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EXHIBIT 10.37
CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT (this "Agreement") is entered
into as of this 11th day of November 1996, by and between Candlewood Hotel
Company, Inc., a Delaware corporation ("Candlewood Inc"), and Doubletree
Corporation, a Delaware
corporation ("Doubletree").
RECITALS
A. Doubletree, the Warren D. Fix Family Partnership, L.P. (the
"Fix Partnership"), and JPD Corporation, a Kansas corporation, formed Candlewood
Inc in August 1996 to succeed to the business of Candlewood Hotel Company,
L.L.C., a Delaware limited liability company ("Candlewood LLC").
B. The membership interests in Candlewood LLC were owned 50%
by Doubletree, 42.5% by JPD Corporation and 7.5% by the Fix Partnership.
C. Pursuant to the Limited Liability Company Agreement of
Candlewood Hotel Company, L.L.C. (the "Candlewood LLC Agreement"), Doubletree
agreed to contribute to Candlewood LLC up to $15 million as requested by the
members of Candlewood LLC. The Candlewood LLC Agreement provided that Doubletree
would receive a preferred return on each such contribution equal to seven
percent (7%) per annum for the first twelve months following its contribution,
ten percent (10%) per annum for the second twelve months and fifteen percent
(15%) per annum thereafter.
D. Prior to the proposed public offering (the "Offering") of
Common Stock of Candlewood Inc, the amount of capital in excess of $200,100
previously contributed to Candlewood LLC by Doubletree, together with a
preferred return on such amount (collectively, the "Excess Contribution
Amount"), will be distributed to Doubletree.
E. Candlewood Inc desires to obtain from Doubletree, prior to
the Offering, a $15 million subordinated credit facility.
F. Doubletree is willing to lend to Candlewood Inc an
aggregate of up to $15 million upon the terms and subject to the conditions set
forth herein.
NOW THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. Initial Loan Disbursement. Concurrently with the execution
of, and subject to the terms and conditions of, this Agreement, Doubletree shall
make a loan (the "Initial Loan") to Candlewood Inc in a principal amount equal
to the Excess Contribution Amount, to be evidenced by a promissory note (the
"First Note") in the form attached as Exhibit A. The terms of the Initial Loan
shall be governed by the First Note.
2. Additional Loan Disbursements. Subsequent to the date of
the Initial Loan, subject to the terms and conditions of this Agreement,
Doubletree shall make
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additional loans (the "Additional Loans") to Candlewood Inc, at such times as
requested by Candlewood Inc upon 30 days' written notice, in increments of not
less than $100,000, each such loan to be evidenced by a promissory note (an
"Additional Note") in the form attached as Exhibit B. The terms of each
Additional Loan shall be governed by the applicable Additional Note. The
aggregate principal amount of the Initial Loan and the Additional Loans shall
not exceed $15 million. Repayment of the Initial Loan or any of the Additional
Loans shall not affect this $15 million limit. For example, if the aggregate
principal amount of the Initial Loan and the Additional Loans were $13 million
(leaving $2 million available for borrowing hereunder) and Candlewood repaid $5
million of that principal amount, the total principal amount available for
borrowing hereunder would remain $2 million.
3. Conditions Precedent. Doubletree's obligation to make the
Initial Loan is subject to its receipt of the Initial Note, fully executed and
acknowledged. Doubletree's obligation to make an Additional Loan is subject to
its receipt of (i) a written request for such Additional Loan from Candlewood
Inc at least 5 days (or such shorter time as shall be agreed upon by the
parties) prior to the date on which Candlewood Inc. requests that the Additional
Loan be disbursed and (ii) an Additional Note, fully executed and acknowledged;
provided, however that if (a) any proceedings shall be commenced by or against
Candlewood Inc, as debtor, under any bankruptcy, reorganization, insolvency,
readjustment of debt, arrangement, receivership or liquidation law or statute of
the federal or any state government and such proceeding has not been dismissed
or an order for relief granted with respect thereto or (b) if an event which
would, or which with the giving of notice or passage of time would, permit any
of the Note or the Additional Notes to be accelerated and to become immediately
due at the option of the holder thereof, shall have occurred and be continuing
or would occur and exist after the funding of such Additional Loan, and such
event shall not have been waived or consented to by the holders of the Note or
the Additional Note, Doubletree shall be under no obligation to make an
Additional Loan.
4. Miscellaneous.
(a) All notices, requests and other communications
required or permitted to be made hereunder shall, except as otherwise
provided, be in writing and may be delivered personally or sent by
telegram, telecopy, telex or certified mail, postage prepaid, addressed
as follows:
To Doubletree: Doubletree Corporation
410 North 44th Street, Suite 700
Phoenix, Arizona 85008
Attention: David L. Stivers
Senior Vice President, General Counsel and
Secretary
Telecopy number: (602) 220-6602
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To Candlewood Inc: Candlewood Hotel Company, Inc.
Lakepoint Office Park
9342 East Central
Wichita, Kansas 67206-2555
Attention: Warren D. Fix
Executive Vice President, Chief Financial
Officer and Secretary
Telecopy number: (316) 631-1333
with a copy to: Latham & Watkins
650 Town Center Drive, Suite 2000
Costa Mesa, California 92626
Attention: Charles K. Ruck
Telecopy number: (714) 755-8290
Such notices, requests and other communications sent shall be effective
upon receipt, unless sent by (i) overnight courier, in which case they
shall be effective exactly one (1) business day after deposit with such
overnight courier, or (ii) mail, in which case they shall be effective
exactly three (3) business days after deposit in the United States
mail. Either party may change its address or other information by
giving notice thereof to the other party hereto in conformity with this
paragraph.
(b) This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
(c) This Agreement or any provision hereof may be
changed, waived, or terminated only by a statement in writing signed by
the party against which such change, waiver or termination is sought to
be enforced.
(d) All rights of Doubletree hereunder shall inure to
the benefit of its successor and assigns. Candlewood Inc shall not
assign any of its interest under this Agreement without the prior
written consent of Doubletree; provided that Candlewood Inc shall be
entitled to direct loans made pursuant hereto to be paid to any of its
directly or indirectly wholly owned subsidiaries. Any purported
assignment inconsistent with this provision shall, at the option of
Doubletree, be null and void.
(e) In any action or proceeding brought to enforce
any provision of this Agreement, or to seek damages for a breach of any
provision hereof, or where any provision hereof is validly asserted as
a defense, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
(f) If any provision of this Agreement should be
found to be invalid or unenforceable, all of the other provisions shall
nonetheless remain in full force and effect to the maximum extent
permitted by law.
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(g) This Agreement, together with the Initial Note
and Additional Notes, is intended by the parties as a final expression
of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof. Acceptance of or
acquiescence in a course of performance rendered under this Agreement
shall not be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party had knowledge of the nature
of the performance and opportunity for objection.
(h) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which shall together constitute one and the same agreement.
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IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date set forth above.
DOUBLETREE CORPORATION, CANDLEWOOD HOTEL COMPANY, INC.,
a Delaware corporation a Delaware corporation
By: /s/ Richard M. Kelleher By: /s/ Warren D. Fix
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Name: Richard M. Kelleher Warren D. Fix
------------------------------ Executive Vice President, Chief
Title:President and Chief Financial Officer and Secretary
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Executive Officer
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