors, in which event such rights, title and interest shall immediately
vest, in the Collateral Administrative Agent for the benefit of the Secured
Creditors, and the Collateral Administrative Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (ii) take and use or sell the Marks and the goodwill of
such Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and such Assignor shall execute such further documents that the
Collateral Administrative Agent may
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reasonably request to further confirm this and to transfer ownership of the
Marks and registrations and any pending trademark application in the United
States Patent and Trademark Office to the Collateral Administrative Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all rights in
(i) all United States trade secrets and proprietary information necessary to
operate the business of the Assignor (the "Trade Secret Rights"), (ii) the
Patents listed in Annex E hereto for such Assignor and that said Patents
include all the material United States patents and applications for United
States patents that such Assignor owns as of the date hereof and (iii) the
Copyrights listed in Annex F hereto for such Assignor and that said Copyrights
constitute all the material United States copyrights registered with the United
States Copyright Office and applications to United States copyrights that such
Assignor owns as of the date hereof. Each Assignor further warrants that it
has no knowledge of any third party claim that any aspect of such Assignor's
present or contemplated business operations infringes or will infringe any
patent or such Assignor has misappropriated any trade secret or proprietary
information (other than such infringements which, either individually or in the
aggregate, could not reasonably be expected to have a material adverse effect
on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole). Each Assignor hereby grants to the Collateral
Administrative Agent an absolute power of attorney to sign, upon the occurrence
and during the continuance of any Event of Default, any document which may be
required by the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in each Patent, and to
record the same.
5.2. Licenses and Assignments. Except as otherwise permitted by
the Secured Debt Agreements, each Assignor hereby agrees not to divest itself
of any right under any Patent or Copyright acquired after the date hereof
absent prior written approval of the Collateral Administrative Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Administrative Agent in writing
with all pertinent information available to such Assignor with respect to any
infringement, contributing infringement or
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active inducement to infringe in any material Patent or material Copyright or
to any claim that the practice of any material Patent or use of any material
Copyright violates any property right of a third party, or with respect to any
misappropriation of any Trade Secret Right or any claim that practice of any
Trade Secret Right violates any property right of a third party. Each Assignor
further agrees, absent direction of the Collateral Administrative Agent to the
contrary, diligently to prosecute any Person infringing any Patent or Copyright
or any Person misappropriating any Trade Secret Right in accordance with such
Assignor's reasonable business judgment; provided, that any litigation in
connection with any such infringement shall be commenced, prosecuted or settled
in accordance with such Assignor's reasonable business judgment.
5.4. Maintenance of Patents or Copyright. At its own expense,
each Assignor shall make timely payment of all post-issuance fees required to
maintain in force rights under each Patent or Copyright, absent prior written
consent of the Collateral Administrative Agent.
5.5. Prosecution of Patent Applications. At its own expense,
each Assignor shall, except as otherwise permitted by the Credit Agreement,
diligently prosecute all applications for (i) United States Patents listed in
Annex E hereto and (ii) Copyrights listed on Annex F hereto, in each case for
such Assignor and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies, absent written consent of the
Collateral Administrative Agent.
5.6. Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a Copyright,
or acquisition of a registered copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Administrative Agent a copy of said Copyright or certificate or
registration of, or application therefor, said patents, as the case may be,
with an assignment for security as to such Patent or Copyright, as the case may
be, to the Collateral Administrative Agent and at the expense of such Assignor,
confirming the assignment for security, the form of such assignment for
security to be substantially the same as the form hereof or in such other form
as may be reasonably satisfactory to the Collateral Administrative Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Administrative Agent may by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare the
entire right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Administrative Agent for the benefit of the
Secured Creditors, in which event such right, title, and interest shall
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immediately vest in the Collateral Administrative Agent for the benefit of the
Secured Creditors, in which case the Collateral Administrative Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such further
documents as the Collateral Administrative Agent may reasonably request further
to confirm this and to transfer ownership of the Patents and Copyrights to the
Collateral Administrative Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Administrative Agent's Security.
Each Assignor will do nothing to impair the rights of the Collateral
Administrative Agent in the Collateral. Each Assignor will at all times keep
its Inventory and Equipment insured in favor of the Collateral Administrative
Agent, at such Assignor's own expense to the extent and in the manner provided
in the Credit Agreement. Except to the extent otherwise permitted to be
retained by such Assignor or applied by such Assignor pursuant to the terms of
the Credit Agreement, the Collateral Administrative Agent shall, at the time
any proceeds of such insurance are distributed to the Secured Creditors, apply
such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all
liability and responsibility in connection with the Collateral acquired by it
and the liability of such Assignor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
6.2. Further Actions. Each Assignor will, at its own expense
and upon the request of the Collateral Administrative Agent, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Administrative
Agent from time to time such lists, descriptions and designations of its
Collateral, warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to the Collateral and other property or rights
covered by the security interest hereby
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granted, which the Collateral Administrative Agent deems reasonably appropriate
or advisable to perfect, preserve or protect its security interest in the
Collateral.
6.3. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Administrative Agent such financing statements, in
form reasonably acceptable to the Collateral Administrative Agent, as the
Collateral Administrative Agent may from time to time reasonably request or as
are necessary or desirable in the opinion of the Collateral Administrative
Agent to establish and maintain a valid, enforceable, first priority perfected
security interest in the Collateral as provided herein and the other rights and
security contemplated hereby all in accordance with the UCC as enacted in any
and all relevant jurisdictions or any other relevant law. Each Assignor will
pay any applicable filing fees, recordation taxes and related expenses relating
to its Collateral. Each Assignor hereby authorizes the Collateral
Administrative Agent to file any such financing statements without the
signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Administrative Agent,
in addition to any rights now or hereafter existing under applicable law, shall
have all rights as a secured creditor under any UCC, and such additional rights
and remedies to which a secured creditor is entitled under the laws in effect,
in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Administrative Agent and may
exercise any and all remedies of such Assignor in respect of such
Collateral;
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(iii) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in accordance
with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Administrative Agent at any place or places designated by the
Collateral Administrative Agent, in which event such Assignor shall at its
own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Administrative Agent and
there delivered to the Collateral Administrative Agent;
(y) store and keep any Collateral so delivered to the
Collateral Administrative Agent at such place or places pending
further action by the Collateral Administrative Agent as provided
in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them
in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as the
Collateral Administrative Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral
Administrative Agent shall be entitled to a decree requiring specific
performance by such Assignor of said obligation. By accepting the benefits of
this Agreement, the Secured Creditors agree that this Agreement may be enforced
only by the action of the Collateral Administrative Agent acting upon the
instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce this Agreement or
to realize upon the security to be granted hereby, it being understood and
agreed that such rights and remedies may be
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exercised by the Collateral Administrative Agent for the benefit of the Secured
Creditors upon the terms of this Agreement and the Credit Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Administrative Agent under or pursuant to Section
7.1 hereof and any other Collateral whether or not so repossessed by the
Collateral Administrative Agent, may be sold, assigned, leased or otherwise
disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Administrative Agent may, in compliance with any
mandatory requirements of applicable law, determine to be commercially
reasonable. Any of the Collateral may be sold, leased or otherwise disposed
of, in the condition in which the same existed when taken by the Collateral
Administrative Agent or after any overhaul or repair at the expense of the
relevant Assignor which the Collateral Administrative Agent shall determine to
be commercially reasonable. Any such disposition which shall be a private sale
or other private proceedings permitted by such requirements shall be made upon
not less than 10 days' prior written notice to the relevant Assignor specifying
the time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the relevant Assignor or any nominee of
such Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' prior written
notice to the relevant Assignor specifying the time and place of such sale and,
in the absence of applicable requirements of law, shall be by public auction
(which may, at the Collateral Administrative Agent's option, be subject to
reserve), after publication of notice of such auction (where required by
applicable law) not less than 10 days prior thereto. The Collateral
Administrative Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the sale may be so adjourned. To the extent
permitted by any such requirement of law, the Collateral Administrative Agent
may bid for and become the purchaser of the Collateral or any item thereof,
offered for sale in accordance with this Section without accountability to the
relevant Assignor. If, under mandatory requirements of applicable law, the
Collateral Administrative Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice
to the relevant Assignor as hereinabove specified, the Collateral
Administrative Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and
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things as may be reasonably necessary to make such sale or sales of all or any
portion of the Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at such
Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement. EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
ADMINISTRATIVE AGENT'S TAKING POSSESSION OR THE COLLATERAL ADMINISTRATIVE
AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY
AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and
each Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Administrative
Agent's gross negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest, claim
and demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Administrative Agent (or, to the extent the Pledge Agreement, any
Mortgage or any
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Additional Security Document require proceeds of collateral under such Security
Document to be applied in accordance with the provisions of this Agreement, the
Pledgee or Mortgagee under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Administrative Agent hereunder, shall be applied as follows.
(i) first, to the payment of all amounts owing the Collateral
Administrative Agent of the type described in clauses (iii) and (iv) of
the definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, with each Secured Creditor receiving an
amount equal to such outstanding Primary Obligations or, if the proceeds
are insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all such
Secondary Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator
of which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in
the case of the Credit Agreement Obligations, all principal of, and interest
on, all Loans, all Unpaid Drawings and all Fees and (ii) in the case of the
Other Obligations that are secured by this Agreement or any other Security
Document, all amounts due under such Interest Rate Protection Agreements or
Other Hedging Agreements (other than
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indemnities, fees (including, without limitation, attorneys' fees) and similar
obligations and liabilities) and (z) "Secondary Obligations" shall mean all
Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations
or Secondary Obligations, as the case may be, have not been paid in full to
receive an amount equal to such excess amount multiplied by a fraction the
numerator of which is the unpaid Primary Obligations or Secondary Obligations,
as the case may be, of such Secured Creditor and the denominator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the
benefits hereof, agrees and acknowledges that if the Bank Creditors are to
receive a distribution on account of undrawn amounts with respect to Letters of
Credit issued under the Credit Agreement (which shall only occur after all
outstanding Loans and Unpaid Drawings with respect to such Letters of Credit
have been paid in full), such amounts shall be paid to the Administrative Agent
under the Credit Agreement and held by it, for the equal and ratable benefit of
the Bank Creditors, as cash security for the repayment of Obligations owing to
the Bank Creditors as such. If any amounts are held as cash security pursuant
to the immediately preceding sentence, then upon the termination of all
outstanding Letters of Credit, and after the application of all such cash
security to the repayment of all Obligations owing to the Bank Creditors after
giving effect to the termination of all such Letters of Credit, if there
remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Administrative Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made
(x) if to the Bank Creditors, to the Administrative Agent under the Credit
Agreement for the account of the Bank Creditors, and (y) if to the Other
Creditors, to the trustee, paying agent or other similar representative (each a
"Representative") for the Other Creditors or, in the absence of such a
Representative, directly to the Other Creditors.
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(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Administrative Agent shall be entitled to
rely upon (i) the Administrative Agent under the Credit Agreement and (ii) the
Representative for the Other Creditors or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative for any Other Creditors and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Administrative Agent) of the outstanding Primary Obligations and
Secondary Obligations owed to the Bank Creditors or the Other Creditors, as the
case may be. Unless it has actual knowledge (including by way of written
notice from a Bank Creditor or an Other Creditor) to the contrary, the
Administrative Agent and each Representative, in furnishing information
pursuant to the preceding sentence, and the Collateral Administrative Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written
notice from an Other Creditor) to the contrary, the Collateral Administrative
Agent, in acting hereunder, shall be entitled to assume that no Interest Rate
Protection Agreements or Other Hedging Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Administrative Agent shall
be in addition to every other right, power and remedy specifically given under
this Agreement, the other Secured Debt Agreements or now or hereafter existing
at law, in equity or by statute and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time or simultaneously and as often and in such order as may be deemed
expedient by the Collateral Administrative Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of the exercise
of one shall not be deemed a waiver of the right to exercise any other or
others. No delay or omission of the Collateral Administrative Agent in the
exercise of any such right, power or remedy and no renewal or extension of any
of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Assignor in any case shall entitle it
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Administrative Agent
to any other or further action in any circumstances without notice or demand.
In the event that the Collateral Administrative Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Administrative Agent may recover
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reasonable expenses, including reasonable attorneys' fees, and the amounts
thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale, entry or otherwise,
and such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Administrative Agent,
then and in every such case the relevant Assignor, the Collateral
Administrative Agent and each holder of any of the Obligations shall be
restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Administrative Agent shall
continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Administrative Agent, each
other Secured Creditor and their respective successors, permitted assigns,
employees, agents and servants (hereinafter in this Section 8.1 referred to
individually as "Indemnitee," and collectively as "Indemnitees") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs, expenses or
disbursements (including reasonable attorneys' fees and expenses) (for the
purposes of this Section 8.1 the foregoing are collectively called "expenses")
of whatsoever kind and nature imposed on, asserted against or incurred by any
of the Indemnitees in any way relating to or arising out of this Agreement, any
other Secured Debt Agreement or any other document executed in connection
herewith or therewith or in any other way connected with the administration of
the transactions contemplated hereby or thereby or the enforcement of any of
the terms of, or the preservation of any rights under any thereof, or in any
way relating to or arising out of the manufacture, ownership, ordering,
purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages
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or liabilities to the extent caused by the gross negligence or willful
misconduct of such Indemnitee. Each Assignor agrees that upon written notice
by any Indemnitee of the assertion of such a liability, obligation, damage,
injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor
shall assume full responsibility for the defense thereof. Each Indemnitee
agrees to use its best efforts to promptly notify the relevant Assignor of any
such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Administrative Agent for any and all reasonable fees, costs and
expenses of whatever kind or nature incurred in connection with the creation,
preservation or protection of the Collateral Administrative Agent's Liens on,
and security interest in, the Collateral, including, without limitation, all
fees and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Collateral
Administrative Agent's interest therein, whether through judicial proceedings
or otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any Interest
Rate Protection Agreement or Currency Hedging Agreement, any other Credit
Document or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement, any Interest Rate Protection Agreement or
Currency Hedging Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of
the other Obligations and notwithstanding the full
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payment of all the Notes issued under the Credit Agreement, the termination of
all Interest Rate Protection Agreements or Other Hedging Agreements and the
payment of all other Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms
of the terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Creditors" shall have the meaning provided in the recitals
of this Agreement.
"Banks" shall have the meaning provided in the recitals of this
Agreement.
"Borrower" shall have the meaning provided in the recitals of
this Agreement.
"Cash Collateral Account" shall mean a cash collateral account
maintained with, and in the sole dominion and control of, the Collateral
Administrative Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
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"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Administrative Agent" shall have the meaning provided
in the first paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor under
each Contract, including, without limitation, (i) any and all rights to receive
and demand payments under any or all Contracts, (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.
"Contracts" shall mean all contracts, between any Assignor and
one or more additional parties (including, without limitation, each Management
Agreement, Joint Venture Agreement, partnership agreement, franchise agreement
and any Interest Rate Protection Agreements or Other Hedging Agreements), but
excluding any contract to the extent that the terms thereof prohibit (after
giving effect to any approvals or waivers) the assignment of, or granting a
security interest in, such contract (it being understood and agreed, however,
that notwithstanding the foregoing, all rights to payment for money due or to
become due pursuant to any such excluded contract shall be subject to the
security interests created by this Agreement).
"Copyrights" shall mean any United States copyright owned by any
Assignor, including any registrations of any Copyrights, in the United States
Copyright Office, as well as any application for a United States copyright
registration now or hereafter made with the United States Copyright Office by
any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided in
the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
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"Equipment" shall mean any "equipment," as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all machinery, equipment, furnishings,
movable trade fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Other Obligations (to the extent
secured hereby) after the expiration of any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York and shall in any event include all of any Assignor's claims, rights,
powers, privileges, authority, options, security interests, liens and remedies
under any partnership agreement to which such Assignor is a party or with
respect to any partnership of which such Assignor is a partner.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same, in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Administrative Agent from
any Assignor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by any Assignor,
provided that the term inventory shall not include
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any liquor located in any jurisdiction to the extent that the laws of such
jurisdiction prohibit the creation of a security interest in liquor.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any
United States trademarks, service marks and trade names now held or hereafter
acquired by any Assignor, including any registration of any trademarks and
service marks in the United States Patent and Trademark Office and any trade
dress including logos and/or designs used by any Assignor in the United States.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, Fees
and interest thereon) of each Assignor to the Bank Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which such Assignor is a
party (including, in the case of the Subsidiary Guarantors, all such
obligations and indebtedness of such Subsidiary Guarantors under the
Subsidiaries Guaranty) and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained in the Credit
Agreement and such other Credit Documents (all such obligations and liabilities
under this clause (i), except to the extent consisting of obligations or
indebtedness with respect to Interest Rate Protection Agreements or Other
Hedging Agreements, being herein collectively called the "Credit Document
Obligations"); (ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
owing by such Assignor to the Other Creditors under, or with respect to
(including by reason of the Subsidiaries Guaranty), any Interest Rate
Protection Agreement or Other Hedging Agreement, whether such Interest Rate
Protection Agreement or Other Hedging Agreement is now in existence or
hereafter arising, and the due performance and compliance by such Assignor with
all of the terms, conditions and agreements contained therein (all such
obligations and liabilities described in this clause (ii) being herein
collectively called the "Other Obligations"); (iii) any and all sums advanced
by the Assignee in order to preserve the Collateral (as hereinafter defined) or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of such Assignor referred to in clauses (i) and (ii) above,
after an Event of Default (which term to mean and include any Event of Default
under, and as defined in, the Credit Agreement or any payment default under any
Interest Rate Protection Agreement
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or Other Hedging Agreement) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, or of any exercise by
the Assignee of its rights hereunder, together with reasonable attorneys' fees
and court costs; and (v) all amounts paid by any Secured Creditor as to which
such Secured Creditor has the right to reimbursement under Section 11 of this
Agreement; it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
"Other Creditors" shall have the meaning provided in the recitals
of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States patent now or hereafter made by
any Assignor.
"Permits" shall mean, to the extent permitted to be assigned by
the terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority
or agency in connection with the maintenance or operation of any Hotel
Property.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Administrative Agent or any Assignor from time to
time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to any Assignor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting
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under color of governmental authority) and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to
secure the foregoing, (b) all of any Assignor's right, title and interest in
and to any goods, the sale of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all books, records,
ledger cards, and invoices relating thereto, (f) all evidences of the filing of
financing statements and other statements and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other
registration officers, (g) all credit information, reports and memoranda
relating thereto and (h) all other writings related in any way to the
foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required Banks
(or, to the extent required by Section 13.12 of the Credit Agreement, each of
the Banks) under the Credit Agreement so long as any Credit Agreement
Obligations remain outstanding and (ii) in any situation not covered by
preceding clause (i), the holders of a majority of the outstanding principal
amount of the Other Obligations that are secured by this Agreement.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
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"Secured Debt Agreements" shall mean and include this Agreement,
the other Credit Documents and, to the extent entitled to the benefits of this
Agreement, the Interest Rate Protection Agreements and Other Hedging
Agreements.
"Termination Date" shall have the meaning provided in Section
10.8 of this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section
5.1 of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered
to the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed as
follows:
(a) if to any Assignor, at it address set forth opposite its
signature below;
(b) if to the Collateral Administrative Agent, at:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention:
Tel. No.:
Fax. No.:
(c) if to any Bank Creditor, at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Administrative Agent;
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or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly effected
thereby and the Collateral Administrative Agent (with the written consent of
the Required Secured Creditors); provided, however, that any change, waiver,
modification or variance affecting the rights and benefits of a single Class of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors of such affected
Class. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of
the Credit Agreement Obligations or (y) if applicable, the Other Creditors as
the holders of the Other Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (x) with respect to
the Credit Agreement Obligations, the Required Banks and (y) with respect to
the Other Obligations that are secured by this Agreement, the holders of at
least a majority of all obligations outstanding from time to time under the
respective Interest Rate Protection Agreements or Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall
not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement or any other
Secured Debt Agreement; or (c) any amendment to or modification of any Secured
Debt Agreement or any security for any of the Obligations; whether or not any
Assignor shall have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns (although no Assignor may
assign its rights and obligations hereunder except in accordance with the
provisions of the Secured Debt Agreements) and shall inure to the benefit of
the Collateral Administrative Agent and the Secured Creditors and their
respective successors and assigns. All agreements, statements, representations
and warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement and the other Secured Debt
Agreements regardless of any investigation made by the Secured Creditors or on
their behalf.
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10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Administrative Agent shall not
have any obligations or liabilities with respect to any Collateral by reason of
or arising out of this Agreement, nor shall the Collateral Administrative Agent
be required or obligated in any manner to perform or fulfill any of the
obligations of each Assignor under or with respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Administrative Agent, at the request and
expense of the respective Assignor, will promptly execute and deliver to such
Assignor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Collateral
Administrative Agent and as has not theretofore been sold or otherwise applied
or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitments and, to
the extent entitled to the benefits of this Agreement, all Interest Rate
Protection Agreements or Other Hedging Agreements have been terminated, no Note
is outstanding (and all Loans have been repaid in full), all Letters of Credit
have been terminated and all Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 9.02 of the Credit Agreement (other
than a sale to any Assignor or a Subsidiary thereof) or otherwise released at
the direction of the Required Secured Creditors and the proceeds of such sale
or sales or from such release are applied in accordance with the provisions of
the Credit Agreement, to the extent required to be so applied, such Collateral
will be sold free and clear of the Liens created by this Agreement
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and the Collateral Administrative Agent, at the request and expense of the
relevant Assignor, will duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
the possession of the Collateral Administrative Agent and has not theretofore
been released pursuant to this Agreement.
(c) At any time that an Assignor desires that the Collateral
Administrative Agent take any action to acknowledge or give effect to any
release of Collateral pursuant to the foregoing Section 10.8(a) or (b), such
Assignor shall deliver to the Collateral Administrative Agent a certificate
signed by a principal executive officer of such Assignor stating that the
release of the respective Collateral is permitted pursuant to Section 10.8(a)
or (b).
10.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with each Assignor and the Collateral Administrative Agent.
10.10. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.11. The Collateral Administrative Agent. The Collateral
Administrative Agent will hold in accordance with this Agreement all items of
the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Collateral Administrative
Agent as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and in Section 12 of the Credit
Agreement. The Collateral Administrative Agent shall act hereunder and
thereunder on the terms and conditions set forth herein and in Section 12 of
the Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto and
its successors and assigns.
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10.13. Additional Assignors. It is understood and agreed that
any Wholly-Owned Subsidiary of the Borrower that is required to execute a
counterpart of this Agreement pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof
and delivering the same to the Collateral Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their duly authorized officers as of the date
first above written.
SAMANTHA HOTEL CORPORATION
By
------------------------
Title:
HARBOR HOTEL CORPORATION
By
-------------------------
Title:
DOUBLETREE PARTNERS
By
-------------------------
Title:
INNCO CORPORATION
By
------------------------
Title:
DOUBLETREE HOTELS CORPORATION
By
------------------------
Title:
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DT MANAGEMENT, INC.
By
------------------------
Title:
ARIZONA DTM PASADENA, INC.
By
------------------------
Title:
DTM BURLINGAME, INC.
By
------------------------
Title:
DTM CAMBRIDGE, INC.
By
------------------------
Title:
DTM PALM SPRING, INC.
By
------------------------
Title:
DTM WALNUT CREEK, INC.
By
------------------------
Title:
288
EXHIBIT H
Page 37
DTM COCONUT GROVE, INC.
By
------------------------
Title:
DTM NASHVILLE, INC.
By
------------------------
Title:
DTM SANTA CLARA, INC.
By
------------------------
Title:
DTM VENTURA, INC.
By
------------------------
Title:
DTM ST. LOUIS, INC.
By
------------------------
Title:
289
EXHIBIT H
Page 38
DTM OKLAHOMA, INC.
By
------------------------
Title:
DTM TULSA, INC.
By
------------------------
Title:
DTR LIMITED PARTNERSHIP
By
------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
------------------------
Title:
HOSCO CORPORATION
By
------------------------
Title:
DOUBLETREE HOTEL SYSTEMS, INC.
By
------------------------
Title:
290
EXHIBIT H
Page 39
COMPRIS HOTEL CORPORATION
By
------------------------
Title:
DTR RFS LESSEE, INC.
By
------------------------
Title:
DOUBLETREE, INC. OF CALIFORNIA
By
------------------------
Title:
DT REAL ESTATE, INC.
By
------------------------
Title:
TUK INNS, INC.
By
------------------------
Title:
291
EXHIBIT H
Page 40
DT INVESTMENTS, INC.
By
------------------------
Title:
DTR CAMBRIDGE, INC.
By
------------------------
Title:
DTR SANTA CLARA, INC.
By
------------------------
Title:
DTR SONORAN HOLDING, INC.
By
------------------------
Title:
DTM ATLANTIC CITY, INC.
By
------------------------
Title:
292
EXHIBIT H
Page 41
DTR INDEPENDENCE, INC.
By
------------------------
Title:
DTR NORTH CANTON, INC.
By
------------------------
Title:
DTR SAN ANTONIO, INC.
By
------------------------
Title:
DTR WEST MONTROSE, INC.
By
------------------------
Title:
RED LION HOTELS, INC.
By
------------------------
Title:
293
EXHIBIT H
Page 42
Accepted and Agreed to:
THE BANK OF NOVA SCOTIA,
as Collateral Administrative Agent for the Banks
By:_________________________
Title:
294
ANNEX A
to
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
295
ANNEX B
to
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
Assignor Location
-------- --------
296
ANNEX C
to
SECURITY
AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
297
ANNEX D
to
SECURITY
AGREEMENT
SCHEDULE OF MARKS
298
ANNEX E
to
SECURITY
AGREEMENT
SCHEDULE OF PATENTS
299
ANNEX F
to
SECURITY
AGREEMENT
SCHEDULE OF COPYRIGHTS
300
ANNEX G
to
SECURITY
AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency
of which are hereby acknowledged, [Name of Assignor], a __________
[partnership] [corporation] ("the Assignor") with principal offices at
____________________________, hereby assigns and grants to The Bank of Nova
Scotia, as Collateral Administrative Agent, with principal offices at 600
Peachtree Street, N.E., Suite 2700, Atlanta, Georgia 30308 (the "Assignee"), a
security interest in (i) all of the Assignor's right, title and interest in and
to the United States trademarks, trademark registrations and trademark
applications (the "Marks") set forth on Schedule A attached hereto, (ii) all of
the Assignor's rights, title and interest in and to the United States patents
(the "Patents") set forth on Schedule B attached hereto, in each case together
with (iii) all Proceeds (as such term is defined in the Security Agreement
referred to below) and products of the Marks and Patents, (iv) the goodwill of
the businesses with which the Marks are associated and (v) all causes of action
arising prior to or after the date hereof for infringement of any of the Marks
and Patents or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the satisfactory performance
and payment of all the Obligations of the Assignor, as such term is defined in
the Security Agreement among the Assignor, the other assignors from time to
time party thereto and
301
ANNEX G
Page 2
the Assignee, dated as November __, 1996 (as amended from time to time, the
"Security Agreement"). Upon the occurrence of the Termination Date (as defined
in the Security Agreement), the Assignee shall, upon such satisfaction,
execute, acknowledge, and deliver to the Assignor an instrument in writing
releasing the security interest in the Marks and Patents acquired under this
Assignment.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the ____ day of _________, 199__.
[NAME OF ASSIGNOR],
Assignor
By_____________________________
Title:
302
ANNEX G
Page 3
THE BANK OF NOVA SCOTIA,
as Collateral Administrative
Agent, Assignee
By_____________________________
Title:
303
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, 199_, before me personally came
________ _________________ who, being by me duly sworn, did state as follows:
that [s]he is _______________ of [Name of Assignor], that [s]he is authorized
to execute the foregoing Assignment on behalf of said [partnership]
[corporation] and that [s]he did so by authority of the [Executive Committee]
[Board of Directors] of said [partnership] [corporation].
_________________________
Notary Public
304
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, 199_, before me personally came
_______________________________ who, being by me duly sworn, did state as
follows: that he is __________________ of The Bank of Nova Scotia that he is
authorized to execute the foregoing Assignment on behalf of said corporation
and that he did so by authority of the Board of Directors of said corporation.
____________________________
Notary Public
305
SCHEDULE A
MARK REG. NO. REG. DATE
- ---- -------- ---------
306
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
- ------ ---------- ----------
307
ANNEX H
to
SECURITY
AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Assignor], a _______________ [corporation]
[partnership] (the "Assignor"), having its chief executive office at
_____________________________________________, ____________________________, is
the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and
applications for registration set forth in Schedule A attached hereto;
WHEREAS, THE BANK OF NOVA SCOTIA, as Collateral Administrative
Agent, having its principal offices at 600 Peachtree Street, N.E., Suite 2700,
Atlanta, Georgia 30308 (the "Assignee"), desires to acquire a security interest
in said copyrights and copyright registrations and applications therefor; and
WHEREAS, the Assignor is willing to assign to the Assignee,
and to grant to the Assignee a security interest in and lien upon the
copyrights and copyright registrations and applications therefor described
above.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of November __, 1996, made by
the Assignor, the other assignors from time to time party thereto and the
Assignee (as amended from time to time, the "Security Agreement"), the Assignor
hereby assigns to the Assignee, and grants to the Assignee a security interest
in the copyrights and copyright registrations and applications therefor set
forth in Schedule A attached hereto.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
308
ANNEX H
Page 2
Executed at New York, New York, the __ day of _________, 199_.
[NAME OF ASSIGNOR], as Assignor
By__________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Collateral Administrative
Agent, Assignee
By__________________________
Name:
Title:
309
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _________, 199_, before me personally came
______________________________, who being duly sworn, did depose and say that
[s]he is ___________________ of [Name of Assignor], that [s]he is authorized
to execute the foregoing Assignment on behalf of said [partnership]
[corporation] and that [s]he did so by authority of the [Executive Committee]
[Board of Directors] of said [partnership] [corporation].
_________________________
Notary Public
310
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
- ------------ ------------ ---------------
311
EXHIBIT I
SUBSIDIARIES GUARANTY
SUBSIDIARIES GUARANTY, dated as of November __, 1996 (as
amended, modified or supplemented from time to time, this "Guaranty"), made by
each of the undersigned guarantors (each a "Guarantor," and together with any
other entity that becomes a guarantor hereunder pursuant to Section 25 hereof,
the "Guarantors"). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Doubletree Corporation (the "Borrower"), the lenders
from time to time party thereto (the "Banks"), Morgan Stanley Senior Funding,
Inc., as Syndication Agent and as Arranger (the "Syndication Agent"), and The
Bank of Nova Scotia, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of November __, 1996 (as amended, modified, or supplemented
from time to time, the "Credit Agreement"), providing for the making of Loans
and the issuance of, and participation in, Letters of Credit, as contemplated
therein (the Banks, the Syndication Agent, the Collateral Administrative Agent
and the Administrative Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower or one or more of its respective
Subsidiaries may at any time and from time to time enter into one or more
Interest Rate Protection Agreements or Other Hedging Agreements with one or
more Banks or any affiliate thereof (each such Bank or affiliate, even if the
respective Bank subsequently ceases to be a Bank under the Credit Agreement for
any reason, together with such Bank's or affiliate's successors and assigns, if
any, collectively, the "Other Creditors," and together with the Bank Creditors,
the "Secured Creditors");
WHEREAS, each Guarantor is a direct or indirect Wholly-Owned
Subsidiary of the Borrower;
WHEREAS, it is a condition to the making of Loans and the
issuance of Letters of Credit under the Credit Agreement that each Guarantor
shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans and the issuance of Letters of Credit under the Credit
Agreement and the entering
312
EXHIBIT I
Page 2
into of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably,
absolutely and unconditionally guarantees: (i) to the Bank Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of and interest on the Notes issued by, and the
Loans made to, the Borrower under the Credit Agreement, and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit issued under
the Credit Agreement and (y) all other obligations (including obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy Code,
would become due), liabilities and indebtedness owing by the Borrower to the
Bank Creditors under the Credit Agreement or any other Credit Document to which
the Borrower is a party (including, without limitation, indemnities, Fees and
interest thereon), whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement or any such other Credit
Document and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in the Credit Documents (all such
principal, interest, liabilities, indebtedness and obligations being herein
collectively called the "Credit Document Obligations"); and (ii) to each Other
Creditor the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due), liabilities and indebtedness owing by the Borrower or any other
Subsidiary of the Borrower under any Interest Rate Protection Agreement or
Other Hedging Agreement, whether now in existence or hereafter arising, and the
due performance and compliance by the Borrower or such Subsidiary with all of
the terms, conditions and agreements contained in the Interest Rate Protection
Agreements or Other Hedging Agreements (all such obligations, liabilities and
indebtedness being herein collectively called the "Other Obligations," and
together with the Credit Document Obligations, the "Guaranteed Obligations").
Each Guarantor understands, agrees and confirms that the Secured Creditors may
enforce this Guaranty up to the full amount of the Guaranteed Obligations
against such Guarantor without proceeding against any other Guarantor, the
Borrower, against any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed Obligations.
313
EXHIBIT I
Page 3
2. Additionally, each Guarantor, jointly and severally,
unconditionally, absolutely and irrevocably, guarantees the payment of any and
all Guaranteed Obligations whether or not due or payable by the Borrower or any
Subsidiary thereof upon the occurrence in respect of the Borrower or any such
Subsidiary of any of the events specified in Section 10.05 of the Credit
Agreement, and unconditionally and irrevocably, jointly and severally, promises
to pay such Guaranteed Obligations to the Secured Creditors, or order, on
demand, in legal tender of the United States. This Guaranty shall constitute a
guaranty of payment, and not of collection.
3. The liability of each Guarantor hereunder is primary,
absolute and unconditional and is exclusive and independent of any security for
or other guaranty of the indebtedness of the Borrower or any Subsidiary thereof
whether executed by such Guarantor, any other Guarantor, any other guarantor or
by any other party, and the liability of each Guarantor hereunder shall not be
affected or impaired by any circumstance or occurrence whatsoever (other than
the indefeasible satisfaction in full in cash of the Guaranteed Obligations),
including, without limitation: (a) any direction as to application of payment
by the Borrower or any Subsidiary thereof or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the Guaranteed Obligations, (c) any payment on or
in reduction of any such other guaranty or undertaking, (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower or any
Subsidiary thereof, (e) any payment made to any Secured Creditor on the
indebtedness which any Secured Creditor repays the Borrower or any Subsidiary
thereof pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding, (f) any action or inaction by the Secured Creditors as
contemplated in Section 6 hereof or (g) any invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations or of any
security therefor.
4. The obligations of each Guarantor hereunder are
independent of the obligations of any other Guarantor, any other guarantor, the
Borrower or any Subsidiary thereof, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other Guarantor, any other guarantor, the Borrower or any
Subsidiary thereof and whether or not any other Guarantor, any other guarantor,
the Borrower or any Subsidiary thereof be joined in any such action or actions.
Each Guarantor waives, to the fullest extent permitted by law, the benefits of
any statute of limitations affecting its liability hereunder or the enforcement
thereof. To the extent permitted by law, any payment by the Borrower or any
Subsidiary thereof or other circumstance which operates to toll any statute of
limitations as to the Borrower or any such Subsidiary shall operate to toll the
statute of limitations as to each Guarantor.
314
EXHIBIT I
Page 4
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent, the Collateral Administrative Agent or any other
Secured Creditor against, and any other notice to, any party liable thereon
(including such Guarantor, any other Guarantor, any other guarantor, the
Borrower or any Subsidiary thereof).
6. Any Secured Creditor may at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the
obligations of such Guarantor hereunder, upon or without any terms or
conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein
made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower, any other Credit Party, any Subsidiary thereof or
otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
Guarantors, other guarantors, the Borrower, any Subsidiary thereof or
other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower or
any Subsidiary thereof to creditors of the Borrower or such Subsidiary
other than the Secured Creditors;
315
EXHIBIT I
Page 5
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower or any Subsidiary
thereof to the Secured Creditors regardless of what liabilities of the
Borrower or such Subsidiary remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, any of the Interest Rate Protection Agreements or
Other Hedging Agreements, the Credit Documents or any of the
instruments or agreements referred to therein, or otherwise amend,
modify or supplement any of the Interest Rate Protection Agreements or
Other Hedging Agreements, the Credit Documents or any of such other
instruments or agreements;
(h) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower or any Subsidiary thereof to recover full
indemnity for any payments made pursuant to this Guaranty; and/or
(i) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of such Guarantor from its liabilities under this Guaranty.
7. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Secured Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative
and not exclusive of any rights or remedies which any Secured Creditor would
otherwise have. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor to any other further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Secured
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Secured Creditor to inquire into the
capacity or powers of the Borrower or any Subsidiary thereof or the officers,
directors, partners or agents acting or purporting to act on its behalf, and
any indebtedness made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
8. Any indebtedness of the Borrower or any Subsidiary thereof
now or hereafter held by any Guarantor is hereby subordinated to the
indebtedness of the Borrower or such Subsidiary to the Secured Creditors, and
such indebtedness of the Borrower or such Subsidiary to any Guarantor, if the
Administrative Agent or the Collateral Administrative
316
EXHIBIT I
Page 6
Agent, after the occurrence and during the continuance of an Event of Default,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Secured Creditors and be paid over to the Secured Creditors on
account of the indebtedness of the Borrower or such Subsidiary to the Secured
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Without limiting
the generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at
any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
9. (a) Each Guarantor waives any right (except as shall be
required by applicable law and cannot be waived) to require the Secured
Creditors to: (i) proceed against the Borrower, any Subsidiary thereof, any
other Guarantor, any other guarantor of the Guaranteed Obligations or any other
party; (ii) proceed against or exhaust any security held from the Borrower, any
Subsidiary thereof, any other Guarantor, any other guarantor of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. Each Guarantor waives any defense based on or
arising out of any defense of the Borrower, any Subsidiary thereof, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any Subsidiary thereof, any other Guarantor, any other guarantor of
the Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower or any Subsidiary thereof other
than payment in full of the Guaranteed Obligations. The Secured Creditors may,
at their election, foreclose on any security held by the Administrative Agent,
the Collateral Administrative Agent or the other Secured Creditors by one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any Subsidiary thereof or
any other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full. Each Guarantor waives any defense arising
out of any such election by the Secured Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any Subsidiary
thereof or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the
317
EXHIBIT I
Page 7
existence, creation or incurring of new or additional indebtedness. Each
Guarantor assumes all responsibility for being and keeping itself informed of
the Borrower's and each of its Subsidiary's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that the Secured Creditors
shall have no duty to advise any Guarantor of information known to them
regarding such circumstances or risks.
(c) Each Guarantor understands, is aware and hereby
acknowledges that to the extent the Guaranteed Obligations are secured by real
property located in the State of California, such Guarantor shall be liable for
the full amount of its liability hereunder notwithstanding foreclosure on such
real property by trustee sale or any other reason impairing such Guarantor's or
any Secured Creditors' right to proceed against the Borrower or any Subsidiary
thereof. Each Guarantor hereby waives, to the fullest extent permitted by law,
all rights and benefits under Section 2809 of the California Civil Code
purporting to reduce a guarantor's obligation in proportion to the principal
obligation. Each Guarantor hereby waives (to the fullest extent permitted by
applicable law) all rights and benefits under Section 580a of the California
Code of Civil Procedure purporting to limit the amount of any deficiency
judgment which might be recoverable following the occurrence of a trustee's
sale under a deed of trust and all rights and benefits under Section 580b of
the California Code of Civil Procedure stating that no deficiency may be
recovered on a real property purchase money obligation. Each Guarantor further
understands, is aware and hereby acknowledges that if the Secured Creditors
elect to nonjudicially foreclose on any real property security located in the
State of California any right of subrogation of such Guarantor against the
Secured Creditors may be impaired or extinguished and that as a result of such
impairment or extinguishment of subrogation rights, such Guarantor will have a
defense to a deficiency judgment arising out of the operation of (i) Section
580d of the California Code of Civil Procedure which states that no deficiency
may be recovered on a note secured by a deed of trust on real property in case
such real property is sold under the power of sale contained in such deed of
trust, and (ii) related principles of estoppel. To the fullest extent
permitted by law, each Guarantor waives all rights and benefits and any defense
arising out of the operation of Section 580d of the California Code of Civil
Procedure and related principles of estoppel, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or the Subsidiary
thereof or any other party or any security. In addition, each Guarantor hereby
waives, to the fullest extent permitted by applicable laws, without limiting
the generality of the foregoing or any other provision hereof, all rights and
benefits which might otherwise be available to such Guarantor under Section 726
of the California Code of Civil Procedure and all rights and benefits which
might otherwise be available to such Guarantor under California Civil Code
Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and
3433.
318
EXHIBIT I
Page 8
(d) Each Guarantor hereby further waives (to the fullest
extent permitted by applicable law): (i) all rights and defenses arising out
of an election of remedies by the Secured Creditors, even though that election
of remedies, such as a nonjudicial foreclosure with respect to security for a
Guaranteed Obligation, has destroyed such Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure or otherwise; (ii) such Guarantor's rights
of subrogation and reimbursement and any other rights and defenses available to
such Guarantor by reason of the California Civil Code Sections 2787 to 2855,
inclusive, including, without limitation, (x) any defenses such Guarantor may
have to the Guaranteed Obligations by reason of an election of remedies by the
Secured Creditors and (y) any rights or defenses such Guarantor may have by
reason of protection afforded to the principal borrower with respect to the
obligation so guaranteed pursuant to the antideficiency or other laws of the
State of California limiting or discharging the borrower's indebtedness,
including, without limitation, California Code of Civil Procedure Sections
580a, 580b, 580d or 726.
10. The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Administrative Agent or the Collateral
Administrative Agent, in each case acting upon the instructions of the Required
Banks (or, after the date on which all Credit Document Obligations have been
paid in full, the holders of at least a majority of the outstanding Other
Obligations) and that no other Secured Creditors shall have any right
individually to seek to enforce or to enforce this Guaranty or to realize upon
the security to be granted by the Security Documents, it being understood and
agreed that such rights and remedies may be exercised by the Administrative
Agent or the Collateral Administrative Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, partner or stockholder
of any Guarantor (except to the extent such partner or stockholder is also a
Guarantor hereunder).
11. In order to induce the Banks to make Loans and issue or
participate in Letters of Credit pursuant to the Credit Agreement, and in order
to induce the Other Creditors to execute, deliver and perform the Interest Rate
Protection Agreements or Other Hedging Agreements, each Guarantor represents,
warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation or partnership in good standing under the laws of
the jurisdiction of its organization, (ii) has the corporate or
partnership power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to
engage and (iii) is duly qualified and is authorized to do business
and is in good
319
EXHIBIT I
Page 9
standing in each jurisdiction where the conduct of its business
requires such qualification except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole.
(b) Such Guarantor has the corporate or partnership power and
authority to execute, deliver and perform the terms and provisions of
this Guaranty and each other Document to which it is a party and has
taken all necessary corporate or partnership action to authorize the
execution, delivery and performance by it of this Guaranty and each
such other Document. Such Guarantor has duly executed and delivered
this Guaranty and each other Document to which it is a party, and this
Guaranty and each such other Document constitutes the legal, valid and
binding obligation of such Guarantor enforceable in accordance with
its terms, except to the extent that the enforceability hereof or
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Document to which it is a
party, nor compliance by it with the terms and provisions hereof and
thereof, will (i) contravene any provision of any applicable law,
statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality (other than
contraventions relating to an Acquisition Document which, individually
or in the aggregate, could not reasonably be expected to have a
material adverse effect (x) on the Acquisition or the Transaction or
(y) on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole), (ii) conflict with or result in
any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except
pursuant to the Security Documents) upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument to
which such Guarantor or any of its Subsidiaries is a party or by which
it or any of its property or assets is bound or to which it may be
subject or (iii) violate any provision of the certificate of
incorporation, by-laws or partnership agreement (or equivalent
organizational documents) of such Guarantor or any of its Subsidiaries
(other than violations of immaterial
320
EXHIBIT I
Page 10
partnership agreements existing on the Initial Borrowing Date by
reason of the Acquisition).
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as
have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to
authorize, or is required for, (i) the execution, delivery and
performance of this Guaranty by such Guarantor or any other Document
to which such Guarantor is a party or (ii) the legality, validity,
binding effect or enforceability of this Guaranty or any other
Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or, to
the best knowledge of such Guarantor, threatened (i) with respect to
this Guaranty or any other Document to which such Guarantor is a party
or (ii) with respect to such Guarantor that are reasonably likely to
materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
12. Each Guarantor covenants and agrees that on and after the
Effective Date and until the termination of the Total Commitments and all
Interest Rate Protection Agreements or Other Hedging Agreements and when no
Note or Letter of Credit remains outstanding and all Guaranteed Obligations
have been paid in full, such Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all of the applicable provisions, covenants and
agreements contained in Sections 8 and 9 of the Credit Agreement, and will
take, or will refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that it is not in violation of any
provision, covenant or agreement contained in Section 8 or 9 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay
all reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and of each Agent in
connection with any amendment, waiver or consent relating hereto (including in
each case, without limitation, the reasonable fees and disbursements of counsel
employed by each Secured Creditor).
14. This Guaranty shall be binding upon each Guarantor and
its successors and assigns and shall inure to the benefit of the Secured
Creditors and their successors and assigns.
321
EXHIBIT I
Page 11
15. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and with the written consent of either
(x) the Required Banks (or to the extent required by Section 13.12 of the
Credit Agreement, with the written consent of each Bank) at all times prior to
the time on which all Credit Document Obligations have been paid in full or (y)
the holders of at least a majority of the outstanding Other Obligations at all
times after the time on which all Credit Document Obligations have been paid in
full; provided, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class (as defined below) of Secured Creditors
(and not all Secured Creditors in a like or similar manner) shall also require
the written consent of the Requisite Creditors (as defined below) of such Class
of Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released). For the purpose of this Guaranty; the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of
the Credit Document Obligations or (y) the Other Creditors as the holders of
the Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean (x) with respect to the Credit Document
Obligations, the Required Banks (or to the extent required by Section 13.12 of
the Credit Agreement, each Bank) and (y) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection or Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and Interest Rate Protection
Agreements or Other Hedging Agreements has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the Credit
Agreement or any payment default under any Interest Rate Protection Agreement
or Other Hedging Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized, at any time or from time to time,
without notice to any Guarantor or to any other Person, any such notice being
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by
such Secured Creditor to or for the credit or the account of such Guarantor,
against and on account of the obligations and liabilities of such Guarantor to
such Secured Creditor under this Guaranty, irrespective of whether or not such
Secured Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or
322
EXHIBIT I
Page 12
unmatured. Notwithstanding anything to the contrary contained in this Section
17, no Secured Creditor shall exercise any such right of set-off without the
prior written consent of the Agents or the Required Banks so long as the
Guaranteed Obligations shall be secured by any real property located in the
State of California, it being understood and agreed, however, that this
sentence is for the sole benefit of the Secured Creditors and may be amended,
modified or waived in any respect by the Required Banks without the requirement
of prior notice to or consent by any Credit Party and does not constitute a
waiver of any rights against any Credit Party or against any Collateral.
18. Each Guarantor hereby confirms that it is its intention
that this Guaranty not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any
similar Federal or state law. To effectuate the foregoing intention, each
Guarantor hereby irrevocably agrees that the Guaranteed Obligations guaranteed
by such Guarantor shall be limited to such amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise) liabilities of
such Guarantor that are relevant under such laws, and after giving effect to
any rights to contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and the other Guarantors, result in the
Guaranteed Obligations of such Guarantor in respect of such maximum amount not
constituting a fraudulent transfer or conveyance.
19. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to
such party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such
address as such Other Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
20. If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including the Borrower or any
Subsidiary thereof), then and in such event each Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon such
Guarantor, notwithstanding any revocation hereof or other instrument evidencing
any liability of the Borrower or any Subsidiary thereof, and such Guarantor
shall be and remain liable to the
323
EXHIBIT I
Page 13
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.
21. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which any Guarantor is a party may be brought in the courts of the State of
New York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor
hereby further irrevocably waives any claim that any such court lacks personal
jurisdiction over such Guarantor, and agrees not to plead or claim in any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which such Guarantor is a party brought in any of the aforesaid courts that
any such court lacks personal jurisdiction over such Guarantor. Each Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Guarantor at
its address set forth opposite its signature below, such service to become
effective 30 days after such mailing. Each Guarantor hereby irrevocably waives
any objection to such service of process and further irrevocably waives and
agrees not to plead or claim in any action or proceeding commenced hereunder or
under any other Credit Document to which such Guarantor is a party that such
service of process was in any way invalid or ineffective. Nothing herein shall
affect the right of any of the Secured Creditors to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives (to the fullest
extent permitted by applicable law) any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Guaranty or any other Credit Document
to which such Guarantor is a party brought in the courts referred to in clause
(a) above and hereby further irrevocably waives and agrees not to plead or
claim in any such court that such action or proceeding brought in any such
court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS
ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL
RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
324
EXHIBIT I
Page 14
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with
the requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall upon
consummation of such sale or other disposition (except to the extent that such
sale or disposition is for the Borrower or another Subsidiary thereof) be
released from this Guaranty automatically and without further action and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons that own, directly or indirectly, all of the capital stock or
partnership interests of any Guarantor shall be deemed to be a sale of such
Guarantor for the purposes of this Section 22).
23. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Administrative Agent.
24. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
25. It is understood and agreed that any Wholly-Owned
Subsidiary of the Borrower that is required to execute a counterpart of this
Guaranty after the date hereof pursuant to the Credit Agreement shall
automatically become a Guarantor hereunder by executing a counterpart hereof
and delivering the same to the Administrative Agent.
26. At any time a payment in respect of the Guaranteed
Obligations is made under this Guaranty, the right of contribution of each
Guarantor against each other Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each
Guarantor to be revised and restated as of each date on which a payment (a
"Relevant Payment") is made on the Guaranteed Obligations under this Guaranty.
At any time that a Relevant Payment is made by a Guarantor that results in the
aggregate payments made by such Guarantor in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment exceeding such
Guarantor's Contribution Percentage (as defined below) of the aggregate
payments made by all Guarantors in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment (such
325
EXHIBIT I
Page 15
excess, the "Aggregate Excess Amount"), each such Guarantor shall have a right
of contribution against each other Guarantor who has made payments in respect
of the Guaranteed Obligations to and including the date of the Relevant Payment
in an aggregate amount less than such other Guarantor's Contribution Percentage
of the aggregate payments made to and including the date of the Relevant
Payment by all Guarantors in respect of the Guaranteed Obligations (the
aggregate amount of such deficit, the "Aggregate Deficit Amount") in an amount
equal to (x) a fraction the numerator of which is the Aggregate Excess Amount
of such Guarantor and the denominator of which is the Aggregate Excess Amount
of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other
Guarantor. A Guarantor's right of contribution pursuant to the preceding
sentences shall arise at the time of each computation, subject to adjustment to
the time of any subsequent computation; provided, that no Guarantor may take
any action to enforce such right until the Guaranteed Obligations have been
paid in full and the Total Commitment has been terminated, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Contribution Agreement against any other
Guarantor shall be expressly junior and subordinate to such other Guarantor's
obligations and liabilities in respect of the Guaranteed Obligations and any
other obligations owing under this Guaranty. As used in this Section 27: (i)
each Guarantor's "Contribution Percentage" shall mean the percentage obtained
by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by
(y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as
defined below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of
each Guarantor shall mean the amount by which the fair salable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) on
such date. All parties hereto recognize and agree that, except for any right
of contribution arising pursuant to this Section 27, each Guarantor who makes
any payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment. Each of the Guarantors recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Banks.
* * *
326
EXHIBIT I
Page 16
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
Addresses:
GUARANTORS
----------
SAMANTHA HOTEL CORPORATION
By
------------------------
Title:
HARBOR HOTEL CORPORATION
By
-------------------------
Title:
DOUBLETREE PARTNERS
By
-------------------------
Title:
INNCO CORPORATION
By
------------------------
Title:
DOUBLETREE HOTELS CORPORATION
By
------------------------
Title:
327
EXHIBIT I
Page 17
DT MANAGEMENT, INC.
By
------------------------
Title:
ARIZONA DTM PASADENA, INC.
By
------------------------
Title:
DTM BURLINGAME, INC.
By
------------------------
Title:
DTM CAMBRIDGE, INC.
By
------------------------
Title:
DTM PALM SPRING, INC.
By
------------------------
Title:
DTM WALNUT CREEK, INC.
By
------------------------
Title:
328
EXHIBIT I
Page 18
DTM COCONUT GROVE, INC.
By
------------------------
Title:
DTM NASHVILLE, INC.
By
------------------------
Title:
DTM SANTA CLARA, INC.
By
------------------------
Title:
DTM VENTURA, INC.
By
------------------------
Title:
DTM ST. LOUIS, INC.
By
------------------------
Title:
DTM OKLAHOMA, INC.
By
------------------------
Title:
329
EXHIBIT I
Page 19
DTM TULSA, INC.
By
------------------------
Title:
DTR LIMITED PARTNERSHIP
By
------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
------------------------
Title:
HOSCO CORPORATION
By
------------------------
Title:
DOUBLETREE HOTEL SYSTEMS, INC.
By
------------------------
Title:
COMPRIS HOTEL CORPORATION
By
------------------------
Title:
330
EXHIBIT I
Page 20
DTR RFS LESSEE, INC.
By
------------------------
Title:
DOUBLETREE, INC. OF CALIFORNIA
By
------------------------
Title:
DT REAL ESTATE, INC.
By
------------------------
Title:
TUK INNS, INC.
By
------------------------
Title:
DT INVESTMENTS, INC.
By
------------------------
Title:
DTR CAMBRIDGE, INC.
By
------------------------
Title:
331
EXHIBIT I
Page 21
DTR SANTA CLARA, INC.
By
------------------------
Title:
DTR SONORAN HOLDING, INC.
By
------------------------
Title:
DTM ATLANTIC CITY, INC.
By
------------------------
Title:
DTR INDEPENDENCE, INC.
By
------------------------
Title:
DTR NORTH CANTON, INC.
By
------------------------
Title:
DTR SAN ANTONIO, INC.
By
------------------------
Title:
332
EXHIBIT I
Page 22
DTR WEST MONTROSE, INC.
By
------------------------
Title:
RED LION HOTELS, INC.
By
------------------------
Title:
Accepted and Agreed to:
THE BANK OF NOVA SCOTIA,
as Collateral Administrative Agent for the Banks
By:_________________________
Title:
333
EXHIBIT J
SOLVENCY CERTIFICATE
I, the undersigned, the Chief Financial Officer of Doubletree
Corporation (the "Borrower"), do hereby certify on behalf of the Borrower that:
1. This Certificate is furnished to the Agents and each of
the Banks pursuant to Section 5.16(i) of the Credit Agreement, dated as of
November __, 1996, among the Borrower, the Banks party thereto from time to
time, Morgan Stanley Senior Funding, Inc., as Syndication Agent and as
Arranger, and The Bank of Nova Scotia, as Administrative Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called
the "Credit Agreement"). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. For purposes of this Certificate, the terms below shall
have the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of the
Borrower and its Subsidiaries (on a consolidated basis) and
the Borrower (on a stand-alone basis) would change hands
between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of the
Borrower and its Subsidiaries (on a consolidated basis) and
the Borrower (on a stand-alone basis) are sold with reasonable
promptness under normal selling conditions in a current
market.
334
EXHIBIT J
Page 2
(c) "New Financing"
The Indebtedness incurred or to be incurred by the Borrower
and its Subsidiaries under the Credit Documents (assuming the
full utilization by the Borrower of the Revolving Loan
Commitments under the Credit Agreement) and the other
Documents and all other financings contemplated by the
Documents, in each case after giving effect to the Transaction
and the incurrence of all financings contemplated therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities)
that would be recorded in accordance with generally accepted
accounting principles ("GAAP") of the Borrower and its
Subsidiaries (on a consolidated basis) and the Borrower (on a
stand-alone basis), in each case, at November __, 1996 after
giving effect to the Transaction, determined in accordance
with GAAP consistently applied, together with, (i) the net
change in long-term debt (including current maturities)
between December 31, 1995 and the date hereof and (ii) without
duplication, the amount of all New Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely
to result from pending litigation, asserted claims and
assessments, guaranties, uninsured risks and other contingent
liabilities of each of the Borrower and its Subsidiaries (on a
consolidated basis) and the Borrower (on a stand-alone basis)
after giving effect to the Transaction (exclusive of such
contingent liabilities to the extent reflected in Stated
Liabilities).
(f) "Will be able to pay its Stated Liabilities and Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through the Tranche B Term
Loan Maturity Date, each of the Borrower and its Subsidiaries
(on a consolidated basis) and the Borrower (on a stand-alone
basis) will have sufficient assets and cash flow to pay their
respective Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or otherwise become
payable.
335
EXHIBIT J
Page 3
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the Tranche B Term
Loan Maturity Date, each of the Borrower and its Subsidiaries
(on a consolidated basis) and the Borrower (on a stand-alone
basis), after consummation of the Transaction and all
Indebtedness (including the Loans) being incurred or assumed
and Liens created by the Borrower and its Subsidiaries
in connection therewith, is a going concern and has sufficient
capital to ensure that it will continue to be a going concern
for such period and to remain a going concern.
3. For purposes of this Certificate, I, or other officers of
the Borrower under my direction and supervision, have performed the following
procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements (including the pro
forma financial statements) referred to in Section 7.05(a) of
the Credit Agreement.
(b) I have made inquiries of certain officials of the Borrower and
its Subsidiaries, who have responsibility for financial and
accounting matters regarding (i) the existence and amount of
Identified Contingent Liabilities associated with the business
of the Borrower and its Subsidiaries and (ii) whether the
unaudited pro forma consolidated financial statements referred
to in paragraph (a) above are in conformity with GAAP applied
on a basis substantially consistent with that of the audited
financial statements as at December 31, 1995.
(c) I have knowledge of and have reviewed to my satisfaction the
Credit Documents and the other Documents, and the respective
Schedules and Exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of the Borrower and its
Subsidiaries, who have responsibility for legal,
financial and accounting matters as to the existence
and estimated liability with respect to all contingent
liabilities known to them;
336
EXHIBIT J
Page 4
2. confirmed with officers of the Borrower and its
Subsidiaries, that, to the best of such officers'
knowledge, (i) all appropriate items were included in
Stated Liabilities or the listing of Identified
Contingent Liabilities and that (ii) the amounts relating
thereto were the maximum estimated amount of liabilities
reasonably likely to result therefrom as of the date
hereof; and
(e) I have examined the Projections which have been delivered to the
Banks and considered the effect thereon of any changes since the
date of the preparation thereof on the results projected therein.
After such review, I hereby certify that in my opinion the
Projections are reasonable and attainable and the Projections
support the conclusions contained in paragraph 4 below.
(f) I have made inquiries of certain officers of the Borrower and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any
events or conditions that, as of the date hereof, would cause the
Borrower and its Subsidiaries (on a consolidated basis) and the
Borrower (on a stand-alone basis), after giving effect to the
Transaction and the related financing transactions (including the
incurrence of the New Financing), to (i) have assets with a Fair
Value or Present Fair Salable Value that are less than the sum of
Stated Liabilities and Identified Contingent Liabilities; (ii)
have Unreasonably Small Capital; or (iii) not be able to pay its
Stated Liabilities and Identified Contingent Liabilities as they
mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on
behalf of the Borrower that, after giving effect to the Transaction and the
related financing transactions (including the incurrence of the New Financing),
it is my informed opinion that (i) the Fair Value and Present Fair Salable
Value of the assets of each of the Borrower and its Subsidiaries (on a
consolidated basis) and the Borrower (on a stand-alone basis) exceed its Stated
Liabilities and Identified Contingent Liabilities; (ii) each of the Borrower
and its Subsidiaries (on a consolidated basis) and the Borrower (on a
stand-alone basis) does not have Unreasonably Small Capital; and (iii) each of
the Borrower and its Subsidiaries (on a consolidated basis) and the Borrower
(on a stand-alone basis) will be able to pay its Stated Liabilities and
Identified Contingent Liabilities, as they mature or otherwise become payable.
337
EXHIBIT J
Page 5
IN WITNESS WHEREOF, I have hereto set my hand this ____ day of
November, 1996.
DOUBLETREE CORPORATION
By_______________________________________
Name:
Title: Chief Financial Officer
338
ANNEX A
339
EXHIBIT K
ASSIGNMENT AND ASSUMPTION AGREEMENT
DATE: ________ __, 19__
Reference is made to the Credit Agreement described in Item 2
of Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement"). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse and without representation or warranty (other than as
expressly provided herein), and the Assignee hereby purchases and assumes from
the Assignor, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof which represents
the percentage interest specified in Item 4 of Annex I (the "Assigned Share")
of all of the outstanding rights and obligations under the Credit Agreement
relating to the facilities listed in Item 4 of Annex I, including, without
limitation, [(x) in the case of any assignment of all or any portion of the
Total Term Loan Commitment, all rights and obligations with respect to the
Assigned Share of such Total Term Loan Commitment,]1/ (y) in the case of any
assignment of all or any portion of the Assignor's outstanding Tranche A Term
Loans and/or Tranche B Term Loans, all rights and obligations with respect to
the Assigned Share of such outstanding Tranche A Term Loans and/or Tranche B
Term Loans and (z) in the case of any assignment of all or any portion of the
Assignor's Revolving Loan Commitment, all rights and obligations with respect
to the Assigned Share of the Total Revolving Loan Commitment and all
outstanding Revolving Loans, Swingline Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claims; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
____________________
1/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Term Loan Commitment.
340
EXHIBIT K
Page 2
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their respective obligations
under the Credit Agreement or the other Credit Documents or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of
the financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon any Agent, the Assignor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent and the Syndication Agent to take such action as agents on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent and the
Syndication Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank[; and (v)
attaches the forms and/or Certificate set forth in the penultimate sentence of
section 13.04(b) of the Credit Agreement.]2/
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the
date of execution hereof by the Assignor and the Assignee, to the extent
required by the Credit Agreement, the receipt of the consent of each Agent,
receipt by the Administrative Agent of the assignment fee referred to in
Section 13.04(b) of the Credit Agreement, and the recordation by the
Administrative Agent of the assignment effected hereby in the Register, unless
otherwise specified in Item 5 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to
the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be
a party to the
____________________
2/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
341
EXHIBIT K
Page 3
Credit Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the
Assignee shall be entitled to (x) all interest on the Assigned Share of the
Loans at the rates specified in Item 6 of Annex I, (y) all Commitment
Commission (if applicable) on the Assigned Share of the respective Commitments
at the rate specified in Item 7 of Annex I and (z) all Letter of Credit Fees
(if applicable) on the Assignee's participation in all Letters of Credit at the
rate specified in Item 8 of Annex I, which, in each case, accrue on and after
the Settlement Date, such interest and, if applicable, Commitment Commission
and Letter of Credit Fees, to be paid by the Administrative Agent directly to
the Assignee. It is further agreed that all payments of principal made on the
Assigned Share of the Loans which occur on and after the Settlement Date will
be paid directly by the Administrative Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
342
EXHIBIT K
Page 4
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such execution
also being made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
[Acknowledged and Agreed:
MORGAN STANLEY SENIOR
FUNDING, INC., as Syndication Agent and as Arranger
By____________________________
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By____________________________
Title:]3/
____________________
3/ The consent of each Agent is required for assignments made as provided in
Section 13.04(b)(y) of the Audit Agreement.
343
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: Doubletree Corporation.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of November __, 1996, among Doubletree
Corporation, the lenders from time to time party thereto, Morgan
Stanley Senior Funding, Inc., as Syndication Agent and as Arranger,
and The Bank of Nova Scotia, as Administrative Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
[Total [Total [Outstanding [Outstanding
Tranche Tranche Principal Principal Revolving
A Term Loan B Term Loan of A Term of B Term Loan
Commitment] Commitment] Loans] Loans] Commitment
---------- ---------- ----- ----- ----------
a. Aggregate
Amount for
all Banks $_______ $_______ $________ $________ $_________
b. Assigned Share ________% ________% ________% ________% ________%
c. Amount of
Assigned Share $_______4/ $_______5/ $________6/ $________7/ $_________
- - - -
5. Settlement Date:
__________________________________
4/ Insert for assignments made before the termination of the Total Tranche A
Term Loan Commitment.
5/ Insert for assignments made before the Initial Borrowing Date.
6/ Insert for assignments made after the Initial Borrowing Date.
7/ Insert for assignments made after the Initial Borrowing Date.
344
ANNEX I
Page 2
6. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the Credit Agreement (unless otherwise
agreed to by the Assignor and the Assignee).8/
7. Term Loan Commitment
Commission to the
Assignee; As set forth in Section 3.01(a) of the Credit Agreement (unless otherwise
agreed to by the Assignor and the Assignee).9/
8. Revolving Loan
Commitment
Commission to
the Assignee: As set forth in Section 3.01(b) of the Credit Agreement; (unless
otherwise agreed to by the Assignor and the Assignee).10/
__________________________________
8/ Each of the Borrowers and the Administrative Agent shall, following
recordation of such assignment by the Administrative Agent on the Register,
direct the entire amount of interest to the Assignee at the rate set forth in
Section 1.08 of the Credit Agreement, with the Assignor and Assignee effecting
any agreed upon sharing of interest through payments by the Assignee to the
Assignor.
9/ Insert "Not Applicable" in lieu of text if no portion of the Total Term
Loan Commitment is being assigned or for assignments made after the termination
of the Total Term Loan Commitment. The Borrower and the Administrative
Agent shall, following recordation of such assignment by the Administrative
Agent on the Register, direct the entire amount of the Term Loan Commitment
Commission to the Assignee at the rate set forth in Section 3.01(a) of the
Credit Agreement, with the Assignor and the Assignee effecting any agreed
upon sharing of the Term Loan Commitment Commission through payment by the
Assignee to the Assignor.
10/ Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. The Borrower and the
Administrative Agent shall, following recordation of such assignment by the
Administrative Agent on the Register, direct the entire amount of the
Revolving Loan Commitment Commission to the Assignee at the rate set forth in
Section 3.01(b) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of the Revolving Loan Commitment Commission
through payment by the Assignee to the Assignor.
345
ANNEX I
Page 3
9. Letter of Credit
Fee to the
Assignee: As set forth in Section 3.01(c) of the Credit Agreement
(unless otherwise agreed to by the Assignor and the Assignee).11/
10. Notice:
ASSIGNEE:
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNEE:
-------------------
-------------------
Attention:
Reference:
__________________________________
11/ Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. The Borrower and the
Administrative Agent shall, following recordation of such assignment by the
Administrative Agent on the Register, direct the entire amount of the Letter of
Credit Fee to the Assignee at the rate set forth in Section 3.01(c) of the
Credit Agreement, with the Assignor and the Assignee effecting any agreed upon
sharing of the Letter of Credit Fee through payment by the Assignee to the
Assignor.
346
ANNEX I
Page 4
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By________________________ By__________________________
________________________ __________________________
(Print Name and Title) (Print Name and Title)
347
EXHIBIT L
INTERCOMPANY NOTE
New York, New York
[Date]
FOR VALUE RECEIVED, [NAME OF PAYOR] (the "Payor"), hereby
promises to pay on demand to the order of _____________ or its assigns (the
"Payee"), in lawful money of the United States of America in immediately
available funds, at such location in the United States of America as the Payee
shall from time to time designate, the unpaid principal amount of all loans and
advances made by the Payee to the Payor.
The Payor promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at such rate per annum as shall be agreed upon from time to time by the
Payor and Payee.
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar proceeding of any jurisdiction relating to the Payor,
the unpaid principal amount hereof shall become immediately due the payable
without presentment, demand, protest or notice of any kind in connection with
this Note.
This Note evidences certain permitted intercompany
Indebtedness referred to in the Credit Agreement, dated as of November __,
1996, among Doubletree Corporation, the lenders party thereto from time to
time, Morgan Stanley Senior Funding, Inc., as Syndication Agent and as
Arranger, and The Bank of Nova Scotia, as Administrative Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement"), and is
subject to the terms thereof, and shall be pledged by the Payee pursuant to the
Pledge Agreement (as defined in the Credit Agreement). The Payor hereby
acknowledges and agrees that the Collateral Administrative Agent pursuant to
and as defined in the Pledge Agreement, as in effect from time to time, may
exercise all rights provided therein with respect to this Note.
348
EXHIBIT L
Page 2
The Payee is hereby authorized to record all loans and
advances made by it to the Payor (all of which shall be evidenced by this
Note), and all repayments or prepayments thereof, in its books and records,
such books and records constituting prima facie evidence of the accuracy of the
information contained therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
[NAME OF PAYOR]
By___________________________________
Title:
[NAME OF PAYEE]
By____________________________
Title:
Pay to the order of
______________________________