1
Exhibit 10.3
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 8, 1996
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TABLE OF CONTENTS
Page
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.............................. 18
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............................................................ 26
4.01 Voluntary Prepayments................................................................ 26
4.02 Mandatory Repayments and Commitment Reductions....................................... 27
4.03 Method and Place of Payment.......................................................... 37
(i)
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Page
4.04 Net Payments......................................................................... 37
SECTION 5. Conditions Precedent to Initial Credit Events........................................... 40
5.01 Execution of Agreement; Notes........................................................ 40
5.02 Officer's Certificate................................................................ 40
5.03 Opinions of Counsel.................................................................. 40
5.04 Corporate Documents; Proceedings; etc................................................ 40
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Tax Sharing Agreements; Joint Venture
Agreements; Property Management Agreements........................................ 41
5.06 Equity Financing; Equity Rollover.................................................... 42
5.07 Consummation of Acquisition; Cash on Hand............................................ 43
5.08 Refinancing.......................................................................... 43
5.09 Adverse Change, etc.................................................................. 44
5.10 Litigation........................................................................... 45
5.11 Pledge Agreement..................................................................... 45
5.12 Security Agreement................................................................... 45
5.13 Subsidiaries Guaranty................................................................ 46
5.14 Mortgages; Title Insurance; Survey; etc.............................................. 46
5.15 Projections; Pro Forma Balance Sheet................................................. 47
5.16 Solvency Certificate; Insurance Certificates......................................... 47
5.17 Fees, etc............................................................................ 47
SECTION 6. Conditions Precedent to All Credit Events............................................... 47
6.01 No Default; Representations and Warranties........................................... 47
6.02 Notice of Borrowing; Letter of Credit Request........................................ 48
SECTION 7. Representations, Warranties and Agreements.............................................. 48
7.01 Corporate and Other Status........................................................... 49
7.02 Corporate and Other Power and Authority.............................................. 49
7.03 No Violation......................................................................... 49
7.04 Approvals............................................................................ 50
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc.................................................................. 50
7.06 Litigation........................................................................... 52
7.07 True and Complete Disclosure......................................................... 52
7.08 Use of Proceeds; Margin Regulations.................................................. 52
7.09 Tax Returns and Payments............................................................. 53
7.10 Compliance with ERISA................................................................ 53
(ii)
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Page
7.11 The Security Documents............................................................... 55
7.12 Representations and Warranties in Acquisition Documents.............................. 56
7.13 Properties........................................................................... 56
7.14 Capitalization....................................................................... 56
7.15 Subsidiaries and Joint Ventures...................................................... 57
7.16 Compliance with Statutes, etc........................................................ 57
7.17 Investment Company Act............................................................... 57
7.18 Public Utility Holding Company Act................................................... 57
7.19 Environmental Matters................................................................ 57
7.20 Labor Relations...................................................................... 58
7.21 Patents, Licenses, Franchises and Formulas........................................... 58
7.22 Indebtedness......................................................................... 59
7.23 Transaction.......................................................................... 59
SECTION 8. Affirmative Covenants................................................................... 59
8.01 Information Covenants................................................................ 60
8.02 Books, Records and Inspections....................................................... 63
8.03 Maintenance of Property; Insurance................................................... 63
8.04 Corporate Franchises................................................................. 64
8.05 Compliance with Statutes, etc........................................................ 65
8.06 Compliance with Environmental Laws................................................... 65
8.07 ERISA................................................................................ 66
8.08 End of Fiscal Years; Fiscal Quarters................................................. 67
8.09 Performance of Obligations........................................................... 67
8.10 Payment of Taxes..................................................................... 67
8.11 Interest Rate Protection............................................................. 67
8.12 Additional Security; Further Assurances.............................................. 68
8.13 Foreign Subsidiaries Security........................................................ 68
8.14 Joint Venture Distributions.......................................................... 69
8.15 Existing Glendale Debt............................................................... 70
8.16 Maintenance of Corporate Separateness................................................ 70
SECTION 9. Negative Covenants...................................................................... 70
9.01 Liens................................................................................ 70
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................... 74
9.03 Dividends............................................................................ 79
9.04 Indebtedness......................................................................... 79
9.05 Advances, Investments and Loans...................................................... 83
9.06 Transactions with Affiliates......................................................... 84
(iii)
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Page
9.07 Capital Expenditures; Permitted Hotel Acquisitions; Permitted
Hotel Investments................................................................ 85
9.08 Consolidated Fixed Charge Coverage Ratio............................................ 89
9.09 Consolidated Interest Coverage Ratio. .............................................. 89
9.10 Maximum Leverage Ratio.............................................................. 90
9.11 Minimum Consolidated Net Worth...................................................... 90
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-
Laws and Certain Other Agreements; etc........................................... 90
9.13 Limitation on Certain Restrictions on Subsidiaries.................................. 91
9.14 Limitation on Issuance of Capital Stock............................................. 92
9.15 Business............................................................................ 92
9.16 Limitation on Creation of Subsidiaries and Joint Ventures........................... 92
SECTION 10. Events of Default..................................................................... 93
10.01 Payments........................................................................... 93
10.02 Representations, etc............................................................... 93
10.03 Covenants.......................................................................... 93
10.04 Default Under Other Agreements..................................................... 94
10.05 Bankruptcy, etc.................................................................... 94
10.06 ERISA.............................................................................. 95
10.07 Security Documents................................................................. 95
10.08 Subsidiaries Guaranty.............................................................. 96
10.09 Judgments.......................................................................... 96
10.10 Change of Control.................................................................. 96
10.11 Certain Master Leases.............................................................. 96
SECTION 11. Definitions and Accounting Terms...................................................... 97
11.01 Defined Terms...................................................................... 97
SECTION 12. The Administrative Agent and the Syndication Agent.................................... 135
12.01 Appointment........................................................................ 135
12.02 Nature of Duties................................................................... 135
12.03 Lack of Reliance on the Administrative Agent and the Syndication
Agent............................................................................ 136
12.04 Certain Rights of the Agents....................................................... 136
12.05 Reliance........................................................................... 137
12.06 Indemnification.................................................................... 137
12.07 The Administrative Agent and the Syndication Agent in their
Individual Capacity.............................................................. 137
(iv)
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Page
12.08 Holders............................................................................ 138
12.09 Resignation by the Administrative Agent and the Syndication
Agent............................................................................ 138
12.10 Managing Agent.................................................................... 139
SECTION 13. Miscellaneous......................................................................... 139
13.01 Payment of Expenses, etc........................................................... 139
13.02 Right of Setoff.................................................................... 140
13.03 Notices............................................................................ 140
13.04 Benefit of Agreement; Assignments; Participations.................................. 141
13.05 No Waiver; Remedies Cumulative..................................................... 143
13.06 Payments Pro Rata.................................................................. 143
13.07 Calculations; Computations; Accounting Terms....................................... 144
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL...................................................... 144
13.09 Counterparts....................................................................... 146
13.10 Effectiveness...................................................................... 146
13.11 Headings Descriptive............................................................... 146
13.12 Amendment or Waiver; etc........................................................... 146
13.13 Survival........................................................................... 148
13.14 Domicile of Loans.................................................................. 148
13.15 Register........................................................................... 149
13.16 Confidentiality.................................................................... 149
13.17 Limitation on Increased Costs...................................................... 150
13.18 Certain Post-Closing Actions....................................................... 150
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
(v)
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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
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)
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CREDIT AGREEMENT, dated as of November 8, 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 the immediately preceding
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Interest Period) and (iii) shall be made by each such Bank on any Term Loan
Borrowing Date in that aggregate principal amount which does not exceed 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
continuing until such time as the
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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 Mandatory Borrowing would otherwise have
occurred to but excluding the date
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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.
(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).
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(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 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
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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 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
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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 evidenced 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
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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 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
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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 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:
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(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 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
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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 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
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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 adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank, the NAIC 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
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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 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
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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 one or more Tranches, the 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 theretofore 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
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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 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.
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(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 (exclusive 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 NonDefaulting 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
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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").
(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
Standby 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
Standby 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 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
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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.
(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.
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(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 (except
as otherwise expressly provided in the last sentence of Section 2.04(b)) 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.
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 dis-
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bursement 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 (including
the NAIC) (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 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
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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 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
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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 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) 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
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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) 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) 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 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 either no
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Tranche A Term Loans are incurred on such date or Tranche A Term Loans are
incurred in an amount less than the Total Tranche A Term Loan Commitment as then
in effect, the amount by which the Total Tranche A Term Loan Commitment is
terminated (after giving effect to any reduction thereto on such date as
provided in Section 4.02(e)(ii)(y)) 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 is made (x) in any fiscal year with
proceeds of the Retained Excess Cash Flow Amount, as then in effect, for such
fiscal year or (y) with proceeds of the Retained Net Equity Proceeds Amount may
(in each case) 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
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Term Loans, and with 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) 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 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.
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(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 $ 1,200,000
June 30, 1997 $ 1,200,000
September 30, 1997 $ 1,200,000
December 31, 1997 $ 1,200,000
March 31, 1998 $12,000,000
June 30, 1998 $12,000,000
September 30, 1998 $12,000,000
December 31, 1998 $12,000,000
March 31, 1999 $15,500,000
June 30, 1999 $15,500,000
September 30, 1999 $15,500,000
December 31, 1999 $15,500,000
March 31, 2000 $17,750,000
June 30, 2000 $17,750,000
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September 30, 2000 $17,750,000
December 31, 2000 $17,750,000
March 31, 2001 $21,500,000
June 30, 2001 $21,500,000
September 30, 2001 $21,500,000
December 31, 2001 $21,500,000
March 31, 2002 $22,600,000
June 30, 2002 $22,600,000
September 30, 2002 $22,600,000
Tranche A Term Loan Maturity Date $22,600,000
(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 $ 400,000
June 30, 1997 $ 400,000
September 30, 1997 $ 400,000
December 31, 1997 $ 400,000
March 31, 1998 $ 400,000
June 30, 1998 $ 400,000
September 30, 1998 $ 400,000
December 31, 1998 $ 400,000
March 31, 1999 $ 400,000
June 30, 1999 $ 400,000
September 30, 1999 $ 400,000
December 31, 1999 $ 400,000
March 31, 2000 $ 400,000
June 30, 2000 $ 400,000
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September 30, 2000 $ 400,000
December 31, 2000 $ 400,000
March 31, 2001 $ 400,000
June 30, 2001 $ 400,000
September 30, 2001 $ 400,000
December 31, 2001 $ 400,000
March 31, 2002 $ 400,000
June 30, 2002 $ 400,000
September 30, 2002 $ 400,000
December 31, 2002 $ 400,000
March 31, 2003 $26,900,000
June 30, 2003 $26,900,000
September 30, 2003 $26,900,000
December 31, 2003 $26,900,000
March 31, 2004 $26,900,000
Tranche B Term Loan Maturity Date $26,900,000
(d) 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 capital
contribution or any sale or issuance of its equity (other than (i) the first
$319,800,000 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%
(or in the case of Net Equity Proceeds received within 30 days after the Initial
Borrowing Date from the exercise of the underwriters overallotment option for
the Public Equity Financing, such other percentage as the Borrower may elect) 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).
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(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
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
(before giving effect to the incurrence of any Tranche A Term Loans on such
date) 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 Red Lion 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
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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 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 Red Lion 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 Red Lion 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 Red Lion 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 purchased the like
assets or 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 Red Lion 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 when, as and 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).
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(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 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
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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 REIT Equity at a time when RFS and/or RFS Sub
are subject to the minimum net worth requirement described in Schedule XV, the
cash proceeds received from the respective sale, to the extent that same would
otherwise be required to be applied as provided above in this Section 4.02(i),
shall only be required to be so applied when, as and 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
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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 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). 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. 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)
only 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 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,
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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) in accordance with Sections 4.02(j) and (k), 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
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
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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, 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), except
to the extent otherwise provided in the last sentence of Section 4.04(b)) are so
levied or imposed, the Borrower agrees to pay the full amount of such
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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, within 5 Business Days after 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 within 5 Business Days after 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 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
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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.
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
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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.
(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,
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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
multi-employer 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");
(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
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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
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
$319,800,000 of gross cash proceeds from the Equity Financing and (ii) the
Borrower shall have utilized at least $319,800,000 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.
(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
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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
$15,000,000 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
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
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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.
(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.
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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 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 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
(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:
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(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;
(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.
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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 Certificate; 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 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).
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(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).
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
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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).
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.
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(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 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).
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(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.
(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 events that are not to be
viewed as facts and that actual results may differ from the projected results
and such differences may be material.
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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, provided that Loans made on
the Initial Borrowing Date may be used to consummate the Acquisition. Neither
the making of any Loan nor the use of the proceeds 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
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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 (with respect 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 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
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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 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.
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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 Permitted
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,
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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 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,
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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 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
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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 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
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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 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).
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(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.
(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)
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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:
(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
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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
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
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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
limitation, 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
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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 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
comply, 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 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), 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,
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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 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
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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 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
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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 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
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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 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
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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 or partners,
(iv) in the case of any Non-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 Existing Glendale Debt. Notwithstanding anything to the
contrary contained in this Agreement, to the extent that the Existing Glendale
Debt is to be refinanced (in whole or in part) with proceeds of Loans, the
Borrower or a Subsidiary Guarantor shall be required to loan the proceeds of
such Loans to the respective Joint Venture to refinance the Existing Glendale
Debt.
8.16 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
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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"):
(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 pro-
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ceedings, 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;
(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
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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;
(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 outstanding Indebtedness secured by such Liens,
when added to the aggregate amount of outstanding 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
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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 outstanding Indebtedness secured by such Liens,
when added to the aggregate amount of outstanding 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;
(xviii) Liens on property or assets of a Subsidiary of the
Borrower in favor of, and securing obligations owed to, the Borrower or
any Subsidiary Guarantor;
(xix) Liens securing Indebtedness incurred pursuant to Section
9.04(xii), so long as the Liens securing such Indebtedness do not
encumber any assets or property other than the assets or property of
the Joint Venture of the Borrower that owns the Red Lion Hotel in
Glendale, California; and
(xx) 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 Administrative Agent
shall be authorized to take any actions deemed appropriate 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
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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-lease-back 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 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 (provided that for
purposes of determining pro forma compliance with any such Section for
any period during which the covenants contained therein are not yet
required to be tested pursuant to
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the terms thereof, the Borrower shall instead use the historical
financial results of the Borrower and its Subsidiaries for the most
recently ended four fiscal quarter period (but calculated as if the
Transaction, the related financing thereof and the other transactions
contemplated hereby had been consummated on the first day of such
period and (x) assuming that the amount of Capital Expenditures, Hotel
Investments and/or Hotel Acquisitions made during any portion of such
period prior to the Initial Borrowing Date is at an assumed per annum
rate of $40,000,000 and (y) with Consolidated EBITDA for such period to
be determined in accordance with the definition thereof) and the
Borrower shall be required to demonstrate, on a Pro Forma Basis, that
no Default or Event of Default will exist under, or would have existed
during such period prior to the date of the respective sale pursuant
to, the financial covenants contained in any of such Sections 9.08
through 9.11, inclusive (but assuming, for this purpose, that the level
of financial performance required to be satisfied is the level
applicable to any such Section the first time compliance with such
Section is required to be tested pursuant to the terms thereof)), and
(II) the Borrower shall have delivered to the Agents an officer's
certificate executed by the Chief Financial Officer of the Borrower or
another senior financial officer of the Borrower, certifying to the
best of such officer's knowledge, compliance with the requirements of
this clause (iv) and containing the calculations (in reasonable detail)
required by this clause (iv);
(v) RFS and RFS Sub may sell the RFS REIT Equity to the RFS
REIT or to any other Person (other than to the Borrower or a Subsidiary
thereof), in each case for cash and at fair market value (as determined
in good faith by RFS or RFS Sub) 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 (provided that for
purposes of determining pro forma compliance with any such Section for
any period
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during which the covenants contained therein are not yet required to be
tested pursuant to the terms thereof, the Borrower shall instead use
the historical financial results of the Borrower and its Subsidiaries
for the most recently ended four fiscal quarter period (but calculated
as if the Transaction, the related financing thereof and the other
transactions contemplated hereby had been consummated on the first day
of such period and (x) assuming that the amount of Capital
Expenditures, Hotel Investments and/or Hotel Acquisitions made during
any portion of such period prior to the Initial Borrowing Date is at an
assumed per annum rate of $40,000,000 and (y) with Consolidated EBITDA
for such period to be determined in accordance with the definition
thereof) and the Borrower shall be required to demonstrate, on a Pro
Forma Basis, that no Default or Event of Default will exist under, or
would have existed during such period prior to the date of the
respective sale pursuant to, the financial covenants contained in any
of such Sections 9.08 through 9.11, inclusive (but assuming, for this
purpose, that the level of financial performance required to be
satisfied is the level applicable to any such Section the first time
compliance with such Section is required to be tested pursuant to the
terms thereof)), and (II) the Borrower shall have delivered to the
Agents an officer's certificate executed by the Chief Financial Officer
of the Borrower or another senior financial officer of the Borrower,
certifying to the best of such officer's knowledge, compliance with the
requirements of this clause (vi) and containing the calculations (in
reasonable detail) required by this clause (vi);
(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 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 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;
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(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-lease-back 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) the Borrower may transfer any assets to a Subsidiary
Guarantor, and 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 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 sub-leases 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
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is for cash and at fair market value (as determined in good faith 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 Administrative 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 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
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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 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; (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;
(v) Indebtedness subject to Liens permitted under Section
9.01(viii);
(vi) intercompany Indebtedness to the extent permitted by Sec-
tions 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 franchisees 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 at any time under all such guaranties does not exceed
$30,000,000;
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(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 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 (provided that for
purposes of determining pro forma compliance with any such Section for
any period during which the covenants contained therein are not yet
required to be tested pursuant to the terms thereof, the Borrower shall
instead use the historical financial results of the Borrower and its
Subsidiaries for the most recently ended four fiscal quarter period
(but calculated as if the Transaction, the related financing thereof
and the other transactions contemplated hereby had been consummated on
the first day of such period and (x) assuming that the amount of
Capital Expenditures, Hotel Investments and/or Hotel Acquisitions made
during any portion of such period prior to the Initial Borrowing Date
is at an assumed per annum rate of $40,000,000 and (y) with
Consolidated EBITDA for such period to be determined in accordance with
the definition thereof) and the Borrower shall be required to
demonstrate, on a Pro Forma Basis, that no Default or Event of Default
will exist under, or would have existed during such period prior to the
date of the respective incurrence pursuant to, the financial covenants
contained in any of such
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Sections 9.08 through 9.11, inclusive (but assuming, for this purpose,
that the level of financial performance required to be satisfied is the
level applicable to any such Section the first time compliance with
such Section is required to be tested pursuant to the terms thereof)),
and (II) the Borrower shall have delivered to the Agents an officer's
certificate executed by the Chief Financial Officer of the Borrower or
another senior financial officer of the Borrower, certifying to the
best of such officer's knowledge, compliance with the requirements of
this clause (x) and containing the calculations (in reasonable detail)
required by this clause (x);
(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 (provided that for purposes of determining
pro forma compliance with any such Section for any period during which
the covenants contained therein are not yet required to be tested
pursuant to the terms thereof, the Borrower shall instead use the
historical financial results of the Borrower and its Subsidiaries for
the most recently ended four fiscal quarter period (but calculated as
if the Transaction, the related financing thereof and the other
transactions contemplated hereby had been consummated on the first day
of such period and (x) assuming that the amount of Capital
Expenditures, Hotel Investments and/or Hotel Acquisitions made during
any portion of such period prior to the Initial Borrowing Date is at an
assumed per annum rate of $40,000,000 and (y) with Consolidated EBITDA
for such period to be determined in accordance with the definition
thereof) and the Borrower shall be required to demonstrate, on a Pro
Forma Basis, that no Default or Event of Default will exist under, or
would have existed during such period prior to the date of the
respective incurrence pursuant to, the financial covenants contained in
any of such Sections 9.08 through 9.11, inclusive (but assuming, for
this purpose, that the level of financial performance required to be
satisfied is the level applicable to any such Section the first time
compliance with such Section is required to be tested pursuant to the
terms thereof)), and (II) the Borrower shall have delivered to the
Agents an officer's certificate executed by the Chief Financial Officer
of the Borrower or another senior financial officer of the Borrower,
certifying to the best of such officer's knowledge, compliance with the
requirements of this clause (xi) and containing the calculations (in
reasonable detail) required by this clause (xi);
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(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 an intercompany loan made by the Borrower or a Subsidiary
Guarantor to such Joint Venture to refinance the Existing Glendale
Debt, provided that (x) 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 inter-company loan owing to the
Borrower or such Subsidiary Guarantor and (y) such Indebtedness may be
guaranteed on an unsecured basis by the Borrower and/or Red Lion to the
same extent that the Borrower and Red Lion guaranty the Existing
Glendale Debt on the Initial Borrowing Date; 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).
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);
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(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);
(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
principal amount of Loans incurred to refinance the 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
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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 condi tions 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, 9.05 and 9.07, (iii) customary fees may be paid to non-officer
directors of the Borrower and (iv) Subsidiaries and Joint 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-
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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 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
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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.
(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 at any time during any fiscal year of the Borrower in an amount
equal to the Retained Excess Cash Flow Amount with respect to such fiscal year
as then in effect, 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, after January 1, 1998, the
Borrower and its Subsidiaries may make Capital Expenditures, Hotel Acquisitions
and Hotel Investments in
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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 Red Lion Proceeds
from any Specified Red Lion Event so long as (i) such Net Sale Proceeds or
Specified Red Lion 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 that amount permitted by Section
4.02(f), (iii) such Net Sale Proceeds or Specified Red Lion Proceeds are not
required to be applied to repay Loans (or reduce Commitments) 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 to repay Loans (or reduce Commitments) 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
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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 contained in Sections 9.08 through 9.11, inclusive (provided that for
purposes of determining pro forma compliance with any such Section for any
period during which the covenants contained therein are not yet required to be
tested pursuant to the terms thereof, the Borrower shall instead use the
historical financial results of the Borrower and its Subsidiaries for the most
recently ended four fiscal quarter period (but calculated as if the Transaction,
the related financing thereof and the other transactions contemplated hereby had
been consummated on the first day of such period and (x) assuming that the
amount of Capital Expenditures, Hotel Investments and/or Hotel Acquisitions made
during any portion of such period prior to the Initial Borrowing Date is at an
assumed per annum rate of $40,000,000 and (y) with Consolidated EBITDA for such
period to be determined in accordance with the definition thereof) and the
Borrower shall be required to demonstrate, on a Pro Forma Basis, that no Default
or Event of Default will exist under, or would have existed during such period
prior to the date of the respective Hotel Acquisition or Hotel Investment
pursuant to, the financial covenants contained in any of such Sections 9.08
through 9.11, inclusive (but assuming, for this purpose, that the level of
financial performance required to be satisfied is the level applicable to any
such Section the first time compliance with such Section is required to be
tested pursuant to the terms thereof)), and (II) the Borrower shall have
delivered to the Agents an officer's certificate executed by the Chief Financial
Officer of the Borrower or another senior 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, (x) such amount shall include the amount of any Indebtedness assumed by
the Borrower or any of its Subsidiaries in connection therewith and (y) any cash
Investments made by the Borrower or a Subsidiary Guarantor in any other
Subsidiary the proceeds of which are to be promptly utilized by such other
Subsidiary to make Capital Expenditures, Hotel Acquisitions and/or Hotel
Investments shall be treated as a single investment.
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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
and thereafter 4.00:1.00
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
December 30, 2000 3.50:1.00
December 31, 2000 and thereafter 3.00:1.00
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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
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 Subordinated Notes or any New
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 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 (it being understood that
amendments may be made to the Doubletree Master REIT Lease to effectuate the
transfers described in Section 9.05(xi)) 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
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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, (vi) restrictions on the assignment or transfer of
any stock or partnership interests in a Subsidiary (other than a Subsidiary
Guarantor which is a Significant Subsidiary) or Joint Venture of the Borrower to
the extent such restrictions are imposed by any stockholders' agreement,
partnership agreement, joint venture agreement or similar agreement and (vii)
restrictions set forth on Schedule XV and similar net worth restrictions imposed
on RFS Sub and any other Subsidiary of the Borrower 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 common stock redeemable 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 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
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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 Administrative 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 thereof) 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 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
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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 pre-payment, prior to the stated maturity thereof, provided that it
shall not be a Default or an 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, arrange-
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ment, 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 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
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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
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
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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.
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.
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"Adjusted Consolidated Cash Income" shall mean, for any period,
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 less the sum of the amount of all net non-cash gains 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 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
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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.
"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 and 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
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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 $319,800,000 are applied within
30 days after the Initial Borrowing Date to reduce the Total Term Loan
Commitment and/or repay outstanding Term Loans pursuant to Section 4.02(d)
(whether or not such proceeds are otherwise required to be applied pursuant to
such Section 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, on a prospective basis only from and after the date such
proceeds are so applied, by 0.125% and (y) in the event that the Borrower issues
any New 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 any Specified Red Lion Event, (x) no Default under Section 10.01
or 10.05 then exists and 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 Red Lion Proceeds
from such Specified Red Lion Event up to an aggregate retained amount (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 per-
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mitted 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 Person 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
take-over 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.
"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
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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 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.
"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
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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 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.
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"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 current 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 (w) to any extraordinary gains or losses, (x)
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 of net gains or losses shall be included
in Consolidated EBIT for any Test Period in connection with such sales or
liquidations referred to in this clause (ii)), (y) to any reduction in a reserve
account liability which was originally established with cash proceeds from the
sale or liquidation of an equity interest in a Joint Venture to the extent that
the gain or loss from such sale or liquidation was already included pursuant to
clause (x)(ii) above whether in the current period or from a prior period 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 was deducted in
arriving at Consolidated
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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
$53,157,000 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 (after
giving effect to any refinancing thereof other than with proceeds of Loans) 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 any 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 consolidated 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
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such Test Period multiplied by 2, (iii) in the case of the Test Period ending on
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 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 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.
"Consolidated Non-Subsidiary 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).
"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
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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.
"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
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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 by the Borrower or a Wholly-Owned Subsidiary thereof
to 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 XIII,
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 common 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.
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"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,
insurance company, financial institution, fund or other Person which regularly
purchases interests in loans or extensions of credit of the types made pursuant
to this Agreement, any other Person which would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act as
in effect on the Effective Date 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 non-compliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental 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
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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
there- under. 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.
"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
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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 issuances, asset sales or
insurance proceeds, 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).
"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.
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"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 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,
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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 Subsidiary Guarantor 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.
"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 four fiscal quarter period then last ended (or, to the extent such
Subsidiary was acquired during such four fiscal quarter period, would have
accounted for less than $2,500,000 of Consolidated EBITDA for such period if the
Borrower had owned such Subsidiary throughout such period) 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
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continuing, would have accounted for less than $2,500,000 of Consolidated EBITDA
of the Borrower for the four fiscal quarter period then last ended and (y) would
not constitute a Significant Subsidiary 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.
"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.
"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.
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"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, 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;
(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:
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(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 (x)
in the case of Tranche A Term Loans, Revolving Loans and Swingline Loans, 1/2 of
1%, provided, in the event that the Applicable Margin is permanently decreased
by 0.125% pursuant to clause (x) of the last sentence of the definition of
Applicable Margin, the Borrower shall have the right to recalculate the Interest
Reduction Discount at the time such decrease is effective by calculating the
Leverage Ratio at such time (after giving effect to any repayment of Term Loans
at such time) (and (x) with the numerator of the Leverage Ratio to be based on
the amount of Consolidated Indebtedness at such time and (y) with the
denominator of the Leverage Ratio (i.e., Consolidated EBITDA) to be
$152,302,000), and with such recalculated Interest Reduction Discount to be
effective on a prospective basis only from and after the date of any delivery of
a certificate of the Chief Financial Officer of the Borrower or another senior
financial officer of the Borrower to the Agents certifying (in reasonable
detail) such Interest Reduction Discount and until the first Start Date after
the Initial Borrowing Date, and (y) in the case of Tranche B Term Loans, 1/4 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 and 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.
"KKR" shall mean Kohlberg Kravis Roberts & Co., L.P., a Delaware
limited partnership.
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"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.
"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.
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"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 on December 31, 1997) ended prior to the date of determination, 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.
"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.
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"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.
"NAIC" shall mean the National Association of Insurance
Commissioners.
"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 or 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.
"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).
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"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
(i) is 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: Eudia Smith, 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).
"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.
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"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. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
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"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 Securities 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, in each case to the extent that the occurrence of any such
event required the financial covenants contained in Sections 9.08
through 9.11, inclusive, to be recalculated on a Pro Forma Basis.
"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
Subsidiary and (v) (I) based on calculations made by the Borrower on a Pro Forma
Basis after giving effect to the respective
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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 (provided that for purposes of determining
pro forma compliance with any such Section for any period during which the
covenants contained therein are not yet required to be tested pursuant to the
terms thereof, the Borrower shall instead use the historical financial results
of the Borrower and its Subsidiaries for the most recently ended four fiscal
quarter period (but calculated as if the Transaction, the related financing
thereof and the other transactions contemplated hereby had been consummated on
the first day of such period and (x) assuming that the amount of Capital
Expenditures, Hotel Investments and/or Hotel Acquisitions made during any
portion of such period prior to the Initial Borrowing Date is at an assumed per
annum rate of $40,000,000 and (y) with Consolidated EBITDA for such period to be
determined in accordance with the definition thereof) and the Borrower shall be
required to demonstrate, on a Pro Forma Basis, that no Default or Event of
Default will exist under, or would have existed during such period prior to the
date of the respective designation pursuant to, the financial covenants
contained in any of such Sections 9.08 through 9.11, inclusive (but assuming,
for this purpose, that the level of financial performance required to be
satisfied is the level applicable to any such Section the first time compliance
with such Section is required to be tested pursuant to the terms thereof)), and
(II) the Borrower shall have delivered to the Agents an officer's certificate
executed by the Chief Financial Officer of the Borrower or another senior
financial officer of the Borrower, certifying to the best of such officer's
knowledge, compliance with the requirements of this definition and containing
the calculations (in reasonable detail) required by this definition.
"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 Red Lion.
"Red Lion Properties" shall mean Red Lion Properties, Inc., a
Delaware corporation.
"Reference Banks" shall mean Scotiabank, Bankers Trust Company and
Societe Generale so long as each such Bank remains a Bank party to this
Agreement. In the event that one or more Reference Banks no longer constitute a
Bank under this Agreement, the Borrower and the Administrative Agent shall
designate another Bank (with the consent of such Bank) to act as a Reference
Bank hereunder.
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"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.
"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.
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"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 fiscal
year of the Borrower (commencing with the fiscal year beginning January 1,
1998), an amount equal to 50% of Excess Cash Flow for the immediately preceding
fiscal year of the Borrower, (i) less the amount of all Capital Expenditures,
Hotel Acquisitions and Hotel Investments previously made pursuant to Section
9.07(f) utilizing such Retained Excess Cash Flow Amount and (ii) the amount of
all voluntary prepayments of Term Loans made pursuant to the proviso of Section
4.01(a)(v) utilizing such Retained Excess Cash Flow Amount.
"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 $319,800,000 of Net Equity Proceeds received from the Equity
Financing) 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/or to reduce the Total Term Loan Commitment or repay outstanding Term Loans
as contemplated in clause (x) of the second sentence of the definition of
Applicable Margin) and (iii) the amount of all Capital Expenditures, Hotel
Acquisitions and Hotel Investments previously made pursuant to Section 9.07(d).
"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).
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"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, 35,000 shares of common stock in the RFS REIT
and the limited partnership interests (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 from RFS REIT, as landlord.
"RFS Sub" shall have the meaning provided in Section 9.05(xi).
"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).
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"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.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Significant Subsidiary" shall mean each Subsidiary of the
Borrower that is a "significant subsidiary" as defined in Rule 1-02(v) of
Regulation S-X under the Securities Act and the Securities Exchange Act (as such
regulation is in effect on the Initial Borrowing Date).
"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 by the Borrower or a Subsidiary thereof to the Joint Venture
holding the Existing Glendale Debt to the extent that the proceeds of the
original loan or advance were used to refinance the Existing Glendale Debt and
were made with proceeds of Loans.
"Specified Red Lion Proceeds" shall mean cash proceeds received by
the Borrower or a Subsidiary thereof from a Specified Red Lion Event.
"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 a single Hotel Property to be developed and/or acquired by
such Subsidiary with Non-Recourse Indebtedness incurred pursuant to Section
9.04(xi).
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"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 Non-Subsidiary 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 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 (or intends to incur) 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 that would be violated by the entering into of the Subsidiaries Guaranty
and (vi) Red Lion Properties, RFS and RFS Sub, so long as such Subsidiaries are
subject to the minimum net worth requirements set forth on Schedule XV.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.13.
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"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.
"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.
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"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 then last ended (in each case taken as one
accounting period) and (y) for any determination made thereafter, the 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,
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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) June 30, 1997 and (y) the Second Term Loan Borrowing Date.
"Tranche A Term Loan Maturity Date" shall mean November 15, 2002.
"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
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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 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).
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"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
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 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.
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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.
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
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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 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
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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 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.
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(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 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.
12.10 Managing Agent. No Managing Agent shall have any duties or
responsibilities under this Agreement in its capacity as such and Credit
Lyonnais New York Branch shall not have any duties or responsibilities in its
capacity as Collateral Agent.
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
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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 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
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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 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
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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 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
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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).
(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
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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.
(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) except as expressly provided herein, the financial results
of Unrestricted Subsidiaries shall be ignored, (iii) notwithstanding anything to
the contrary contained above, 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 (iv) so long as recourse in respect of the Austin
Obligations is limited solely to the Borrower's Hotel Property in Austin, Texas,
for purposes
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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 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
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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.
(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.
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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 of interest or Fees or extend the time of payment of interest
or Fees, 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)
release a Subsidiary Guarantor which is a Significant Subsidiary from the
Subsidiaries Guaranty (except as expressly provided in the Subsidiaries Guaranty
or in connection with the sale of such Subsidiary Guarantor in accordance with
the terms of this Agreement), (iv) amend, modify or waive any provision of this
Section 13.12, (v) 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 determination 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 (vi) 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 (u) 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), (v) 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, (w) 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
Administrative Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Administrative 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 Commit-
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ments 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 (vi), 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 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).
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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 name
and address of each Bank, 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 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
-147-
155
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, the Federal Deposit Insurance
Corporation, the NAIC 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, (f) to any rating agency to the
extent required in connection with any rating to be assigned to such Bank and
(g) 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 and to any direct or indirect contractual
counterparties in Interest Rate Protection Agreements or Other Hedging
Agreements entered into by any Bank, provided that such prospective transferee
and each such contractual counterparty agrees to be bound by the confidentiality
provisions contained in this Section 13.16.
(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
-148-
156
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.
13.18 Certain Post-Closing Actions. Notwithstanding anything to
the contrary contained in the Credit Agreement or in any other Credit Document,
the Borrower and each other Credit Party shall have until the 60th day after the
Initial Borrowing Date to deliver to the Collateral Administrative Agent
pursuant to the Pledge Agreement the capital stock of any Liquor License
Subsidiary owned by the Borrower or such other Credit Party (but only to the
extent that the capital stock of such Liquor License Subsidiary is permitted to
be so pledged under applicable law).
-149-
157
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:
158
CIBC, INC.,
Individually and as a Managing Agent
By__________________________________________
Title:
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:
159
ALLIED IRISH BANKS PLC acting through its CAYMAN
ISLAND BRANCH
By:_________________________________
Title
By:_________________________________
Title
ALLSTATE LIFE INSURANCE COMPANY
By:_________________________________
Title
By:_________________________________
Title
160
BANKERS TRUST COMPANY
By:_________________________________
Title
BANK OF HAWAII
By:_________________________________
Title
THE BANK OF NEW YORK
By:_________________________________
Title
BANQUE NATIONALE DE PARIS
By:_________________________________
Title
161
CHL HIGH YIELD LOAN PORTFOLIO
(a unit of Chase Manhattan Bank)
By:_________________________________
Title
CHANG HWA COMMERCIAL BANK,
LTD., NEW YORK BRANCH
By:_________________________________
Title
CITIBANK, N.A.
By:_________________________________
Title
CRESCENT/MACH I PARTNERS, L.P.,
by TCW Asset Management Company
its Investment Manager
By:_________________________________
Title
162
DLJ CAPITAL FUNDING, INC.
By:_________________________________
Title
DRESDNER BANK AG, NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By:_________________________________
Title
By:_________________________________
Title
FIRST HAWAIIAN BANK
By:_________________________________
Title
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________________
Title
163
THE FUJI BANK LIMITED, LOS ANGELES
AGENCY
By:_________________________________
Title
GIROCREDIT BANK AG DER SPARKASSEN,
GRAND CAYMAN ISLAND BRANCH
By:_________________________________
Title
HARCH CAPITAL MANAGEMENT
By:_________________________________
Title
HIBERNIA NATIONAL BANK
By:_________________________________
Title
164
IMPERIAL BANK
By:_________________________________
Title
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:_________________________________
Title
ING CAPITAL ADVISORS, INC., as agent
for bank syndication account
By:_________________________________
Title
KEY BANK OF COLORADO
By:_________________________________
Title
KZH HOLDING CORPORATION
By:_________________________________
Title
165
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
By:_________________________________
Title
MARINE MIDLAND BANK
By:_________________________________
Title
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By:_________________________________
Title
MELLON BANK, N.A.
By:_________________________________
Title
166
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By:_________________________________
Title
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:_________________________________
Title
MITSUI LEASING (U.S.A.) INC.
By:_________________________________
Title
NATIONSBANK OF TEXAS, N.A.
By:_________________________________
Title
167
THE NIPPON CREDIT BANK, LTD., LOS ANGELES
AGENCY
By:_________________________________
Title
NORTHERN LIFE INSURANCE COMPANY
By:_________________________________
Title
OAK HILL SECURITIES FUND, L.P.,
By: Oak Hill Securities GenPar, L.P.
its General Partner
By: Oak Hill Securities MGP, Inc.,
its General Partner
By:_________________________________
Scott Krase
Vice President
ORIX USA CORPORATION
By:_________________________________
Title
168
PPM AMERICA, INC., as attorney-in-fact
on behalf of Jackson National Life
Insurance Company
By:_________________________________
Title
PRIME INCOME TRUST
By:_________________________________
Title
PROTECTIVE LIFE INSURANCE COMPANY
By:_________________________________
Title
THE ROYAL BANK OF SCOTLAND PLC
By:_________________________________
Title
169
THE SAKURA BANK, LIMITED
By:_________________________________
Title
THE SANWA BANK, LIMITED
By:_________________________________
Title
SOUTHERN PACIFIC THRIFT & LOAN ASSOCIATION
By:_________________________________
Title
THE SUMITOMO BANK, LIMITED
By:_________________________________
Title
170
THE TOYO TRUST & BANKING CO.,
LTD., LOS ANGELES AGENCY
By:_________________________________
Title
THE TRAVELERS INSURANCE COMPANY
By:_________________________________
Title
WELLS FARGO BANK, N.A.
By:_________________________________
Title
171
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 8, 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
$____________.
(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:
- --------------
(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.
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
(A-1)
172
(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:
(A-2)
173
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 8, 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.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_____________________________________
Title:
(B-1-1)
174
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 8, 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.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
DOUBLETREE CORPORATION
By:_________________________________
Title:
(B-2-1)
175
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 8, 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.
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:
(B-3-1)
176
EXHIBIT C
LETTER OF CREDIT REQUEST
No. (3) Dated (4)
----- -----
The Bank of Nova Scotia,
as Administrative Agent under the
Credit Agreement (the "Credit
Agreement"), dated as of November 8,
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 (5) (the "Date of Issuance") in the aggregate stated
amount of (6) .
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.
- --------
(3) Letter of Credit Request Number.
(4) Date of Letter of Credit Request.
(5) 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).
(6) Aggregate initial Stated Amount of Letter of Credit.
(C-1)
177
The beneficiary of the requested Letter of Credit will be (7) ,
and such Letter of Credit will be in support of (8) and will have a stated
expiration date of (9) .
We hereby certify that:
(1) 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 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 an Event of Default occur.
Copies of all documentation with respect to the supported
transaction are attached hereto.
DOUBLETREE CORPORATION
By_______________________________________
Title:
____________________
(7) Insert name and address of beneficiary.
(8) 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.
(9) 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) 360 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.
(C-2)
178
EXHIBIT D
SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as
November 8, 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: _______________, ____
(D-1)
179
EXHIBIT E
[OPINION LETTER]
[Initial Borrowing Date]
To the Administrative Agent,
the Syndication Agent,
the Collateral Administrative
Agent and each of
the Banks party to the Credit
Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to Doubletree Corporation, a
Delaware corporation (the "Borrower"), RLH Acquisition Corp., a Delaware
corporation ("Merger Sub"), and each of the Subsidiary Guarantors (together with
the Borrower and Merger Sub, the "Credit Parties" and each, a "Credit Party"),
in connection with the preparation, execution and delivery of the Credit
Agreement, dated as of November __, 1996 (the "Credit Agreement"), among the
Borrower, the lenders party thereto from time to time (the "Banks"), Morgan
Stanley Senior Funding, Inc., as Syndication Agent and as Arranger (the
"Syndication Agent"), and The Bank of Nova Scotia, as Collateral Administrative
Agent (the "Administrative Agent"), and the transactions contemplated thereby.
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such records,
certificates and documents as we have deemed necessary or appropriate as a basis
for the opinions set forth herein, including, without limitation, the following:
(a) the Credit Documents, (b) the Acquisition Documents, (c) the Equity
Financing Documents, (d) the Refinancing Documents and (e) such other public,
corporate documents and records as we have deemed necessary or appropriate in
connection with this opinion.
This opinion is delivered to you pursuant to Section 5.03(i) of
the Credit Agreement.
As to questions of fact not independently verified by us we have
relied upon, to the extent we have deemed appropriate, (1) certificates of
public officials, (2) searches of public records and other documents, and (3)
representations, as to factual matters, made by the Credit Parties in response
to our inquiries and in the Documents. We have (without any investigation or
independent confirmation) relied upon, and assumed the accuracy of, such factual
representations and such certificates, corporate records, searches and other
documents with respect to factual matters.
Whenever our opinion with respect to the existence or the absence
of facts is indicated to be based on our knowledge or awareness, we are
referring to the actual knowledge of Dewey Ballantine attorneys who have
represented such parties. Except as expressly set forth herein, we have not
undertaken any independent investigation to determine the existence or absence
of any facts and no inference as to our knowledge concerning any facts should be
drawn as a result of the limited representation undertaken by us.
(E-1)
180
In rendering the opinions expressed below, we have also assumed,
with your permission and without independent verification, that: (1) the
signatures of persons (other than persons signing on behalf of the Credit
Parties) signing all documents in connection with which the opinions are
rendered are genuine and authorized; (2) all documents submitted to us as
originals or duplicate originals are authentic; (3) all documents submitted to
us as copies, whether certified or not, conform to authentic original documents;
(4) all parties to the documents reviewed by us, other than the Borrower, are
duly organized, validly existing and in good standing under the laws of all
jurisdictions where they are conducting their businesses or otherwise required
to be so qualified, and have full power and authority to execute, deliver and
perform under such documents and all such documents have been duly authorized by
all necessary corporate or other action on the part of such parties, have been
duly executed by such parties and have been duly delivered by such parties; and
(5) each Credit Document constitutes the valid and binding obligation of each
party thereto (other than the Borrower) enforceable against such party in
accordance with its terms.
Based upon the foregoing, and subject to the qualifications noted
below, we are of the opinion that:
1. The Borrower (i) is a duly incorporated and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate 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 listed on Schedule __ hereto.
2. The Borrower has the corporate power and authority to execute,
deliver and perform the terms and provisions of each of the Documents to which
it is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Documents to which it is a party. The
Borrower has duly executed and delivered each of the Documents to which it is a
party. Each of the Documents to which a Credit Party is a party constitutes the
legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms.
3. 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, will contravene any provision of any federal law,
statute, rule or regulation (including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System).
4. Neither the execution, delivery or performance by the Borrower
of the Documents to which it is a party, nor compliance by it with the terms and
provisions thereof, will violate any provision of the certificate of
incorporation, or by-laws (or similar organizational documents) of the Borrower.
5. With respect to the Borrower, all necessary shareholder and
board of director 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.
6. The Borrower is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7. The Borrower is not 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.
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8. The Transaction has been consummated in all material respects
in accordance with the terms and conditions of the respective Documents and all
applicable laws. 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 consummate each
part of the Transaction have been obtained, given, filed or taken and are in
full force and effect (other than (x) those required to effect the transfer of
liquor licenses as part of the Acquisition, and (y) to the extent not required
to be obtained prior to the date hereof) (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto 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 consummation of the Transaction. Additionally, to our
knowledge, there does not exist any judgment, order or injunction prohibiting or
imposing material adverse conditions on the consummation of the Transaction and,
to our knowledge, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the occurrence of any
Credit Event or the performance by the Borrower of its obligations under the
Documents.
9. On the date hereof and after giving effect to the Transaction
and the other transactions contemplated thereby, the authorized capital stock of
the Borrower consists of (i) ______ shares of common stock, $.01 par value per
share, and (ii) ______ shares of preferred stock, $____ par value per share, of
which no shares of such preferred stock are issued and outstanding.
10. After giving effect to the delivery to the Collateral
Administrative Agent of the Pledged Stock and Pledged Notes listed on Annex A
and Annex B to the Pledge Agreement, respectively, the security interest created
in favor of the Collateral Administrative Agent under the Pledge Agreement in
such Pledged Securities and constitutes a valid and enforceable perfected
security interest in such Pledged Securities in favor of the Collateral
Administrative Agent for the benefit of the Secured Creditors.
11. We have examined the Trademark Assignments (the "Trademark
Filings") and the Copyright Assignments (the "Copyright Filings") attached
hereto as Annexes C and D, respectively. The recordation of the Trademark
Filings in the United States Patent and Trademark Offices and assuming the
filing of the Financing Statements with the Filing Offices will be effective,
under law, to perfect the security interest granted to the Collateral
Administrative Agent in the trademarks covered by the Security Agreement. The
filing of the Copyright Filing with the United States Copyright Office and
assuming the filing of the Financing Statements with the Filing Offices will be
effective under federal law to perfect the security interest granted to the
Collateral Administrative Agent in the copyrights specified on Annex D.
12. We have been advised by the SEC that the Registration
Statements on Forms S-3 and S-4 filed in connection with the Transaction (the
"Registration Statements") were declared effective under the Securities Act on
____________, 1996 and ____________, 1996, respectively, and, to the best of our
knowledge and information, no stop order suspending the effectiveness of such
Registration Statements has been issued under the Securities Act or proceedings
therefor initiated or threatened by the SEC.
Our opinions as hereinafter expressed are subject to the following
further qualifications:
1. our opinions as to the enforceability of the Documents are
subject to the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or other similar laws from time to time in
effect affecting or relating to the rights of creditors or secured creditors
generally and of general principles of equity (regardless of whether such
enforceability is considered in a proceeding at equity or at law);
2. no opinion is expressed herein with regard to the availability
of the remedies of specific performance and injunctive and other forms of
equitable relief, or the availability of attorney's fees, or any
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provisions in the Documents which purport to exculpate the Collateral
Administrative Agent from the duty to exercise reasonable diligence and care
with regard to the Collateral;
3. our opinions are subject to limitations imposed by laws and
judicial decisions relating to or affecting the rights of creditors or secured
creditors generally, particularly where (a) the breach of such covenants or
provisions imposes restrictions or burdens upon a debtor and it cannot be
demonstrated that the enforcement of such remedies, restrictions or burdens is
reasonably necessary for the protection of a creditor, (b) a creditor's
enforcement of such remedies, covenants or provisions under the circumstances,
or the manner of such enforcement, would violate such creditor's implied
covenant of good faith and fair dealing, or would be commercially unreasonable,
or (c) a court having competent personal and subject matter jurisdiction finds
that such remedies, covenants or provisions were at the time made, or are in
application, unconscionable as a matter of law or public policy;
4. we express no opinion as to the enforceability of cumulative
remedies to the extent such cumulative remedies purport to or would have the
effect of compensating the party entitled to the benefits thereof in amounts in
excess of the actual loss suffered by such party;
5. the rights of debtors, guarantors and other secured parties to
receive notices under Sections 9-504 and 9-505 of the Uniform Commercial Code as
in effect in the State of New York may not be waived prior to default and the
failure to comply with such notice requirements may bar or limit the recovery of
any deficiency remaining after the retention or sale of repossessed collateral;
6. notwithstanding certain language of the Documents, you may be
limited to recovering only reasonable expenses with respect to the retaking,
holding, preparing for sale or lease, selling, leasing and the like of
collateral and reasonable attorneys' fees and legal expenses;
7. requirements in the Documents specifying that the provisions
thereof may only be waived in writing may not be valid, binding or enforceable
to the extent that an oral agreement or an implied agreement by trade practice
or course of conduct has been created modifying any provisions of such
documents;
8. we express no opinion as to the accuracy of the description of
the Collateral, or that Collateral Administrative Agent can enforce its rights
against the Collateral prior to acceleration of the Obligations;
9. certain other rights, remedies and waivers contained in the
Documents may be rendered ineffective, or limited by, applicable laws or
judicial decisions governing such provisions, but such laws and judicial
decisions do not, in our opinion, make the Documents inadequate for the
practical realization of the benefits provided by such Documents;
10. we express no opinion as to the enforceability of the
indemnification provisions of the Documents insofar as said provisions might
require indemnification with respect to any litigation against the Credit
Parties determined adversely to the indemnitee, or any loss, cost or expense
arising out of the indemnitee's gross negligence or willful misconduct or any
violations of the statutory duties, general principles of equity or public
policy;
11. in rendering the opinions set forth above we express no
opinion as to the priority of a security interest in any Collateral or as to the
creation of any security interest in (or other lien on) any Collateral to the
extent that, pursuant to Section 9-104 of the Uniform Commercial Code, Article 9
of the Uniform Commercial Code does not apply thereto;
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183
12. we express no opinion as to the right, title or interest of
the Credit Parties to any Collateral or the value given therefor;
13. except as set forth above, we express no opinion as to the
perfection of any security interest or lien;
14. we express no opinion as to the effect (if any) of any law of
any jurisdiction (except the State of New York) in which any Lender is located
that may limit the rate of interest that such Lender may charge or collect; and
15. we express no opinion as to any events, facts, circumstances
or developments subsequent to the date hereof.
We also note that (1) a security interest will continue in
Collateral after its sale, exchange or other disposition only to the extent
provided in Sections 9-306 and 9-307 of the UCC and (2) the security interest in
Collateral in which the Credit Parties acquired rights after the commencement of
a case involving the Credit Parties under the United States Bankruptcy Code may
be limited by Section 552 of such Code.
We are members of the Bar of the State of New York, and we do not
hold ourselves out as being conversant with, and, except as set forth in the
following sentence, express no opinion as to, the laws of any jurisdiction other
than those of the United States of America, the State of New York and the
general corporate law of the State of Delaware. Also, our opinions are based
upon a review only of those statutes, rules and regulations which, in our
experience, are normally applicable to transactions which are similar to the
transactions contemplated by the Documents.
This opinion letter is solely for your benefit and for the benefit
of your participants and assigns. This opinion may not be relied upon for any
other purpose, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
(E-5)
184
EXHIBIT F
OFFICERS' CERTIFICATE
I, the undersigned, [Title] 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 5 of the
Credit Agreement, dated as November 8, 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__.(10) The signature written
opposite the name and title of each such officer is his genuine signature.
Name(11) 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.
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
____________________
(10) Insert a date prior to the time of any corporate action relating to
the Credit Documents or related documentation.
(11) 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.
(F-1)
185
[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.](12)
[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.
[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:
___________________
(12) Insert in Officers' Certificate of the Borrower.
(F-2)
186
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:
(F-3)
187
EXHIBIT G
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified or supplemented from time
to time, this "Agreement"), dated as of November 8, 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.
WITNESSETH:
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 8, 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");
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:
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188
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 (including any interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar
proceeding, whether or not such interest is an allowed claim against
the debtor in any such proceeding)) 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");
(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)
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189
with 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 all Intercompany Notes and all other promissory notes or other evidences of
indebtedness (other than Excluded Notes) from time to time issued to, or held
by, any 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. As used herein, the term
"Excluded Notes" shall mean (i) promissory notes that are in a principal amount
of less than $1,000,000, (ii) the promissory note in the principal amount of
$2,575,000 made by Columbus/Front Ltd. in favor of Doubletree Partners, (iii)
the promissory note in the principal amount of $4,500,000 made by Boston HSR
Ltd. Partnership in favor of Doubletree Partners, (iv) the promissory note in
the principal amount of $2,500,000 made by Washington Park Hotel Assoc., L.P. in
favor of DT Management, Inc. and (v) the promissory note in the principal amount
of $1,300,000 made by Hotel Roanoke, LLC in favor of DT Management, Inc.
(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 any Subsidiary (other than a Subsidiary Guarantor which
is a Significant Subsidiary) or Joint Venture (whether such equity interests are
in the form of partnership interests, capital stock or otherwise) to the extent
that the equity interests in such Subsidiary or Joint Venture are not permitted
to be assigned or a security interest therein granted (x) without the consent of
(or the granting of a first offer or right of first refusal to) the other joint
venture partner (but only to the extent that such other joint venture partner is
not a Subsidiary of a Pledgor) or (y) without the consent of any existing lender
to such Subsidiary or Joint Venture on the Initial Borrowing Date (or any
refinancing of such lender).
(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 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
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190
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;
(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.
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191
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 such 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, 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, amendment and other rights and remedies under any partnership
agreement or otherwise with respect to the Pledged Partnership Interests of such
Pledgor. 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
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(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.
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, the Credit Agreement, any other Credit Document or any Interest Rate
Protection Agreement or Other Hedging Agreement (collectively, the "Secured Debt
Agreements") 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
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(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 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 in 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 in 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
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
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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.
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
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as the Pledgee may reasonably require or 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) of the Credit Agreement);
(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, 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, provided that with
respect to shares of Stock of corporations other than Subsidiaries or Joint
Ventures of any Pledgor, such representation or warranty is made to the
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best of such Pledgor's knowledge; (vii) each of the Intercompany Notes
constituting 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
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)
to the best of each Pledgor's knowledge, 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 under the UCC
(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, in each case within the time period
required by Section 25 of this Agreement; 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.
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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 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
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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
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 or
otherwise disposed in connection with a sale or other disposition permitted by
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 such disposition or dispositions or from such release are
applied in accordance with the provisions of Section 4.02(f) or (i) of the
Credit Agreement, as the case may be, 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 from its obligations hereunder.
(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 not
be effective until received by the Pledgee. All notices and other communications
shall be in writing and addressed as follows:
(G-12)
199
(a) if to any Pledgor, at the chief executive office of such
Pledgor as set forth on Annex F hereto;
(b) if to the Pledgee, at:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Eudia Smith
Tel: (404) 877-1500
Fax: (404) 888-8998
with a copy to:
The Bank of Nova Scotia
San Francisco Agency
580 California Street, Suite 2100
San Francisco, California 94104
Attention: John Quick
Tel: (415) 986-1100
Fax: (415) 397-0791
(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 (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
(G-13)
200
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 date of any pledge of any Pledged Partnership Interests hereunder.
* * *
(G-14)
201
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.
PLEDGORS
DOUBLETREE CORPORATION
By:
------------------------------
Title:
SAMANTHA HOTEL CORPORATION
By
------------------------------
Title:
HARBOR HOTEL CORPORATION
By
------------------------------
Title:
DOUBLETREE PARTNERS
By
------------------------------
Title:
INNCO CORPORATION
By
------------------------------
Title:
DOUBLETREE HOTELS CORPORATION
By
------------------------------
Title:
DT MANAGEMENT, INC.
By
------------------------------
(G-15)
202
Title:
(G-16)
203
ARIZONA DTM PASADENA, INC.
By
------------------------------
Title:
DTM BURLINGAME, INC.
By
------------------------------
Title:
DTM CAMBRIDGE, INC.
By
------------------------------
Title:
DTM PALM SPRINGS, INC.
By
------------------------------
Title:
DTM WALNUT CREEK, INC.
By
------------------------------
Title:
DTM COCONUT GROVE, INC.
By
------------------------------
Title:
DTM NASHVILLE, INC.
By
------------------------------
Title:
(G-17)
204
DTM SANTA CLARA, INC.
By
------------------------------
Title:
DTM VENTURA, INC.
By
------------------------------
Title:
DTM ST. LOUIS, INC.
By
------------------------------
Title:
DTM OKLAHOMA, INC.
By
------------------------------
Title:
DTM TULSA, INC.
By
------------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
------------------------------
Title:
HOSCO CORPORATION
By
------------------------------
Title:
(G-18)
205
DOUBLETREE HOTEL SYSTEMS, INC.
By
------------------------------
Title:
COMPRIS HOTEL CORPORATION
By
------------------------------
Title:
DT REAL ESTATE, INC.
By
------------------------------
Title:
DTR PAH HOLDING, INC.
By
------------------------------
Title:
DTR CAMBRIDGE, INC.
By
------------------------------
Title:
DTR SONORAN HOLDING, INC.
By
------------------------------
Title:
DTM ATLANTIC CITY, INC.
By
------------------------------
Title:
(G-19)
206
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
By:
----------------------------------
Title:
(G-20)
207
ANNEX A
to
PLEDGE AGREEMENT
LIST OF STOCK
I. Doubletree Corporation
================================================================================
Percentage of
Number Outstanding
Name of Issuing Certificate Type of of Shares of
Corporation Number Shares Shares Capital Stock
- --------------------------------------------------------------------------------
================================================================================
II. Each Subsidiary Guarantor
================================================================================
Percentage of
Number Outstanding
Name of Issuing Certificate Type of of Shares of
Corporation Number Shares Shares Capital Stock
- --------------------------------------------------------------------------------
================================================================================
(G-21)
208
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)
- ------- -------- --------
(G-22)
209
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
---------------- ----- --------
(G-23)
210
ANNEX F
to
PLEDGE AGREEMENT
OFFICE LOCATIONS
A. Doubletree Corporation
Office Locations County
---------------- ------
B. [List Each Subsidiary Guarantor Individually]
Office Locations County
---------------- ------
(G-24)
211
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 8, 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;
(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
(G-25)
212
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:
(G-26)
213
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 November
8, 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:
(G-27)
214
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 8, 1996
(H-1)
215
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
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
(H-2)
216
Page
----
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
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
(H-3)
217
EXHIBIT H
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of November 8, 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 8, 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;
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:
(H-4)
218
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 investments 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, 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.
(H-5)
219
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.
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.
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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 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, and (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 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
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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 the 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 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
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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 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 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
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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 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.
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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 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 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
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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 material 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
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
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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 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;
(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 liqui-
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227
date 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
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
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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 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 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";
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(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 whoever 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 Document 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 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
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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.
(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 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
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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 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.
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(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 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.
"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.
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"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 Document 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.
"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,
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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 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 (including any interest accruing after the commencement of
any bankruptcy, insolvency, receivership or similar proceeding, whether or not
such interest is an allowed claim against the debtor in any such proceeding)) 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 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 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.
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"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 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 Document 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 the chief executive office of such
Assignor as set forth on Annex A hereto;
(b) if to the Collateral Administrative Agent, at:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Eudia Smith
Tel. No.: (404) 877-1500
Fax. No.: (404) 888-8998
with a copy to:
The Bank of Nova Scotia
San Francisco Agency
580 California Street, Suite 2100
San Francisco, CA 94104
Attention: John Quick
Tel. No.: (415) 986-1100
Fax. No.: (415) 397-0791
(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;
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
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237
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 Document 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 Document 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.
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
(H-24)
238
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 or
otherwise disposed in connection with a sale or other disposition permitted by
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 such disposition or dispositions 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 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.
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 after the date hereof 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.
(H-25)
239
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.
ASSIGNORS
DOUBLETREE CORPORATION
By
-------------------------------
Title:
SAMANTHA HOTEL CORPORATION
By
-------------------------------
Title:
HARBOR HOTEL CORPORATION
By
-------------------------------
Title:
DOUBLETREE PARTNERS
By
-------------------------------
Title:
(H-26)
240
INNCO CORPORATION
By
-------------------------------
Title:
DOUBLETREE HOTELS CORPORATION
By
-------------------------------
Title:
DT MANAGEMENT, INC.
By
-------------------------------
Title:
ARIZONA DTM PASADENA, INC.
By
-------------------------------
Title:
DTM BURLINGAME, INC.
By
-------------------------------
Title:
(H-27)
241
DTM CAMBRIDGE, INC.
By
-------------------------------
Title:
DTM PALM SPRINGS, INC.
By
-------------------------------
Title:
DTM WALNUT CREEK, INC.
By
-------------------------------
Title:
DTM COCONUT GROVE, INC.
By
-------------------------------
Title:
DTM NASHVILLE, INC.
By
-------------------------------
Title:
DTM SANTA CLARA, INC.
By
-------------------------------
Title:
(H-28)
242
DTM VENTURA, INC.
By
-------------------------------
Title:
DTM ST. LOUIS, INC.
By
-------------------------------
Title:
DTM OKLAHOMA, INC.
By
-------------------------------
Title:
DTM TULSA, INC.
By
-------------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
-------------------------------
Title:
HOSCO CORPORATION
By
-------------------------------
Title:
DOUBLETREE HOTEL SYSTEMS, INC.
By
-------------------------------
Title:
(H-29)
243
COMPRIS HOTEL CORPORATION
By
-------------------------------
Title:
DT REAL ESTATE, INC.
By
-------------------------------
Title:
DTR PAH HOLDING, INC.
By
-------------------------------
Title:
DTR CAMBRIDGE, INC.
By
-------------------------------
Title:
(H-30)
244
DTR SONORAN HOLDING, INC.
By
-------------------------------
Title:
DTM ATLANTIC CITY, 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
By:
----------------------------------
Title:
(H-31)
245
ANNEX A
to
SECURITY
AGREEMENT
---------
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
(H-32)
246
ANNEX B
to
SECURITY
AGREEMENT
---------
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
Assignor Location
-------- --------
(H-33)
247
ANNEX C
to
SECURITY
AGREEMENT
---------
SCHEDULE OF TRADE AND FICTITIOUS NAMES
(H-34)
248
ANNEX D
to
SECURITY
AGREEMENT
---------
SCHEDULE OF MARKS
(H-35)
249
ANNEX E
to
SECURITY
AGREEMENT
---------
SCHEDULE OF PATENTS
(H-36)
250
ANNEX F
to
SECURITY
AGREEMENT
---------
SCHEDULE OF COPYRIGHTS
(H-37)
251
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 the Assignee, dated as November 8, 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
(H-38)
252
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:
THE BANK OF NOVA SCOTIA,
as Collateral Administrative Agent, Assignee
By______________________________________
Title:
(H-39)
253
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
(H-40)
254
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
(H-41)
255
SCHEDULE A
MARK REG. NO. REG. DATE
- ---- -------- ---------
(H-42)
256
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
- ------ ---------- ----------
(H-43)
257
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 8, 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.
(H-44)
258
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:
(H-45)
259
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
(H-46)
260
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
------- ---- ---------------
(H-47)
261
EXHIBIT I
SUBSIDIARIES GUARANTY
SUBSIDIARIES GUARANTY, dated as of November 8, 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 8, 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 and 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 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:
I. 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
(I-1)
262
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 (including any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding, whether or not such
interest is an allowed claim against the debtor in any such proceeding)),
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.
II. 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.
III. 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.
IV. 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
(I-2)
263
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.
V. 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).
VI. 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;
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
(I-3)
264
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.
VII. 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.
VIII. 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 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.
IX. 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
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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 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.
(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
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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.
X. 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).
XI. 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 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
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(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 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.
XII. 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.
XIII. 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).
XIV. 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.
XV. 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
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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.
XVI. 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.
XVII. In addition to any rights now or hereafter granted
under applicable law (including, without limitation, Section 151 of the New York
Debtor and 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
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.
XVIII. 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.
XIX. 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)
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in the case of any Guarantor, at the chief executive office of such Guarantor as
set forth in the Security Agreement 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.
XX. 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 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.
XXI. (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
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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270
XXII. 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 to 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).
XXIII. 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.
XXIV. All payments made by any Guarantor hereunder will be
made without setoff, counterclaim or other defense.
XXV. 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.
XXVI. 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 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 Commitments have 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
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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.
* * *
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
GUARANTORS
SAMANTHA HOTEL CORPORATION
By
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Title:
HARBOR HOTEL CORPORATION
By
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Title:
DOUBLETREE PARTNERS
By
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Title:
INNCO CORPORATION
By
----------------------------------
Title:
DOUBLETREE HOTELS CORPORATION
By
----------------------------------
Title:
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273
DT MANAGEMENT, INC.
By
---------------------------------
Title:
ARIZONA DTM PASADENA, INC.
By
---------------------------------
Title:
DTM BURLINGAME, INC.
By
---------------------------------
Title:
DTM CAMBRIDGE, INC.
By
---------------------------------
Title:
DTM PALM SPRINGS, INC.
By
---------------------------------
Title:
DTM WALNUT CREEK, INC.
By
---------------------------------
Title:
(I-13)
274
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:
(I-14)
275
DTM TULSA, INC.
By
---------------------------------
Title:
DOUBLETREE OF PHOENIX, INC.
By
---------------------------------
Title:
HOSCO CORPORATION
By
---------------------------------
Title:
DOUBLETREE HOTEL SYSTEMS, INC.
By
---------------------------------
Title:
COMPRIS HOTEL CORPORATION
By
---------------------------------
Title:
DT REAL ESTATE, INC.
By
---------------------------------
Title:
DTR PAH HOLDING, INC.
By
---------------------------------
Title:
(I-15)
276
DTR CAMBRIDGE, INC.
By
---------------------------------
Title:
DTR SONORAN HOLDING, INC.
By
---------------------------------
Title:
DTM ATLANTIC CITY, 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
By:__________________________________
Title:
(I-16)
277
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
8, 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.
(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"
(J-1)
278
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.
(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;
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
(J-2)
279
(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 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.
IN WITNESS WHEREOF, I have hereto set my hand this 8th day of
November, 1996.
DOUBLETREE CORPORATION
By ____________________________________
Name:
Title: Chief Financial Officer
(J-3)
280
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,
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
- -----------------------------
(1) Delete bracketed language in Assignment and Assumption Agreements
executed after the termination of the Total Term Loan Commitment.
(K-1)
281
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 and the Borrower,
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 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.
- -------------------------
(2) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
(K-2)
282
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:
DOUBLETREE CORPORATION
By____________________________
Title:](3)
- ---------------------
(3) The consent of each Agent and the Borrower is required for assignments made
as (and to the extent) provided in Section 13.04(b)(y) of the Credit Agreement.
(K-3)
283
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 8, 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:
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
- ---------------------------------
(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.
(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.
(K-4)
284
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)
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:
- --------------------------
(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.
(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.
(K-5)
285
Payment Instructions:
ASSIGNEE:
__________________
__________________
__________________
__________________
Attention:
Reference:
(K-6)
286
Accepted and Agreed:
[NAME OF ASSIGNEE]
[NAME OF ASSIGNOR]
By________________________
By__________________________
- --------------------------------------------------------------------------------
__________________________
(Print Name and Title)
(Print Name and Title)
(K-7)
287
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 8, 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.
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.
(L-1)
288
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
______________________________
(L-2)
289
SCHEDULE I
To Credit Agreement
Commitments
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
Morgan Stanley $ 21,628,559.12 $55,000,000 $ 5,971,440.89
Senior Funding, Inc.
The Bank of Nova Scotia $ 21,628,559.13 $ 9,000,000 $ 5,971,440.90
Allied Irish Bank plc acting
through its Cayman Island Branch $ 2,163,565.56 $ 7,836,434.44 $ 0
Allstate Life Insurance Company $ 0 $ 5,000,000 $ 0
Bankers Trust Company $ 10,579,186.50 $ 0 $ 2,920,813.50
Bank of Hawaii $ 9,795,543.06 $ 0 $ 2,704,456.95
The Bank of New York $ 9,795,543.06 $ 0 $ 2,704,456.95
Banque Nationale de Paris $ 9,403,721.34 $ 0 $ 2,596,278.67
CHL High Yield Loan Portfolio $ 0 $ 9,000,000 $ 0
(a unit of Chase Manhattan Bank)
(1 of 6)
290
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
Chang Hwa Commercial Bank, Ltd., $ 9,795,543.06 $ 0 $ 2,704,456.95
New York Branch
CIBC Inc. $ 12,146,473.38 $ 0 $ 3,353,526.61
Citibank, N.A $ 0 $ 5,000,000 $ 0
Credit Lyonnais New York Branch $ 12,146,473.38 $ 0 $ 3,353,526.61
Crescent/Mach I Partners, L.P.
by TCW Asset Management Company
its Investment Manager $ 0 $ 5,000,000 $ 0
DLJ Capital Funding, Inc. $ 3,918,217.22 $ 0 $ 1,081,782.78
Dresdner Bank AG, New York
Branch and Grand Cayman Branch $ 10,579,186.50 $ 0 $ 2,920,813.50
First Hawaiian Bank $ 9,403,721.34 $ 0 $ 2,596,278.67
The First National Bank of Boston $ 7,836,434.44 $ 0 $ 2,163,565.56
First Union National Bank of $ 12,146,473.38 $ 0 $ 3,353,526.61
North Carolina
(2 of 6)
291
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
The Fuji Bank Limited,
Los Angeles Agency $ 9,795,543.06 $ 0 $ 2,704,456.95
GiroCredit Bank Ag Der Sparkassen,
Grand Cayman Island Branch $ 7,836,434.44 $ 0 $ 2,163,565.56
Hibernia National Bank $ 9,403,721.34 $ 0 $ 2,596,278.67
Imperial Bank $ 9,403,721.34 $ 0 $ 2,596,278.67
The Industrial Bank of Japan,
Limited, Los Angeles Agency $ 9,795,543.06 $ 0 $ 2,704,456.95
ING Capital Advisors, Inc., as
agent for bank syndication account $ 0 $ 5,000,000 $ 0
Key Bank of Colorado $ 9,795,543.06 $ 0 $ 2,704,456.95
KZH Holding Corporation $ 0 $ 5,000,000 $ 0
The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency $ 10,579,186.50 $ 0 $ 2,920,813.50
Marine Midland Bank $ 9,403,721.34 $ 0 $ 2,596,278.67
(3 of 6)
292
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
Massachusetts Mutual Life
Insurance Company $ 0 $11,000,000 $ 0
Mellon Bank, N.A $ 9,795,543.06 $ 0 $ 2,704,456.95
Merrill Lynch Senior Floating
Rate Fund, Inc. $ 0 $ 6,000,000 $ 0
The Mitsubishi Trust and
Banking Corporation $ 10,579,186.50 $ 0 $ 2,920,813.50
Mitsui Leasing (U.S.A.) Inc. $ 9,403,721.34 $ 0 $ 2,596,278.67
NationsBank of Texas, N.A $ 9,795,543.06 $ 0 $ 2,704,456.95
The Nippon Credit Bank, Ltd.,
Los Angeles Agency $ 10,579,186.50 $ 0 $ 2,920,813.50
Northern Life Insurance Company $ 0 $ 5,000,000 $ 0
Oak Hill Securities Fund, L.P. $ 0 $ 9,000,000 $ 0
ORIX USA Corporation $ 0 $ 5,000,000 $ 0
(4 of 6)
293
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
PPM America, Inc., as attorney-
in-fact on behalf of Jackson
National Life Insurance Company $ 0 $8,000,000 $ 0
Prime Income Trust $ 0 $7,000,000 $ 0
Protective Life Insurance Company $ 0 $9,000,000 $ 0
The Royal Bank of Scotland plc $ 9,403,721.34 $ 0 $ 2,596,278.67
The Sakura Bank, Limited $ 9,403,721.34 $ 0 $ 2,596,278.67
The Sanwa Bank, Limited $ 9,403,721.34 $ 0 $ 2,596,278.67
Societe Generale $12,146,473.38 $ 0 $ 3,353,526.61
Southern Pacific Thrift &
Loan Association $ 9,403,721.34 $ 0 $ 2,596,278.67
The Toyo Trust & Banking Co., Ltd,
Los Angeles Agency $ 9,795,543.06 $ 0 $ 2,704,456.95
The Travelers Insurance Company $ 7,836,434.44 $5,000,000 $ 2,163,565.56
Wells Fargo Bank, N.A $ 0 $8,000,000 $ 0
(5 of 6)
294
Tranche A Tranche B
Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
------------ ------------ ------------
TOTAL: $362,200,000 $171,000,000 $100,000,000
(6 of 6)
295
SCHEDULE II
To Credit Agreement
Bank Addresses
Morgan Stanley Senior 1585 Broadway
Funding, Inc. New York, NY 10036
Attn: Michael McLaughlin
Tel: (212) 761-4000
Fax: (212) 761-0587
The Bank of Nova Scotia 600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Attn: Eudia Smith
Tel: (404) 877-1500
Fax: (404) 888-8998
with a copy to:
San Francisco Agency
580 California Street,
Suite 2100
San Francisco, CA 94104
Attn: John Quick
Tel: (415) 986-1100
Fax: (415) 397-0791
Allied Irish Banks plc, 405 Park Avenue
acting through its Cayman New York, NY 10022
Island Branch Attn: William Murray
Tel: (212) 339-8021
Fax: (212) 339-8007
AllState Life Insurance 3075 Sanders Road, Suite
Company G3A
Northbrook, IL 60062-7127
Attn: Chris Guergen
Tel: (847) 402-3095
Fax: (847) 402-3092
(1 of 9)
296
Bankers Trust Company One Bankers Trust Plaza
New York, NY 10006
Attn: Anthony LoGrippo
Tel: (212) 250-4886
Fax: (212) 250-7218
Bank of Hawaii 1850 North Central Avenue,
Suite 400
Phoenix, AZ 85004
Attn: Joseph Donalson
Tel: (602) 257-2432
Fax: (602) 257-2235
The Bank of New York 10990 Wilshire Boulevard,
Suite 1125
Los Angeles, CA 90024
Attn: Craig Rethmeyer
Tel: (310) 996-8650
Fax: (310) 996-8667
Banque Nationale de Paris 725 South Figueroa Street,
20th FL
Los Angeles, CA 90017
Attn: Margaret Mudd
Tel: (213) 688-6436
Fax: (213) 488-9120
CHL High Yield Loan 380 Madison Avenue
Portfolio (a unit of Chase New York, NY 10017
Manhattan Bank) Attn: Jim Ferguson
Tel: (212) 622-3070
Fax: (212) 622-3797
Chang Hwa Commercial Bank, One World Trade Center
Ltd., New York Branch Suite 3211, 32nd Floor
New York, NY 10048
Attn: Teddy Mou
Tel: (212) 390-7040
Fax: (212) 390-0120
(2 of 9)
297
CIBC Inc. 350 South Grand Avenue,
Suite 2600
Los Angeles, CA 90071
Attn: Paul Chakmak
Tel: (213) 617-6226
Fax: (213) 346-0157
Citibank, N.A. 399 Park Avenue
New York, NY 10043
Attn: Ken Ostmann
Tel: (212) 559-0378
Fax: (212) 793-1871
Credit Lyonnais New York 1301 Avenue of Americas
Branch New York, NY 10019-6022
Attn: Joseph Asciolla
Tel: (212) 261-7834
Fax: (212) 261-7890
Crescent/Mach I Partners, 200 Park Avenue, Suite 220
L.P., by TCW Asset New York, NY 10166
Management Company its Attn: Justin Driscole
Investment Manager Tel: (212) 297-4137
Fax: (212) 297-4159
DLJ Capital Funding, Inc. c/o Donaldson Lufkin &
Jenrette
277 Park Avenue, 9th FL
New York, N.Y. 10172
Attn: Steve Hickey
Tel: (212) 892-2403
Fax: (212) 892-5286
Dresdner Bank AG, New York 233 South Grand Avenue
Branch and Grand Cayman Suite 1700
Branch Los Angeles, CA 90071
Attn: Sid Jordan
Tel: (213) 473-5420
Fax: (213) 473-5450
(3 of 9)
298
First Union National Bank 301 South College Street,
of North Carolina DC-5
Charlotte, NC 28288-0737
Attn: Jorge Gonzalez
Tel: (704) 383-8461
Fax: (704) 374-3300
First Hawaiian Bank 999 Bishop Street, 11th FL
Honolulu, HI 96813
Attn: Robert Wheeler
Tel: (808) 525-6367
Fax: (808) 525-6372
The First National Bank of 100 Federal Street
Boston Boston, MA 02110
Attn: Timothy Barns
Tel: (617) 434-7976
Fax: (617) 434-4929
The Fuji Bank Limited, Los 333 South Hope Street, 39th
Angeles Agency FL
Los Angeles, CA 900071
Attn: Ching Lim
Tel: (213) 253-4179
Fax: (213) 253-4198
Girocredit Bank AG Der Park Avenue Tower
Sparkassen, Grand Cayman 65 East 55th Street, 29th
Island Branch Floor
New York, NY 10022
Attn: John Redding
Tel: (212) 909-0624
Fax: (212) 644-0644
Hibernia National Bank 313 Carondelet Street, 12th
FL
New Orleans, LA 70130
Attn: Troy Villafara
Tel: (504) 533-5490
Fax: (504) 533-5344
(4 of 9)
299
The Industrial Bank of 350 South Grand Avenue,
Japan, Limited, Los Angeles Suite 1500
Agency Los Angeles, CA 90071
Attn: Mr. Sugano
Tel: (213) 893-6436
Fax: (213) 488-9840
Imperial Bank P.O. Box 92991
Los Angeles, CA 90090
Attn: Ray Valdama
Tel: (310) 417-5710
Fax: (310) 338-2612/2611
ING Capital Advisors, Inc., 333 South Grand Avenue
as agent for bank Suite 400
syndication account Los Angeles, CA 90071
Attn: Kathleen Lenarcic
Tel: (213) 621-9063
Fax: (213) 626-6552
KZH Holding Corporation c/o The Chase Manhattan
Bank
450 West 33rd Street, 15th
Floor
New York, NY 10001
Attn: Robert Goodwin
Tel: (212) 946-7544
Fax: (212) 946-7776
Key Bank of Colorado 3600 S. Yosemite Street
4th Floor
Denver, CO 80237
Attn: Mark Sunderland
Tel: (303) 804-8376
Fax: (303) 741-3958
The Long-Term Credit Bank 350 South Grand Avenue
of Japan, Ltd., Los Angeles Suite 3000
Agency Los Angeles, CA 90071
Attn: Bryan Read
Tel: (213) 689-6314
Fax: (213) 622-6908
(5 of 9)
300
Massachusetts Mutual Life 1295 State Street, Mail
Insurance Company Suite F457
Springfield, MA 01111
Attn: John Wheeler
Tel: (413) 744-6228
Fax: (413) 744-6127
Mellon Bank, N.A. 300 South Grand Avenue
Suite 3800
Los Angeles, CA 90071
Attn: Mack Clapp
Tel: (213) 680-7351
Fax: (213) 626-3745
Merrill Lynch Senior 800 Scudders Mill Road
Floating Rate Fund, Inc. Plainsboro, NJ 08536
Attn: Gilles Marchand
Tel: (609) 282-2000
Fax: (609) 282-2756
Marine Midland Bank c/o HSBC-Midland
140 Broadway, 5th FL
New York, NY 10005
Attn: Karen Wold
Tel: (212) 658-2748
Fax: (212) 658-2586
The Mitsubishi Trust and 520 Madison Avenue
Banking Corporation New York, NY 10022
Attn: Susan LeFevre
Tel: (212) 891-8243
Fax: (212) 644-6825
Mitsui Leasing (U.S.A.) 200 Park Avenue, Suite 3214
Inc. New York, NY 10166
Attn: Jerry Parisi
Tel: (212) 883-3061
Fax: (212) 490-1684
(6 of 9)
301
NationsBank of Texas, N.A. 901 Main Street, 67th Floor
Dallas, TX 75202
Attn: Kimberly Knop
Tel: (214) 508-3363
Fax: (214) 508-0980
The Nippon Credit Bank, 550 South Hope Street,
Ltd., Suite 2500
Los Angeles Agency Los Angeles, CA 90071
Attn: Julien Michaels
Tel: (213) 243-5720
Fax: (213) 892-0111
Northern Life Insurance c/o Reliastar Investment
Company Research
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401
Attn: Jim Tobin
Tel: (612) 342-3204
Fax: (612) 372-5368
Oak Hill Securities Fund, 65 East 55th Street
L.P. New York, NY 10022
Attn: Scott Krase
Tel: (212) 326-1500
Fax: (212) 593-3596
ORIX USA Corporation 780 Third Avenue, 48th
Floor
New York, NY 10017
Attn: Hiroyuki Miyauchi
Tel: (212) 418-8300
Fax: (212) 418-8308
PPM America, Inc. as 225 West Wacker, Suite 1200
attorney-in-fact on behalf Chicago, IL 60606
of Jackson National Life Attn: Michael DiRe
Insurance Company Tel: (312) 634-2509
Fax: (312) 634-0054
(7 of 9)
302
Prime Income Trust c/o Dean Witter
Intercapital, Inc.
2 World Trade Center, 72nd
Floor
New York, NY 10048
Attn: Peter Gewirtz
Tel: (212) 392-9034
Fax: (212) 392-5345
Protective Life Insurance 1150 Two Galleria Tower
Company 13455 Noel Road LB #45
Dallas, TX 75240
Attn: James Dondero
Tel: (972) 233-4300
Fax: (972) 233-4343
The Royal Bank of Scotland 88 Pine Street
plc Wall Street Plaza, 26th
Floor
New York, NY 10005
Attn: Shona Pryor/Derek
Bonnar
Tel: (212) 269-1718
Fax: (212) 480-0791
The Sakura Bank, Limited 515 South Figueroa Street,
Suite 400
Los Angeles, CA 90071
Attn: Mike Ross
Tel: (213) 489-6756
Fax: (213) 623-8692
The Sanwa Bank, Limited 601 South Figueroa Street
(W5-4)
Los Angeles, CA 90017
Attn: Steven Yamada
Tel: (213) 896-7547
Fax: (213) 896-7467
(8 of 9)
303
Societe Generale 1221 Avenue of the Americas
New York, NY 10020
Attn: Catherine Scaillier-
Loiseau
Tel: (212) 278-6469
Fax: (212) 278-6178
Southern Pacific Thrift & 12300 Wilshire Boulevard
Loan Los Angeles, CA 90025
Association Attn: Chris Kelleher
Tel: (310) 442-3351
Fax: (310) 207-4067
The Toyo Trust & Banking 444 South Flower Street,
Co., Ltd., Los Angeles Suite 1550
Agency Los Angeles, CA 90071
Attn: Jeffrey King
Tel: (213) 236-1527
Fax: (213) 624-5874
The Travelers Insurance One Tower Square
Company Hartford, CT 06183-2030
Attn: Teresa M. Torrey
Tel: (860) 277-5952
Fax: (860) 954-5243
Wells Fargo Bank, N.A. 555 Montgomery Street, 17th
Floor
San Francisco, CA 94111
Attn: Sean Flannery
Tel: (415) 396-6764
Fax: (415) 788-9421
(9 of 9)
304
================================================================================
SCHEDULE III
To Credit Agreement
Real Property -- Owned and Leased
================================================================================
RED LION GROUP
- --------------------------------------------------------------------------------
OWNED PROPERTIES
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
OWNER PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Eureka, CA Yes
1929 Fourth Street
Eureka, CA 95501
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Modesto, CA Yes
1150 Ninth Street
Modesto, CA 95354
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Redding Yes
1830 Hilltop Drive
Redding, CA 96002
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- San Jose Yes
2050 Gateway Place
San Jose, CA 95110
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Bend South Yes
849 NE Third Street
Bend South, OR 97701
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Portland/Jantzen Beach Yes
909 North Hayden Island Drive
Portland/Jantzen Beach, OR 97217
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Klamath Falls Yes
3612 South Sixth Street
Klamath Falls, OR 97603
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Portland/Columbia River Yes
1401 North Hayden Island Drive
Portland/Columbia, OR 97217
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Houston Yes
2525 West Loop South
Houston, TX 77027
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- San Antonio Yes
37 NE Loop 410
San Antonio, TX 78218
- -----------------------------------------------------------------------------------------------------------------------
(1 of 10)
305
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Port Angeles Yes
221 North Lincoln Street
Port Angeles, WA 98362
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Bellevue Yes
300 112th Avenue SE
Bellevue, WA 98004
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Yakima Yes
1507 North First Street
Yakima, WA 98901
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Pasco Yes
2525 North 20th Street
Pasco, WA 99301
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Aberdeen Yes
521 West Wishah Street
Aberdeen, WA 98520
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Corporate Headquarters Yes
4001 Main Street
Vancouver, WA 98663
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Astro Gas Station No
Vancouver, WA
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotels -- Austin No
6121 I-35 North
Austin, TX 78752
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Excess Land No
Portland/Jantzen Beach, OR
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Properties, Inc. Red Lion Hotel -- Richland (Hanford House) No
802 George Washington Way
Richland, WA 99352
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Properties, Inc. Red Lion Hotel -- Kalispell No
1330 Highway Southwest
Kalispell, MT 59901
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LEASED PROPERTIES
- -----------------------------------------------------------------------------------------------------------------------
TENANT PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Rohnert/Sonoma City Yes
1 Red Lion Drive
Rohnert Park, CA 94928
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Sacramento Inn Yes
2000 One Point West Way
Sacramento, CA 95815
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- San Diego Yes
7450 Hazard Center Drive
San Diego, CA 92108
- -----------------------------------------------------------------------------------------------------------------------
(2 of 10)
306
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Durango Yes
501 Camino Delrio
Durango, CO 81301
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Boise Downtown Yes
2900 Shinden Boulevard
Boise, ID 83714
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Missoula Yes
700 West Broadway
Missoula, MT 59802
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Medford Yes
200 North Riverside Street
Medford, OR 97501
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Eugene Yes
205 Coburg Road
Eugene, OR 97401
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Pendleton Yes
304 SE Nye Avenue
Pendleton, OR 97801
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Astoria Yes
400 Industry Street
Astoria, OR 97103
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Bend North Yes
1415 Third Street
Bend North, OR 97701
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Coos Bay Yes
1313 North Bayshore Street
Coos Bay, OR 97420
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Salt Lake City Yes
255 West Temple Street
Salt Lake City, UT 84101
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Seattle (Airport) Yes
18740 Pacific Highway South
Seattle, WA 98188
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Kelso Yes
510 Kelso Drive
Kelso, WA 98626
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Vancouver Yes
100 Columbia Street
Vancouver, WA 98660
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Red Lion Hotel -- Wenatchee Yes
1225 North Wenatchee Avenue
Wenatchee, WA 98801
- -----------------------------------------------------------------------------------------------------------------------
(3 of 10)
307
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Pizza Pub No
Portland Airport
Portland, OR
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Reds Restaurant and Theme Bar No
Portland Airport
Portland, OR
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Park Plaza One Office Building No
Vancouver, WA
- -----------------------------------------------------------------------------------------------------------------------
Red Lion Hotels, Inc. Stonemill Office Park No
Vancouver, WA
- -----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DOUBLETREE GROUP
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
OWNED PROPERTIES
- -----------------------------------------------------------------------------------------------------------------------
OWNER PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
DTM Burlingame, Inc. Doubletree Guest Suites Hotel Yes
28100 Franklin Road
Southfield, MI 48034
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LEASED PROPERTIES
- -----------------------------------------------------------------------------------------------------------------------
TENANT PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
DTR Boston Heights, Inc. Doubletree Hotel at Coconut Grove No
2649 S. Bayshore Drive
Miami, FL 33133
- -----------------------------------------------------------------------------------------------------------------------
DTR Houston, Inc. Doubletree Hotel Tysons Corner No
7801 Leesburg Pike
Falls Church, VA 22043
- -----------------------------------------------------------------------------------------------------------------------
DTR Cambridge, Inc. Inn at Harvard No
1201 Massachusetts Avenue
Cambridge, MA 02138
- -----------------------------------------------------------------------------------------------------------------------
DTR Cambridge, Inc. Harvard Square Hotel No
110 Mount Auburn Street
Cambridge, MA 02138
- -----------------------------------------------------------------------------------------------------------------------
Doubletree of Phoenix, Inc. Doubletree Hotel Corporate Headquarters No
410 N. 44th Street, Suite 700
Phoenix, AZ 85008
- -----------------------------------------------------------------------------------------------------------------------
Doubletree of Phoenix, Inc. Doubletree General Office No
30 Rowes Wharf -- 4th Floor
Boston, MA 02110
- -----------------------------------------------------------------------------------------------------------------------
Doubletree Partners Cincinnati Accounting Office No
10234 Alliance Road
Blue Ash, OH 45242
- -----------------------------------------------------------------------------------------------------------------------
(4 of 10)
308
- -----------------------------------------------------------------------------------------------------------------------
Doubletree Hotels Corporation Philadelphia National Sales Office No
101 Henderson Drive
Sharon Hill, PA 19079
- -----------------------------------------------------------------------------------------------------------------------
Doubletree of Phoenix, Inc. Chicago National Sales Office No
875 North Michigan Avenue
Suite 1534
Chicago, IL 60611
- -----------------------------------------------------------------------------------------------------------------------
Doubletree Hotels Corporation Los Angeles National Sales Office No
c/o Doubletree Hotel
Los Angeles Airport
5400 West Century Boulevard
Suite 449
Los Angeles, CA 90045
- -----------------------------------------------------------------------------------------------------------------------
Doubletree of Phoenix, Inc. Central Reservations Office No
1221 North College Avenue
Tempe, AZ
- -----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RFS GROUP
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LEASED PROPERTIES
- -----------------------------------------------------------------------------------------------------------------------
TENANT PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
DTR RFS Lessee, Inc. Doubletree Hotel Del Mar No
11915 El Camino Real
San Diego, CA 92130
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. 889 Ridgelake Boulevard #100 No
Memphis, TN 38120
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Conyers No
(Comfort Inn)
1363 Klondike Road
Conyers, GA 30207
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Marietta No
(Comfort Inn)
2100 Northwest Parkway
Marietta, GA 30067
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Farmington Hills No
(Comfort Inn)
30715 W. Twelve Mile Road
Farmington Hills, MI 48334
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Grand Rapids No
(Comfort Inn)
4155 28th Street, S.E.
Grand Rapids, MI 49512
- -----------------------------------------------------------------------------------------------------------------------
(5 of 10)
309
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Clemson No
(Comfort Inn)
1305 Tiger Boulevard Zip 29631
P.O. Box 1496
Clemson, SC 29633
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Ft. Mill No
(Comfort Inn)
3725 Avenue of the Carolinas
Ft. Mill, SC 29715
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Denver No
(Hampton Inn)
4685 Quebec Street
Denver, CO 80216
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Lakewood No
(Hampton Inn)
3605 So. Wadsworth Blvd.
Lakewood, CO 80235
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Ft. Lauderdale No
(Hampton Inn)
720 E. Cypress Creek
Ft. Lauderdale, FL 33334
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Indianapolis No
(Hampton Inn)
5601 Fortune Circle West
Indianapolis, IN 46241
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Lansing No
(Hampton Inn)
525 North Canal Rd.
Lansing, MI 48917
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Warren No
(Hampton Inn)
7447 Convention Blvd.
Warren, MI 48092
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Bloomington No
(Hampton Inn)
4201 West 80th St.
Bloomington, MN 55437
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Minnetonka No
(Hampton Inn)
10420 Wayzata Blvd.
Minnetonka, MN 55305
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Hattiesburg No
(Hampton Inn)
4301 Hardy Street
Hattiesburg, MS 39401
- -----------------------------------------------------------------------------------------------------------------------
(6 of 10)
310
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Lincoln No
(Hampton Inn)
1301 W. Bond Circle
Lincoln, NE 68521-3636
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Omaha No
(Hampton Inn)
9720 West Dodge Rd.
Omaha, NE 68114
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Oklahoma City No
(Hampton Inn)
1905 S. Meridian Ave.
Oklahoma City, OK 73108
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Tulsa No
(Hampton Inn)
3209 S. 79th East Ave.
Tulsa, OK 74145
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Memphis No
(Hampton Inn)
33 Humphrey Center Dr.
Memphis, TN 38120
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Laredo No
(Hampton Inn)
7903 San Dario
Laredo, TX 78041
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Atlanta No
(Hawthorne Suites)
1500 Parkwood Circle
Atlanta, GA 30339
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Crystal Lake No
(Holiday Inn)
800 South Route 31
Crystal Lake, IL 60014
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Louisville No
(Holiday Inn)
4110 Dixie Highway
P.O. Box 16046
Louisville, KY 40216
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Lafayette No
(Holiday Inn)
2032 N.E. Evangeline Thruway
P.O. Box 91807
Lafayette, LA 70509
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Flint No
(Holiday Inn)
5353 Gateway Center
Flint, MI 48507
- -----------------------------------------------------------------------------------------------------------------------
(7 of 10)
311
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Clayton No
(Holiday Inn)
7730 Bonhomme Ave.
Clayton, MO 63105
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Columbia No
(Holiday Inn)
630 Assembly St.
Columbia, SC 29201
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Arlington Heights No
(Holiday Inn Express)
2120 S. Arlington Heights Rd.
Arlington Heights, IL 60005
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Downers Grove No
(Holiday Inn Express)
3031 Finley Rd.
Downers Grove, IL 60515
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Bloomington No
(Holiday Inn Express)
814 East 79th St.
Bloomington, MN 55420
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Tupelo No
(Holiday Inn Express)
923 N. Gloster - Zip 38801
P.O. Box 1724
Tupelo, MS 38802
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Franklin No
(Holiday Inn Express)
1307 Murfreesboro Rd. Zip 37064
P.O. Box 906
Franklin, TN 37065-0906
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Austin No
(Holiday Inn Express)
7622 1-35 North
Austin, TX 78752
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Wauwatosa No
(Holiday Inn Express)
11111 West North Ave.
Wauwatosa, WI 53226-2233
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Sacramento No
(Residence Inn by Marriott)
1530 Howe Ave.
Sacramento, CA 95825-3358
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Torrance No
(Residence Inn by Marriott)
3701 Torrance Blvd.
Torrance, CA 90503
- -----------------------------------------------------------------------------------------------------------------------
(8 of 10)
312
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Wilmington No
(Residence Inn by Marriott)
240 Chapman Rd.
Newark, DE 19702
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Orlando No
(Residence Inn by Marriott)
7975 Canada Ave.
Orlando, FL 32819-8262
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Atlanta No
(Residence Inn by Marriott)
6096 Barfield Rd.
Atlanta, GA 30328
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Ann Arbor No
(Residence Inn by Marriott)
800 Victors Way
Ann Arbor, Mi 48108
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Kansas City No
(Residence Inn by Marriott)
2975 Main St. - Union Hall
Kansas City, MO 64108
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Fishkill No
(Residence Inn by Marriott)
2481 Route 9
Fishkill, NY 12524
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Charlotte No
(Residence Inn by Marriott)
5800 West Park Dr.
Charlotte, NC 28217
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Providence (Warwick) No
(Residence Inn by Marriott)
500 Kilvert St.
Warwick, RI 02883
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Ft. Worth No
(Residence Inn by Marriott)
1701 S. University Dr.
Ft. Worth, TX 76107
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Tyler No
(Residence Inn by Marriott)
3303 Troup Highway
Tyler, TX 75701
- -----------------------------------------------------------------------------------------------------------------------
RFS, Inc. Tupelo No
(Executive Inn)
1011 N. Gloster
P.O. Box 1603
Tupelo, MS 38802
- -----------------------------------------------------------------------------------------------------------------------
(9 of 10)
313
- --------------------------------------------------------------------------------
PATRIOT - AMERICAN GROUP
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LEASED PROPERTIES
- -----------------------------------------------------------------------------------------------------------------------
TENANT PROPERTY MORTGAGED PROPERTY
- -----------------------------------------------------------------------------------------------------------------------
DTR North Canton, Inc. (soon Tallahassee No
to be DTM PAH Lessee, Inc.) (Capital Plaza Hotel)
101 South Adams Street
Tallahassee, FL 32301
- -----------------------------------------------------------------------------------------------------------------------
DTR North Canton, Inc. (soon Doubletree Denver at Boulder No
to be DTM PAH Lessee, Inc.) 8773 Yates Drive
Westminster, CO 80030
- -----------------------------------------------------------------------------------------------------------------------
DTR North Canton, Inc. (soon Miami No
to be DTM PAH Lessee, Inc.) (Holiday Inn Airport Lakes South)
101 Northwest 57th Ave.
Miami, Fl 33126
- -----------------------------------------------------------------------------------------------------------------------
DTR North Canton, Inc. (soon O'Hare Airport No
to be DTM PAH Lessee, Inc.) (Holiday Inn Des Plaines/O'Hare Airport)
1450 E. Touhy Avenue
Des Plaines, IL 60018
=======================================================================================================================
(10 of 10)
314
SCHEDULE IV
To Credit Agreement
Indebtedness to be Refinanced
1. Loans in the aggregate outstanding principal amount of $0.00 to
Doubletree Hotels Corporation and Doubletree Partners made by a
syndicate of banks led by The Bank of Nova Scotia upon which there is
no accrued and unpaid interest as of the date hereof.
2. Loans in the aggregate outstanding principal amount of $123,869,000
made by a syndicate of banks led by Credit Lyonnais to Red Lion Hotels,
Inc. upon which there is accrued and unpaid interest in the amount of
$9,479.17, fees of $9,479.17 due as of the date hereof and a reserve
for payment of expenses of $51,000.
3. Loan in the aggregate outstanding principal amount of $39,400,899 made
by Yasuda Trust & Banking Co., Ltd. to Glendale Red Lion Hotel, a
California limited partnership upon which there is accrued and unpaid
interest of $196,540 as of September 30, 1996.
315
SCHEDULE V
To Credit Agreement
Convertible Securities/Options
1. Rights of the underwriters of the Public Equity Offering to purchase an
over allotment of 15% of the total number of Doubletree Corporation
shares for which they have a firm commitment to purchase, all pursuant
to the Equity Financing Documents.
2. Option to Purchase 20,000 shares (rights to 10,000 shares of which have
vested) of Doubletree Corporation common shares held by General
Electric Hotel Partners I, Limited Partnership.
3. The trustees of General Electric Pension Trust ("GEPT") (or an
affiliate thereof) shall receive five-year warrants to purchase 10% of
the number of shares of Doubletree Corporation stock purchased by GEPT
or such affiliate thereof in the Private Equity Offering.
316
SCHEDULE VI
To Credit Agreement
Subsidiaries and Joint Ventures
Name Borrower Ownership Interest
---- ---------------------------
I. WHOLLY-OWNED
RED LION
Subsidiary Guarantors
- ---------------------
1. Red Lion Hotels, Inc. ("Red Lion")(DE). Borrower owns 100% of common stock.
Other Wholly-Owned Subsidiaries (not guarantors)
- ------------------------------------------------
2. Boise-Red Lion/Downtowner, Inc. (ID) 100% of common stock owned by Red Lion
(liq. lic. only)
3. Red Lion Properties, Inc. (DE) ("RLP") 100% of common stock owned by Red Lion
(guaranty prohibited because of net worth
covenant)
4. SALC, Inc. (TX) (liq. lic. only) 100% of common stock owned by Red Lion
5. Santa Barbara Red Lion Hotel (has only RLP has a 1% g.p. interest and Red Lion owns a
0.1% interest in Fess Parker - Red Lion 99% g.p. interest
Hotel)1
DOUBLETREE
Subsidiary Guarantors
- ---------------------
6. Arizona DTM Pasadena, Inc. (CA) 100% of common stock owned by DTM
7. Compris Hotel Corporation (DE) 100% of common stock owned by DHC
("Compris")
8. Doubletree Hotel Systems, Inc. (AZ) ("DH 100% of common stock owned by DPI
Systems")
9. Doubletree Hotels Corporation (AZ) 100% of common stock owned by Borrower
("DHC")
10. Doubletree of Phoenix, Inc. (DE) ("DPI") 100% of common stock owned by DHC
11. Doubletree Partners (DE g.p.) ("DP") 60% interest owned by SHC; 40% interest owned
by Borrower
12. DT Management, Inc. (AZ) ("DTM") 100% of common stock owned by DPI
(1 of 8)
317
Name Borrower Ownership Interest
---- ---------------------------
13. DT Real Estate Inc. (AZ) 100% of common stock owned by DPI
14. DTM Atlantic City, Inc. (AZ) 100% of common stock owned by DTR Sonoran
Holding, Inc.
15. DTM Burlingame, Inc. (AZ) 100% of common stock owned by DTM
16. DTM Cambridge, Inc. (MA) 100% of common stock owned by DTM
17. DTM Coconut Grove, Inc. (AZ) 100% of common stock owned by DTM
18. DTM Nashville, Inc. (AZ) 100% of common stock owned by DTM
19. DTM Oklahoma, Inc. (AZ) 100% of common stock owned by DTM
20. DTM Palm Springs, Inc. (AZ) 100% of common stock owned by DTM
21. DTM Santa Clara, Inc. (AZ) 100% of common stock owned by DTM
22. DTM St. Louis, Inc. (AZ) 100% of common stock owned by DTM
23. DTM Tulsa, Inc. (AZ) 100% of common stock owned by DTM
24. DTM Ventura, Inc. (AZ) 100% of common stock owned by DTM
25. DTM Walnut Creek, Inc. (AZ) 100% of common stock owned by DTM
26. DTR Cambridge, Inc. (AZ) 100% of common stock owned by DT Real Estate,
Inc.
27. DTR PAH Holding, Inc. (AZ)(1) 100% of common stock owned by DTR Sonoran
Holding, Inc.
28. DTR Sonoran Holding, Inc. (AZ) 100% of common stock owned by DT Real Estate,
Inc.
29. DTR West Montrose, Inc. (AZ) 100% of common stock owned by DTR Sonoran
Holding, Inc.
30. Harbor Hotel Corporation (DE) 100% of common stock owned by SHC
31. HOSCO Corporation (AZ) 100% of common stock owned by DHC
32. INNCO Corporation (AZ) 100% of common stock owned by DHC
33. Samantha Hotel Corporation (DE) ("SHC") 100% of common stock owned by Borrower
(2 of 8)
318
Name Borrower Ownership Interest
---- ---------------------------
Other Wholly-Owned Subsidiaries (not guarantors)
- ------------------------------------------------
34. Arizona DTM Florida, Inc. (FL) (Inactive) 100% of common stock owned by DTM
35. Compris Realty Corporation No. 1 (AZ) 100% of common stock owned by DT Real Estate,
(Inactive) Inc.
36. Doubletree Hotel Ventures, Inc. (AZ) 100% of common stock owned by DT Real Estate,
(Inactive) Inc.
37. Doubletree Inc. of California (AZ) (owns 100% of common stock owned by DT Real Estate,
only a 2% l.p. interest in Custom House Inc.
Co., Ltd., which owns 2 hotels)
38. DT Investments, Inc. (AZ) (owns only 100% of common stock owned by DT Real Estate,
small interest in Southcenter Motor Hotel, Inc.
Ltd., which owns only one hotel)
39. DTCM Portland, Inc. (AZ) (Inactive) 100% of common stock owned by DTM
40. DTM Antlers Inc. (AZ) (Inactive) 100% of common stock owned by DTM
41. DTM Salt Lake City, Inc. (UT) (Inactive) 100% of common stock owned by DTM
42. DTM Tampa, Inc. (FL) (Inactive) 100% of common stock owned by DTM
43. DTM Vail, Inc. (AZ) (Inactive) 100% of common stock owned by DTM
44. DTR Independence, Inc. (AZ) (only leases 100% of common stock owned by DTR Sonoran
the "Doubletree System" to the Mexican Holding, Inc.
j.v.s)
45. DTR Limited Partnership (AZ) (owns only DT Real Estate, Inc. - 1% General Partner
minority joint venture interest) DT Management, Inc. - 53% Limited Partner
Compris Hotel Corporation - 20% Limited Partner
INNCO Corporation - 15% Limited Partner
DTM Santa Clara - 2% Limited Partner
DTM Coconut Grove, Inc. - 1% Limited Partner
DTM Nashville, Inc. - 1% Limited Partner
DTM Oklahoma, Inc. - 1% Limited Partner
DTM Tulsa, Inc. - 1% Limited Partner
DTM Tampa, Inc. - 1% Limited Partner
DTM Salt Lake City, Inc. - 1% Limited Partner
DTM St. Louis, Inc. - 1% Limited Partner
DTM Vail, Inc. - 1% Limited Partner
DTM Ventura, Inc. - 1% Limited Partner
(3 of 8)
319
Name Borrower Ownership Interest
---- ---------------------------
46. DTR RFS Lessee, Inc. (CA) (only lessee 100% of common stock owned by Compris
of one hotel from RFS Partnership, L.P -
subject to same net worth covenant as
RFS, Inc.)1
47. DTR North Canton, Inc. (AZ) (name to be 100% of common stock owned by DTR Sonoran
changed to DTM PAH Lessee, Inc.) Holding, Inc.
(subject to net worth covenant)1
48. DTR San Antonio, Inc. (AZ) (holds 50% 100% of common stock owned by DTR Sonoran
interest in Mexican j.v. - j.v. prohibits Holding, Inc.
assignment of interest)
49. DTR Santa Clara, Inc. (AZ) (Inactive) 100% of common stock owned by DT Real Estate,
Inc.
50. Greenville Doubletree, Inc. (AZ) (Inactive) 100% of common stock owned by DT Real Estate,
Inc.
51. Guest Quarters Services Corporation (IL) 100% of common stock owned by DP
(liq. lic. only)
52. Hotel Clubs of Corporate Woods, Inc. 100% of common stock owned by DPI
(KS) (liq. lic. only)
53. Houston Airport Doubletree, Inc. (TX) 100% of common stock owned by DT Real Estate,
(Inactive) Inc.
54. Indiana Harbor Hospitality Corporation 100% of common stock owned by DP
(IN) (Inactive)
55. RFS, Inc. (TN) (guaranty prohibited 100% of common stock owned by Borrower
because of net worth covenant in Master
Agreement)1
56. Scottsdale Plaza Doubletree, Inc. (AZ) 100% of common stock owned by DT Real Estate,
(Inactive) Inc.
57. TUK Inns, Inc. (WA) (only owns 12.62% 100% of common stock owned by DT Real Estate,
equity in Southcenter j.v.) Inc.
II. NON-WHOLLY-OWNED SUBSIDIARIES
(50 less than X less than 100%)
RED LION
1. Bakersfield Red Lion Motor Inn (CA j.v.)(6) Red Lion owns a 66.7% joint venture interest
2. Glendale Red Lion Hotel (CA l.p.)(1,6) Red Lion owns a 75% interest
(4 of 8)
320
Name Borrower Ownership Interest
---- ---------------------------
3. Ontario-Red Lion Motor Inn (j.v.)(1,6) Red Lion owns a 66.7% interest
4. Red Lion Orange County Partners, L.P. Red Lion owns a 51% interest
(CA)(1,6)
DOUBLETREE
5. BHH Management Associates (MA g.p.)(1) DP owns 99% interest
6. DTR Boston Heights, Inc. (AZ)(1) DTR Sonoran Holding, Inc. owns 80% of common
stock
7. DTR Houston, Inc. (AZ)(1) DTR Sonoran Holding, Inc. owns 80% of common
stock
8. Hotel Properties-Newport (AZ j.v.)(1) DTR Limited Partnership holds 45% interest, DT
(Inactive) Real Estate, Inc. holds 10% interest
9. Fess Parker-Red Lion Hotel (CA g.p.)(1,6) Red Lion directly owns a 49.401% interest, Santa
Barbara Red Lion owns a 0.1% interest and RLP
owns a 0.499% interest
III. NON-SUBSIDIARY JOINT VENTURES
(X less than or equal to 50)
RED LION
1. Betty MacWilliam & Company (TX Red Lion owns 490 shares of common stock (total
corp.)(2) outstanding 1,000 shares)
2. Red Lion La Posada (AZ j.v.)(1,6) Red Lion owns a 50% joint venture interest
3. Red Lion/Riverfront, L.L.C.(1,6) Red Lion owns a 10% interest
4. Village Motor Inn (MT j.v.)(1,6) Red Lion owns a 50% joint venture interest
DOUBLETREE Hotel Properties-Boise owns 99% of common
stock. DT Real Estate, Inc. owns 1% of common
5. Arlington Hotel Co. (AZ) stock and all voting rights have been assigned to
Sumitomo Bank
6. Boise Beverage, Inc. (ID)(2) 100% of common stock owned by Hotel Properties-
Boise
7. Campbell Beverages, Inc. (TX) (liq. lic. DPI holds 48% of common stock
only)(2)
8. Candlewood Hotel Company L.L.C. (DE)(1) Borrower holds 50% interest
(5 of 8)
321
Name Borrower Ownership Interest
---- ---------------------------
9. Corporate Associates-Boise Limited DTR Limited Partnership holds 11.11% g.p.
Partnership (ID)(1) interest and 2.22% l.p. interest
10. Corporate Associates-Newport Limited D.T. Real Estate, Inc. holds 13.33% g.p. interest
Partnership (AZ)1
11. Custom House Hotel, L.P. (MO l.p.) Doubletree, Inc. of California holds 2.11% l.p.
(f/k/a Custom House Hotel Co., Ltd.)(3) interest, Hotel Equities Co. holds 10.75% l.p.
interest
12. Dallas DBLT, Inc. (TX)(2) DPI holds 45% of common stock
13. DDP Partners, L.P.(3) RFS, Inc. owns 5% g.p. interest
14. Devonshire Associates(3) RFS, Inc. owns 10% g.p. interest
15. Doubletree de Mexico, S.A. de C.V. DTR San Antonio, Inc. holds 50% of the stock
(Mexico variable capital corporation)(1)
16. D.T. Beverages, Inc. (TX) (liq. lic. Doubletree of Phoenix, Inc. holds 45% of common
only)(2,5) stock
17. D.T. Beverages One, Inc. (TX) (liq. lic. Doubletree of Phoenix, Inc. holds 45% of common
only)(2) stock
18. Highland Plaza Partners, Ltd.(3) RFS, Inc. owns 5% g.p. interest
19. Hotel Equities Co. (AZ g.p.)(3) DTR Limited Partnership holds 2.1% interest
20. Hotel Properties-Boise (AZ g.p.)(3) DTR Limited Partnership holds 27.5% interest,
Corporate Associates-Boise Limited Partnership
holds 22.5% interest
21. Hutton Centre Hotel Associates (CA j.v.) Hotel Properties-Newport holds 50% interest
(inactive to be liquidated)(3)
22. PAH DT Chicago O'Hare Airport DTR PAH Holdings owns 10% limited partnership
Partners, L.P.(1) interest
23. PAH DT Miami Airport Partners, L.P.(1) DTR PAH Holdings owns 10% limited partnership
interest
24. PAH DT Tallahassee Airport Partners, DTR PAH Holdings owns 10% limited partnership
L.P.(1) interest
25. PAH DT Westminster Airport Partners, DTR PAH Holdings owns 10% limited partnership
L.P.(1) interest
26. Post Oak Beverages, Inc. (TX) (liq. lic. Doubletree of Phoenix, Inc. hold 45% of common
only)(3) stock
(6 of 8)
322
Name Borrower Ownership Interest
---- ---------------------------
27. RFS Partnership, L.P. RFS, Inc. owns less than a 1% l.p. interest
28. RW Motels, Ltd. (AZ l.p.)(3) DTR Limited Partnership holds 25% interest
29. SF Partners RFS, Inc. owns 2.5% g.p. interest
30. Shelby Distribution Partners, Ltd. RFS, Inc. owns 46.63% g.p. interest
31. Southcenter Motor Hotel, Ltd. (WA l.p.)(3) Tuk Inns, Inc. holds 12.62% g.p. interest, DT
Investments, Inc. holds 7.57% l.p. interest
32. THI FQ L.P. (DE)(3) Thayer II holds 98.675845% interest
33. THI Austin L.P. (DE)(3) Thayer II holds 98.64424% interest
34. THI Metairie L.P. (DE)(3) Thayer II holds 98.58519% interest
35. THI Oceanfront L.P. (DE)(3) Thayer II holds 98.59659% interest
36. THI Rockville L.P. (DE)(3) Thayer II holds 98.33025% interest
37. THI Somerset L.P. (DE)(3) Thayer II holds 98.69213% interest
38. Thayer Hotel Investors II, L.P. (DE) Borrower holds 4.35388% interest
(Thayer II)(1)
39. Tucson Hotel Equity Limited Partnership DTM Oklahoma, Inc. has 33.34% g.p. interest,
(AZ) DTM St. Louis, Inc. has 8.28% g.p. interest,
DTM Tulsa, Inc. has 8.28% g.p. interest
40. Tapas Corp. (liq. lic. only)(2, 4)
41. VRLB Inc. (liq. lic. only)(2, 5)
(7 of 8)
323
Name Borrower Ownership Interest
---- ---------------------------
- --------------------
(1) Joint venture agreement/shareholder agreements and/or existing credit
agreements restrict assignment without consent.
(2) Liquor license entities.
(3) No direct ownership by any Subsidiary Gruarantor.
(4) Tapas Corporation, a Utah non-profit corporation, is a social club
entitling members access to the restaurant/lounge at Red Lion Hotel
Salt Lake. There are no authorized or issued shares of stock.
(5) Red Lion controls VRLB, Inc., a Montana corporation, but does not have
an ownership interest sufficient to qualify it as a Subsidiary within
the meaning set forth in the Credit Agreement. VRLB, Inc. has an
authorized capitalization of 10,000 shares of common stock and there
are 11 shares of common stock issued and outstanding. Village Motor
Inn, a Montana joint venture, owns 1 share of the common stock and
pursuant to an irrevocable proxy Red Lion has the right to vote the
other 10 shares of issued and outstanding common stock.
(6) Entity indicated is an Existing Red Lion Joint Venture.
(8 of 8)
324
SCHEDULE VII
Existing Indebtedness
*Items marked with an aserisk (*)
are part of Consolidated Indebtedness
PART A - LOANS
*1. Glendale Red Lion Hotel, a California limited partnership ("Glendale")
is indebted to The Yasuda Trust & Banking Co. in the outstanding
principal amount of $39,400,899.
*2. Glendale is indebted to the Glendale Redevelopment Agency in the
outstanding principal amount of $6,000,000.
3. Glendale is indebted to Red Lion in the outstanding principal amount of
$6,730,550. (INTERCOMPANY)
4. Bakersfield Red Lion Motor Inn, a California joint venture is indebted
to Red Lion in the outstanding principal amount of $18,573,684.
(INTERCOMPANY)
5. Red Lion Orange County Partners, L.P. is indebted to Red Lion in the
outstanding principal amount of $20,324,925. (INTERCOMPANY)
6. Ontario-Red Lion Motor Inn, a California general partnership is
indebted to Red Lion in the outstanding principal amount of
$24,504,253. (INTERCOMPANY)
7. Red Lion is indebted to Chequers Investment Associates II in the
outstanding principal amount of $17,000,000. This is the "Austin
Obligation".
8. Secured Promissory Note made by Red Lion Properties, Inc. in favor of
Red Lion in the outstanding principal amount of $3,343,401.
(INTERCOMPANY)
9. Demand note in the principal amount of $4,880,000 made by Red Lion
payable to Red Lion Properties, Inc. (INTERCOMPANY - relates to net
worth covenant)
*10. Fess Parker - Santa Barbara Hotel is indebted to Credit Lyonnais,
United States National Bank of Oregon and Banque
(1 of 9)
325
Nationale de Paris in the outstanding principal amount of $45,000,000.
ALL OF THE ABOVE MAY BE REFINANCED PURSUANT TO SECTION 9.04(II).
(2 of 9)
326
PART B - LETTERS OF CREDIT
*1. Irrevocable Letter of Credit in favor of Harvard Real Estate Inc. in
the face amount of $1,000,000 renewable annually for a period of one
year issued by the Bank of Nova Scotia (Collateral for lease of the two
Harvard properties).
*2. Irrevocable Letter of Credit in favor of Securities Reliance Surety
Company in the face amount of $1,860,000 expiring March, 1997 issued by
the Bank of Nova Scotia (Collateral for Roosevelt Hotel Corporation).
PART C - CAPITALIZED LEASES (LIST AMOUNT TO BE CAPITALIZED)
NONE
PART D - GUARANTIES AND OTHER CONTINGENT OBLIGATIONS
*1. Net Operating Deficient Guaranty of Red Lion made as of July 16, 1990
in favor of The Yasuda Trust & Banking Co., Ltd., Los Angeles Agency,
with respect to certain indebtedness of Glendale Red Lion Hotel. Total
liability under the guaranty limited to $7,000,000. Pursuant to the
Third Loan Modification Agreement, Red Lion has agreed that $20,000,000
of indebtedness of Glendale Red Lion Hotel will be recourse to Red
Lion. (Borrower may be required to assume such obligations of Red Lion
as a condition to the lenders consent to waive change in control)
*2. Guaranty of Red Lion made as of June 30, 1993 and Guaranty of Borrower
dated as of November 8, 1996, both in favor of Credit Lyonnais, etc.
with respect to indebtedness of Fess Parker-Red Lion Hotel, with an
outstanding principal amount of $45,000,000.
3. "Keepwell letter" obligation to contribute up to an additional $800,000
by DTR Boston Heights, Inc., the lessee of the Doubletree Miami Coconut
Grove hotel.
4. "Keepwell letter" obligation to contribute up to an additional $800,000
by DTR Houston, Inc., the lessee of the Doubletree Tyson's Corner
hotel.
(3 of 9)
327
5. Obligation to fund an additional $200,000 loan by DT Management, Inc.
to the owner of the Doubletree Charlotte hotel.
6. Obligation to fund $6,300,000 permanent loan financing on the
Doubletree Somerset hotel to the owner, THI Somerset LP.
7. Termination Agreement for Mr. Jim Grier requires payment of $9,749 per
month until death - currently 61 years old.
8. Candlewood - obligation to fund balance of $15.0 million commitment.
Funding through October 15, 1996 amounted to $12,300,000.
9. Patriot/Doubletree Alliance - Commitment to invest up to $20,000,000
million of which $3,000,000 million has been funded as of September 30,
1996.
*10. A $2,000,000 portion of the Hotel Properties Boise debt in the original
amount of $7,000,000 (mortgage note payable, due 2006, secured by a
deed of trust on substantially land, building and equipment and
otherwise non-recourse) is guaranteed by Doubletree Hotels Corporation.
11. Guaranty of Renovation Completion and Performance made by Red Lion in
favor of Finova Capital Corporation, dated November 21, 1995, with
respect to Red Lion Spokane - City Center.
12. Guaranties by Red Lion of leases of real property entered into by RLH
Partnership, L.P. with respect to the Boise Downtowner and Eugene,
Oregon properties.
13. Doubletree Corporation is required to maintain a net worth of RFS, Inc.
of at least $15,000,000 pursuant to the Master Agreement with RFS Hotel
Investors, Inc.
14. DTR North Canton, Inc. (name to be changed to DTM PAH Lessee, Inc.) is
required to maintain a net worth of the greater of $400,000 or 20% of
the aggregate projected annual percentage rent deposit and percentage
rent under all leases with Patriot American Hospitality, Inc. pursuant
to each such lease agreement.
(4 of 9)
328
15. Red Lion Properties, Inc. is required to maintain net assets of
$9,880,000 pursuant to Section6.14 of the partnership agreEMENT of Red
Lion Inns Limited Partnership.
PART E - INTEREST RATE PROTECTION AGREEMENTS AND OTHER HEDGING
AGREEMENTS
All three to be terminated on or about November 8, 1996.
1. Interest Rate and Currency Exchange Agreement dated October 1, 1990 by
Red Lion with United States National Bank of Oregon, as amended and
supplemented regarding debt in the notional amount of $25,000,000.
2. Interest Rate and Currency Exchange Agreement dated March 1, 1993 by
Red Lion with Societe Generale, as amended and supplemented regarding
debt in the notional amount of $25,000,000.
3. Master Agreement dated as of August 1, 1995 by Red Lion with The Bank
of Tokyo, Ltd., as amended and supplemented, regarding debt in the
notional amount of $25,000,000.
PART F - OTHER INDEBTEDNESS AS GENERAL PARTNER OF PRIMARY OBLIGOR
*1. Highland Plaza Partners, Ltd. (RFS, Inc. is a general partner)
unsecured promissory note in the original amount of $300,000.
*2. Red Lion is the general partner of Red Lion La Posada, an Arizona joint
venture and as such may be liable for such joint ventures loan payable
to Equitable Life Assurance Co. upon which there is $6,479,598 of
principal outstanding.
*3. Red Lion is the general partner of Village Motor Inn, a Montana joint
venture and as such may be liable for such joint venture's loan payable
to First Interstate Bank of Commerce upon which there is $2,634,773 of
principal outstanding.
(5 of 9)
329
*4. Obligations as a general partner of a primary obligor arising in the
ordinary course of business except to the extent that the underlying
obligation would otherwise constitute Indebtedness.
(6 of 9)
330
PART G - BOND OBLIGATIONS OUTSTANDING
BROKER: Sedgwick James & Company
SURETY: Continental Casualty Co./American Casualty of PA
Fireman's Inc. Co. of NJ
BOND AMOUNT ANNUAL
NUMBER DESCRIPTION AT 9/30/96 PREMIUM
*142-448-4888 AIG 94-95 $1,000,000 $10,000
*142-448-443 AIG 95-96 2,447,751 22,210
*142-448-457 AIG 96-97 202,698 13,176
*142-448-412 Liberty Northwest 92-93 116,158 538
*142-448-426 Liberty Northwest 93-94 242,143 2,002
*142-488-409 Liberty Mutual 92-93 436,672 4,985
*142-448-474 Liberty Mutual 93-94 280,199 2,776
*142-488-460 Port of Vancouver 200,000 2,000
BNS1296217-006 Roberta Pearson St Wash Notary Public Bond 10,000 50
BNS1296219-0016 Ella J. Lee 10,000 50
St. Wash Notary Public
BNS1320264 Red Lion Inns. L.P. 202,464 4,049
Supersedeas Appeal Bond
Patricia Fair vs. Red Lion
141886901 Red Lion Hotels, Inc. 107,500 1,613
Concessionaires Bond/Port of Portland
Portland Airport Red Lion Restaurant
141886929 Red Lion Hotels, Inc. 55,500 833
Concessionaires Bond/Port of Portland
Red Lion Pizza Restaurant - "Red's"
BNS1319865-0055 Red Lion Hotels, Inc. 4,029 100
License and Permit Bond
City of Los Angeles/Dept. of Airports
Los Angeles Airport & Ontario Red Lions
BNS1319865-0056 Red Lion Hotels, Inc. 2,000 100
Liquor and Beer License
State of Nebraska
Omaha Red Lion
141887031-0382 Red Lion Hotels, Inc. 750 50
Financial Guarantee Bond
City of Los Angeles/Dept. of Airports
Los Angeles Airport Red Lion
(7 of 9)
331
BOND AMOUNT ANNUAL
NUMBER DESCRIPTION AT 9/30/96 PREMIUM
BNS1319865-0400 Red Lion Hotels, Inc. 5,000 250
Restaurant Liquor Bond
State of Utah
Salt Lake City Red Lion
141887031-0411 Red Lion Hotels, Inc. 2,467 50
License & Permit Bond
John Wayne Airport
Orange County Red Lion
BNS1319865-0469 Red Lion Hotels, Inc. 1,000 100
Liquor Bond - Gift Shop
State of Utah
Salt Lake City Red Lion
BNS1319865-0477 St Wash Notary Bond 10,000 50
Howard J. Cohen
BNS1319865-0478 St Wash Notary Bond 10,000 50
Vicki Lynn Zimmerman-Williams
BNS1319865-0671 Tapas Corporation 10,000 50
Private Club Bond
St of Utah/Dept. of Alcoholic Bev. Control
Salt Lake City Red Lion
BNS1319865-0683 Notary Public St of Wash 10,000 50
Michelle Geschke/Seattle
141887031-0822 SALC, Inc. 5,000 50
St of Texas/Alcoholic Bev. Commission
San Antonio Red Lion
141887031-0858 SALC, Inc. 5,000 50
St of Texas/Alcoholic Bev. Commission
Houston Red Lion
141887031-0404 Betty MacWilliam & Co/dba: Club Max 20,000 200
St of Texas/Alcoholic Bev. Commission
Austin Red Lion
141887031-0859 SALC, Inc. 7,500 50
St of Texas/Mixed Bev. Gross Receipts Tax Bond
Houston & San Antonio Red Lions
141887031-0860 Red Lion Hotels, Inc. 32,800 590
City of Houston Utility Bond
Houston Red Lion
141887031-0876 Red Lion Hotels, Inc. 49,000 882
Houston Lighting & Power Co. Utility Bond
Houston Red Lion
1. Indemnity Agreement Bond No. 142448488 by Red Lion, as principal, and
National Fire Insurance Company of Hartford, as Surety, dated July 23,
1996.
(8 of 9)
332
2. Indemnity Agreement Bond No. 142448443 by Red Lion, as principal, and
National Fire Insurance Company of Hartford, as Surety, dated July 23,
1996.
3. Indemnity Agreement Bond No. 142448457 by Red Lion, as principal, and
National Fire Insurance Company of Hartford, as Surety, dated July 23,
1996.
The obligations of Red Lion under the preceding three (3) Indemnity
Agreements are in partial substitution for Red Lion's obligations with
respect to certain letters of credit in the aggregate amount of
approximately $5.6 million as disclosed on Red Lion's balance sheet
dated as of June 30, 1996.
(9 of 9)
333
SCHEDULE VIII
To Credit Agreement
Insurance
Certificates of Insurance attached herein.
334
SCHEDULE IX
To Credit Agreement
Existing Liens which will survive closing
Property Subject Maturity Date of
to Lien Secured Party Amount of Lien Debt Secured Thereby
------- ------------- -------------- --------------------
10 shares of common Sumitomo Bank, $55,125,000 02/10/00
stock of Arlington Hotel Limited
Co. which are owned by
DT Real Estate, Inc.,
an Arizona corporation
Note: The remaining 990 shares of Arlington Hotel Co. which are owned by
Hotel Properties - Boise, an Arizona general partnership in which
Doubletree has an interest but which is not a Subsidiary, are also
pledged to Sumitomo as security for the note listed above.
Glendale Red Lion Hotel Yasuda Trust and $39,500,000 07/16/97
Banking Corp.
Glendale Red Lion Hotel Glendale Redevelopment $ 6,000,000 30 years after first to occur
Authority of hotel opening or 90 days
after certificate of occupancy
is issued
Fess Parker's Red Lion Santa Credit Lyonnais Cayman $45,000,000 06/29/98
Barbara Resort Islands Branch
U.S. National Bank of
Oregon
Banque Nationale De
Paris
Austin Red Lion Hotel Chequers Investment Approximately 12/31/97
Associates II $17,000,000
Bakersfield Red Lion Hotel Red Lion Hotels, Inc. $18,573,684 02/29/00
Costa Mesa (Orange County) Red Red Lion Hotels, Inc. $20,324,925 10/01/00
Lion Hotel
Ontario Red Lion Hotel Red Lion Hotels, Inc. $24,504,253 12/31/97
Richland Red Lion Hotel and Red Lion Hotels, Inc. $ 3,343,401 08/01/02
Kalispell Red Lion Hotel
Note: Each of the above-listed liens is permitted to be refinanced.
(1 of 2)
335
Additional Liens:
1) Liens under the Red Lion Master Lease in favor of the landlord
thereunder.
2) Furniture, fixtures and equipment located in Hotel Properties leased
under the Master Lease are subject to the right of Credit Lyonnais,
holder of the fee mortgage on these properties, to purchase such
furniture, fixtures and equipment upon foreclosure of the fee mortgage
held by Credit Lyonnais pursuant to the non-disturbance agreement among
Red Lion, Credit Lyonnais and the Master Landlord.
3) Liens on Red Lion's interest, in its capacity as manager, in (i) leases
of personal property entered into by Red Lion in connection with the
development, use, occupancy or operation of the properties owned by Red
Lion Inns Operating L.P. (the "MLP Properties"), and (ii)
authorizations, approvals, permits, variances and land use entitlements
required for the construction and maintenance of the MLP properties and
permits, licenses and agreements required for use, occupancy or
operation of the MLP Properties.
4) Furniture, fixtures and equipment located in the Hotel Properties
leased under the Master Lease are subject to the right of the Master
Landlord to purchase such furniture, fixtures and equipment upon
termination of the Master Lease.
(2 of 2)
336
SCHEDULE X
To Credit Agreement
Existing Investments
1. All Investments set forth on Schedules VI, XVI and XVII to this Credit
Agreement.
2. All investments in hotel management agreements, hotel franchise
agreements and leases of hotels to which Borrower or any Subsidiaries
are a party on the date hereof.
337
SCHEDULE XI
To Credit Agreement
Scheduled Capital Expenditures
BORROWER SHALL HAVE THE RIGHT TO REALLOCATE AMOUNTS PERMITTED AS CAPITAL
EXPENDITURES BY VIRTUE OF INCLUSION ON THIS SCHEDULE, SO LONG AS (I) THE TOTAL
OF SAME REMAINS $42,800,000 AND (II) THE AGGREGATE NET AMOUNTS OF SUCH
REALLOCATIONS SHALL NOT EXCEED $5,000,000.
Description Amount
- ----------- ------
Related to conversion of name and
acquisition integration $16,800,000
Related to existing arrangements
with Patriot American $10,000,000
Related to existing arrangements
with Candlewood Hotel Company, L.L.C $ 6,000,000
Related to existing arrangements with Red
Lion Hotels in Houston, San Antonio,
Modesto & Spokane $ 7,000,000
Related to existing arrangements with
Thayer Hotel Investors II, L.P. $ 3,000,000
-----------
Total $42,800,000
338
SCHEDULE XII
To Credit Agreement
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
339
SCHEDULE XIII
To Credit Agreement
Designated Hotel Properties
Red Lion Eureka Red Lion Modesto
1929 Fourth Street 1150 Ninth Street
Eureka, CA 95501 Modesto, CA 95354
Red Lion Redding Red Lion San Jose
1830 Hilltop Drive 2050 Gateway Place
Redding, CA 96002 San Jose, CA 95110
Red Lion Portland/Jantzen Beach Red Lion Bend South
909 North Hayden Island Drive 849 NE 3rd Street
Portland/Jantzen Beach, OR Bend South, OR 97701
97217
Red Lion Klamath Falls Red Lion Portland/Columbia River
3612 South 6th Street 1401 North Hayden Island Drive
Klamath Falls, OR 97603 Portland/Columbia, OR 97217
Red Lion San Antonio Red Lion Houston
37 NE Loop 410 2525 West Loop South
San Antonio, TX 78218 Houston, TX 77027
Red Lion Bellevue Red Lion Port Angeles
300 112th Avenue SE 221 North Lincoln Street
Bellevue, WA 98004 Port Angeles, WA 98362
Red Lion Aberdeen Red Lion Yakima
521 West Wishah Street 1507 North 1st Street
Aberdeen, WA 98520 Yakima, WA 98901
Red Lion Pasco Doubletree Guest Suites
2525 North 20th Street Southfield
Pasco, WA 99301 28100 Franklin Road
Southfield, MI 48034
340
SCHEDULE XIV
To Credit Agreement
ERISA
There is an application pending with the Internal Revenue
Service for the Employee Retirement Savings Plan maintained by Red Lion under
Revenue Procedure 94-62. It is anticipated that the liability in connection with
this application will not exceed $600,000.
Borrower has applied for a determination letter from the
Internal Revenue Service to the effect that the Employee Retirement Savings Plan
maintained by the Borrower is qualified.
341
SCHEDULE XV
To Credit Agreement
Restrictions on Subsidiaries
1. RFS Inc. and DTR RFS Lessee, Inc. are required to maintain a net worth
of at least $15,000,000 pursuant to the Master Agreement with RFS Hotel
Investors, Inc.
2. DTR North Canton, Inc. (name to be changed to DTM PAH Lessee, Inc.) is
required to maintain a net worth of the greater of $400,000 or 20% of
the aggregate projected annual percentage rent deposit and percentage
rent under all leases with Patriot American Hospitality, Inc. pursuant
to each such lease agreement.
3. Red Lion Properties, Inc. is required to maintain net assets of
$9,880,000 pursuant to Section6.14 of the partnership agreement of Red
Lion Inns Limited Partnership.
342
SCHEDULE XVI
To Credit Agreement
Existing Doubletree Investments
GUARANTEED/
UNSECURED SECURED
INVESTMENT NAME EQUITY OWNERSHIP NOTEHOLDER ADVANCES/LOANS ADVANCES/LOANS
- --------------- ---------------- ---------- -------------- --------------
Boston HSR Ltd. Partnership N/A Doubletree $ 0 $4,500,000
Partners
Arlington Hotel Co. DTR Real Estate owns 1% Compri Hotel Corp. $ 1,555,000(1) $3,500,000
Hotel Properties - Boise (DTR Limited
Partnership owns only 27.5% interest
therein;
Corporate Assocaties - Boise owns only
22.5% interest therein) owns 99%
Custom House Hotel, L.P. Doubletree, Inc. of California holds Doubletree Hotels $4,000,000 $ 0
2.11% l.p. interest; Corp.
Hotel Equities Co. (DTR Limited
Partnership holds only 2.19% interest
therein) holds 10.75% l.p. interest
THI Somerset L.P. Thayer Hotel Investors II, L.P. DT Management, $ 0 $ 3,647,000(2)
("Thayer II") (Borrower holds only Inc.
4.35388% l.p. interest therein) owns
98.69213% interest
Master Preferred Hotels L.P. N/A RFS, Inc. $3,000,000 $ 0
Grand Partners JV II N/A DT Management, $ 0 $2,850,000
Inc.
Columbus/Front Ltd. N/A Doubletree $ 0 $2,575,000
Partners
Washington Park Hotel Assoc., N/A DT Management, $ 0 $2,500,000
L.P. Inc.
- --------
(1) There is also a $195,000 future funding obligation.
(2) There is also a $253,000 future funding obligation. Loan amount above
does not include $6,300,000 commitment to provide substitute first
mortgage financing is existing mortgage loan is not rolled over by
November 30, 1996.
(1 of 4)
343
GUARANTEED/
UNSECURED SECURED
INVESTMENT NAME EQUITY OWNERSHIP NOTEHOLDER ADVANCES/LOANS ADVANCES/LOANS
- --------------- ---------------- ---------- -------------- --------------
Hotel Roanoke, LLC N/A DT Management, $ 0 $1,300,000
Inc.
LOF Plymouth Meeting, L.P. N/A Doubletree Hotels $ 0 $1,000,000
Corp.
THI Metairie L.P. Thayer II owns 98.58519% interest DT Management, $1,000,000 $ 0
Inc.
Bayside Resort, Inc. N/A DT Management, $ 900,000 $ 0
Inc.
NUHO Company N/A Doubletree $ 645,000 $ 0
Partners
PSH Master L.P. N/A Doubletree $ 0 $ 500,000
Partners
Tysons Corner PT Limited N/A DT Management, $ 500,000 $ 0
Partnership Inc.
Waltham HSR, L.P. N/A Doubletree $ 0 $ 300,000
Partners
Jacksonville PT Hotel Corp. N/A Doubletree Hotels $ 256,000 $ 0
Corp.
PH Hotel, Inc. N/A Doubletree $0 $ 500,000(3)
Partners
NCNB N/A DT Management, $ 200,000 $ 0
Inc.
The Villas of St. Paul, Inc. N/A DT Management, $0 $ 200,000
Inc.
(4)Pickett MLP N/A t/b/d $ 194,000 $ 0
- --------
(3) Book Value is $250,000; Principal owed is $500,000.
(4) Proceeds out of bankruptcy proceeding.
(2 of 4)
344
GUARANTEED/
UNSECURED SECURED
INVESTMENT NAME EQUITY OWNERSHIP NOTEHOLDER ADVANCES/LOANS ADVANCES/LOANS
- --------------- ---------------- ---------- -------------- --------------
Coconut Grove PT Limited N/A t/b/d $ 175,000 $ 0
Partnership
Canal 66 Partnership N/A Doubletree, Inc. $ 136,000 $ 0
Mayfair Assoc., L.P. N/A Doubletree, Inc. $ 0 $ 41,000
Novi Hotel Fund Ltd. N/A Doubletree Hotel $ 32,000 $ 0
Partnership Systems, Inc.
Louisville Lodging Assoc. of N/A Ltd./Doubletree $ 25,000 $ 0
Kentucky Hotel Systems,
Inc.
PSH Master, L.P. N/A Doubletree $ 0 $ 22,000
Partners
Hotel Properties Boise DTR Limited Partnership ("DTRLP") owns N/A N/A N/A
27.50%;
Corporate Associates - Boise owns 2.5%
RW Motels, Ltd. DTRLP owns 25% N/A N/A N/A
Southcenter Motor Hotel, Ltd. Tuk Inns, Inc. owns 12.626% N/A N/A N/A
Thayer II Doubletree Hotels Corporation owns N/A N/A N/A
4.353% l.p. interest
PAH DT Miami Airport Partners, DTR PAH Holdings owns 10% l.p. N/A N/A N/A
L.P. interest
PAH DT Tallahassee Partners, DTR PAH Holdings owns 10% l.p. N/A N/A N/A
L.P. interest
PAH Chicago O'hare Partners, DTR PAH Holdings owns 10% l.p. N/A N/A N/A
L.P. interest
PAH DT Westminster DTR PAH Holdings owns 10% l.p. N/A N/A N/A
Partners L.P. interest
Candlewood Hotel Company, LLC 50% LLC interest and by Doubletree N/A N/A N/A
Corporation
SF Partners RFS, Inc. owns 2.5% g.p. interest N/A N/A N/A
(3 of 4)
345
GUARANTEED/
UNSECURED SECURED
INVESTMENT NAME EQUITY OWNERSHIP NOTEHOLDER ADVANCES/LOANS ADVANCES/LOANS
- --------------- ---------------- ---------- -------------- --------------
DDP Partners RFS, Inc. owns 5% g.p. interest N/A N/A N/A
Devonshire Associates RFS, Inc. owns 10% g.p. interest N/A N/A N/A
Highland Plaza Partners, Ltd. RFS, Inc. owns 5% g.p. interest N/A N/A N/A
Shelby Distribution Partners RFS, Inc. owns 46.63% g.p. interest N/A N/A N/A
RFS Partnership, L.P. less than 1% l.p. interest N/A N/A N/A
owned by RFS, Inc.
RFS Hotel Investors, Inc. RFS, Inc. owns 973,684 shares of N/A N/A N/A
convertible preferred stock and 35,000
shares of common stock
Tucson Hotel Equity Limited DTM Oklahoma owns 33.34% g.p. interest N/A N/A N/A
Partnership
Doubletree de Mexico, S.A. de DTR San Antonio Inc. holds 50% of N/A N/A N/A
C.V. stock
(4 of 4)
346
SCHEDULE XVII
To Credit Agreement
Existing Red Lion Investments
GUARANTEED/
UNSECURED SECURED
INVESTMENT NAME EQUITY OWNERSHIP NOTEHOLDER ADVANCES/LOANS ADVANCES/LOANS
- --------------- ---------------- ---------- -------------- --------------
Red Lion La Posada 50% owned by Red Lion ("RL") RL $27,720,403 $ 0
Bakersfield Red Lion Motor Inn 66.67& profit, loss and capital RL $ 4,381,017 $14,192,667
interest owned by RL
Red Lion Orange County Partners, 51% profit and loss interest owned by RL $ 824,925 $19,500,000
L.P. RL
Glendale Red Lion Hotel 75% owned by RL RL $ 6,730,550 $ 0
Ontario Red Lion Motor Inn 66.67% owned by RL RL $ 7,170,581 $17,333,672
Village Motor Inn 50% owned by RL RL $ 0 $ 0
Fess Parker Red Lion Hotel 49.401% owned by RL, RL $ 0 $ 0
0.499% owned by Red Lion Properties,
Inc. and 0.1% owned by Santa Barbara
Red Lion
Red Lion Inns L.P. 1% general partnership interest owned RL $ 0 $0
by Red Lion Properties, Inc.
Red Lion Inns Operating L.P. 1% general partnership interest owned RL $22,165,814 $0
by Red Lion Properties, Inc.
Red Lion/Riverfront L.L.C. 10% owned by RL RL $ 0 $ 7,007,413
Betty MacWilliam & Company 49% of common stock owned by Red Lion N/A N/A N/A
Red Lion Properties, Inc. 100% owned by RL RL $ 0 $ 3,343,401