$50,000,000
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 13, 2006
among
RED LION HOTELS CORPORATION,
Borrower
CALYON NEW YORK BRANCH,
Sole Lead Arranger and Administrative Agent
KEYBANK NATIONAL ASSOCIATION,
Documentation Agent
and
THE LENDERS NAMED HEREIN,
Lenders
TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS AND TERMS......................................... 7
1.1 DEFINITIONS................................................... 7
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES.................. 21
1.3 ACCOUNTING PRINCIPLES......................................... 21
1.4 TIME REFERENCES............................................... 21
SECTION 2 BORROWING PROVISIONS.......................................... 21
2.1 COMMITMENTS................................................... 21
2.2 LC SUBFACILITY................................................ 22
2.3 VOLUNTARY TERMINATION OF COMMITMENTS.......................... 26
2.4 BORROWING PROCEDURE........................................... 27
2.5 SWING LINE SUBFACILITY........................................ 27
2.6 EXTENSION OF MATURITY DATE.................................... 29
2.7 INCREASE IN COMMITMENTS....................................... 30
SECTION 3 TERMS OF PAYMENT.............................................. 31
3.1 NOTES AND PAYMENTS............................................ 31
3.2 INTEREST AND PRINCIPAL PAYMENTS............................... 31
3.3 INTEREST OPTIONS.............................................. 32
3.4 QUOTATION OF RATES............................................ 32
3.5 DEFAULT RATE.................................................. 32
3.6 INTEREST RECAPTURE............................................ 33
3.7 INTEREST CALCULATIONS......................................... 33
3.8 MAXIMUM RATE.................................................. 33
3.9 INTEREST PERIODS.............................................. 33
3.10 CONVERSIONS................................................... 34
3.11 ORDER OF APPLICATION.......................................... 34
3.12 RIGHT OF SET-OFF; ADJUSTMENTS................................. 35
3.13 BOOKING BORROWINGS............................................ 36
SECTION 4 CHANGE IN CIRCUMSTANCES....................................... 36
4.1 INCREASED COST AND REDUCED RETURN............................. 36
4.2 LIMITATION ON TYPES OF BORROWINGS............................. 37
4.3 ILLEGALITY.................................................... 37
4.4 TREATMENT OF AFFECTED LOANS................................... 38
4.5 COMPENSATION.................................................. 38
4.6 TAXES......................................................... 38
SECTION 5 FEES.......................................................... 40
5.1 TREATMENT OF FEES............................................. 40
5.2 FEES OF ADMINISTRATIVE AGENT.................................. 40
5.3 LC FEES....................................................... 40
5.4 LC ISSUANCE AND FRONTING FEES................................. 40
5.5 COMMITMENT FEES............................................... 41
SECTION 6. GUARANTIES AND COLLATERAL..................................... 41
6.1 SUBSIDIARY GUARANTY........................................... 41
6.2 COLLATERAL.................................................... 41
SECTION 7 CONDITIONS PRECEDENT.......................................... 41
7.1 CONDITIONS PRECEDENT TO CLOSING............................... 41
CREDIT AGREEMENT (ii)
7.2 CONDITIONS TO ALL CREDIT EXTENSION............................ 45
SECTION 8 REPRESENTATIONS AND WARRANTIES................................ 46
8.1 PURPOSE OF CREDIT FACILITY.................................... 46
8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS....... 46
8.3 SUBSIDIARIES; CAPITAL STOCK................................... 46
8.4 AUTHORIZATION AND CONTRAVENTION............................... 47
8.5 BINDING EFFECT................................................ 47
8.6 FINANCIAL STATEMENTS.......................................... 47
8.7 LITIGATION, CLAIMS, INVESTIGATIONS............................ 47
8.8 TAXES......................................................... 48
8.9 ENVIRONMENTAL MATTERS......................................... 48
8.10 EMPLOYEE BENEFIT PLANS........................................ 48
8.11 PROPERTIES; LIENS............................................. 48
8.12 GOVERNMENT REGULATIONS........................................ 48
8.13 TRANSACTIONS WITH AFFILIATES.................................. 49
8.14 MATERIAL AGREEMENTS........................................... 49
8.15 INSURANCE..................................................... 49
8.16 LABOR MATTERS................................................. 49
8.17 SOLVENCY...................................................... 49
8.18 INTELLECTUAL PROPERTY......................................... 49
8.19 COMPLIANCE WITH LEGAL REQUIREMENTS............................ 50
8.20 TRADENAMES.................................................... 50
8.21 FULL DISCLOSURE............................................... 50
8.22 DRAINAGE/CONDEMNATION/ZONING.................................. 50
8.23 PROPERTY CONDITION............................................ 50
8.24 REPRESENTATIONS CONCERNING LEASES............................. 51
8.25 CONDEMNATION.................................................. 51
8.26 CONTRACTS..................................................... 51
8.27 RECIPROCAL AGREEMENTS......................................... 51
8.28 MANAGEMENT AGREEMENTS......................................... 51
8.29 FRANCHISE AGREEMENTS.......................................... 51
SECTION 9 AFFIRMATIVE COVENANTS......................................... 52
9.1 USE OF PROCEEDS............................................... 52
9.2 BOOKS AND RECORDS............................................. 52
9.3 ITEMS TO BE FURNISHED......................................... 52
9.4 INSPECTIONS AND PROPERTY VISITS............................... 54
9.5 TAXES......................................................... 54
9.6 PAYMENT OF OBLIGATION......................................... 55
9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS................ 55
9.8 INSURANCE..................................................... 55
9.9 PRESERVATION AND PROTECTION OF RIGHTS......................... 58
9.10 ENVIRONMENTAL LAWS............................................ 58
9.11 COMPLIANCE WITH LEGAL REQUIREMENTS............................ 59
9.12 OTHER COLLATERAL PROPERTY INFORMATION......................... 59
9.13 REPORTS AND TESTING........................................... 59
9.14 FF&E RESERVE ACCOUNT.......................................... 59
9.15 OPERATING ACCOUNTS............................................ 60
(iii)
9.16 CONTRACTS..................................................... 60
9.17 CONDEMNATION.................................................. 60
9.18 TITLE AND PERMITTED ENCUMBRANCES.............................. 61
9.19 TAXES AND OTHER IMPOSITIONS................................... 62
9.20 COMPLIANCE WITH LAWS.......................................... 62
9.21 MAINTENANCE, REPAIR, AND RESTORATION.......................... 62
9.22 OPERATION OF PROPERTY......................................... 63
9.23 DELIVERY OF LEASING INFORMATION AND DOCUMENTS................. 63
9.24 COMPLIANCE AND DEFAULT........................................ 64
9.25 CONCERNING LEASES AND RENTS................................... 64
9.26 PROPERTY MANAGEMENT........................................... 64
9.27 FRANCHISE AGREEMENTS.......................................... 64
9.28 SUBSIDIARY GUARANTIES......................................... 64
9.29 APPRAISALS.................................................... 64
9.30 ADDITIONAL COLLATERAL PROPERTIES.............................. 65
SECTION 10 NEGATIVE COVENANTS............................................ 65
10.1 EMPLOYEE BENEFIT PLANS........................................ 65
10.2 DEBT.......................................................... 65
10.3 LIENS......................................................... 65
10.4 TRANSACTIONS WITH AFFILIATES.................................. 66
10.5 ASSIGNMENT.................................................... 66
10.6 FISCAL YEAR AND ACCOUNTING METHODS............................ 66
10.7 GOVERNMENT REGULATIONS........................................ 66
10.8 LOANS, ADVANCES, AND INVESTMENTS.............................. 67
10.9 DISTRIBUTIONS................................................. 67
10.10 RESTRICTIONS ON COMPANIES..................................... 67
10.11 SALE OF ASSETS................................................ 67
10.12 SALE-LEASEBACK FINANCINGS..................................... 68
10.13 MERGERS AND DISSOLUTIONS...................................... 68
10.14 NEW BUSINESS.................................................. 68
10.15 AMENDMENTS TO DOCUMENTS....................................... 68
10.16 CONTRACTS..................................................... 68
10.17 LEASE APPROVAL................................................ 68
10.18 FINANCIAL COVENANTS........................................... 69
SECTION 11 DEFAULT....................................................... 71
11.1 PAYMENT OF OBLIGATION......................................... 71
11.2 COVENANTS..................................................... 71
11.3 DEBTOR RELIEF................................................. 71
11.4 JUDGMENTS AND ATTACHMENTS..................................... 71
11.5 GOVERNMENT ACTION............................................. 72
11.6 MISREPRESENTATION............................................. 72
11.8 CHANGE OF CONTROL............................................. 72
11.9 AUTHORIZATIONS................................................ 72
11.10 DEFAULT UNDER OTHER DEBT AND AGREEMENTS....................... 72
11.11 EMPLOYEE BENEFIT PLANS........................................ 73
11.12 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS................. 73
11.13 ENVIRONMENTAL LIABILITY....................................... 74
(iv)
11.14 COLLATERAL PROPERTIES......................................... 74
SECTION 12 RIGHTS AND REMEDIES........................................... 75
12.1 REMEDIES UPON DEFAULT......................................... 75
12.2 COMPANY WAIVERS............................................... 75
12.3 PERFORMANCE BY ADMINISTRATIVE AGENT........................... 76
12.4 DELEGATION OF DUTIES AND RIGHTS............................... 76
12.5 NOT IN CONTROL................................................ 76
12.6 COURSE OF DEALING............................................. 76
12.7 CUMULATIVE RIGHTS............................................. 77
12.8 APPLICATION OF PROCEEDS....................................... 77
12.9 CERTAIN PROCEEDINGS........................................... 77
12.10 EXPENSES; INDEMNIFICATION..................................... 77
SECTION 13 AGENT......................................................... 78
13.1 APPOINTMENT AND AUTHORITY..................................... 78
13.2 RIGHTS AS A LENDER............................................ 78
13.3 EXCULPATORY PROVISIONS........................................ 79
13.4 RELIANCE BY ADMINISTRATIVE AGENT.............................. 79
13.5 DELEGATION OF DUTIES.......................................... 80
13.6 RESIGNATION OF ADMINISTRATIVE AGENT........................... 80
13.7 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS........ 81
13.8 NO OTHER DUTIES, ETC.......................................... 81
13.8 COLLATERAL AND GUARANTY MATTERS............................... 81
SECTION 14 MISCELLANEOUS................................................. 81
14.1 HEADINGS...................................................... 81
14.2 NONBUSINESS DAYS.............................................. 81
14.3 COMMUNICATIONS................................................ 82
14.4 FORM AND NUMBER OF DOCUMENTS.................................. 83
14.5 EXCEPTIONS TO COVENANTS....................................... 83
14.6 SURVIVAL...................................................... 83
14.7 GOVERNING LAW................................................. 83
14.8 INVALID PROVISIONS............................................ 83
14.9 ENTIRETY...................................................... 83
14.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL........... 84
14.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.................. 84
14.12 MULTIPLE COUNTERPARTS......................................... 85
14.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS........ 85
14.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES......................................... 88
14.15 USA PATRIOT ACT NOTICE........................................ 89
14.16 REPLACEMENT OF LENDERS........................................ 89
(v)
SCHEDULES AND EXHIBITS
Schedule 1.1 Annex B to Compliance Certificate; Calculation of
Consolidated EBITDA; Subordinated Debt
Schedule 2.1 Lenders and Commitments
Schedule 8 Schedule of Exceptions
Schedule 9.8 Insurance Requirements
Exhibit A Form of Compliance Certificate
Exhibit B-1 Form of Revolving Credit Note
Exhibit B-2 Form of Swing Line Note
Exhibit C-1 Form of Notice of Borrowing
Exhibit C-2 Form of Notice of LC
Exhibit D Form of Opinion of Counsel
Exhibit E Form of Assignment and Assumption
Exhibit F Form of Joinder Agreement
Exhibit G Form of Increase Certificate
Exhibit H Form of Subsidiary Guaranty
(vi)
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 13, 2006 among RED
LION HOTELS CORPORATION, a Washington corporation ("BORROWER"), Lenders
(hereinafter defined), and CALYON NEW YORK BRANCH, as Administrative Agent
(hereinafter defined).
RECITALS
A. Borrower has requested that Lenders extend credit to Borrower in the
form of this Agreement, providing for a revolving credit and letter of credit
facility.
B. Upon and subject to the terms and subject to the conditions of this
Agreement, Lenders are willing to extend such credit to Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 DEFINITIONS. As used herein:
ACCEPTABLE APPRAISAL means an appraisal commissioned by and addressed to
Administrative Agent (acceptable to Administrative Agent as to form,
assumptions, substance, and appraisal date), prepared by a qualified
professional appraiser acceptable to Administrative Agent, and having the
minimum qualifications required under all applicable Legal Requirements
including, without limitation, the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
ACQUISITION means any transaction or series of related transactions for the
purpose of, or resulting in, directly or indirectly, (a) the acquisition by any
Company of all or substantially all of the assets of a Person, or of any line of
business or division of a Person, that is engaged in the hospitality or any
related business, (b) the acquisition by any Company of more than fifty percent
(50%) of any class of Stock (or similar ownership interests) of any Person that
is engaged in the hospitality or any related business, (c) the acquisition of
any Property or interest therein (whether directly, through a joint venture or
tenancy-in-common arrangement, or through the acquisition of Stock (or similar
ownership interests) of any Person); or (d) a merger, consolidation,
amalgamation, or other combination by any Company with another Person that is
engaged in the hospitality or any related business if a Company is the surviving
entity; provided that in any merger involving Borrower, Borrower must be the
surviving entity.
ADJUSTED EURODOLLAR RATE means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Borrowing for such Interest Period by (b) one (1) minus the Reserve Requirement
for such Eurodollar Borrowing for such Interest Period.
ADMINISTRATIVE AGENT means Calyon, and its permitted successors or assigns
as "Administrative Agent" for Lenders under this Agreement.
CREDIT AGREEMENT
ADMINISTRATIVE QUESTIONNAIRE means an Administrative Questionnaire in a
form supplied by Administrative Agent.
AFFILIATE of any Person means any other Person who directly or indirectly
controls, or is controlled by, or is under common control with, such Person,
and, for purposes of this definition only, "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of the
power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract, or otherwise).
AGREEMENT means this Credit Agreement.
APPLICABLE LENDING OFFICE means, for each Lender and for each Type of
Borrowing, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated on such Lender's Administrative Questionnaire or such other office as
such Lender may from time to time specify to Administrative Agent and Borrower
by written notice in accordance with the terms hereof as the office by which its
Borrowings of such Type are to be made and maintained.
APPLICABLE MARGIN means, at the time of determination thereof, the interest
margin over Base Rate or the Eurodollar Rate, as the case may be, based upon the
Total Leverage Ratio as follows:
APPLICABLE MARGIN APPLICABLE MARGIN
FOR EURODOLLAR FOR BASE RATE
TOTAL LEVERAGE RATIO BORROWINGS BORROWINGS
-------------------- ----------------- -----------------
Equal to or less than 4.0 to 1.0 1.50% 0.00%
Greater than 4.0 to 1.0 but less than or
equal to 5.0 to 1.0 1.75% 0.25%
Greater than 5.0 to 1.0 but less than or
equal to 6.0 to 1.0 2.00% 0.50%
Greater than 6.0 to 1.0 2.25% 0.75%
The Total Leverage Ratio shall be determined from the Current Financials and
Compliance Certificate delivered to Administrative Agent pursuant to SECTION
9.3. The adjustment, if any, to the Applicable Margin shall be effective
commencing on the fifth (5th) Business Day after delivery of such Current
Financials and Compliance Certificate to Administrative Agent. If Borrower fails
at any time to furnish to Administrative Agent the Current Financials and
Compliance Certificate as required to be delivered pursuant to SECTION 9.3, then
the maximum Applicable Margin shall apply until such time as such Current
Financials and Compliance Certificate are so delivered. The Applicable Margin in
effect from the Closing Date until the fifth (5th) Business Day after delivery
of the Current Financials and Compliance Certificate for the fiscal quarter
ending September 30, 2006 shall be one and three-quarters of one percent (1.75%)
for Eurodollar Borrowings and one-quarter of one percent (0.25%) for Base Rate
Borrowings.
2
APPRAISED VALUE means, with respect to any Collateral Property as of any
date, the appraised value of such Collateral Property on an "as-is value" basis
pursuant to an Acceptable Appraisal.
APPROVED FUND means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
ASSIGNMENT AND ASSUMPTION means an assignment and assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by SECTION 14.13(B)(III)), and accepted by Administrative Agent, in
substantially the form of EXHIBIT E or any other form approved by Administrative
Agent.
ASSIGNMENT OF FF&E RESERVE ACCOUNT means (a) initially, the Assignment of
FF&E Reserve Account in favor of Administrative Agent, for the benefit of
Lenders, dated of even date herewith, executed by Initial Collateral Property
Owner, and (b) thereafter, together with the assignment referenced in CLAUSE
(A), each Assignment of FF&E Reserve Account in favor of Administrative Agent,
for the benefit of Lenders executed by an Obligor holding title to a Collateral
Property.
ASSIGNMENT OF MANAGEMENT AGREEMENT means an Assignment and Subordination of
Management Agreement among Administrative Agent, Borrower, the applicable
Obligor, and the applicable Manager, in form and substance acceptable to
Administrative Agent and the applicable Manager.
ASSIGNMENT OF OPERATING ACCOUNT means (a) initially, the Assignment of
Operating Account dated of even date herewith, and executed by Initial
Collateral Property Owner, in favor of Administrative Agent, for the benefit of
Lenders, and (b) thereafter, together with the assignment referenced in CLAUSE
(A), each Assignment of Operating Account in favor of Administrative Agent, for
the benefit of Lenders executed by an Obligor holding title to a Collateral
Property.
AUTHORIZATIONS means all filings, recordings, and registrations with, and
all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.
AVAILABILITY AMOUNT means, as of any date of determination, the lesser of
(a) the remainder of (i) five (5) times the Free Cash Flow Amount for the
most-recent four (4) fiscal quarters ended on the date of the most recent
balance sheet contained in the Current Financials minus (ii) the outstanding
amount of all Recourse Debt (other than the Obligation), of the Companies that
is not Subordinated Debt as of such date of determination and (b) the Total
Commitment.
BASE RATE means, for any day, the rate per annum equal to the greater of
(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%), and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Rate.
BASE RATE BORROWING means a Borrowing bearing interest at the sum of the
Base Rate plus the Applicable Margin for Base Rate Borrowings.
3
BORROWER is defined in the preamble to this Agreement.
BORROWING means any amount disbursed (a) by one or more Lenders to Borrower
under the Loan Documents, whether such amount constitutes an original
disbursement of funds, the Continuation of an amount outstanding, or payment of
a draft under an LC, or (b) by any Lender in accordance with, and to satisfy the
obligations of any Obligor under, any Loan Document.
BORROWING DATE is defined in SECTION 2.4(A).
BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by any Legal Requirement to be closed at the place of
Administrative Agent's Payment Office, and (b) in addition to the foregoing, in
respect of any Eurodollar Borrowing, a day on which dealings in United States
dollars are conducted in the London interbank market and commercial banks are
open for international business in London.
CALYON means Calyon New York Branch and its successors.
CAPITAL EXPENDITURES means an expenditure for any fixed asset having a
useful life of more than one (1) year, or any improvements or additions thereto,
including the direct or indirect acquisition of such assets, and including any
obligations to pay rent or other amounts under a Capital Lease.
CAPITALIZED LEASE OBLIGATIONS means all obligations under Capital Leases
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.
CHANGE IN CONTROL means either: (a) any Person or group of related Persons
shall have acquired beneficial ownership of more than thirty-five percent (35%)
of the outstanding Stock of Borrower (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended, and the applicable
rules and regulations thereunder); (b) during any period of twelve (12)
consecutive calendar months, individuals who were members of the Board of
Directors of Borrower on the first (1st) day of such period, together with any
new directors whose election by the Board of Directors of Borrower or whose
nomination for election by the stockholders of Borrower was approved by a vote
of a majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved, shall cease to constitute at least sixty-six and
two-thirds percent (66-2/3%) of the members of the Board of Directors of
Borrower; (c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of Borrower, or control over the Stock
of Borrower entitled to vote for members of the Board of Directors of Borrower
on a fully-diluted basis (and taking into account all such Stock that such
Person or group has the right to acquire pursuant to any option right)
representing thirty-five percent (35%) or more of the combined voting power of
such Stock; or (d) Borrower shall cease to own, directly or indirectly, at least
ninety percent (90%) of the Stock of any Subsidiary that holds title to a
Collateral Property.
4
CLOSING DATE means the date upon which this Agreement has been executed by
Borrower and the Credit Parties and all conditions precedent specified in
SECTION 7.1 have been satisfied or waived.
COLLATERAL PROPERTIES means, collectively, (a) the Initial Collateral
Property and (b) all additional Properties that have been pledged to
Administrative Agent, for the benefit of Lenders, pursuant to SECTION 2.7(A)(XI)
as a condition to an increase in the Total Commitment, and COLLATERAL PROPERTY
shall mean any one of the Collateral Properties.
COLLATERAL PROPERTY BUDGET means, with respect to each Collateral Property,
the most recently delivered of the (i) annual operating budget and capital
expenditure budget for the Initial Collateral Property delivered on the Closing
Date pursuant to SECTION 7.1, or (ii) the annual operating budget and capital
expenditure budget for each Collateral Property delivered pursuant to SECTION
9.3(D).
COMMITMENT means, for any Lender at any date of determination, the amount
stated beside each Lender's name on the most-recently amended SCHEDULE 2.1
(which amount is subject to increase, reduction, or cancellation in accordance
with this Agreement).
COMMITMENT USAGE means, at the time of any determination thereof, the sum
of (a) the Total Principal Debt, plus (b) the LC Exposure.
COMPANIES means, as of any date, Borrower and each of its Subsidiaries the
accounts of which are required by GAAP to be included in the consolidated
Financial Statements of Borrower, and COMPANY means any one of the Companies.
COMPANIES BUDGET means with respect to the operations of the Companies, the
most recently delivered of the (a) annual consolidated financial budget for the
Companies delivered on the Closing Date pursuant to SECTION 7.1, or (b) the
annual consolidated financial budget for the Companies delivered pursuant to
SECTION 9.3(C).
COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer,
substantially in the form of EXHIBIT A. For purposes of illustration, SCHEDULE
1.1 contains Annex B to Compliance Certificate with calculations of the
Availability Amount and compliance with the financial covenants as of the
Closing Date, which each of Borrower and Lenders acknowledges, assuming the
accuracy of the Current Financials, are correct.
CONSEQUENTIAL LOSS is defined in SECTION 4.5.
CONSOLIDATED DEBT means, as of any date of determination, all Debt of the
Companies, on a consolidated basis.
CONSOLIDATED EBITDA means, for any period of determination, as calculated
in accordance with GAAP, the sum of (a) consolidated net income from continuing
operations of Borrower and its Subsidiaries, plus (b) income taxes, plus (c)
interest expense, plus (d) depreciation and amortization, plus (e) cash
distributions from Persons other than Subsidiaries, plus (f) extraordinary
losses and losses from asset dispositions, minus (g) extraordinary gains and
gains from asset dispositions, plus (h) the amount of any expense for
stock-based compensation, plus (i) all cash premiums or penalties for the
repayment, redemption, or repurchase of Debt not included in the calculation of
Interest Expense, plus (j)
5
nonrecurring non-cash charges, plus (k) losses attributable to equity
investments in Persons other than Subsidiaries, minus (l) income attributable to
equity investments in Persons other than Subsidiaries, plus (m) minority
interest income, minus (n) minority interest loss; provided that Consolidated
EBITDA for any period shall be adjusted on a pro forma basis to include (or
exclude) amounts attributable to assets and operations that were acquired or
otherwise commenced operations (or that were sold or otherwise discontinued
operations) during such period as if such acquisition or commencement of
operations (or sale or discontinuance of operations) had occurred on the first
day of such period. For purposes of illustration, SCHEDULE 1.1 contains a
calculation of Borrower's Consolidated EBITDA for 2005 and for the four (4)
fiscal quarters ended on June 30, 2006, which each of Borrower and Lenders
acknowledges conforms to the preceding definition of Consolidated EBITDA for
those periods.
CONSOLIDATED INTEREST EXPENSE means, for any period of determination, the
interest expense of Borrower and its Subsidiaries for such period, computed on a
consolidated basis in accordance with GAAP.
CONTINGENT OBLIGATIONS means as to any Person any obligation of such Person
guaranteeing any Indebtedness, leases, dividends, or other obligations ("PRIMARY
OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation, or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (c) 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 (d) otherwise
to assure or hold harmless the owner 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.
CONTINUE, CONTINUATION, and CONTINUED refers to the continuation pursuant
to SECTION 3.10 of a Eurodollar Borrowing from one Interest Period to the next
Interest Period.
CONSTITUENT DOCUMENTS means, with respect to any Person, its articles or
certificate of incorporation, bylaws, partnership agreements, organizational
documents, limited liability company agreements, trust agreement, or such other
document as may govern such Person's formation, organization, and management.
CONVERT, CONVERSION, and CONVERTED refers to a conversion pursuant to
SECTION 3.10 of one Type of Borrowing into another Type of Borrowing.
CREDIT EXTENSION means, for any Credit Party, the funding of its portion of
a Borrowing or the issuance of an LC.
CREDIT PARTIES means Administrative Agent and Lenders, and "CREDIT PARTY"
means any one of the Credit Parties.
CURRENT FINANCIALS means, at the time of any determination thereof, the
most recently delivered to Administrative Agent of either (a) the Financial
Statements of Borrower for the fiscal year ended
6
December 31, 2005, and the period ended June 30, 2006, calculated on a
consolidated basis for the Companies, or (b) the Financial Statements of
Borrower required to be delivered under SECTIONS 9.3(A) or 9.3(B), as the case
may be.
CUSTOMARY RECOURSE EXCEPTIONS means with respect to any Non-Recourse Debt,
exclusions from the exculpation provisions with respect to such Non-Recourse
Debt for fraud, misapplication of cash, environmental claims, breach of
representations or warranties, failure to pay taxes and insurance, and other
circumstances customarily excluded by institutional lenders from exculpation
provisions and/or included in separate indemnification agreements in
non-recourse financings of real estate.
DEBT means (without duplication), for any Person, the sum of the following:
(a) all liabilities, obligations, and indebtedness of such Person for money
borrowed; (b) all liabilities, obligations, and indebtedness of such Person
which is evidenced by bonds, notes, debentures, or other similar instruments;
(c) all Capitalized Lease Obligations; (d) all obligations of such Person issued
or assumed as the deferred purchase price of property, all conditional sale
obligations, and obligations under any title retention agreement (but excluding
trade accounts payable and other accruals arising in the ordinary course of
business); (e) all Contingent Obligations of such Person that are required to be
recognized as liabilities under GAAP; (f) all obligations of the type referred
to in CLAUSES (A) and (B) preceding of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is assumed by
such Person); (g) all obligations under all letters of credit, banker's
acceptances, bank guaranties, surety bonds and similar instruments issued for
the account of such Person, and without duplication, all drafts drawn and unpaid
thereunder, in each case to the extent required to be recognized as liabilities
under GAAP; (h) all Stock of such Person subject to repurchase or redemption
other than at the sole option of such Person; (i) all obligations of such Person
to purchase Stock (or other property) which arise out of or in connection with
the sale of the same or substantially similar Stock (or property); and (j) all
liabilities, obligations, and indebtedness arising under Financial Hedges.
DEBT SERVICE means, for the Companies for any period, the sum of (a) all
regularly scheduled principal payments on Consolidated Debt (other than
scheduled payments of principal on Consolidated Debt which pay such Consolidated
Debt in full, but only to the extent such final payment is greater than the
scheduled principal payment immediately preceding such final payment), and (b)
all Consolidated Interest Expense, in each case paid or payable during such
period in respect of all Consolidated Debt.
DEBT SERVICE COVERAGE RATIO means, as of any date of determination thereof,
the ratio of (a) Consolidated EBITDA, to (b) Debt Service, on a consolidated
basis, in each case for the most-recent four (4) fiscal quarters ended on the
date of the most recent balance sheet contained in the Current Financials.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Legal Requirements
from time to time in effect affecting the rights of creditors generally.
DEFAULTING LENDER means, as of any date, any Lender that has (a) failed to
make a Credit Extension required to be made by it hereunder, or (b) given notice
to Administrative Agent or Borrower that it will not make, or that it has
disaffirmed or repudiated any obligation to make, any Credit Extension hereunder
(unless such notice is given by all Lenders).
7
DEFAULT RATE means a per annum rate of interest equal from day to day to
the lesser of (a) the sum of the Base Rate plus the Applicable Margin for Base
Rate Borrowings plus two percent (2%), and (b) the Maximum Rate.
DISTRIBUTION for any Person means, with respect to any shares of any Stock
issued by such Person, (a) the retirement, redemption, purchase, or other
acquisition for value of any such Stock, (b) the declaration or payment of any
dividend or distribution on or with respect to any such Stock, and (c) any other
payment by such Person with respect to such Stock.
DOLLARS and the symbol $ means lawful money of the United States of
America.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of
ERISA and established or maintained by Borrower or any ERISA Affiliate, but not
including any Multiemployer Plan.
ENGINEER'S AUDIT means the engineer's audit report with respect to any
Collateral Property commissioned by Administrative Agent, prepared by an
engineering firm acceptable to Administrative Agent, and in form, scope and
substance acceptable to Administrative Agent.
ENVIRONMENTAL AUDIT means the Phase 1 environmental audit with respect to
any Collateral Property commissioned by Administrative Agent, prepared by an
environmental engineering group acceptable to Administrative Agent, in form,
scope and substance acceptable to Administrative Agent.
ENVIRONMENTAL INDEMNITY AGREEMENT means (a) initially, the Environmental
Indemnity Agreement dated of even date herewith, and executed by Borrower and
the Initial Collateral Property Owner, and (b) thereafter, together with the
Environmental Indemnity Agreement referenced in CLAUSE (A), each Environmental
Indemnity Agreement executed by Borrower and an Obligor holding title to a
Collateral Property.
ENVIRONMENTAL LAWS means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.
ERISA AFFILIATE means any company or trade or business (whether or not
incorporated) which, for purposes of Title IV of ERISA, is a member of
Borrower's controlled group or which is under common control with Borrower
within the meaning of Section 414(b), (c), (m), or (o) of the Tax Code.
EURODOLLAR BORROWING means a Borrowing bearing interest at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Borrowings.
8
EURODOLLAR RATE means, for any Eurodollar Borrowing for any Interest Period
therefor, the rate per annum equal to the British Bankers Association LIBOR Rate
(BBA LIBOR), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first (1st) day of such Interest Period) with a term equivalent
to such Interest Period. If for any reason such rate is not available, then the
term "Eurodollar Rate" shall mean, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum determined by Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first (1st) day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Borrowing being made, Continued or Converted by Administrative Agent or Lenders
and with a term equivalent to such Interest Period would be offered by Calyon's
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.
EVENT OF DEFAULT is defined in SECTION 11.
EXCLUDED TAXES is defined in SECTION 4.6(A).
EXHIBIT means an exhibit to this Agreement unless otherwise specified.
EXISTING COMMERCIAL LEASE SPACE means each "Premises" under and as defined
in the Existing Leases and approximately 20,000 usable square feet on the fourth
floor of the Initial Collateral Property, and up to an aggregate of 2,000 usable
square feet of additional space in one or more other portions of the Initial
Collateral Property.
EXISTING LEASES means (a) that certain Lease dated January 17, 1997, by and
between Elephant & Castle, Inc., a Texas corporation, as tenant, and Inn on
Fifth Avenue Associates, L.P., a Washington limited partnership, predecessor in
interest to Initial Collateral Property Owner, as landlord, and (b) that certain
Lease dated September 30, 1998, by and between Cavanaughs Hospitality Limited
Partnership, predecessor in interest to Initial Collateral Property Owner, as
landlord, and The Northern Trust Bank, Federal Savings Bank, as tenant.
FACILITY means the credit facility as described in and subject to the
limitations set forth in SECTION 2.1.
FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with member banks of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, then the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, then the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
FF&E means furniture, fixtures, and equipment.
9
FF&E RESERVE ACCOUNT means (a) initially, the account of Initial Collateral
Property Owner at Calyon, Account No. 01 53628 0024 00, and styled "Red Lion
Hotel Fifth Avenue, Seattle FF&E Reserve Account," and (b) thereafter, together
with the account referenced in CLAUSE (A), each FF&E account of an Obligor
holding title to a Collateral Property, all of which accounts shall be held at
Calyon and pledged to Administrative Agent, for the benefit of Lenders, pursuant
to an Assignment of FF&E Reserve Account.
FF&E RESERVES means, for any period, the greater of (a) an assumed reserve
for FF&E and other capital expenditures equal to four percent (4%) of total
revenues generated by all Properties of the Companies for such period or (b) the
sum of (i) for all Companies without any contractual obligation to set aside any
specific level of reserves for FF&E and other capital expenditures for such
period, an assumed reserve equal to four percent (4%) of total revenues
generated by all Properties of such Companies for such period, plus (ii) for all
Companies with contractual obligations to set aside specific levels of reserves
for FF&E and other capital expenditures for such period, the actual contractual
amount of such reserves required to be set aside by such Companies for such
period.
FINANCIAL HEDGE means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "MASTER AGREEMENT"), including
any such obligations or liabilities under any Master Agreement.
FINANCIAL STATEMENTS means balance sheets, statements of operations,
statements of stockholders' equity, and statements of cash flows prepared in
accordance with GAAP, which statements of operations and statements of cash
flows shall be in comparative form to the corresponding period of the preceding
fiscal year, and which balance sheets and statements of stockholders' equity
shall be in comparative form to the prior fiscal year-end figures.
FIRST EXTENDED MATURITY DATE means September 13, 2010.
FOREIGN LENDER means any Lender that is organized under the laws of a
jurisdiction other than that in which Borrower is resident for tax purposes. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
FRANCHISE AGREEMENTS means each franchise or similar agreement entered into
by and between an Obligor and each Franchisor pursuant to which such Obligor is
permitted to operate the applicable Collateral Property under the "flag" or
other trade name that is the subject thereof, and FRANCHISE AGREEMENT means any
one of the Franchise Agreements.
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FRANCHISORS means Red Lion Hotels Franchising, Inc., a Wholly-owned
Subsidiary of Borrower, or such other entity selected as the franchisor of the
applicable Collateral Property in accordance with the terms of this Agreement,
and FRANCHISOR means any one of the Franchisors.
FREE CASH FLOW AMOUNT means, for any period, for the Companies on a
consolidated basis, the remainder of (a) Consolidated EBITDA, minus (b) the
aggregate amount of scheduled principal payments required to be made during such
period on Consolidated Debt that is not Subordinated Debt, minus (c)
Consolidated Interest Expense payable during such period (other than interest
payable with respect to the Borrowings and Subordinated Debt), minus (d) FF&E
Reserves, minus (e) the aggregate amount of cash Taxes paid for such period of
continuing operations.
GAAP means generally accepted accounting principles in the United States of
America as set forth in the opinions and pronouncements of the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable from time to
time.
GOVERNMENTAL AUTHORITY means any applicable (a) local, state, municipal, or
federal judicial, executive, or legislative instrumentality, (b) private
arbitration board or panel, or (c) central bank.
HAZARDOUS MATERIAL means "hazardous substance," "pollutant or contaminant,"
and "petroleum," and "natural gas liquids" as those terms are defined or used in
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and any other substances regulated because of
their effect or potential effect on public health and the environment including
PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials,
putrescible materials, and infectious materials.
IMPROVEMENTS means all on site and off site improvements to the Collateral
Properties, together with all fixtures, tenant improvements, and appurtenances
now or later to be located on the Collateral Properties and/or in such
improvements.
INDEMNITEES is defined in SECTION 12.10(B).
INITIAL COLLATERAL PROPERTY means the Seattle 5th Avenue Red Lion Hotel.
INITIAL COLLATERAL PROPERTY OWNER means WHC809 LLC, a Delaware limited
liability company.
INITIAL MATURITY DATE means September 13, 2009.
INSURANCE AUDIT means an audit report of the insurance policies required by
SECTION 9.8, to be commissioned by Administrative Agent and delivered prior to
the Closing Date, prepared by a professional acceptable to Administrative Agent,
and in form, scope and substance acceptable to Administrative Agent.
INTEREST COVERAGE RATIO means, as of any date of determination thereof, the
ratio of (a) Consolidated EBITDA, to (b) Consolidated Interest Expense, in each
case for the most-recent four (4) fiscal quarters ended on the date of the most
recent balance sheet contained in the Current Financials.
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INTEREST PERIOD is determined in accordance with SECTION 3.9.
INTEREST RATE HEDGING ARRANGEMENTS means Financial Hedges with a Lender or
any other financial institution acceptable to Administrative Agent and otherwise
satisfactory to Administrative Agent in all respects that effectively fix or
limit the interest rate payable by Borrower on any Debt of Borrower for the
entire term thereof, which agreements, if entered into with Calyon, any Lender,
or any Affiliate of such Persons will be secured by the Security Documents and
other Loan Documents.
ISP means, with respect to any LC, the "International Standby Practices
1998" published by the Institute of International Banking Law & Practice (or
such later version thereof as may be in effect at the time of issuance).
LC means the letter(s) of credit issued hereunder in the form agreed upon
among Borrower, Administrative Agent, and the beneficiary thereof at the time of
issuance thereof and participated in by Lenders pursuant to the terms and
conditions of SECTION 2.2.
LC AGREEMENT means a letter of credit application and agreement (in form
and substance satisfactory to Administrative Agent) submitted by Borrower to
Administrative Agent for an LC for its own account (and for its benefit or the
benefit of any other Company).
LC EXPOSURE means, at any time and without duplication, the sum of (a) the
aggregate undrawn portion of all uncancelled and unexpired LCs, plus (b) the
aggregate unpaid reimbursement obligations of Borrower in respect of drawings of
drafts under any LC.
LC SUBFACILITY means a subfacility for the issuance of LCs, as described in
and subject to the limitations of SECTION 2.2.
LEASE means each existing or future lease, sublease (to the extent of the
applicable Obligor's rights thereunder) or other agreement under the terms of
which any person has or acquires any right to occupy or use any Collateral
Property, or any part thereof, or interest therein, and each existing or future
guaranty of payment or performance thereunder, and all extensions, renewals,
modifications, and replacements of each such lease, sublease, agreement, or
guaranty.
LEGAL REQUIREMENTS means all applicable statutes, laws, treaties,
ordinances, tariff requirements, rules, regulations, orders, writs, injunctions,
decrees, judgments, opinions, or interpretations of any Governmental Authority.
LENDERS means, on any date of determination, the financial institutions
named on SCHEDULE 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the assignments made in accordance with SECTION
14.13(B) of this Agreement), and subject to the terms and conditions of this
Agreement, their respective successors and assigns.
LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind, and any other
right of or arrangement with any creditor (other than under or relating to
subordination or other intercreditor arrangements) to have its claim satisfied
out of any property or assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
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LITIGATION means any actions, suit, proceeding, claim, or dispute pending,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority.
LOAN DOCUMENTS means (a) this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents, the LCs, the LC Agreements, the Environmental
Indemnity Agreement, and all documentation evidencing an Interest Rate Hedging
Arrangement between any Obligor and any Lender, and (b) all agreements,
documents, or instruments in favor of any Credit Party ever delivered pursuant
to this Agreement or otherwise delivered in connection with all or any part of
the Obligation.
MANAGEMENT AGREEMENTS means each management agreement entered into by and
between an Obligor and each Manager, pursuant to which each Manager is to
provide management and other services with respect to each applicable Collateral
Property, and MANAGEMENT AGREEMENT means any one of the Management Agreements.
MANAGERS means Red Lion Hotels Franchising, Inc., a Wholly-owned Subsidiary
of Borrower, or such other entity selected as the manager of the applicable
Collateral Property in accordance with the terms of this Agreement, and MANAGER
means any one of the Managers.
MATERIAL ADVERSE EVENT means any set of one or more circumstances or events
which, individually or collectively, could reasonably be expected to result in
any (a) material impairment of the ability of Borrower and its Subsidiaries, on
a consolidated basis, to perform any of their payment or other material
obligations under the Loan Documents or the ability of any Credit Party to
enforce any such obligations or any of its rights under the Loan Documents, (b)
material and adverse effect on the business, properties, condition (financial or
otherwise), results of operations, or prospects of Borrower and its
Subsidiaries, taken as a whole, (c) material and adverse effect on the validity
or enforceability of any of the Loan Documents or the rights and/or remedies of
any Credit Party thereunder, or (d) Event of Default.
MATERIAL AGREEMENT means, for any Person or with respect to the ownership
or operation of any Collateral Property, any contract or agreement of such
Person or with respect to such Collateral Property the breach, violation, or
termination of which could reasonably be expected to result in a Material
Property Event with respect to such Collateral Property.
MATERIAL PROPERTY EVENT means, with respect to any Collateral Property, the
occurrence of any event or circumstance that could reasonably be expected to
result in a (a) material adverse effect with respect to the financial condition
or the operations of such Collateral Property, (b) material adverse effect on
the Appraised Value of such Collateral Property, (c) material adverse effect on
the use or operation of such Collateral Property, or (d) material adverse effect
on the ownership of such Collateral Property.
MATURITY DATE means the later of (a) if the Initial Maturity Date is not
extended to the First Extended Maturity Date pursuant to SECTION 2.6, then the
Initial Maturity Date, (b) if the Initial Maturity Date is extended to the First
Extended Maturity Date (but the First Extended Maturity Date is not extended to
the Second Extended Maturity Date) pursuant to SECTION 2.6, then the First
Extended Maturity Date, and (c) if the Initial Maturity Date is extended to the
First Extended Maturity Date and the First Extended Maturity Date is extended to
the Second Extended Maturity Date pursuant to SECTION 2.6, then the Second
Extended Maturity Date; provided, however, that, in each case, if such date is
not a Business Day, then the Maturity Date shall be the next preceding Business
Day.
13
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under all Legal Requirements, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.
MOODY'S means Moody's Investors Service, Inc., or, if Moody's no longer
publishes ratings, another ratings agency acceptable to Administrative Agent.
MORTGAGES means each Mortgage (or Deed of Trust, as applicable), Security
Agreement, Financing Statement, and Assignment of Leases or similarly titled
document, each executed by an Obligor, to or for the benefit of Administrative
Agent, for the ratable benefit of the Lenders, covering the Collateral
Properties.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections 3(37)
or 4001(a)(3) of ERISA or Section 414(f) of the Tax Code to which any Company or
any ERISA Affiliate is making, or has made, or is accruing, or has accrued, an
obligation to make contributions.
NON-CONSENTING LENDER means any Lender that, within the preceding sixty
(60) days failed to agree to an amendment, waiver, or consent that was (a)
requested by Borrower and (b) approved by Required Lenders.
NON-RECOURSE DEBT means, for any Person, any Debt of such Person in which
the holder of such Debt may not look to such Person personally for repayment,
other than to the extent of any security therefor or pursuant to Customary
Recourse Exceptions.
NOTES means the Revolving Credit Notes and the Swing Line Note, and NOTE
means any one of the Notes.
NOTICE OF BORROWING means a notice substantially in the form of EXHIBIT
C-1.
NOTICE OF LC means a notice substantially in the form of EXHIBIT C-2.
OBLIGATION means all present and future indebtedness, liabilities, and
obligations, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to any Credit Party or any Affiliate of any Credit Party by
any Obligor arising from, by virtue of, or pursuant to any Loan Document,
together with all interest accruing thereon, fees, costs, and expenses
(including all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents.
OBLIGORS means Borrower, Subsidiary Guarantors, and each other Person
obligated to pay any of the Obligation or on any of whose assets any Credit
Party has a Lien to secure the Obligation, and OBLIGOR means any one of the
Obligors.
OPERATING ACCOUNT means (a) initially, the accounts of Initial Collateral
Property Owner, Account No. 410 0052836 styled "Red Lion Hotel Fifth Avenue,
Seattle Disbursement Account," and Account No. 410 0052810 styled "Red Lion
Hotel Fifth Avenue, Seattle Depository Account," each held at Wells Fargo Bank,
National Association, or any successor account thereto that the Initial
Collateral Property Owner has pledged to Administrative Agent, for the benefit
of Lenders, pursuant to an Assignment of Operating Account, and (b) thereafter,
together with the operating account referenced in
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CLAUSE (A), each operating account of an Obligor holding title to a Collateral
Property, all of which accounts shall be pledged to Administrative Agent, for
the benefit of Lenders, pursuant to an Assignment of Operating Account.
PARTICIPANT is defined in SECTION 14.13(D).
PAYMENT OFFICE means Administrative Agent's office located in New York, New
York, or such other office as Administrative Agent shall notify Borrower and the
Credit Parties in writing.
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.
PERMITTED ACQUISITION means an Acquisition, provided that: (i) as of the
closing of any Acquisition, no Potential Default or Event of Default shall exist
or occur as a result of, and after giving effect to, such Acquisition; (ii) not
less than five (5) Business Days after the closing of any such Acquisition
having an aggregate purchase price equal to or exceeding $10,000,000, Borrower
shall have delivered to Administrative Agent a certificate, executed by a
Responsible Officer of Borrower, demonstrating pro forma compliance with the
terms and conditions of the Loan Documents, after giving pro forma effect to the
Acquisition, including (A) unaudited pro forma consolidated balance sheet,
income statement, and, if available, cash flow statement of Borrower (giving pro
forma effect to the Acquisition) as of the most recent balance sheet, income
statement, and, cash flow statement contained in the Current Financials, and (B)
an adjusted annual consolidated financial budget for the Companies (giving
effect to the Acquisition).
PERMITTED DISTRIBUTIONS means (a) Distributions declared, made, or paid by
any Company wholly in the form of its capital stock, (b) Distributions by any
Company to Borrower or to a Subsidiary of Borrower, (c) Distributions in
connection with the Stock of Borrower received by Borrower in exchange for
assets owned by Borrower; provided that, the fair market value of such assets is
equal to the market value of such Stock of Borrower exchanged therefore, (d) any
Distribution by Red Lion Hotels Limited Partnership ("RLHLP") to any Person that
is a partner in RLHLP for federal income tax purposes so long as (i) at the time
of the distribution, Borrower has at least an eighty percent (80%) interest in
the income, gain, loss and deductions of RLHLP, and (ii) such distribution is
required by the Amended and Restated Agreement of Limited Partnership of RLHLP,
as amended and in effect on the Closing Date, and (e) cash dividends by Borrower
that do not exceed, in any fiscal year of Borrower, an aggregate amount equal to
twenty-five percent (25%) of Free Cash Flow for the immediately preceding fiscal
year; provided that, no such cash dividends under this CLAUSE (E) shall be
permitted unless Borrower shall have demonstrated a Total Leverage Ratio of 3.5
to 1.0 or less as of the date of distribution of such dividends.
PERMITTED LIENS means Liens permitted under SECTION 10.3 as described in
such SECTION.
PERSON means any individual, entity, or Governmental Authority.
PLANS means the plans and specifications for the Collateral Properties, in
the possession of Borrower or any of the other Companies, including existing or
proposed Improvements, and all modifications thereof and additions thereto that
are included as part of the Plans in accordance with the terms of this
Agreement.
15
POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance which, except for the notice requirements or cure periods specified
in SECTION 11 or both, would be an Event of Default.
PRIME RATE means the per annum rate of interest established from time to
time by Calyon as its prime rate, which rate may not be the lowest rate of
interest charged by Calyon to its customers.
PRINCIPAL DEBT means, for a Credit Party and at any time, the unpaid
principal balance of all outstanding Borrowings from such Credit Party under the
Loan Documents as of such date.
PROPERTIES means hotels, resorts, or other properties used for a
substantially similar purpose by an Obligor, and PROPERTY means any of the
Properties.
PRO RATA or PRO RATA PART means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Total Commitment at such
time; provided that if the commitment of each Lender to fund Borrowings and the
obligation of Administrative Agent to make LCs have been terminated pursuant to
SECTION 12.1, then the Pro Rata Part of each Lender shall be determined based on
the Pro Rata Part of such Lender immediately prior to such termination and after
giving effect to any subsequent assignments made pursuant to the terms hereof.
The initial Pro Rata Part of each Lender is set forth opposite the name of such
Lender on SCHEDULE 2.1 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable
REAS means the construction, operation, and reciprocal easement agreements
or similar agreements (including any separate agreements or other agreements
between an Obligor and one or more other parties to any REA with respect to such
REA) affecting any Collateral Property or portion thereof, and REA means any one
of the REAs.
RECOURSE DEBT means, for any Person, Debt of such Person that is not
Non-Recourse Debt.
REGISTER is defined in SECTION 14.13(C).
REGULATION D means Regulation D of the Board of Governors of the Federal
Reserve System, as amended.
REGULATION U means Regulation U of the Board of Governors of the Federal
Reserve System, as amended.
RELATED PARTIES means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing into the
environment (including air, groundwater, surface water, soil, other
environmental media, or natural resources).
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RELEASE DATE means the earlier of the following two dates: (a) the date on
which the Obligation has been paid in full and the Mortgages have been released;
or (b) the date on which the Liens of the Mortgages are fully and finally
foreclosed or a conveyance by deed in lieu of such foreclosure is fully and
finally effective and possession of the Collateral Properties has been given to
and accepted by the purchaser or Administrative Agent free of occupancy and
claims to occupancy by Borrower and its successors and assigns; provided that,
if such payment, performance, release, foreclosure or conveyance is challenged,
in bankruptcy proceedings or otherwise, the Release Date shall be deemed not to
have occurred until such challenge is validly released, dismissed with prejudice
or otherwise barred by Legal Requirement from further assertion.
RENTS means all of the rents, revenue, income, profits, and proceeds
derived and to be derived from the Collateral Properties or arising from the use
or enjoyment of any portion thereof or from any Lease, including but not limited
to the proceeds from any negotiated lease termination or buyout of such Lease,
liquidated damages following default under any such Lease, all proceeds payable
under any policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Collateral Properties, all
rights to recover monetary amounts from any tenant in bankruptcy including,
without limitation, rights of recovery for use and occupancy and damage claims
arising out of Lease defaults, including rejections, under any applicable Debtor
Relief Law, together with any sums of money that may now or at any time
hereafter be or become due and payable to any Obligor by virtue of any and all
royalties, overriding royalties, bonuses, delay rentals, and any other amount of
any kind or character arising under any and all present and all future oil, gas,
mineral, and mining leases covering any Collateral Property or any part thereof,
and all proceeds and other amounts paid or owing to an Obligor under or pursuant
to any and all contracts and bonds relating to the construction or renovation of
any Collateral Property.
REPORTABLE EVENT shall have the meaning specified in Section 4043 of ERISA
or the regulations issued thereunder in connection with an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations other than those events described in Sections 2615.11, 2615.15
and 2615.19 of such regulations, including each such provision as it may
subsequently be renumbered.
REPRESENTATIVES of a Person means representatives, officers, directors,
employees, attorneys, and agents of that Person.
REQUIRED LENDERS means (a) on any date of determination prior to
termination of the Total Commitment, at least three (3) Lenders (other than
Defaulting Lenders) holding in the aggregate more than fifty and ten
one-hundredths percent (50.10%) of the Total Commitment (excluding the
Commitments of any Defaulting Lenders), or (b) on any date of determination
occurring after the Total Commitment has terminated, at least three (3) Lenders
holding in the aggregate more than fifty and ten one-hundredths percent (50.10%)
of the outstanding Total Principal Debt (excluding the Principal Debt of any
Defaulting Lenders).
RESERVE REQUIREMENT means, at any time, the maximum rate at which reserves
(including any marginal, special, supplemental, or emergency reserves) are
required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any
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other reserves required to be maintained by such member banks with respect to
(a) any category of liabilities which includes deposits by reference to which
the Adjusted Eurodollar Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Eurodollar Borrowings. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
RESPONSIBLE OFFICER of a Person means its chairman, president, chief
executive officer, chief financial officer, executive or senior vice president,
or treasurer, or, for all purposes under the Loan Documents, any other officer
designated from time to time by the board of directors or other governing body
of such Person, which designated officer is acceptable to Administrative Agent.
REVOLVING CREDIT NOTES means any promissory notes executed pursuant to
SECTION 3.1(A), substantially in the form of EXHIBIT B-1, and REVOLVING CREDIT
NOTE means any one of the Revolving Credit Notes.
SCHEDULE means, unless specified otherwise, a schedule attached to this
Agreement, as the same may be supplemented and modified from time to time in
accordance with the terms of the Loan Documents.
SECOND EXTENDED MATURITY DATE means September 13, 2011.
SECURITY DOCUMENTS means:
(A) the Mortgages;
(B) to the extent Administrative Agent believes necessary to perfect
the Liens granted to Administrative Agent for the benefit of Lenders,
Assignments of Leases and Rents, executed by the grantor under the applicable
Mortgage;
(C) each Assignment of FF&E Reserve Account;
(D) each Assignment of Operating Account;
(E) financing statements to be filed with the appropriate state and/or
county offices for the perfection of a security interest in any of the
Collateral Properties or any other collateral or security for the Obligation;
(F) assignments of all Material Agreements, executed by the grantor
under the applicable Mortgage;
(G) assignments of all Management Agreements;
(H) estoppel letters, consents, comfort letters, or other confirming
agreements and/or non-disturbance agreements executed by (i) each Manager, (ii)
each Franchisor, and (iii) such other parties to Material Agreements as
Administrative Agent may request;
(I) opinions of counsels in form and substance acceptable to
Administrative Agent; and
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(J) all other agreements, documents, and instruments evidencing,
securing, or pertaining to the Obligation or any part thereof, as shall from
time to time be executed and delivered by Borrower, Guarantors, any Manager, or
any other Person in favor of Administrative Agent.
SENIOR LEVERAGE RATIO means, as of any date of determination thereof, the
ratio of (a) the remainder of (i) all Consolidated Debt that is not Subordinated
Debt outstanding as of the date of the most recent balance sheet contained in
the Current Financials, minus (ii) the amount of cash not subject to any Lien,
restriction, or other encumbrance held by Borrower or a Subsidiary Guarantor in
excess of $5,000,000 as of such date to (b) Consolidated EBITDA for the most
recent four (4) fiscal quarters ended on such date.
SOLVENT means, as to a Person, that (a) the aggregate fair market value of
such Person's assets exceeds its liabilities (whether contingent, subordinated,
unmatured, unliquidated, or otherwise), (b) such Person has sufficient cash flow
to enable it to pay its Debts as they mature, and (c) such Person does not have
unreasonably small capital to conduct such Person's businesses.
S & P means Standard & Poor's Ratings Group, a division of The McGraw -
Hill Companies, Inc., a New York corporation, or if S & P no longer publishes
ratings, then another ratings agency acceptable to Administrative Agent.
STOCK means all shares, options, warrants, general or limited partnership
interests, membership interests, or other ownership interests (regardless of how
designated) of or in a corporation, partnership, limited liability company,
trust, or other entity, whether voting or nonvoting, including common stock,
preferred stock, or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended).
SUBORDINATED DEBT means (a) the Trust Debt, and (b) any other Debt of any
Company subordinated to the Obligation in form and substance satisfactory to
Administrative Agent. SCHEDULE 1.1 sets forth a list of Subordinated Debt as of
the Closing Date, which each of Borrower and Lenders acknowledges conforms to
the preceding definition of Subordinated Debt.
SUBSIDIARY of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of Stock or other interests having ordinary voting power for the election
of directors or other governing body (other than Stock or interests having such
power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.
SUBSIDIARY GUARANTOR means each of the following Persons, but only for so
long as it is a Subsidiary of Borrower: (a) Red Lion Hotels Limited Partnership,
(b) Red Lion Hotels Franchising, Inc., (c) Red Lion Hotels Management, Inc., (d)
Red Lion Hotels Holdings, Inc., (e) WHC809, LLC, and (f) each Person that (i)
hereafter becomes a Subsidiary of Borrower, (ii) has total assets or revenues in
excess of five percent (5%) of the total assets or revenues, respectively, of
Borrower and its Subsidiaries determined on a consolidated basis, and (iii) does
not have Debt that prohibits such Person from becoming a party to the Subsidiary
Guaranty.
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SUBSIDIARY GUARANTY means the Unconditional Guaranty Agreement executed by
each Subsidiary Guarantor in favor of Administrative Agent on behalf of the
Lenders, substantially in the form of EXHIBIT H.
SWING LINE LENDER means Calyon in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.
SWING LINE LOAN means a Borrowing made pursuant to SECTION 2.5.
SWING LINE NOTE means that certain promissory note executed by Borrower and
payable to the order of Calyon in the original principal amount of $5,000,000
substantially in the form of EXHIBIT B-2.
SWING LINE SUBFACILITY means the subfacility under the Total Commitment as
described in, and subject to the limitations of, SECTION 2.5.
TAX CODE means the Internal Revenue Code of 1986, as amended, together with
the rules and regulations promulgated thereunder.
TAXES means, for any Person, taxes, assessments, duties, levies, imposts,
deductions, charges, or withholdings, or other governmental charges or levies
imposed upon such Person, its income, or any of its properties, franchises, or
assets.
TITLE COMPANY means First American Title Insurance Company.
TITLE INSURANCE means the loan policy or policies of title insurance issued
to Administrative Agent for the benefit of Lenders by the Title Company, in an
amount equal to the Total Commitment, insuring the validity and priority of the
Mortgage encumbering the Initial Collateral Property and Improvements described
in the Mortgage for the benefit of Administrative Agent and Lenders.
TOTAL COMMITMENT means, on any date of determination, the sum of all
Commitments for all Lenders (as the same may have been reduced or canceled as
provided in the Loan Documents) then in effect.
TOTAL LEVERAGE RATIO means, as of any date of determination thereof, the
ratio of (a) the remainder of (i) all Consolidated Debt outstanding as of the
date of the most recent balance sheet contained in the Current Financials minus
(ii) the amount of cash not subject to any Lien, restriction, or other
encumbrance held by Borrower or a Subsidiary Guarantor in excess of $5,000,000
as of such date, to (b) Consolidated EBITDA for the most recent four (4) fiscal
quarters ended on such date.
TOTAL PRINCIPAL DEBT means, at any time, the sum of the Principal Debt of
all Credit Parties.
TRUST DEBT means the Debt of Borrower to Red Lion Hotels Capital Trust, a
Delaware statutory trust.
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UNUSED COMMITMENT means, as of any date, the amount by which (a) the Total
Commitment on such date exceeds (b) the Commitment Usage (other than the
Principal Debt of any Swing Line Loans) on such date.
TYPE means any type of Borrowing determined with respect to the interest
option applicable thereto.
WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Borrower or
one or more of its Wholly-owned Subsidiaries.
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise
specified in the Loan Documents, (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
provisions, (c) monetary references are to currency of the United States of
America, (d) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (e)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (f) references to "including" mean including without
limiting the generality of any description preceding that word, (g) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Legal Requirement include every
amendment or supplement to it, rule and regulation adopted under it, and
successor or replacement for it, and (j) references to any Loan Document or
other document include every renewal and extension of it, amendment and
supplement to it, and replacement or substitution for it.
1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the
Loan Documents and the compliance with each financial covenant therein shall be
determined in accordance with GAAP, and, all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period. If Borrower or any Credit Party determines that a
change in GAAP from that in effect on the date hereof has altered the treatment
of certain financial data to its detriment under this Agreement, then such party
may, by written notice to the others and Administrative Agent not later than ten
(10) days after the effective date of such change in GAAP, request renegotiation
of the financial covenants affected by such change. If Borrower and Required
Lenders have not agreed on revised covenants within thirty (30) days after
delivery of such notice, then, for purposes of this Agreement, GAAP will mean
generally accepted accounting principles on the date just prior to the date on
which the change that gave rise to the renegotiation occurred.
1.4 TIME REFERENCES. Unless otherwise specified in the Loan Documents (a)
time references are to time in New York, New York, and (b) in calculating a
period from one date to another, the word "from" means "from and including" and
the word "to" or "until" means "to but excluding."
SECTION 2 BORROWING PROVISIONS.
2.1 COMMITMENTS. Subject to and in reliance upon the terms, conditions,
representations, and warranties in the Loan Documents, each Lender severally and
not jointly agrees to lend to Borrower
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such Lender's Pro Rata Part of one or more Borrowings (except for Swing Line
Loans) not to exceed such Lender's Commitment, which may be repaid and
reborrowed from time to time in accordance with the terms and provisions of the
Loan Documents subject to the following conditions:
(A) each Borrowing requested by Borrower hereunder must occur on a
Business Day and no later than the Business Day immediately preceding the
Maturity Date;
(B) each Borrowing requested by Borrower must be in the amount of
$500,000 or a greater multiple of $500,000;
(C) the Commitment Usage may not exceed the Availability Amount; and
(D) the sum of (i) each Lender's Principal Debt plus (ii) such
Lender's Pro Rata Part of the LC Exposure and all Swing Line Loans may not
exceed such Lender's Commitment.
2.2 LC SUBFACILITY.
(A) CONDITIONS.
(i) Subject to the terms and conditions of this Agreement and all
Legal Requirements, Administrative Agent agrees to issue LCs for the
account of Borrower or its Subsidiaries upon Borrower's application
therefor (denominated in Dollars) by delivering to Administrative
Agent a properly completed Notice of LC and an LC Agreement with
respect thereto no later than 1:00 p.m. three (3) Business Days before
such LC is to be issued; provided that (A) on any date of
determination and after giving effect to any LC to be issued on such
date, the Commitment Usage shall never exceed the Total Commitment
then in effect, (B) the Commitment Usage may not exceed the
Availability Amount, (C) the sum of (x) each Lender's Principal Debt
plus (y) such Lender's Pro Rata Part of the LC Exposure and all Swing
Line Loans may not exceed such Lender's Commitment, (D) on any date of
determination and after giving effect to any LC to be issued on such
date, the LC Exposure shall never exceed $10,000,000, (E) at the time
of issuance of such LC, no Potential Default or Event of Default shall
exist, (F) each LC requested by Borrower must be in a minimum amount
of $100,000; provided that, notwithstanding the foregoing minimum,
Borrower may request and have outstanding at any one time up to five
(5) LCs in an amount not less than $10,000, and (G) each LC must
expire no later than the earlier of the thirtieth (30th) day prior to
the Maturity Date or one (1) year from its issuance.
(ii) Administrative Agent shall not issue any LC, if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain Administrative Agent from issuing such LC, or any Legal
Requirement applicable to Administrative Agent or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Administrative
Agent shall prohibit, or request that Administrative Agent
refrain from, the issuance of letters of credit generally or such
LC in particular or shall impose upon Administrative Agent with
respect to such LC any restriction, reserve or capital
requirement (for which Administrative Agent is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon
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Administrative Agent any unreimbursed loss, cost or expense which
was not applicable on the Closing Date and which Administrative
Agent in good faith deems material to it;
(B) the issuance of such LC would violate one or more
policies of Administrative Agent applicable to letters of credit
generally;
(C) such LC is to be denominated in a currency other than
Dollars;
(D) such LC contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder;
or
(E) a default of any Lender's obligations to fund under
SECTION 2.2(C) exists or any Lender is at such time a Defaulting
Lender hereunder, unless (x) Administrative Agent has entered
into satisfactory arrangements with Borrower or such Lender to
eliminate Administrative Agent's risk with respect to such Lender
or (y) after giving effect to such LC, the sum of (x) the Total
Principal Debt of all Lenders other than the Defaulting
Lender(s), plus (y) all LC Exposure of all Lenders other than the
Defaulting Lender(s), plus (z) all Swing Line Loans does not
exceed the Commitments of all Lenders other than of all
Defaulting Lenders.
(iii) Administrative Agent shall be under no obligation to amend
any LC if (A) Administrative Agent would have no obligation at such
time to issue such LC in its amended form under the terms hereof, or
(B) the beneficiary of such LC does not accept the proposed amendment
to such LC.
(B) PARTICIPATION. Immediately upon the issuance by Administrative
Agent of any LC, Administrative Agent shall be deemed to have sold and
transferred to each other Lender, and each other such Lender shall be deemed
irrevocably and unconditionally to have purchased and received from
Administrative Agent, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Pro Rata Part, in such LC, and all
rights of Administrative Agent in respect thereof (other than rights to receive
certain fees provided for in SECTION 2.2(C)). Upon the issuance, renewal, or
extension of an LC, Administrative Agent shall provide copies of such LC to each
other Lender.
(C) REIMBURSEMENT OBLIGATION. In order to induce Administrative Agent
to issue and maintain LCs and Lenders to participate therein, Borrower agrees to
pay or reimburse Administrative Agent (i) on the date on which any draft is
presented under any LC, the amount of any draft paid or to be paid by
Administrative Agent, and (ii) promptly, upon demand, the amount of any fees (in
addition to the fees described in SECTION 5) which Administrative Agent
customarily charges to a Person similarly situated in the ordinary course of its
business for amending LC Agreements, for honoring drafts, and taking similar
action in connection with letters of credit; provided that (A) if Borrower has
not reimbursed Administrative Agent for any drafts paid or to be paid within
twenty-four (24) hours of demand therefor by Administrative Agent, then
Administrative Agent is hereby irrevocably authorized to fund such reimbursement
obligations as a Borrowing under the Facility to the extent of availability
under the Facility, and the proceeds of such Borrowing under the Facility shall
be advanced directly to Administrative Agent in payment of Borrower's
reimbursement obligation with respect to the draft under the LC, and (B) if for
any reason, funds are not advanced pursuant to the Facility, then Borrower's
reimbursement obligation shall continue to be due and payable. Borrower's
obligations under this SECTION 2.2(C) shall be absolute and unconditional under
any and all circumstances and irrespective of any
23
setoff, counterclaim, or defense to payment which Borrower may have at any time
against Administrative Agent or any other Person, and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including any of the following circumstances: (1) any lack of
validity or enforceability of this Agreement or any of the Loan Documents; (2)
the existence of any claim, setoff, defense, or other right which Borrower may
have at any time against a beneficiary named in a LC, any transferee of any LC
(or any Person for whom any such transferee may be acting), any Credit Party, or
any other Person, whether in connection with this Agreement, any LC, the
transactions contemplated herein, or any unrelated transactions (including any
underlying transaction between Borrower and the beneficiary named in any such
LC); (3) any draft, certificate, or any other document presented under the LC
proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; and (4) the
occurrence of any Potential Default or Event of Default. To the extent any
funding of a draft has been made by Lenders pursuant to SECTION 2.2(E) or under
the Facility, Administrative Agent shall promptly distribute any such payments
received from Borrower with respect to such draft to all Lenders funding such
draft according to their Pro Rata Part. Interest on any amounts remaining unpaid
by Borrower (and unfunded by a Borrowing under the Facility) under this CLAUSE
at any time from and after the date such amounts become payable until paid in
full shall be payable by Borrower to Administrative Agent at the Default Rate.
In the event any payment by Borrower received by Administrative Agent with
respect to an LC and distributed to Lenders on account of their participations
therein is thereafter set aside, avoided, or recovered from Administrative Agent
in connection with any receivership, liquidation, or bankruptcy proceeding, each
Lender which received such distribution shall, upon demand by Administrative
Agent, contribute such Lender's ratable portion of the amount set aside,
avoided, or recovered, together with interest at the rate required to be paid by
Administrative Agent upon the amount required to be repaid by it.
(D) GENERAL. If any draft shall be presented for honor under any LC,
then Administrative Agent shall promptly notify Borrower of the date and amount
of such draft; provided that failure to give any such notice shall not affect
the obligations of Borrower hereunder. Administrative Agent shall make payment
upon presentment of a draft for honor unless it appears that presentment on its
face does not comply with the terms of such LC, regardless of whether (i) any
default or potential default under any other agreement has occurred, and (ii)
the obligations under any other agreement have been performed by the beneficiary
or any other Person (and Administrative Agent shall not be liable for any
obligation of any Person thereunder). The Credit Parties shall not be
responsible for, and Borrower's reimbursement obligations for honored drafts
shall not be affected by, any matter or event whatsoever (including the validity
or genuineness of documents or of any endorsements thereof, even if such
documents should in fact prove to be in any respect invalid, fraudulent, or
forged), or any dispute among any Company, the beneficiary of any LC, or any
other Person to whom any LC may be transferred, or any claims whatsoever of any
Company against any beneficiary of any LC or any such transferee; provided that
nothing in this Agreement shall constitute a waiver of Borrower's rights to
assert any claim based upon the gross negligence or willful misconduct of any
Credit Party.
(E) OBLIGATION OF LENDERS. If Borrower fails to reimburse
Administrative Agent as provided in SECTION 2.2(C) within twenty-four (24) hours
of the demand therefor by Administrative Agent, and no Borrowing has been made
pursuant to such SECTION 2.2(C), then Administrative Agent shall promptly notify
each Lender of such failure, of the date and amount of the draft paid, and of
such Lender's Pro Rata Part thereof. Each Lender shall promptly and
unconditionally make available to Administrative Agent in immediately available
funds such Lender's Pro Rata Part of such unpaid reimbursement obligation, which
funds shall be paid to Administrative Agent on or before the close of
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business on the Business Day on which such notice was given by Administrative
Agent (if given prior to 1:00 p.m.) or on the next succeeding Business Day (if
notice was given after 1:00 p.m.). All such amounts payable by any such Lender
shall include interest thereon accruing at the Federal Funds Rate from the day
the applicable draft is paid by Administrative Agent to (but not including) the
date such amount is paid by such Lender to Administrative Agent. The obligations
of Lenders to make payments to Administrative Agent with respect to LCs shall be
irrevocable and not subject to any qualification or exception whatsoever (other
than the gross negligence or willful misconduct of Administrative Agent) and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including any of the following circumstances: (i) any
lack of validity or enforceability of this Agreement or any of the Loan
Documents; (ii) the existence of any claim, setoff, defense, or other right
which Borrower may have at any time against a beneficiary named in a LC, any
transferee of any LC (or any Person for whom any such transferee may be acting),
any Credit Party, or any other Person, whether in connection with this
Agreement, any LC, the transactions contemplated herein, or any unrelated
transactions (including any underlying transaction between Borrower and the
beneficiary named in any such LC); (iii) any draft, certificate, or any other
document presented under the LC proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; and (iv) the occurrence of any Potential Default or Event of
Default.
(F) DELIVERY AND CANCELLATION. Borrower acknowledges that each LC will
be deemed issued upon delivery to its beneficiary or Borrower. If Borrower
requests any LC be delivered to Borrower rather than the beneficiary, and
Borrower subsequently cancels such LC, then Borrower agrees to return it to
Administrative Agent together with Borrower's written certification that it has
never been delivered to such beneficiary. If any LC is delivered to its
beneficiary pursuant to Borrower's instructions, then no cancellation thereof by
Borrower shall be effective without written consent of such beneficiary to
Administrative Agent and return of such LC to Administrative Agent. Borrower
hereby agrees that if Administrative Agent becomes involved in any dispute as a
result of Borrower's cancellation of any LC, then it shall indemnify the Credit
Parties for all losses, costs, damages, expenses, and reasonable attorneys' fees
suffered or incurred by the Credit Parties as a direct result thereof.
(G) DUTIES OF ADMINISTRATIVE AGENT. Administrative Agent agrees with
each Lender that it will exercise and give the same care and attention to each
LC as it gives to its other letters of credit, and Administrative Agent's sole
liability to each Lender with respect to such LCs (other than liability arising
from the gross negligence or willful misconduct of Administrative Agent) shall
be to distribute promptly to each Lender who has acquired a participating
interest therein such Lender's ratable portion of any payments made to
Administrative Agent by Borrower pursuant to SECTION 2.2(C). Each Lender and
Borrower agree that, in paying any draw under any LC, Administrative Agent shall
not have any responsibility to obtain any document (other than any documents
required by the respective LC) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person delivering any such
document. The Credit Parties and their respective Representatives shall not be
liable to any other Credit Party or any Obligor for the use which may be made of
any LC or for any acts or omissions of any beneficiary thereof in connection
therewith. Any action, inaction, error, delay, or omission taken or suffered by
Administrative Agent or any of its Representatives under or in connection with
any LC, the draws, drafts, or documents relating thereto, or the transmission,
dispatch, or delivery of any message or advice related thereto, if in good faith
and in conformity with such Legal Requirements as Administrative Agent or any of
its Representatives may deem applicable and in accordance with the standards of
care specified in the Uniform Customs and Practice for Documentary Credits
issued by the International Chamber of Commerce, as in effect on the date of
issue of such LC, shall be binding upon
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Obligors and the Credit Parties and shall not place Administrative Agent or any
of its Representatives under any resulting liability to any Credit Party or any
Obligor. Any action taken or omitted to be taken by Administrative Agent under
or in connection with any LC if taken or omitted in the absence of gross
negligence or willful misconduct shall not create for Administrative Agent any
resulting liability to any Credit Party or any Obligor.
(H) INDEMNIFICATION. IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE
PROVIDED IN THIS AGREEMENT, BORROWER HEREBY AGREES TO PROTECT, INDEMNIFY, PAY,
AND SAVE EACH CREDIT PARTY AND ITS RESPECTIVE RELATED PARTIES HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, OR LOSSES OF, OR OWED
TO THIRD PARTIES, AND ANY AND ALL RELATED COSTS, CHARGES, AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES, INCLUDING ALLOCATED COSTS OF INTERNAL
COUNSEL), WHICH ANY CREDIT PARTY OR ANY SUCH RELATED PARTY MAY INCUR OR BE
SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF (A) THE ISSUANCE OF ANY LC,
OR (B) THE FAILURE OF ADMINISTRATIVE AGENT TO HONOR A DRAFT UNDER SUCH LC AS A
RESULT OF ANY ACT OR OMISSION, WHETHER RIGHTFUL OR WRONGFUL, OF ANY PRESENT OR
FUTURE GOVERNMENTAL AUTHORITY; PROVIDED THAT BORROWER SHALL HAVE NO LIABILITY TO
INDEMNIFY ANY CREDIT PARTY OR ANY OF ITS RESPECTIVE RELATED PARTIES IN RESPECT
OF ANY LIABILITY ARISING OUT OF THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF
SUCH PARTY. THE PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATIONS SET FORTH IN
THIS SECTION 2.2(H) SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE OBLIGATION
AND TERMINATION OF THIS AGREEMENT.
(I) LC AGREEMENTS. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not in any
manner incorporated herein. The fees and other amounts payable with respect to
each LC shall be as provided in this Agreement, drafts under any LC shall be
deemed part of the Obligation, and in the event of any conflict between the
terms of this Agreement and any LC Agreement, the terms of this Agreement shall
be controlling.
(J) LCS ISSUED FOR SUBSIDIARIES. Notwithstanding that an LC issued or
outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, Borrower shall be obligated to reimburse Administrative Agent
hereunder for any and all drawings under such LC. Borrower hereby acknowledges
that the issuance of LCs for the account of Subsidiaries inures to the benefit
of Borrower, and that Borrower's business derives substantial benefits from the
businesses of such Subsidiaries.
(K) APPLICABILITY OF ISP. Unless otherwise expressly agreed by
Administrative Agent and Borrower when an LC is issued, the rules of the ISP
shall apply to each LC.
2.3 VOLUNTARY TERMINATION OF COMMITMENTS. Without premium or penalty, and
upon giving not less than ten (10) Business Days prior written and irrevocable
notice to Administrative Agent, Borrower may terminate in whole or in part the
unused portion of the Total Commitment; provided that: (i) each partial
termination shall be in the amount of $1,000,000 or a greater integral multiple
of $1,000,000; (ii) the amount of the Total Commitment may not be reduced below
the Commitment Usage; and (iii) each reduction shall be allocated Pro Rata among
Lenders in accordance with their respective Pro Rata Parts. Promptly after
receipt of such notice of termination or reduction, Administrative Agent shall
notify each Lender of the proposed cancellation or reduction. Such termination
or partial reduction of the Total Commitment shall be effective on the Business
Day specified in Borrower's notice (which date
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must be at least ten (10) Business Days after Borrower's delivery of such
notice). In the event that the Total Commitment is reduced to zero at a time
when there shall be no LC Exposure or Principal Debt, this Agreement shall be
terminated to the extent specified in SECTION 14.14, and all commitment fees and
other fees then earned and unpaid hereunder and all other amounts of the
Obligation then due and owing shall be immediately due and payable, without
notice or demand by Administrative Agent or any Lender.
2.4 BORROWING PROCEDURE. The following procedures apply to Borrowings
(other than Swing Line Loans):
(A) NOTICE OF BORROWING. Each Borrowing shall be made pursuant to a
Notice of Borrowing delivered to Administrative Agent requesting that Lenders
fund a Borrowing on a certain date (the "BORROWING DATE"), which notice (i)
shall be irrevocable and binding on Borrower, (ii) shall specify the Borrowing
Date, amount, Type, and (for a Borrowing comprised of Eurodollar Borrowings)
Interest Period, and (iii) must be received by Administrative Agent no later
than 1:00 p.m. on the third (3rd) Business Day preceding the Borrowing Date for
any Eurodollar Borrowing or on the Business Day immediately preceding the
Borrowing Date for any Base Rate Borrowing. Administrative Agent shall timely
notify each Lender with respect to each Notice of Borrowing.
(B) FUNDING. Each Lender shall remit its Pro Rata Part of each
requested Borrowing to Administrative Agent at its Payment Office in funds which
are or will be available for immediate use by Administrative Agent by 2:00 p.m.
on the Borrowing Date therefor. Subject to receipt of such funds, Administrative
Agent shall (unless to its actual knowledge any of the conditions precedent
therefor have not been satisfied by Borrower or waived by Required Lenders) make
such funds available to Borrower by causing such funds to be deposited to
Borrower's account as designated to Administrative Agent by Borrower.
Notwithstanding the foregoing, unless Administrative Agent shall have been
notified by a Lender prior to a Borrowing Date that such Lender does not intend
to make available to Administrative Agent such Lender's Pro Rata Part of the
applicable Borrowing, Administrative Agent may assume that such Lender has made
such proceeds available to Administrative Agent on such date, as required
herein, and Administrative Agent may (unless to its actual knowledge any of the
conditions precedent therefor have not been satisfied by Borrower or waived by
Required Lenders), in reliance upon such assumption (but shall not be required
to), make available to Borrower a corresponding amount in accordance with the
foregoing terms, but, if such corresponding amount is not in fact made available
to Administrative Agent by such Lender on such Borrowing Date, then
Administrative Agent shall be entitled to recover such corresponding amount on
demand (i) from such Lender, together with interest at the Federal Funds Rate
during the period commencing on the date such corresponding amount was made
available to Borrower and ending on (but excluding) the date Administrative
Agent recovers such corresponding amount from such Lender, or (ii) if such
Lender fails to pay such corresponding amount forthwith upon such demand, then
from Borrower, together with interest at a rate per annum equal to the
applicable rate for such Borrowing during the period commencing on such
Borrowing Date and ending on (but excluding) the date Administrative Agent
recovers such corresponding amount from Borrower. No Lender shall be responsible
for the failure of any other Lender to make its Pro Rata Part of any Borrowing.
2.5 SWING LINE SUBFACILITY.
(A) Subject to the terms and conditions hereof, Swing Line Lender
agrees to make Swing Line Loans to Borrower at any time on or prior to the
Maturity Date, not to exceed an amount at
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any one time outstanding equal to $5,000,000. Swing Line Loans shall constitute
Borrowings for all purposes hereunder, except that Swing Line Loans shall not be
considered a utilization of any Lender's Commitment. Notwithstanding the
foregoing, (i) the Total Principal Debt (including, without limitation, all
Swing Line Loans) shall not at any time exceed the Total Commitment, (ii) the
Commitment Usage may not exceed the Availability Amount, and (c) the sum of (i)
each Lender's Principal Debt plus (ii) such Lender's Pro Rata Part of the LC
Exposure and all Swing Line Loans may not exceed such Lender's Commitment.
(B) Each request for a Swing Line Loan shall be in the amount of
$250,000 or a greater integral multiple of $250,000. Borrower may request a
Swing Line Loan by submitting a Notice of Borrowing to Administrative Agent and
Swing Line Lender. Such Notice of Borrowing must be received by Administrative
Agent and Swing Line Lender no later than 1:00 p.m. on the Borrowing Date for
such Swing Line Loan, provided that Borrower shall have provided telephonic
notice to Administrative Agent and Swing Line Lender no later than 1:00 p.m. on
the Borrowing Date for such Swing Line Loan. Swing Line Lender shall make such
Swing Line Loan available to Borrower in New York, New York at 3:00 p.m. on such
Borrowing Date.
(C) Upon the occurrence of an Event of Default or in the event that
any Swing Line Loan shall be outstanding for more than five (5) Business Days,
Administrative Agent shall, on behalf of Borrower (which hereby irrevocably
directs and authorizes Administrative Agent to act on its behalf), request a
Base Rate Borrowing from Lenders (and each Lender shall fund its Pro Rata Part
thereof) in an amount sufficient to repay the Principal Debt outstanding under
such Swing Line Loan; provided that, such Borrowing shall be made
notwithstanding Borrower's noncompliance with SECTION 7. The proceeds of such
Borrowing shall be immediately applied to repay such Swing Line Loan. If, for
any reason, a Borrowing may not be (as determined by Administrative Agent in its
sole discretion), or is not, made pursuant to this SECTION 2.5(C) to repay any
Swing Line Loan as required hereby, then, effective on the date such Borrowing
would otherwise have been made, each Lender severally, unconditionally, and
irrevocably agrees that it shall be deemed to have purchased an undivided
participating interest in such Swing Line Loan (an "UNREFUNDED SWING LINE
BORROWING") to the extent of such Lender's Pro Rata Part thereof. Each Lender
shall fund a Borrowing or a participation in the Unrefunded Swing Line
Borrowings no later than the close of business on the date notice of such
funding requirement is given by Administrative Agent if such notice was given
prior to 11:00 a.m. on any Business Day, or if made at any other time, on the
next Business Day following the date of such notice. All such amounts payable by
any Lender under this SECTION 2.5(C) shall include interest thereon from the
date on which such payment is payable by such Lender to, but not including, the
date such amount is paid by such Lender to Administrative Agent, at the Federal
Funds Rate. If such Lender does not promptly pay such amount upon Administrative
Agent's demand therefor, and until such time as such Lender makes the required
payment, Swing Line Lender shall be deemed to continue to have outstanding its
ratable portion of the Principal Debt of such Swing Line Loan in the amount of
such unpaid obligation. Each payment by Borrower of all or any part of any Swing
Line Loan shall be paid to Administrative Agent for the benefit of Swing Line
Lender and those Lenders who hold funded participations in such Swing Line Loan
under this SECTION 2.5(C); provided that with respect to any such participation,
all interest on the Principal Debt of such Swing Line Loan to which such
participation relates accruing prior to the date of funding such participation,
shall be payable solely to Administrative Agent for the account of Swing Line
Lender (and all Lenders holding funded participations in any Unrefunded Swing
Line Borrowing prior to such date). Any Lender holding a participation in any
Unrefunded Swing Line Borrowing may exercise any and all rights of banker's
lien, setoff, or counterclaim with respect to any and all moneys owing by
Borrower to
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such Lender by reason thereof as fully as if such Lender had extended such
Borrowing directly to Borrower in the amount of such participation. Whenever, at
any time after Swing Line Lender has received from any Lender such Lender's
participating interest in any Swing Line Loan, Swing Line Lender receives any
payment on account thereof, Swing Line Lender will promptly distribute to such
Lender its participating interest in such amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Lender's participating interest was outstanding and funded); provided, however,
that in the event that such payment received by Swing Line Lender is required to
be returned, such Lender will return to Swing Line Lender any portion thereof
previously distributed by Swing Line Lender to it.
(D) Each Lender's obligation to purchase an interest in all Swing Line
Loans shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation (i) any set-off, counterclaim,
recoupment, defense, or other right which such Lender or any other Person may
have against Swing Line Lender or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Potential Default or Event of Default or
the termination of any Lender's Commitment, (iii) the occurrence of any Material
Adverse Event, (iv) any breach of this Agreement or any other Loan Document by
Borrower, any of its Affiliates, Administrative Agent, or any other Lender, or
(v) any other circumstance, happening, or event whatsoever, whether or not
similar to any of the foregoing. Any portion of a Swing Line Loan not so
purchased and converted may be treated by Swing Line Lender as a Borrowing which
was not funded by the non-purchasing Lenders as contemplated in SECTION 2.4(B),
and as a funding by Swing Line Lender under the Total Commitment in excess of
Swing Line Lender's Commitment. Each Swing Line Loan, once so sold, shall cease
to be a Swing Line Loan for the purposes of this Agreement, but shall be a
Borrowing made under the Total Commitment and each Lender's Commitment.
2.6 EXTENSION OF MATURITY DATE.
(A) Subject to the conditions set forth in this Section 2.6, Borrower
may request, by notice to Administrative Agent (who shall promptly notify
Lenders) not earlier than ninety (90) days prior to, nor later than forty-five
(45) days prior to the Initial Maturity Date, that the Initial Maturity Date be
extended to the First Extended Maturity Date, in which event the Initial
Maturity Date shall be so extended.
(B) If the Initial Maturity Date is extended to the First Extended
Maturity Date, then, subject to the conditions set forth in this SECTION 2.6,
Borrower may request, by notice to Administrative Agent (who shall promptly
notify Lenders) not earlier than ninety (90) days prior to, nor later than
forty-five (45) days prior to the First Extended Maturity Date, that the First
Extended Maturity Date be extended to the Second Extended Maturity Date, in
which event the First Extended Maturity Date shall be so extended.
(C) Notwithstanding the foregoing, the extension of the Initial
Maturity Date to the First Extended Maturity Date and the extension of the First
Extended Maturity Date to the Second Extended Maturity Date pursuant to this
SECTION 2.6 shall not be effective with respect to any Lender unless, (i) no
Event of Default exists before or after giving effect to such extension, and
(ii) Borrower shall have paid to Administrative Agent for the benefit of each
Lender, an extension fee in an amount equal to twenty-five basis points (0.25%)
times each Lender's Commitment.
(D) CONFLICTING PROVISIONS. This SECTION shall supersede any
provisions in SECTION 14.11 to the contrary.
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2.7 INCREASE IN COMMITMENTS.
(A) At any time after the Closing Date, Administrative Agent may, from
time to time at the request of Borrower, increase the Total Commitment by (i)
admitting additional Lenders hereunder (each a SUBSEQUENT LENDER), or (ii)
increasing the Commitment of any Lender (each an INCREASING LENDER), subject to
the following conditions:
(I) each Subsequent Lender is a Lender, an Affiliate of a Lender
or an Approved Fund;
(II) Borrower executes (A) a new Revolving Credit Note payable to
the order of a Subsequent Lender, or (B) a replacement Revolving
Credit Note payable to the order of an Increasing Lender;
(III) each Subsequent Lender executes and delivers to
Administrative Agent a Joinder Agreement in the form of EXHIBIT F;
(IV) each Increasing Lender executes and delivers to
Administrative Agent an increase certificate substantially in the form
of EXHIBIT G;
(V) after giving effect to the admission of any Subsequent Lender
or the increase in the Commitment of any Increasing Lender, the Total
Commitment does not exceed $100,000,000 less the amount of any
previous reductions pursuant to SECTION 2.3;
(VI) each increase in the Total Commitment shall be in the amount
of $10,000,000 or a greater integral multiple of $5,000,000;
(VII) no admission of any Subsequent Lender shall increase the
Commitment of any existing Lender without the written consent of such
Lender;
(VIII) no Event of Default or Potential Default exists or would
occur after giving effect to such increase;
(IX) no Lender shall be an Increasing Lender without the written
consent of such Lender;
(X) the amount of all increases in the Total Commitment pursuant
to this SECTION 2.7 shall not exceed $50,000,000 in the aggregate;
(XI) Borrower shall have (a) pledged to Administrative Agent, for
the benefit of Lenders, a first priority Lien and security interest in
one or more additional Collateral Properties to which all Lenders, in
their sole discretion, have consented and (b) delivered to
Administrative Agent each of the items listed in SECTION 7.1(C)
related to such Collateral Properties and the applicable Subsidiary
that holds title to such Collateral Properties, all acceptable to
Required Lenders; and
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(XII) after giving effect to the pledge of one or more additional
Collateral Properties as required in CLAUSE (XI) above, the ratio of
(a) the Total Commitment (after giving effect to the increase
requested pursuant to this SECTION 2.7) to (b) the aggregate Appraised
Value of all Collateral Properties as of the date of such request is
less than or equal to seventy percent (70%).
(B) After the admission of any Subsequent Lender or the increase in
the Commitment of any Increasing Lender, Administrative Agent shall promptly
provide to each Lender and to Borrower a new SCHEDULE 2.1 to this Agreement. In
the event that there are any Borrowings outstanding after giving effect to an
increase in the Total Commitment pursuant to this SECTION 2.7, upon notice from
Administrative Agent to each Lender, the amount of such Borrowings owing to each
Lender shall be appropriately adjusted to reflect the new Applicable Percentage
of Lenders, and Borrower shall pay any losses associated therewith pursuant to
SECTION 4.5.
(C) CONFLICTING PROVISIONS. This Section shall supersede any
provisions in SECTION 14.11 to the contrary.
SECTION 3 TERMS OF PAYMENT.
3.1 NOTES AND PAYMENTS.
(A) NOTES. The Total Principal Debt (other than Swing Line Loans)
shall be evidenced by the Revolving Credit Notes, one payable to each Lender in
the stated principal amount of its Commitment. The Principal Debt of all Swing
Line Loans shall be evidenced by the Swing Line Note.
(B) PAYMENTS GENERALLY. Each payment or prepayment on the Obligation
is due and must be paid to Administrative Agent at its Payment Office in Dollars
and in immediately available funds, without set-off, deduction, or counterclaim,
by Administrative Agent by 1:00 p.m. on the day due. Payments made after 1:00
p.m. shall be deemed made on the Business Day next following. Administrative
Agent shall pay to each Lender any payment or prepayment to which such Lender is
entitled hereunder on the same day Administrative Agent shall have received the
same from Borrower; provided that such payment or prepayment is received by
Administrative Agent prior to 1:00 p.m., and otherwise before 1:00 p.m. on the
Business Day next following. If and to the extent Administrative Agent shall not
make such payments to Lenders when due as set forth in the preceding sentence,
then such unpaid amounts shall accrue interest, payable by Administrative Agent,
at the Federal Funds Rate from the due date until (but not including) the date
on which Administrative Agent makes such payments to Lenders.
3.2 INTEREST AND PRINCIPAL PAYMENTS.
(A) INTEREST PAYMENTS. Interest on each Eurodollar Borrowing shall be
due and payable as it accrues on the last day of its respective Interest Period
and on the Maturity Date, as applicable; provided that (i) with respect to
Eurodollar Borrowings having an Interest Period in excess of three (3) months,
Borrower shall pay interest quarterly in arrears on the last Business Day of
each March, June, September, and December, commencing on the first (1st) such
date after the date on which such Interest Period commences and continuing on
the last Business Day of each March, June, September, and December thereafter
and on the last day of the applicable Interest Period. Interest on each Base
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Rate Borrowing shall be due and payable as it accrues on the last Business Day
of each March, June, September, and December, and on the Maturity Date.
(B) MANDATORY PAYMENTS.
(I) The Total Principal Debt is due and payable on the Maturity
Date.
(II) On any date of determination, if the Commitment Usage
exceeds the Availability Amount, then Borrower shall immediately
prepay the Total Principal Debt in an aggregate amount equal to such
excess, together with (A) all accrued and unpaid interest on the
Principal Debt prepaid, and (B) any Consequential Loss arising as a
result thereof.
(C) VOLUNTARY PREPAYMENTS. After giving Administrative Agent advance
written notice of the intent to prepay (of which Administrative Agent shall
promptly give notice to Lenders), Borrower may voluntarily prepay all or any
part of the Total Principal Debt from time to time and at any time, in whole or
in part, without premium or penalty; provided that: (i) such notice must be
received by Administrative Agent by 1:00 p.m. on (A) the third (3rd) Business
Day preceding the date of prepayment of a Eurodollar Borrowing, and (B) the
Business Day of a prepayment of a Base Rate Borrowing; (ii) each such partial
prepayment must be in the amount of $1,000,000 or a greater integral multiple of
$1,000,000; (iii) all accrued interest on the Principal Debt being prepaid must
also be paid in full, to the date of such prepayment; and (iv) Borrower shall
pay any related Consequential Loss within ten (10) days after demand therefor.
Each notice of prepayment shall specify the prepayment date and the Type of
Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid and shall
constitute a binding obligation of Borrower to make a prepayment on the date
stated therein.
3.3 INTEREST OPTIONS. Except where specifically otherwise provided,
Borrowings (other than Swing Line Loans) shall bear interest at a rate per annum
equal to the lesser of (a) as to the respective Type of Borrowing (as designated
by Borrower in accordance with this Agreement), the Base Rate plus the
Applicable Margin for Base Rate Borrowings or the Adjusted Eurodollar Rate plus
the Applicable Margin for Eurodollar Borrowings, and (b) the Maximum Rate.
Except as specifically otherwise provided, Swing Line Loans shall bear interest
at an annual rate equal to the lesser of (i) the Base Rate plus the Applicable
Margin for Base Rate Borrowings, and (ii) the Maximum Rate. Each change in the
Base Rate or the Maximum Rate, subject to the terms of this Agreement, will
become effective, without notice to Borrower or any other Person, upon the
effective date of such change.
3.4 QUOTATION OF RATES. A Responsible Officer may call Administrative Agent
on or before the date on which a Notice of Borrowing is to be delivered by
Borrower in order to receive an indication of the rates then in effect, but such
indicated rates shall neither be binding upon Administrative Agent or Lenders
nor affect the rate of interest which thereafter is actually in effect when the
Notice of Borrowing is given.
3.5 DEFAULT RATE. At the option of Required Lenders at any time while an
Event of Default exists and to the extent permitted by all Legal Requirements,
all Principal Debt, accrued interest thereon, and fees and expenses payable
hereunder and under the other Loan Documents shall bear interest at the Default
Rate until paid, regardless whether such payment is made before or after entry
of a judgment; provided that the Default Rate shall automatically apply in the
case of SECTION 2.2(C) where the Default Rate is specified.
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3.6 INTEREST RECAPTURE. If the designated rate applicable to any Borrowing
exceeds the Maximum Rate, then the rate of interest on such Borrowing shall be
limited to the Maximum Rate, but any subsequent reductions in such designated
rate shall not reduce the rate of interest thereon below the Maximum Rate until
the total amount of interest accrued thereon equals the amount of interest which
would have accrued thereon if such designated rate had at all times been in
effect. In the event that at maturity (stated or by acceleration), or at final
payment of the Total Principal Debt, the total amount of interest paid or
accrued is less than the amount of interest which would have accrued if such
designated rates had at all times been in effect, then, at such time and to the
extent permitted by all Legal Requirements, Borrower shall pay an amount equal
to the difference between (a) the lesser of the amount of interest which would
have accrued if such designated rates had at all times been in effect and the
amount of interest which would have accrued if the Maximum Rate had at all times
been in effect, and (b) the amount of interest actually paid or accrued on the
Total Principal Debt.
3.7 INTEREST CALCULATIONS.
(A) All payments of interest shall be calculated on the basis of
actual number of days (including the first (1st) day but excluding the last day)
elapsed but computed as if each calendar year consisted of 360 days. All
interest rate determinations and calculations by Administrative Agent shall be
conclusive and binding absent manifest error.
(B) The provisions of this Agreement relating to the calculation of
the Base Rate and the Adjusted Eurodollar Rate are included only for the purpose
of determining the rate of interest or other amounts to be paid hereunder that
are based upon such rate.
3.8 MAXIMUM RATE. Regardless of any provision contained in any Loan
Document, no Credit Party shall ever be entitled to contract for, charge, take,
reserve, receive, or apply, as interest on the Obligation, or any part thereof,
any amount in excess of the Maximum Rate, and, if any Credit Party ever does so,
then such excess shall be deemed a partial prepayment of principal and treated
hereunder as such and any remaining excess shall be refunded to Borrower. In
determining if the interest paid or payable exceeds the Maximum Rate, Borrower
and the Credit Parties shall, to the maximum extent permitted under all Legal
Requirements, (a) treat all Borrowings as but a single extension of credit (and
the Credit Parties and Borrower agree that such is the case and that provision
herein for multiple Borrowings is for convenience only), (b) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(c) exclude voluntary prepayments and the effects thereof, and (d) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the Obligation; provided that if the Obligation is paid and
performed in full prior to the end of the full contemplated term thereof, and if
the interest received for the actual period of existence thereof exceeds the
Maximum Amount, then the Credit Parties shall refund such excess, and, in such
event, the Credit Parties shall not, to the extent permitted by all Legal
Requirements, be subject to any penalties provided by any Legal Requirements for
contracting for, charging, taking, reserving, or receiving interest in excess of
the Maximum Amount.
3.9 INTEREST PERIODS. When Borrower requests any Eurodollar Borrowing,
Borrower may elect the interest period (each an "INTEREST PERIOD") applicable
thereto, which shall be, at Borrower's option, one (1) week, one (1) month or
two (2), three (3), or six (6) months, in each case to the extent available from
each Lender (or other periods, if requested by Borrower and available from each
Lender);
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provided, however, that: (a) the initial Interest Period for a Eurodollar
Borrowing shall commence on the date of such Borrowing (including the date of
any Conversion thereto), and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next preceding
Interest Period applicable thereto expires; (b) if any Interest Period (other
than a one (1) week Interest Period) for a Eurodollar Borrowing begins on a day
for which there is no numerically corresponding Business Day in the calendar
month at the end of such Interest Period, then such Interest Period shall end on
the next Business Day immediately following what otherwise would have been such
numerically corresponding day in the calendar month at the end of such Interest
Period (unless such date would be in a different calendar month from what would
have been the month at the end of such Interest Period, or unless there is no
numerically corresponding day in the calendar month at the end of the Interest
Period; whereupon, such Interest Period shall end on the last Business Day in
the calendar month at the end of such Interest Period); (c) no Interest Period
may be chosen with respect to any portion of the Total Principal Debt which
would extend beyond the scheduled repayment date (including any dates on which
mandatory prepayments are required to be made) for such portion of the Total
Principal Debt; and (d) no more than an aggregate of five (5) Interest Periods
shall be in effect at one time.
3.10 CONVERSIONS. Borrower may (a) Convert a Eurodollar Borrowing on the
last day of an Interest Period to a Base Rate Borrowing, (b) Convert a Base Rate
Borrowing at any time to a Eurodollar Borrowing, and (c) elect a new Interest
Period (in the case of a Eurodollar Borrowing), by giving a Notice of Borrowing
no later than 1:00 p.m. on the third (3rd) Business Day prior to the date of
Conversion or the last day of the Interest Period, as the case may be (in the
case of a Conversion to a Eurodollar Borrowing or an election of a new Interest
Period), and no later than 1:00 p.m. one (1) Business Day prior to the last day
of the Interest Period (in the case of a Conversion to a Base Rate Borrowing);
provided that the principal amount Converted to, or Continued as, a Eurodollar
Borrowing shall be in the amount of $500,000 or a greater integral multiple of
$500,000. Administrative Agent shall timely notify each Lender with respect to
each Notice of Borrowing. Absent Borrower's Notice of Borrowing or election of a
new Interest Period, a Eurodollar Borrowing shall be deemed Converted to a Base
Rate Borrowing effective as of the expiration of the Interest Period applicable
thereto. No Eurodollar Borrowing may be either made or Continued as a Eurodollar
Borrowing, and no Base Rate Borrowing may be Converted to a Eurodollar
Borrowing, if the interest rate for such Eurodollar Borrowing would exceed the
Maximum Rate.
3.11 ORDER OF APPLICATION.
(A) Payments and prepayments of the Obligation shall be applied
(except as may be otherwise required by applicable Legal Requirements) in the
order and manner specified in this Agreement; provided, however, if no order is
otherwise specified and no Potential Default or Event of Default exists,
payments and prepayments of the Obligation shall be applied (except as may be
otherwise required by applicable Legal Requirements) first, to fees, second, to
accrued interest then due and payable on the Total Principal Debt, and then to
the remaining Obligation in the order and manner as Borrower may direct.
(B) If a Potential Default or Event of Default exists (or if Borrower
fails to give directions as permitted under SECTION 3.11(A)), any payment or
prepayment (including proceeds from the exercise of any rights) shall be applied
to the Obligation in the following order: (i) to the ratable payment of all
fees, expenses, and indemnities for which the Credit Parties have not been paid
or reimbursed in accordance with the Loan Documents; (ii) to the ratable payment
of accrued and unpaid interest on the
34
Total Principal Debt; (iii) to the ratable payment of any reimbursement
obligation with respect to any LC issued pursuant to the Facility which is due
and payable and which remains unfunded by any Borrowing under the Facility;
provided that such payments shall be allocated ratably among Administrative
Agent and Lenders which have funded their participation in such LC; (iv) to the
ratable payment of the Total Principal Debt; (v) as a deposit with
Administrative Agent, for the benefit of the Credit Parties, as security for,
and to provide for the payment of, any reimbursement obligations, if any,
thereafter arising with respect to any issued and outstanding LCs issued
pursuant to the Facility; and (vi) to the payment of the remaining Obligation in
the order and manner Required Lenders deem appropriate.
(C) Subject to the provisions of SECTION 13 and provided that
Administrative Agent shall not in any event be bound to inquire into or to
determine the validity, scope, or priority of any interest or entitlement of any
Credit Party and may suspend all payments or seek appropriate relief (including
instructions from Required Lenders or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or distribution
contemplated hereby, Administrative Agent shall promptly distribute such amounts
to each Credit Party in accordance with the Agreement and the related Loan
Documents.
3.12 RIGHT OF SET-OFF; ADJUSTMENTS.
(A) SET-OFF. Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its Affiliates) is hereby authorized
(subject to the prior written consent of Administrative Agent) at any time and
from time to time, to the fullest extent permitted by applicable Legal
Requirements, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender (or any of its Affiliates) to or for the credit or
the account of Borrower against any and all of the obligations of Borrower now
or hereafter existing under this Agreement and the Note held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify Borrower after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this SECTION 3.12(A) are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
(B) SHARING OF PAYMENTS. If any Lender (a "BENEFITTED LENDER") shall
at any time receive any payment of all or part of the Borrowings owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Borrowings owing to it, or interest thereon, then
such benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Borrowings
owing to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with all Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such benefited
Lender, then such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this SECTION 3.12(B) may, to the fullest extent permitted by
applicable Legal Requirements, exercise all of its
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rights of payment (including the right of set-off) with respect to such
participation as fully as if such Person were the direct creditor of Borrower in
the amount of such participation.
3.13 BOOKING BORROWINGS. To the extent permitted by all Legal Requirements,
any Lender may make, carry, or transfer its Borrowings at, to, or for the
account of any of its branch offices or the office of any of its Affiliates;
provided that no Affiliate shall be entitled to receive any greater payment
under SECTION 4 than the transferor Lender would have been entitled to receive
with respect to such Borrowings.
SECTION 4 CHANGE IN CIRCUMSTANCES.
4.1 INCREASED COST AND REDUCED RETURN.
(A) CHANGE IN LEGAL REQUIREMENTS. If, after the date hereof, the
adoption of any applicable Legal Requirement, or any change in any applicable
Legal Requirement, or any change in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority:
(I) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurodollar
Borrowing, its Note, or its obligation to make Eurodollar Borrowings,
or change the basis of taxation of any amounts payable to such Lender
(or its Applicable Lending Office) under this Agreement or its Note in
respect of any Eurodollar Borrowings (other than taxes imposed on the
overall net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office);
(II) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitment of
such Lender hereunder; or
(III) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Borrowings or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Borrowings, then Borrower
shall pay to such Lender on demand such amount or amounts as will compensate
such Lender for such increased cost or reduction. If any Lender requests
compensation by Borrower under this SECTION 4.1(A), then Borrower may, by notice
to such Lender (with a copy to Administrative Agent), suspend the obligation of
such Lender to make or Continue Eurodollar Borrowings, or Convert all Eurodollar
Borrowings into Base Rate Borrowings, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of SECTION
4.4 shall be applicable); provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
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(B) CAPITAL ADEQUACY. If, after the date hereof, any Lender shall have
determined that the adoption of any applicable Legal Requirement regarding
capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of such Lender's obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(C) NOTICE. Each Lender shall promptly notify Borrower and
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
SECTION 4.1 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this SECTION 4.1 shall furnish to
Borrower and Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
4.2 LIMITATION ON TYPES OF BORROWINGS. If on or prior to the first (1st)
day of any Interest Period for any Eurodollar Borrowing:
(A) Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
(B) Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Eurodollar Rate
will not adequately and fairly reflect the cost to Lenders of funding Eurodollar
Borrowings for such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, Lenders shall be under no obligation to make additional Eurodollar
Borrowings, Continue any Eurodollar Borrowings, or to Convert any Base Rate
Borrowings to Eurodollar Borrowings and Borrower shall, on the last day(s) of
the then-current Interest Period(s) for the outstanding Eurodollar Borrowings,
either prepay such Borrowings or Convert such Borrowings into Base Rate
Borrowings in accordance with the terms of this Agreement.
4.3 ILLEGALITY. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Borrowings hereunder, then such
Lender shall promptly notify Administrative Agent and Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Borrowings and to Convert
Base Rate Borrowings into Eurodollar Borrowings shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Borrowings (in
which case the provisions of SECTION 4.4 shall be applicable).
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4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make or
Continue Eurodollar Borrowings or to Convert Base Rate Borrowings into
Eurodollar Borrowings shall be suspended pursuant to SECTIONS 4.1, 4.2, or 4.3,
then such Lender's Eurodollar Borrowings shall be automatically Converted into
Base Rate Borrowings on the last day(s) of the then current Interest Period(s)
for all Eurodollar Borrowings (or, in the case of a Conversion required by
SECTION 4.3, on such earlier date as such Lender may specify to Borrower with a
copy to Administrative Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3
that gave rise to such Conversion no longer exist:
(A) to the extent that such Lender's Eurodollar Borrowings have been
so Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Borrowings shall be applied instead to its
Base Rate Borrowings; and
(B) all Borrowings that would otherwise be made or Continued by such
Lender as Eurodollar Borrowings shall be made or Continued instead as Base Rate
Borrowings, and all Borrowings of such Lender that would otherwise be Converted
into Eurodollar Borrowings shall be Converted instead into (or shall remain as)
Base Rate Borrowings.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 that gave rise to
the Conversion of such Lender's Eurodollar Borrowings pursuant to this SECTION
4.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Borrowings made by
other Lenders are outstanding, then such Lender's Base Rate Borrowings shall be
automatically Converted, on the first (1st) day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Borrowings held
by Lenders are held Pro Rata (as to principal amounts, Types, and Interest
Periods).
4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to
such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense (herein
called a "CONSEQUENTIAL LOSS") incurred by it as a result of:
(A) any payment, prepayment, or Conversion of a Eurodollar Borrowing
for any reason (including the acceleration of the Obligation pursuant to SECTION
11.1) on a date other than the last day of the Interest Period for such
Borrowing; or
(B) any failure by Borrower for any reason (including the failure of
any condition precedent specified in SECTION 7 to be satisfied) to borrow,
Convert, Continue, or prepay a Eurodollar Borrowing on the date for such
borrowing, Conversion, Continuation, or prepayment specified in the relevant
Borrowing Notice.
4.6 TAXES.
(A) Any and all payments by Borrower to or for the account of any
Credit Party hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any and all present or future Taxes,
excluding, in the case of each Credit Party, Taxes based on or measured by its
income, and franchise taxes imposed on it, by the jurisdiction under the Legal
Requirements of which
38
such Credit Party (or its Applicable Lending Office) is organized or any
political subdivision thereof (such income and franchise Taxes being "EXCLUDED
TAXES"). If Borrower shall be required by any Legal Requirement to deduct any
Taxes from or in respect of any sum payable under this Agreement or any other
Loan Document to any Credit Party, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 4.6) such Credit Party
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with all Legal Requirements.
(B) In addition, Borrower agrees to pay any and all present or future
stamp or documentary Taxes and any other excise or property Taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "OTHER TAXES").
(C) Borrower agrees to indemnify each Credit Party for the full amount
of Taxes (other than Excluded Taxes) and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this SECTION 4.6) paid by such Credit Party (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(D) Each Lender organized under the Legal Requirements of a
jurisdiction outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if requested
in writing by Borrower or Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide Borrower and Administrative Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Tax Code), certifying that such
Lender is entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.
(E) For any period with respect to which a Lender has failed to
provide Borrower and Administrative Agent with the appropriate form pursuant to
SECTION 4.6(D) (unless such failure is due to a change in any Legal Requirement
occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under SECTIONS
4.6(A) or (B) with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes (other than Excluded
Taxes) because of its failure to deliver a form required hereunder, Borrower
shall take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
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(F) If Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this SECTION 4.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(G) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes, Borrower shall furnish to Administrative Agent the original or a
certified copy of a receipt evidencing such payment.
(H) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
SECTION 4.6 shall survive the termination of the Total Commitment and the
payment in full of the Notes.
SECTION 5 FEES.
5.1 TREATMENT OF FEES. Except as otherwise provided by any Legal
Requirement, the fees described in this SECTION 5: (a) do not constitute
compensation for the use, detention, or forbearance of money; (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement; (c) shall be payable in accordance with SECTION 3.1; (d) shall
be non-refundable; (e) shall, to the fullest extent permitted by all Legal
Requirements, bear interest, if not paid when due, at the Default Rate; and (f)
shall be calculated on the basis of actual number of days (including the first
day but excluding the last day) elapsed, but computed as if each calendar year
consisted of 360 days.
5.2 FEES OF ADMINISTRATIVE AGENT. Borrower shall pay to Administrative
Agent the fees specified in the letter agreement between Administrative Agent
and Borrower, which fees shall be for the account of Administrative Agent and
for the account of the Credit Parties as shall be agreed between Administrative
Agent and each other Credit Party.
5.3 LC FEES. Borrower shall pay to Administrative Agent, for the ratable
benefit of Lenders, in accordance with their respective Pro Rata Parts, a fee
for each LC, payable in installments in arrears, so long as such LC remains
outstanding. Such installments shall be paid for the period from and including
the date of issuance of the applicable LC to but excluding the next quarterly
payment date (as hereinafter specified), and thereafter for the period from and
including such quarterly payment date to but excluding the next quarterly
payment date or (if earlier) the expiry date of such LC. Such installments shall
be paid on the last Business Day of each March, June, September, and December.
Each such installment shall be in an amount equal to the product of (a) the
Applicable Margin for Eurodollar Borrowings in effect on the date of payment of
such fee (and applied on a per annum basis) times (b) the face amount of such
LC, and pro rated (in accordance with SECTION 5.1(F)) for the period for which
such installment is due.
5.4 LC ISSUANCE AND FRONTING FEES. Borrower shall pay Administrative Agent,
as the issuer of LCs and for the individual account of Administrative Agent, an
LC issuance and fronting fee for each LC, payable in installments in arrears, so
long as such LC remains outstanding. Such installments shall be paid for the
period from and including the date of issuance of the applicable LC, to but
excluding the next quarterly payment date (as hereinafter specified), and
thereafter for the period from and including such quarterly payment date to but
excluding the next quarterly payment date or (if earlier) the expiry date of
such LC. Such installments shall be paid on the last Business Day of each March,
June,
40
September, and December. Each such installment shall be in an amount equal to
the product of (a) 12.5 basis points (0.125%) per annum times (b) the face
amount of such LC, and pro rated (in accordance with SECTION 5.1(F)) for the
period for which such installment is due. In addition, Borrower shall pay to
Administrative Agent, for its individual account, standard administrative
charges for LC amendments provided for in SECTION 2.2(C).
5.5 COMMITMENT FEES. Following the Closing Date, Borrower shall pay to
Administrative Agent, for the ratable account of Lenders, a commitment fee,
payable in installments in arrears, on the last Business Day of each March,
June, September, and December and on the Maturity Date. Each installment shall
be, in an amount equal to the product of (a) daily Unused Commitment times (b)
(i) 37.5 basis points (0.375%) at all times during which the Unused Commitment
is equal to or greater than fifty percent (50%) of the Total Commitment and (ii)
25 basis points (0.25%) at all times during which the Unused Commitment is less
than fifty percent (50%) of the Total Commitment, in each case during the period
from and including the last payment date to and excluding the payment date for
such installment.
SECTION 6 GUARANTIES AND COLLATERAL.
6.1 SUBSIDIARY GUARANTY. Pursuant to the Subsidiary Guaranty, each
Subsidiary Guarantor shall unconditionally guarantee in favor of Administrative
Agent on behalf of the Lenders the full payment and performance of the
Obligation; provided that if any Subsidiary Guarantor hereunder is no longer
required to be a Subsidiary Guarantor pursuant to the definition thereof, then,
upon the request of Borrower, Administrative Agent shall, so long as no
Potential Default or Event of Default exists or would result therefrom, release
such Subsidiary Guarantor from the Subsidiary Guaranty pursuant to a release in
form and substance reasonably acceptable to Administrative Agent and Borrower.
6.2 COLLATERAL. As more fully described in the Security Documents, Borrower
shall cause each Obligor holding title to a Collateral Property to grant to
Administrative Agent, for the ratable benefit of the Lenders, as security for
the payment and performance of the Obligation, a valid, enforceable, perfected,
first priority, and only Lien on and to the Collateral Property (subject to
Permitted Liens), together with assignments of all Rents, Leases, Management
Agreements, operating agreements, and other contracts related to the Collateral
Property.
SECTION 7 CONDITIONS PRECEDENT.
7.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not become
effective, and Lenders shall not be obligated to make any Credit Extension,
unless the following conditions precedent are satisfied on or before the Closing
Date:
(A) BORROWER DOCUMENTS. Borrower shall deliver or cause to be
delivered to Administrative Agent the following, each, unless otherwise noted,
dated as of the Closing Date:
(I) certified copies of its Constituent Documents, together with
a good standing certificate or its equivalent from the Secretary of
State of the state of its incorporation and each other state in which
it is qualified as a foreign corporation to do business, each dated a
recent date prior to the Closing Date;
41
(II) an Officer's Certificate of Borrower certifying (A) its
Constituent Documents, (B) resolutions of its Board of Directors
approving and authorizing the execution, delivery, and performance of
this Agreement and the other Loan Documents, certified as of the
Closing Date as being in full force and effect without modification or
amendment, and (C) signatures and incumbency of its officers executing
this Agreement and the other Loan Documents;
(III) executed originals of this Agreement, the Notes, the
Subsidiary Guaranty, the Security Documents, and the other Loan
Documents to be executed by Borrower;
(IV) evidence as of a recent date prior to the Closing Date that
all insurance required to be maintained pursuant to the Loan Documents
has been obtained and is in effect;
(V) evidence that seventy-five percent (75%) or more of the
Consolidated Debt as of June 30, 2006 is subject to a fixed rate of
interest by the terms of such Debt, or pursuant to Interest Rate
Hedging Arrangements with respect to such Debt; and
(VI) such other documents as Administrative Agent may reasonably
request.
(B) SUBSIDIARY GUARANTORS. Borrower shall deliver or cause to be
delivered to Administrative Agent the following with respect to each Subsidiary
Guarantor, each, unless otherwise noted, dated as of the Closing Date:
(I) certified copies of its Constituent Documents, together with
a good standing certificate or its equivalent from its jurisdiction of
incorporation, formation, or organization and of its principal place
of business, dated a recent date prior to the Closing Date;
(II) an Officer's Certificate of each Subsidiary Guarantor
certifying (A) its Constituent Documents, (B) resolutions of its Board
of Directors approving and authorizing the execution, delivery, and
performance of the Loan Documents to which it is a party, certified as
of the Closing Date as being in full force and effect without
modification or amendment, and (C) signatures and incumbency of its
officers executing the Loan Documents to which it is a party;
(III) executed originals of the Loan Documents to which it is a
party; and
(IV) such other documents as Administrative Agent may reasonably
request.
(C) INITIAL COLLATERAL PROPERTY DOCUMENTS. Administrative Agent shall
have received the following:
(I) (A) a survey of the Initial Collateral Property and
improvements thereon satisfactory to Administrative Agent and the
Title Company; and (B) a flood insurance policy in an amount required
by Administrative Agent, but in no event less than the amount
sufficient to meet the requirements of applicable law and the Flood
Disaster Protection Act of 1973, or evidence satisfactory to
Administrative Agent that none of the Initial Collateral Property is
located in a flood hazard area;
42
(II) with respect to the Initial Collateral Property: true and
correct copies of each Existing Lease, and any guarantees thereof;
(III) evidence satisfactory to Administrative Agent that no
portion of the Initial Collateral Property is "wetlands" under any
applicable Legal Requirement and the Initial Collateral Property does
not contain nor is within or near any area designated as a hazardous
waste site by any Governmental Authority, that the Initial Collateral
Property or any adjoining property does not contain or has ever
contained any Hazardous Material under any Legal Requirement
pertaining to health or the environment, and that the Initial
Collateral Property or any use or activity thereon does not violate or
is or could be subject to any response, remediation, clean up, or
other obligation under any Legal Requirement pertaining to health or
the environment including without limitation, an Environmental Audit
of the Initial Collateral Property, made within thirty (30) days prior
to the Closing Date, complying with Administrative Agent's established
guidelines, showing that there is no evidence of any Hazardous
Material which has been generated, treated, stored, released, or
disposed of in the Initial Collateral Property, and such additional
evidence as may be required by Administrative Agent. All reports,
drafts of reports, and recommendations, whether written or oral, from
such engineering firm shall be made available and communicated to
Administrative Agent;
(IV) (A) evidence that the Initial Collateral Property abuts and
has fully adequate direct and free access to one or more public
streets, dedicated to public use, fully installed and accepted by the
appropriate Governmental Authority, that all fees, costs and expenses
of the installation and acceptance thereof have been paid in full, and
that there are no restrictions on the use and enjoyment of such
streets which would adversely affect the Initial Collateral Property;
(B) evidence that all applicable zoning ordinances, restrictive
covenants, and Legal Requirements affecting the Initial Collateral
Property permit the use for which the Initial Collateral Property is
intended and have been or will be complied with without the existence
of any variance, non-complying use, nonconforming use or other special
exception; (C) evidence that the Initial Collateral Property and
Improvements comply and will comply with all Legal Requirements
regarding subdivision and platting and would so comply if the Initial
Collateral Property and the Improvements thereon were conveyed as a
separate parcel; and (D) evidence of compliance by Initial Collateral
Property Owner and the Initial Collateral Property, and any proposed
construction, use and occupancy of the Improvements, with such other
applicable Legal Requirements as Administrative Agent may request,
including all Legal Requirements regarding access and facilities for
handicapped or disabled persons including, without limitation and to
the extent applicable, The Federal Architectural Barriers Act (42
U.S.C. Section 4151 et seq.), The Fair Housing Amendments Act of 1988
(42 U.S.C. Section 3601 et seq.), The Americans With Disabilities Act
of 1990 (42 U.S.C. Section 12101 et seq.), The Rehabilitation Act of
1973 (29 U.S.C. Section 794), and any applicable state requirements;
(V) evidence satisfactory to Administrative Agent (A) of the
identity of all taxing authorities and utility districts (or similar
authorities) currently exercising ad valorem or real property taxing
or assessment jurisdiction over the Initial Collateral Property or any
portion thereof; (B) that all taxes, standby fees and any other
similar charges have been paid, and (C) that the Initial Collateral
Property is a separate tax lot or lots with separate assessment or
assessments of the Initial Collateral Property and Improvements,
independent of any other improvements and that the Initial Collateral
Property is a separate legally subdivided parcel;
43
(VI) executed, acknowledged, and/or sworn to as required
counterparts of the Mortgage covering the Initial Collateral Property,
which shall have been delivered to the Title Company and released for
recordation in the official records of the city or county in which the
Initial Collateral Property is located, and UCC-1 financing statements
which shall have been furnished for filing in all filing offices that
Administrative Agent may require;
(VII) Title Insurance policy promulgated by the Legal
Requirements of the state in which the Initial Collateral Property is
located in the amount of the Total Commitment plus any other amount
secured by the applicable Mortgage;
(VIII) (A) evidence that immediately prior to the Closing Date
and as of the time the Mortgage covering the Initial Collateral
Property will be filed for record: (1) no contract, or memorandum
thereof, for construction, design, surveying, or any other service
relating to the Initial Collateral Property has been filed for record
in the county where the Initial Collateral Property is located; and
(2) no mechanic's or materialman's Lien claim or notice, lis pendens,
judgment, or other claim or encumbrance against the Initial Collateral
Property has been filed for record in the county where the Initial
Collateral Property is located or in any other public record which by
any Legal Requirement provides notice of claims or encumbrances
regarding the Initial Collateral Property; (B) a certificate or
certificates of a reporting service acceptable to Administrative
Agent, reflecting the results of searches made not earlier than
forty-five (45) days prior to the Closing Date, (1) of the central and
local Uniform Commercial Code records, showing no filings against any
of the collateral for the Obligation or against Initial Collateral
Property Owner otherwise except as consented to by Administrative
Agent; and (2) if required by Administrative Agent, of the appropriate
judgment and tax Lien records, showing no outstanding judgment or tax
Lien against Initial Collateral Property Owner;
(IX) to the extent reasonably deemed necessary by Administrative
Agent, an executed REA estoppel letter from each party to any REA for
the Initial Collateral Property;
(X) a true and correct copy of each Management Agreement with
respect to the Initial Collateral Property;
(XI) a true and correct copy of each Franchise Agreement;
(XII) an Acceptable Appraisal of the Initial Collateral Property;
(XIII) Uniform Commercial Code searches covering Initial
Collateral Property Owner, as debtor, and showing no Liens on any of
such owner's assets (other than Permitted Liens);
(XIV) A Collateral Property Budget for the Initial Collateral
Property;
(XV) an Engineer's Audit with respect to the Initial Collateral
Property;
(XVI) a seismic survey with respect to the Initial Collateral
Property, commissioned by and addressed to Administrative Agent,
conducted by a qualified engineering firm acceptable to Administrative
Agent, and in form, scope and substance acceptable to Administrative
Agent;
44
(XVII) an Insurance Audit; and
(XVIII) such other documents as Administrative Agent may
reasonably request.
(D) OPINIONS OF COUNSEL FOR OBLIGORS. The Credit Parties and their
respective counsel shall have received originally executed copies of a favorable
written opinion of counsel for Obligors, addressed to the Credit Parties, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date, and setting forth substantially the
matters in the opinions designated in EXHIBIT D and as to such other matters as
Administrative Agent, acting on behalf of the Credit Parties, may reasonably
request.
(E) FEES. Borrower shall have paid to Administrative Agent, for
distribution (as appropriate) to the Credit Parties, the fees payable on the
Closing Date referred to in SECTION 5.
(F) COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
(G) NO MATERIAL ADVERSE EVENT. No Material Adverse Event has occurred
since June 30, 2006.
7.2 CONDITIONS TO ALL CREDIT EXTENSION. The obligations of the Credit
Parties to make each Credit Extension (including the initial Credit Extension)
are subject to the following conditions precedent:
(A) NOTICE OF BORROWING; NOTICE OF LC. Administrative Agent shall have
received, (i) in the case of a Borrowing, in accordance with the provisions of
SECTION 2.1, an originally executed Notice of Borrowing, (b) in the case of an
LC, in accordance with SECTION 2.2, a Notice of LC, and (c) in the case of a
Swing Line Loan, in accordance with the provisions of SECTION 2.5, an originally
executed Notice of Borrowing.
(B) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. As of
the date of such Credit Extension, the representations and warranties in Loan
Documents are true, correct, and complete in all material respects (unless they
speak to a specific date or are based on facts which have changed by
transactions expressly contemplated or permitted by this Agreement).
(C) NO DEFAULT. No Potential Default or Event of Default exits or
would be caused by the making of such Credit Extension.
(D) NO INJUNCTION OR RESTRAINING ORDER. No order, judgment, or decree
of any Governmental Authority shall purport to enjoin or restrain any Credit
Party from making such Credit Extension.
45
(E) NO VIOLATION. The making of such Credit Extension shall not
violate any Legal Requirement, including Regulation T, Regulation U, or
Regulation X of the Board of Governors of the Federal Reserve System.
(F) OTHER MATTERS. All matters related to such Credit Extension must
be satisfactory to Required Lenders and their respective counsel in their
reasonable determination, and upon the reasonable request of Administrative
Agent, Borrower shall deliver to Administrative Agent evidence substantiating
any of the matters in the Loan Documents which are necessary to enable Borrower
to qualify for such Credit Extension.
Each condition precedent in this Agreement is material to the transactions
contemplated in this Agreement, and time is of the essence in respect of each
thereof.
SECTION 8 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
the Credit Parties that, except as disclosed in the Schedule of Exceptions
attached to this Agreement as SCHEDULE 8, the following representations and
warranties are true and correct:
8.1 PURPOSE OF CREDIT FACILITY. Borrower will use all proceeds of Credit
Extensions (or will lend such proceeds to, and/or contribute such proceeds to
the capital of, one or more of the Companies to use) for one or more of the
following: (a) to finance Permitted Acquisitions; (b) to finance Capital
Expenditures of the Companies; (c) for working capital; and (d) other lawful
corporate purposes of the Companies.
8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each (a)
Obligor is duly organized, validly existing, and in good standing under the
Legal Requirements of its jurisdiction of organization and (b) except as is not
reasonably likely to result in a Material Adverse Event, each other Company is
duly organized, validly existing, and in good standing under the Legal
Requirements of its jurisdiction of organization (all such jurisdictions
referenced in CLAUSES (A) and (B) being identified on SCHEDULE 8, as
supplemented and modified in writing from time to time to reflect any changes to
such SCHEDULE as a result of transactions permitted by the Loan Documents).
Except as is not reasonably likely to result in a Material Adverse Event, each
Company is duly qualified to transact business and is in good standing in each
jurisdiction (other than its jurisdiction of organization) where the nature and
extent of its business and properties require the same. Except as is not
reasonably likely to result in a Material Adverse Event, each Company possesses
all the Authorizations, franchises, permits, licenses, certificates of
compliance, and approvals and grants of authority necessary or required in the
conduct of its respective business, and the same are valid, binding,
enforceable, and subsisting without any defaults thereunder or enforceable
adverse limitations thereon and are not subject to any proceedings or claims
opposing the issuance, development, or use thereof or contesting the validity
thereof. Except as is not reasonably likely to result in a Material Adverse
Event, no authorization, consent, approval, waiver, license, or formal
exemptions from, nor any filing, declaration, or registration with, any
Governmental Authority, or non-governmental entity, under the terms of contracts
or otherwise, is required by reason of or in connection with the execution and
performance of the Loan Documents by each Obligor.
8.3 SUBSIDIARIES; CAPITAL STOCK. The Companies have no Subsidiaries except
as disclosed on SCHEDULE 8 (as supplemented and modified in writing from time to
time to reflect any changes to such SCHEDULE as a result of transactions
permitted by the Loan Documents). All of the outstanding Stock of each
Subsidiary is duly authorized, validly issued, fully paid, and nonassessable and
is owned of record
46
and beneficially as set forth on SCHEDULE 8 (as supplemented and modified in
writing from time to time to reflect any changes to such SCHEDULE as a result of
transactions permitted by the Loan Documents), free and clear of any Liens,
restrictions, claims, or rights of another Person, other than Permitted Liens,
and none of such Stock owned by any Company is subject to any restriction on
transfer thereof except for restrictions imposed by securities Legal
Requirements and general corporate Legal Requirements. No Company has
outstanding any warrant, option, or other right of any Person to acquire any of
its Stock. All of the outstanding Stock in Borrower has been validly issued, and
is fully paid and nonassessable.
8.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by each
Obligor of each Loan Document to which it is a party and the performance by such
Obligor of its obligations thereunder (a) are within the corporate, partnership
or limited liability company power of such Obligor, (b) have been duly
authorized by all necessary corporate, partnership or limited liability company
action on the part of such Obligor, (c) require no action by or in respect of,
or filing with, any Governmental Authority, which action or filing has not been
taken or made on or prior to the Closing Date (or if later, the date of
execution and delivery of such Loan Document), (d) will not violate any
provision of the Constituent Documents of any Company, (e) will not violate any
provision of any Legal Requirement applicable to any Company, other than such
violations which individually or collectively are not reasonably likely to
result in a Material Adverse Event, (f) will not violate any material written or
oral agreements, contracts, commitments, or understandings to which any Company
is a party, other than such violations which are not reasonably likely to result
in a Material Adverse Event, or (g) will not result in the creation or
imposition of any Lien on any asset of any Company (other than pursuant to the
Loan Documents).
8.5 BINDING EFFECT. Upon execution and delivery by all parties thereto,
each Loan Document will constitute a legal, valid, and binding obligation of
each Obligor that is a party thereto, enforceable against each such Obligor in
accordance with its terms, except as enforceability may be limited by applicable
Debtor Relief Laws and general principles of equity.
8.6 FINANCIAL STATEMENTS. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated financial condition, results of operations, and cash flows of the
Companies as of and for the portion of the fiscal year ending on the date or
dates thereof (subject only to normal year-end audit adjustments). There were no
material liabilities, direct or indirect, fixed or contingent, of the Companies
as of the date or dates of the Current Financials which are required under GAAP
to be reflected therein or in the notes thereto, and are not so reflected.
Except for transactions directly related to, or specifically contemplated by,
the Loan Documents, there have been no changes in the consolidated financial
condition of the Companies from that shown in the Current Financials after such
date which is reasonably likely to result in a Material Adverse Event, nor has
any Company incurred any liability (including any liability under any
Environmental Law), direct or indirect, fixed or contingent, after such date
which is reasonably likely to result in a Material Adverse Event.
8.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to, or aware
of the threat of, any Litigation which is reasonably likely to be determined
adversely to any Company, and, if so adversely determined, is reasonably likely
(individually or collectively with other Litigation) to result in a Material
Adverse Event. There are no outstanding orders or judgments for the payment of
money in excess of $2,500,000 (individually or collectively) or any warrant of
attachment, sequestration, or similar proceeding against the assets of any
Company having a value (individually or collectively) of $2,500,000 or more
which are not either (a) stayed on appeal, or (b) being contested in good faith
by appropriate proceedings diligently conducted, and against which reserves or
other provisions required by GAAP have
47
been made. There are no formal complaints, suits, claims, investigations, or
proceedings initiated at or by any Governmental Authority pending or threatened
by or against any Company which are reasonably likely to result in a Material
Adverse Event, nor any judgments, decrees, or orders of any Governmental
Authority outstanding against any Company that are reasonably likely to result
in a Material Adverse Event.
8.8 TAXES. All Tax returns of each Company required to be filed have been
filed (or extensions have been granted) prior to delinquency, except for any
such returns for which the failure to so file is not reasonably likely to result
in a Material Adverse Event, and all Taxes imposed upon each Company which are
due and payable have been paid prior to delinquency, other than Taxes (a) that
are being contested in good faith by appropriate proceedings diligently
conducted, and against which reserves or other provisions required by GAAP have
been made, or (b) for which nonpayment thereof is not reasonably likely to
result in a Material Adverse Event.
8.9 ENVIRONMENTAL MATTERS. Each Company has conducted a review of the
effect of Environmental Laws and any claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations, and properties, and as a result thereof each Company has
reasonably concluded that such Environmental Laws and any such claims could not,
individually or in the aggregate, reasonably be expected to cause a Material
Adverse Event.
8.10 EMPLOYEE BENEFIT PLANS. Except as is not reasonably likely to result
in a Material Adverse Event (a) no Employee Plan has incurred an accumulated
funding deficiency, as defined in Section 302 of ERISA and Section 412 of the
Tax Code, (b) neither Borrower nor any ERISA Affiliate has incurred material
liability which is currently due and remains unpaid under Title IV of ERISA to
the PBGC or to an Employee Plan in connection with any such Employee Plan, (c)
neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) Borrower has not engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Tax Code), and (e) no Reportable Event has occurred. Except as is not
reasonably likely to result in a Material Adverse Event, the present value of
all benefit liabilities within the meaning of Title IV of ERISA under each
Employee Plan (based on those actuarial assumptions used to fund such Employee
Plan) did not, as of the last annual valuation date for the plan year of such
Plan, exceed the value of the assets of such Employee Plan, and the total
present values of all benefit liabilities within the meaning of Title IV of
ERISA of all Employee Plans (based on the actuarial assumptions used to fund
each such Plan) did not, as of the respective annual valuation dates for the
plan year of each such Plan, exceed the value of the assets of all such plans.
8.11 PROPERTIES; LIENS. Each Company has good and marketable title to all
its property reflected on the Current Financials, except for property that (a)
that is obsolete, or (b) has been disposed of in the ordinary course of business
or as otherwise permitted by the Loan Documents. Except for Permitted Liens,
there is no Lien on any on any of the Collateral Properties, and the execution,
delivery, performance, or observance of the Loan Documents will not require or
result in the creation of any Lien on such property. Each Obligor holding title
to a Collateral Property will preserve its title to such Collateral Property,
will forever warrant and defend the same to Lenders, and will forever warrant
and defend the validity and priority of the Liens of the Loan Documents with
respect to each such Collateral Property against the claims of all Persons
whomsoever.
8.12 GOVERNMENT REGULATIONS.
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(A) No Company is currently engaged and will not engage, principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation U. No part of the proceeds of any Credit Extension will be used,
directly or indirectly, for a purpose which violates any Legal Requirement,
including the provisions of Regulations T, U, or X (as enacted by the Board of
Governors of the Federal Reserve System, as amended)
(B) No Company, any Person Controlling a Company, or any Subsidiary
thereof is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
8.13 TRANSACTIONS WITH AFFILIATES. No Company is a party to a transaction
with any of its Affiliates, other than transactions with one or more other
Companies (which may or may not be on an arm's length basis) and transactions
with other Affiliates in the ordinary course of business and upon fair and
reasonable terms not materially less favorable than such Company could obtain or
could become entitled to in an arm's-length transaction with a Person that was
not its Affiliate.
8.14 MATERIAL AGREEMENTS. There exists no default under any contracts
material to the respective business of the Companies that is reasonably likely
to result in a Material Adverse Event. There is no failure of any written or
oral agreements, contracts, commitments, or understandings to which any Company
is a party to be in full force and effect which is reasonably likely to result
in a Material Adverse Event, and no default or potential default exists on the
part of any Company thereunder which is reasonably likely to result in a
Material Adverse Event.
8.15 INSURANCE. Each Company maintains, with financially sound,
responsible, and reputable insurance companies or associations, insurance
concerning its properties and businesses against such casualties and
contingencies and of such types and in such amounts (and with co-insurance and
deductibles) as is customary in the case of same or similar businesses.
8.16 LABOR MATTERS. There are no actual or threatened strikes, labor
disputes, slow downs, walkouts, or other concerted interruptions of operations
by the employees of any Company that are reasonably likely to result in a
Material Adverse Event. Hours worked by and payment made to employees of the
Companies have not been in violation of the Fair Labor Standards Act or any
other Legal Requirements, other than any such violations which are not,
individually or collectively, reasonably likely to result in a Material Adverse
Event. All payments due from any Company on account of employee health and
welfare insurance have been paid or accrued as a liability on its books, other
than any such non-payment which is not, individually or collectively, reasonably
likely to result in a Material Adverse Event.
8.17 SOLVENCY. At the time of each Credit Extension hereunder and on the
date of each Permitted Acquisition, each Obligor is (and after giving effect to
the transactions contemplated by the Loan Documents, any Permitted Acquisition,
and any incurrence of additional Debt, will be) Solvent.
8.18 INTELLECTUAL PROPERTY. Except as is not reasonably likely to result in
a Material Adverse Event, each Company owns or has sufficient and legally
enforceable rights to use all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications, and trade names
necessary to continue to conduct its businesses as heretofore conducted by it,
now conducted by it,
49
and now proposed to be conducted by it. Each Company is conducting its business
without infringement or claim of infringement of any license, patent, copyright,
service mark, trademark, trade name, trade secret, or other intellectual
property right of others, other than any such infringements or claims which, if
successfully asserted against or determined adversely to any Company, are not,
individually or collectively, reasonably likely to result in a Material Adverse
Event.
8.19 COMPLIANCE WITH LEGAL REQUIREMENTS. No Company is in violation of any
Legal Requirements (including Environmental Laws), other than such violations
which are not, individually or collectively, reasonably likely to result in a
Material Adverse Event. No Company has received notice alleging any
non-compliance with any Legal Requirements, except for such non-compliance which
no longer exists or which is not reasonably likely to result in a Material
Adverse Event.
8.20 TRADENAMES. No Company has used or transacted business under any other
corporate or trade name in the five (5) year period preceding the date hereof.
8.21 FULL DISCLOSURE. There is no material fact or condition relating to
the Loan Documents or the financial condition, business, or property of any
Company which is reasonably likely to result in a Material Adverse Event and
which has not been related, in writing, to Administrative Agent. All information
heretofore furnished by any Company to any Credit Party in connection with the
Loan Documents was, and all such information hereafter furnished by any Company
to any Credit Party will be, true and accurate in all material respects or based
on reasonable estimates on the date as of which such information is stated or
certified.
8.22 DRAINAGE/CONDEMNATION/ZONING. The Improvements have not been damaged
and not repaired and are not the subject of any pending or threatened
condemnation or adverse zoning proceeding, except as could not reasonably be
expected to cause a Material Property Event.
8.23 PROPERTY CONDITION. Except as is not reasonably likely to result in a
Material Property Event: (a) to the knowledge of the applicable Obligor, the
Plans are complete in all material respects, contain all necessary detail, are
satisfactory to the applicable Obligor, have been approved by all applicable
Governmental Authorities and comply with all applicable Legal Requirements,
restrictive covenants, rules and regulations; (b) no Collateral Property is part
of a larger tract of property owned by an Obligor, is otherwise included under
any unity of title or similar covenant with other property not owned by an
Obligor, nor fails to constitute a separate tax lot or lots with a separate tax
assessment or assessments for such Collateral Property and the Improvements
related thereto, independent of those for any other property or improvements;
(c) each Collateral Property complies with all Legal Requirements, including all
subdivision and platting requirements, without reliance on any adjoining or
neighboring property; (d) the Improvements comply with all Legal Requirements
regarding access and facilities for handicapped or disabled persons; (e) no
Obligor has directly or indirectly conveyed, assigned or otherwise disposed of
or transferred (or agreed to do so) any development rights, air rights, or other
similar rights, privileges, or attributes with respect to any Collateral
Property, including those arising under any zoning or property use ordinance or
other Legal Requirement; (f) all utility services necessary for the use of the
Collateral Properties and the Improvements and the operation thereof for their
intended purpose are satisfactory; (g) except as otherwise provided for in the
Loan Documents, no Obligor has made a contract or arrangement of any kind the
performance of which by the other party thereto would give rise to a Lien on any
Collateral Property; (h) the current and anticipated use of each Collateral
Property complies with all applicable zoning ordinances, regulations, and
restrictive covenants affecting
50
such Collateral Property without the existence of any variance, non-complying
use, nonconforming use, or other special exception, all use restrictions of any
Governmental Authority having jurisdiction have been satisfied, and no violation
of any Legal Requirement or regulation exists with respect thereto.
8.24 REPRESENTATIONS CONCERNING LEASES.
(a) The Initial Collateral Property Owner has delivered to
Administrative Agent a true and correct copy of each of the Existing Leases and
each guarantee thereof (if any), and no such Existing Lease or guarantee
contains any option to purchase all or any portion of the Initial Collateral
Property or any interest therein or contains any right of first refusal relating
to any sale of the Initial Collateral Property or any portion thereof or
interest therein;
(b) With respect to each additional Collateral Property pledged
pursuant to SECTION 2.7(A)(XI), no lease or guarantee with respect to such
additional Collateral Property contains any option to purchase all or any
portion of such additional Collateral Property or any interest therein or
contains any right of first refusal relating to any sale of such additional
Collateral Property or any portion thereof or interest therein.
8.25 CONDEMNATION. No condemnation or other proceeding has been commenced
or, to Borrower's knowledge, is threatened or contemplated with respect to all
or any portion of any Collateral Property or for the relocation of roadways
providing access to any Collateral Property except where such condemnation or
other proceeding could not reasonably be expected to cause a Material Property
Event.
8.26 CONTRACTS. The copy of any construction, architectural design,
management, brokerage, or contract relating to any Collateral Property furnished
or to be furnished to Administrative Agent is and shall be a true and complete
copy thereof, and that no Obligor's interest therein is subject to any claim,
setoff, or encumbrance.
8.27 RECIPROCAL AGREEMENTS.
(A) No Obligor is currently in default in any respect (nor has any
notice been given or received with respect to an alleged or current default)
under any of the terms and conditions of any REA, and each REA remains
unmodified and in full force and effect except where such failure could not
reasonably be expected to cause a Material Property Event.
(B) All sums due and owing by any Obligor to the other parties to each
REA (or by the other parties to each REA to any Obligor) pursuant to the terms
of such REA, have been paid, are current, and no lien has attached on any
Collateral Property (or threat thereof been made) for failure to pay any of the
foregoing except where such failure could not reasonably be expected to cause a
Material Property Event.
8.28 MANAGEMENT AGREEMENTS. Each Management Agreement with respect to any
Collateral Property is in full force and effect.
8.29 FRANCHISE AGREEMENTS. Each Franchise Agreement with respect to any
Collateral Property is in full force and effect.
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SECTION 9 AFFIRMATIVE COVENANTS. Borrower covenants and agrees to perform,
observe, and comply with each of the following covenants, from the Closing Date
and so long thereafter as Lenders are committed to make any Credit Extensions
under this Agreement and thereafter until the payment in full of all Principal
Debt (and termination of all outstanding LCs, if any) and payment in full of all
other interest, fees, and other amounts of the Obligation then due and owing,
unless Borrower receives a prior written consent to the contrary by
Administrative Agent as authorized by Required Lenders (or all Lenders if
required by SECTION 14.11):
9.1 USE OF PROCEEDS. Borrower shall use the proceeds of all Credit
Extensions only for the purposes represented in SECTION 8.1.
9.2 BOOKS AND RECORDS. Borrower shall, and shall cause each other Company
to, maintain books, records, and accounts necessary to prepare all Financial
Statements in accordance with GAAP.
9.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to be
furnished to Administrative Agent (with sufficient copies for each Lender):
(A) ANNUAL FINANCIAL STATEMENTS. Promptly after preparation, and no
later than one hundred twenty (120) days after the last day of each fiscal year
of Borrower, Financial Statements showing the consolidated financial condition
and results of operations for the Companies as of, and for the year ended on,
such day, in each case setting forth in comparative form the figures for the
preceding fiscal year, accompanied by:
(I) the unqualified opinion of a firm of nationally-recognized
independent certified public accountants, based on an audit using
generally accepted auditing standards, that such Financial Statements
were prepared in accordance with GAAP and present fairly the
consolidated financial condition and results of operations of the
Companies and, if required to be prepared under applicable SEC
regulations, an opinion of such independent certified public
accountants independently assessing the Companies' internal controls
over financial reporting in accordance with Item 308 of SEC Regulation
S-K, Public Company Accounting Oversight Board Auditing Standard No.
2, and Section 404 of Sarbanes-Oxley expressing a conclusion that
contains no statement that there is a material weakness in such
internal controls, except for such material weaknesses as are not
reasonably likely to result in a Material Adverse Event;
(II) a certificate from such accounting firm to Administrative
Agent on behalf of Lenders indicating that during its audit it
obtained no knowledge of any Event of Default or, if it obtained such
knowledge, the nature and period of existence thereof;
(III) a Compliance Certificate; and
(IV) such revised or updated Schedules as are required by
SECTION 9.3(G).
(B) PERIODIC FINANCIAL STATEMENTS. Promptly after preparation, and no
later than sixty (60) days after the last day of each fiscal quarter of Borrower
other than the last fiscal quarter of Borrower's fiscal year, unaudited
Financial Statements showing the consolidated financial condition and results of
operations for the Companies as of, and for the fiscal quarter (and, if
different, for the year-to-date period) ended on, such day, in each case setting
forth in comparative form the figures for
52
the corresponding period(s) of the preceding fiscal year, accompanied by a
Compliance Certificate with respect to such Financial Statements and such
revised or updated Schedules as are required by SECTION 9.3(G).
(C) COMPANIES BUDGET. Promptly upon request by Administrative Agent,
the Companies Budget for the current fiscal year, in the case of a request made
following the first fiscal quarter of the current fiscal year, or for the
preceding fiscal year, in the case of a request made during the first fiscal
quarter of the current fiscal year, accompanied by a certificate executed by a
Responsible Officer, certifying that such Companies Budget was prepared based on
assumptions which Borrower believes are reasonable.
(D) COLLATERAL PROPERTIES BUDGET. On or prior to the end of the first
fiscal quarter of each fiscal year of each Obligor holding title to a Collateral
Property, the Collateral Property Budget for such Collateral Property for such
fiscal year, accompanied by a certificate executed by a Responsible Officer of
such Obligor, certifying that such Collateral Property Budget was prepared based
on assumptions which the Obligor believes are reasonable.
(E) COLLATERAL PROPERTY REPORTS. Promptly after preparation, and no
later than thirty (30) days after the last day of each calendar month,
statements showing the unaudited results of operations for each Collateral
Property calculated for such Collateral Property for such calendar month,
accompanied by a certificate executed by a Responsible Officer of such Obligor,
certifying such statement.
(F) NOTICES OF LITIGATION, DEFAULTS, ETC. Notice, promptly after any
Responsible Officer of Borrower knows or has reason to know of (i) the existence
and status of any Litigation which could reasonably be likely to result in a
Material Adverse Event, or of any order or judgment for the payment of money
which (individually or collectively) is in excess of $2,500,000, or any warrant
of attachment, sequestration, or similar proceeding against the assets of any
Company having a value (individually or collectively) of $2,500,000, (ii) any
material change in any material fact or circumstance represented or warranted in
any Loan Document which could reasonably be likely to result in a Material
Adverse Event, (iii) any Potential Default or Event of Default, specifying the
nature thereof and what action Borrower or any other Company has taken, is
taking, or proposes to take with respect thereto, (iv) the receipt by any
Company of any notice from any Governmental Authority of the expiration without
renewal, termination, material modification or suspension of, or institution of
any proceedings to terminate, materially modify, or suspend, any Authorization
which any Company is required to hold in order to operate its business in
compliance with all Legal Requirements, other than such expirations,
terminations, suspensions, or modifications which individually or in the
aggregate are not reasonably likely to result in a Material Adverse Event, (v)
any federal, state, or local statute, regulation, or ordinance or judicial or
administrative order limiting or controlling the operations of any Company which
has been issued or adopted after the Closing Date and which could reasonably be
likely to result in a Material Adverse Event, (vi) the receipt by any Company of
notice of any violation or alleged violation of any Environmental Law, which
violation or alleged violation could individually or collectively with other
such violations or allegations, reasonably be likely to result in a Material
Adverse Event, (vii) (A) the occurrence of a Reportable Event that, alone or
together with any other Reportable Event, could reasonably be expected to result
in liability of any Company to the PBGC in an aggregate amount exceeding
$2,500,000; (B) any expressed statement in writing on the part of the PBGC of
its intention to terminate any Employee Plan or Plans; (C) Borrower's or an
ERISA
53
Affiliate's becoming obligated to file with the PBGC a notice of failure to make
a required installment or other payment with respect to an Employee Plan; or (D)
the receipt by Borrower or an ERISA Affiliate from the sponsor of a
Multiemployer Plan of either a notice concerning the imposition of withdrawal
liability in an aggregate amount exceeding $2,500,000 or of the impending
termination or reorganization of such Multiemployer Plan, (viii) any litigation,
arbitration, or governmental investigation or proceeding instituted or
threatened against any Collateral Property, and any material development therein
to the extent such litigation, arbitration, or governmental investigation or
proceeding instituted or threatened against any Collateral Property could
reasonably be likely to result in a Material Property Event, (ix) any actual or
threatened condemnation of any material portion of any Collateral Property, any
negotiations with respect to any such taking, or any loss of or substantial
damage to the Collateral Property to the extent such actual or threatened
condemnation could reasonably be likely to result in a Material Property Event,
(x) any notice received by any Obligor with respect to the cancellation,
alteration, or non renewal of any required insurance coverage maintained with
respect to any Collateral Property, (xi) any required and material permit,
license, certificate, or approval with respect to a Collateral Property lapses
or ceases to be in full force and effect, and (xii) any claim from any person
that any Collateral Property, or any use, activity, operation, or maintenance
thereof or thereon, is not in material compliance with any Legal Requirement, if
such claim is reasonably to result in a Material Property Event.
(G) SCHEDULE AND EXHIBIT UPDATES. Each time that Borrower furnishes
its Financial Statements to Administrative Agent pursuant to SECTION 9.3(A) or
SECTION 9.3(B), such revised or updated SCHEDULES as may be necessary or
appropriate to update or correct any of the information or disclosures provided
on any of the SCHEDULES delivered pursuant to this Agreement or any Loan
Documents that are outdated or incorrect in any material respect.
(H) GOVERNMENTAL REPORTS. Upon request by Administrative Agent, true,
correct, and complete copies of any material reports or filings filed by or on
behalf of any Company with any Governmental Authority (including the Securities
and Exchange Commission).
(I) SEC FILINGS. Upon request by Administrative Agent, a true,
correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by
or on behalf of any Company with the Securities and Exchange Commission.
(J) OTHER INFORMATION. Promptly upon request therefor by any Credit
Party, such information (not otherwise required to be furnished under the Loan
Documents) respecting the business affairs, assets, and liabilities of the
Companies, and such opinions, certifications, and documents, in addition to
those mentioned in this Agreement, as are reasonably requested.
9.4 INSPECTIONS AND PROPERTY VISITS. Borrower shall, and shall cause each
Obligor to, upon reasonable notice, allow any Credit Party (or its
Representatives) to inspect any Collateral Properties, and to review reports,
files, and other records related to Collateral Properties and to make and take
away copies thereof, from time to time during reasonable business hours.
Borrower shall, and shall cause each of its Subsidiaries to, upon reasonable
notice, allow any Credit Party (or its Representatives) to visit any of the
other Properties during reasonable business hours.
9.5 TAXES. Borrower shall, and shall cause each other Company to (a)
promptly pay when due any and all Taxes other than (i) Taxes the applicability,
amount, or validity of which is being
54
contested in good faith by appropriate proceedings diligently conducted, and
against which reserves or other provisions required by GAAP have been made, and
in respect of which levy and execution of any lien securing same have been and
continue to be stayed, and (ii) Taxes the nonpayment of which is not reasonably
likely to result in a Material Adverse Event, (b) shall not, directly or
indirectly, use any portion of the proceeds of any Borrowing to pay the wages of
employees unless a timely payment to or deposit with the appropriate
Governmental Authorities of all amounts of Tax required to be deducted and
withheld with respect to such wages is also made, and (c) notify Administrative
Agent immediately if the Internal Revenue Service or any other taxing authority
commences or notifies any Company of its intention to commence an audit or
investigation with respect to any material Taxes of any kind due or alleged to
be due from any Company.
9.6 PAYMENT OF OBLIGATION. Borrower shall pay the Obligation in accordance
with the terms and provisions of the Loan Documents. Borrower shall, and shall
cause each other Company to promptly pay (or renew and extend) all of its
material obligations as the same become due (unless such obligations (other than
the Obligation are being contested in good faith by appropriate proceedings).
9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as otherwise
permitted by SECTION 10.13 and except as is not reasonably likely to result in a
Material Adverse Event, Borrower shall, and shall cause each other Company to,
at all times: (a) maintain its existence and good standing in the jurisdiction
of its organization and its authority to transact business in all other
jurisdictions where it is transacting business; (b) maintain all licenses,
permits, and franchises necessary for its business; (c) keep all of its assets
which are useful in and necessary to its business in good working order and
condition (ordinary wear and tear excepted) and make all necessary repairs
thereto and replacements thereof; and (d) do all things necessary to obtain,
renew, extend, and continue in effect all Authorizations which may at any time
and from time to time be necessary for the Companies to operate their businesses
in compliance with all Legal Requirements.
9.8 INSURANCE.
(A) GENERALLY. Borrower shall, and shall cause each other Company to,
maintain with financially sound, responsible, and reputable insurance companies
or associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates), insurance reasonably acceptable to Administrative Agent concerning
its properties and businesses against casualties and contingencies and of types
and in amounts (and with co insurance and deductibles) as is customary in the
case of similar businesses. At Administrative Agent's request, Borrower shall,
and shall cause each Company to, promptly deliver to Administrative Agent
evidence of insurance for each policy of insurance and evidence of payment of
all premiums. Without limiting the foregoing, to the extent any Company owns any
Collateral Property, such Company will maintain insurance concerning such
Collateral Property of the types and amounts as set forth in SCHEDULE 9.8. In
clarification of the foregoing, in the event a casualty occurs due to any event
that is required to be insured hereunder (e.g., an earthquake), Borrower or such
Company shall continue to maintain at all times the insurance coverage required
with respect to such event, including during the occurrence of an on-going
casualty, settlement of insurance claims after the casualty, and during the
course of any post-event restoration or repairs to such Collateral Property.
Borrower or such Company shall perform the obligations set forth herein and in
the attached SCHEDULE 9.8 as and when required herein or therein, and
Administrative Agent and Lenders shall have the rights and remedies set forth
herein.
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(B) APPLICATION OF PROCEEDS.
(i) Borrower or such other Obligor owning the applicable
Collateral Property shall give prompt notice to Administrative Agent
of any damage, destruction or casualty to the such Collateral Property
or any part thereof, whether or not covered by insurance, the cost of
restoration of which is in excess of $100,000.
(ii) Provided no Event of Default shall have occurred and be
continuing, such Obligor may make a proof of loss and adjust and
compromise any claim under any insurance policy, and such Obligor may
appear in and prosecute any action arising from such insurance policy,
and collect and receive the proceeds of any and all insurance that may
become payable with respect to any damage, destruction or casualty to
such Collateral Property, in each of the foregoing cases, so long as
(A) the cost of the repair or restoration necessitated by such damage,
destruction or casualty, in the reasonable estimate of Administrative
Agent, will not exceed $500,000, and (B) subject to the limitation
that in the event Administrative Agent determines that such Obligor is
not diligently proceeding with any of the foregoing actions,
Administrative Agent shall have the right, but not the obligation, to
revoke such Obligor's right to take any of the foregoing actions by
delivering a notice of same to such Obligor, which revocation shall be
effective immediately upon such Obligor's receipt of such notice, and
to take such actions in such Obligor's stead. Provided no Event of
Default shall have occurred and be continuing, such Obligor shall use
all such proceeds actually received by it to restore or rebuild such
Collateral Property to a condition reasonably satisfactory to
Administrative Agent, but in any event to substantially the same
character and condition as prior to such damage, destruction or
casualty and in compliance with all construction codes and ordinances.
Any insurance proceeds which may remain after payment of all costs and
expenses of such repair and restoration shall be retained by such
Obligor.
(iii) If the cost of restoration or repair of any damage,
destruction or casualty to such Collateral Property, or any part
thereof, in the reasonable estimate of Administrative Agent, will
equal or exceed $500,000, Administrative Agent may collect the
proceeds of any and all insurance (including as set forth in SECTION
9.8(B)(V)) that may become payable with respect thereto (and such
Obligor hereby authorizes and directs any insurance company to make
payments of such proceeds directly to Administrative Agent at
Administrative Agent's request). Any such insurance proceeds shall be
made available to such Obligor for the restoration and repair of the
Collateral Property from time to time as such restoration or repair
progresses, subject to compliance by such Obligor with SECTION 9.21
hereof and to compliance by such Obligor with the following terms and
conditions:
(A) No Event of Default shall have occurred and be
continuing;
(B) such Obligor shall deposit with Administrative Agent
sums in an amount at least equal to the excess, if any, of
Administrative Agent's reasonable estimate of the aggregate costs
and expenses of restoration and repair of such Collateral
Property, over the amount of insurance proceeds payable with
respect to such damage, destruction or casualty, which additional
sums shall be disbursed by Administrative Agent prior to any
disbursements of insurance proceeds;
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(C) if the cost of restoration or repair of such damage,
destruction or casualty to such Collateral Property, or any part
thereof, in the reasonable estimate of Administrative Agent, will
equal or exceed $10,000,000, then Administrative Agent shall have
been provided an Acceptable Appraisal (and Administrative Agent
shall provide such appraisal to Lenders), certifying that upon
completion of the repairs and restoration of the Collateral
Property the outstanding Principal Debt shall not exceed seventy
(70%) percent of the Appraised Value as set forth in the
then-most recent Acceptable Appraisal;
(D) In Administrative Agent's reasonable judgment, the
repairs and renovations can be completed at least twelve (12)
months prior to the Maturity Date;
(E) Administrative Agent shall have received architectural
and/or engineering plans and specifications for all restoration
and repairs and an estimate of the costs and expenses of all such
restoration and repairs, all of which shall be in form reasonably
acceptable to Administrative Agent;
(F) Prior to any disbursement by Administrative Agent, the
following information and documentation shall have been obtained
by such Obligor, at such Obligor's expense, and submitted to
Administrative Agent, which information and documentation shall
be in form and substance reasonably satisfactory to
Administrative Agent: (1) a request for disbursement signed by
such Obligor, accompanied by billing statements, vouchers or
invoices, which request for disbursement shall expressly warrant
that the work with respect to which the advance is requested has
been performed in all material respects in accordance with the
approved plans and specifications for the restoration or repair;
(2) proof that all invoices for labor and materials previously
submitted by such Obligor and approved and reimbursed by
Administrative Agent have been paid, except for those the subject
of the current request for disbursement; (3) Lien waivers for all
payees under previous requests for advances; (4) a report from
such Obligor's architect or, if Administrative Agent shall elect,
such consultant as Administrative Agent shall retain, which shall
specify the percentage of completion of restoration or repair,
shall provide detailed comments on specific work performed since
the date of the last such report, and, if required by
Administrative Agent, an estimate of the cost to complete the
restoration and repair after taking into account the work then
completed; (5) at the request of Administrative Agent, an
endorsement of the Title Insurance Policy, which endorsement
shall show no Liens of record or additional encumbrances not
acceptable to Administrative Agent; (6) copies of the agreements
pursuant to which the restoration or repair shall be done, and
which also shall be reasonably satisfactory to Administrative
Agent as to the party performing the construction obligations
thereunder; (7) an assignment to Administrative Agent for the
benefit of Lenders of all construction and design-professional
contracts (which may be pursuant to the Mortgage), together with
the written consent to such assignments by all parties to such
contracts (which may be included in any such contract); and (8)
such other information and documentation as Administrative Agent
may reasonably request regarding the Improvements and the
restoration or repairs and the cost thereof.
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In the event each of the conditions set forth in CLAUSES (A)
through (E) above is not satisfied within one hundred twenty (120)
days from and after the date of the respective damage, destruction or
casualty, then Administrative Agent may apply the insurance proceeds
actually received by it to the payment of the Obligation in such order
and manner as is set forth herein.
(iv) Prior to application or disbursal of any insurance proceeds
received by Administrative Agent under this SECTION 9.8, and without
limiting the provisions set forth in SECTION 12.10, Administrative
Agent may deduct therefrom any expenses reasonably incurred by
Administrative Agent in connection with the collection or handling of
such proceeds, it being understood and agreed that neither
Administrative Agent nor Lenders shall be, under any circumstances,
liable or responsible for failure to collect, or to exercise diligence
in the collection of, any such proceeds, and upon the request of such
Obligor, Administrative Agent shall provide such Obligor with a
written summary of all expenses deducted from such proceeds.
(v) All proceeds of business interruption (including rental
income), extra expense or other loss of income insurance proceeds
shall also be deposited with Administrative Agent as further security
for the Obligation. Administrative Agent shall disburse such proceeds
at such Obligor's written request from time to time on a monthly basis
to pay for reasonable and necessary expenses of such Collateral
Property incurred in the ordinary course of the ownership, maintenance
and operation of such Collateral Property and in accordance with the
applicable Collateral Property Budget provided that the payment of
such expense is not prohibited by the terms hereof and that no Event
of Default has occurred and is continuing. Upon verification by
Administrative Agent that such Collateral Property has been restored
in accordance with this Agreement and that such Obligor is in
compliance with this SECTION 9.8, provided that no Event of Default
has occurred and is continuing, the remainder, if any, of such
business interruption or other loss of income insurance proceeds shall
be paid to such Obligor. From and after the occurrence and during the
continuation of an Event of Default, such proceeds may, in
Administrative Agent's discretion, be applied to the payment of the
Obligations in such order as Administrative Agent may determine.
(vi) In the event the Mortgage with respect to such Collateral
Property is foreclosed or title to such Collateral Property is
transferred by a deed in lieu of foreclosure, all right, title, and
interest of such Obligor in and to all insurance policies and the
proceeds thereof shall inure to the benefit of and pass to
Administrative Agent.
(vii) So long as the Obligor owning the applicable Collateral
Property is in compliance with its obligations under this SECTION
9.8(B), the damage, destruction or casualty to the Collateral Property
will not be considered an Event of Default under SECTION 11.13(C).
9.9 PRESERVATION AND PROTECTION OF RIGHTS. Borrower shall, and shall cause
each other Company to, perform such acts and duly authorize, execute,
acknowledge, deliver, file, and record any additional agreements, documents,
instruments, and certificates as Administrative Agent or Required Lenders may
reasonably deem necessary or appropriate in order to preserve and protect the
rights of the Credit Parties under any Loan Document.
9.10 ENVIRONMENTAL LAWS. Borrower shall, and shall cause each other Company
to (a) conduct its business so as to comply with all applicable Environmental
Laws in all material respects
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and promptly take corrective action to remedy any material non-compliance with
any Environmental Law, and (b) promptly investigate and remediate any known
Release or threatened Release of any Hazardous Material on any property owned by
any Company or at any facility operated by any Company to the extent and degree
necessary to comply with all Environmental Laws.
9.11 COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall, and shall cause
each other Company to, comply with the provisions of all Legal Requirements
applicable to it, and any material written or oral agreement, contract,
commitment, or understanding to which it is a party, unless the failure to so
comply alone, or when aggregated with all other such non-compliance, could not
reasonably be likely to result in a Material Adverse Event.
9.12 OTHER COLLATERAL PROPERTY INFORMATION. Borrower shall, and shall cause
each Obligor holding title to a Collateral Property to, furnish to
Administrative Agent from time to time upon Administrative Agent's request, each
of the following items with respect to the Collateral Properties: (a) copies of
all contracts, bills of sale, statements, receipts, or other documents under
which an Obligor claims title to any materials, fixtures, or articles of
personal property incorporated or to be incorporated into the Improvements or
subject to the Liens of the Mortgages; and (b) such other information relating
to the Improvements or the Collateral Properties as Administrative Agent may
reasonably request.
9.13 REPORTS AND TESTING. Borrower shall, and shall cause each Obligor
holding title to a Collateral Property to promptly (a) make available to
Administrative Agent upon request copies of all reports, studies, inspections
and tests made on the Collateral Properties, the Improvements, or any materials
to be incorporated into the Improvements, and (b) make such additional tests on
the Collateral Properties, the Improvements, or any materials to be incorporated
into the Improvements as Administrative Agent reasonably requires.
9.14 FF&E RESERVE ACCOUNT.
(A) FUNDING AND INVESTING THE FF&E RESERVE ACCOUNT. In order to
further secure the payment and performance of the Obligation, Borrower shall,
and shall cause each other Obligor holding title to a Collateral Property to,
pledge to Administrative Agent, for the benefit of Lenders, a first priority
Lien in the applicable FF&E Reserve Account pursuant to an Assignment of FF&E
Reserve Account. The FF&E Reserve with respect to each Collateral Property will
be paid to and held in the FF&E Reserve Account and released and applied in
accordance with the terms of this Agreement and the Assignment of FF&E Reserve
Account. Each FF&E Reserve Account shall be in the form of an account, the
credit balances of which, if any, will be invested overnight in interest bearing
deposits, in accordance with Administrative Agent's usual practices and
procedures. Any income from such investments will be deposited to and become a
portion of the applicable FF&E Reserve Account.
(B) DISBURSEMENTS PRIOR TO DEFAULT. So long as no Event of Default has
occurred and is continuing, the applicable Obligor may withdraw funds from the
applicable FF&E Reserve Account by submitting to Administrative Agent a request
signed by a Responsible Officer of such Obligor stating the amount requested and
the proposed uses for such funds. Withdrawals from the applicable FF&E Reserve
Account shall be used solely for the purpose of funding Capital Expenditures
with respect to the applicable Collateral Property in accordance with the
Collateral Property Budget for such Collateral Property. Notwithstanding
anything set forth in this SECTION 9.14 to the contrary, Administrative Agent
shall have sole dominion and control over each FF&E Reserve Account.
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(C) ADMINISTRATIVE AGENT'S RIGHTS UPON DEFAULT. Each Obligor hereby
irrevocably authorizes Administrative Agent, from time to time, upon the
occurrence and during the continuation of an Event of Default, to charge each
FF&E Reserve Account and any other accounts of any Obligor at Administrative
Agent or any other Lender for amounts due to Administrative Agent or Lenders
hereunder or in connection with the Obligation. Neither Administrative Agent nor
any Lender shall be liable for any loss of interest on or any penalty or charge
assessed against funds in, payable on, or credited to any FF&E Reserve Account
as a result of the exercise by Administrative Agent or any Lender of any of its
rights, remedies or obligations under any of the Loan Documents.
9.15 OPERATING ACCOUNTS.
(A) In order to further secure the payment and performance of the
Obligation, each Obligor holding title to a Collateral Property shall pledge to
Administrative Agent, for the benefit of Lenders, a first priority Lien in the
applicable Operating Account pursuant to an Assignment of Operating Account.
Each Obligor holding title to a Collateral Property shall cause all receipts,
revenues, income, profits, rents, issues, accounts and accounts receivable of
such Obligor resulting from the ownership and operation of any such Collateral
Property, and all other receipts, revenues, income, profits, rents, issues,
accounts and accounts receivable of such Obligor, from whatever source (such
amounts to be collectively referred to as the "RECEIPTS"), to be paid and
deposited to the applicable Operating Account.
(B) Unless an Event of Default exists, such Obligor may make
withdrawals from the applicable Operating Account. If an Event of Default has
occurred and is continuing, but Administrative Agent has not notified such
Obligor that Administrative Agent is terminating such Obligor's right to
withdraw funds from such Operating Account, such Obligor may continue to make
withdrawals from such Operating Account, to pay (a) reasonable and necessary
expenses approved in writing by Administrative Agent at the time of withdrawal
(and whether or not previously approved by Administrative Agent in any
Collateral Property Budget), in any case incurred by such Obligor in the
ownership, maintenance and operation of the applicable Collateral Property and
paid to third parties not an Affiliate of Borrower or such Obligor, and (b) the
Obligation.
(C) Except as set forth in SECTION 9.15(B) above, such Obligor shall
not make or allow to be made any withdrawals from such Operating Account or
otherwise use any Receipts following the occurrence and during the continuation
of an Event of Default. Borrower shall cause each and every withdrawal from such
Operating Account to be used for the purpose for which such withdrawal was made
and for no other purpose. Following the occurrence and during the continuation
of an Event of Default, Administrative Agent shall have the rights and remedies
with respect to such Operating Account specified in this Agreement and in any
other Loan Document.
9.16 CONTRACTS. Each Obligor holding title to a Collateral Property shall,
perform all of its obligations under any construction, architectural design,
management, brokerage or contract relating to the Collateral Properties, and
continue to be liable for all with respect thereto.
9.17 CONDEMNATION. Each Obligor holding title to a Collateral Property
shall notify Administrative Agent immediately (of which Administrative Agent
shall promptly notify the Lenders) of any threatened or pending proceeding for
condemnation affecting any Collateral Property or arising out of damage to any
Collateral Property, and the applicable Obligor shall, at its expense,
diligently prosecute
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any such proceedings. Administrative Agent for the benefit of Lenders shall have
the right (but not the obligation) to participate in any such proceeding and to
be represented by counsel of its own choice. Administrative Agent shall be
entitled to receive any and all sums which may be awarded or become payable to
an Obligor for the condemnation of any portion of any Collateral Property for
public or quasi-public use, or by virtue of private sale in lieu thereof, and
any sums which may be awarded or become payable to such Obligor for damages
caused by public works or construction on or near any Collateral Property but
only to the extent of the Obligation. All such sums are hereby assigned to
Administrative Agent for the benefit of Lenders and each Obligor shall, upon
request of Administrative Agent, make, execute, acknowledge, and deliver any and
all additional assignments and documents as may be necessary from time to time
to enable Administrative Agent to collect and receive any such sums.
Administrative Agent may apply all such sums actually received by Administrative
Agent to the payment of the Obligation in such order and manner as is set forth
herein. If any Collateral Property or any part thereof is condemned, so long as
no Event of Default shall have occurred and shall be continuing, and provided
the applicable Obligor promptly files all claims and diligently prosecutes the
condemnation proceeding, such Obligor shall have the right to file, adjust,
settle and prosecute any claim for any such awards or compensation relating to
any such condemnation proceeding; provided, however, such Obligor shall not
agree to any adjustment or settlement of any such claim payable with respect to
any such condemnation proceeding which awards and proceeds are reasonably
estimated by Administrative Agent to be equal to or greater than $500,000; and
provided, further, in the event that Administrative Agent determines that such
Obligor is not diligently prosecuting such claim, Administrative Agent shall
have the right, but not the obligation, to revoke such Obligor's right to
adjust, settle and prosecute any claim for any such awards or compensation
relating to such any such condemnation proceeding by delivering a notice of same
to such Obligor, which revocation shall be effective immediately upon such
Obligor's receipt of such notice and to take such actions in such Obligor's
stead. Notwithstanding the foregoing, if any Collateral Property or any part
thereof is condemned and the awards and proceeds of condemnation are reasonably
estimated by Administrative Agent to equal or exceed $500,000, then such Obligor
authorizes and empowers Administrative Agent, at Administrative Agent's option,
as attorney-in-fact for such Obligor, to commence, appear in and prosecute, in
Administrative Agent's or such Obligor's name, any action or proceeding relating
to any condemnation of any Collateral Property or any portion thereof, to settle
or compromise any claim in connection with such condemnation, to collect and
receive condemnation awards and to deduct Administrative Agent's expenses in the
settlement process. Administrative Agent shall provide such Obligor with a
written summary of all expenses deducted from such awards. If Administrative
Agent elects not to participate in such condemnation proceeding, then such
Obligor shall, at its expense, diligently prosecute any such proceeding. Neither
Administrative Agent nor Lenders shall be, under any circumstances, liable or
responsible for failure to collect, or exercise diligence in the collection of,
any of such sums. Any sums so collected shall be applied by Administrative
Agent, first, to the reasonable expenses, if any, of collection, and then in the
same manner and under the same conditions as insurance proceeds are applied as
set forth in SECTION 9.8.
9.18 TITLE AND PERMITTED ENCUMBRANCES. Each Obligor holding title to a
Collateral Property shall maintain, lawful, good, and marketable title to such
Collateral Property, and every part thereof, and the right to convey the same,
free and clear of all liens, charges, claims, security interests, and
encumbrances except for Permitted Liens. Each Obligor holding title to a
Collateral Property, and its successors and assigns, shall warrant generally and
forever defend title to such Collateral Property, subject as aforesaid, to
Administrative Agent for the benefit of Lenders and their successors or
substitutes and assigns, against the claims and demands of all persons claiming
or to claim the same or any part thereof. Each Obligor holding title to a
Collateral Property shall punctually pay, perform, observe, and
61
keep all covenants, obligations, and conditions in or pursuant to any Permitted
Liens, unless the failure to do so is not reasonably likely to result in a
Material Property Event.
9.19 TAXES AND OTHER IMPOSITIONS. Each Obligor holding title to a
Collateral Property shall pay, or cause to be paid, all taxes, assessments and
other charges or levies imposed upon or against or with respect to such
Collateral Property or the ownership, use, occupancy, or enjoyment of any
portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all real estate taxes assessed against
such Collateral Property or any part thereof, unless the failure to do so is not
reasonably likely to result in a Material Property Event, and shall deliver
promptly to Administrative Agent such evidence of the payment thereof as
Administrative Agent may require.
9.20 COMPLIANCE WITH LAWS. Each Obligor holding title to a Collateral
Property shall cause the Collateral Property and the use, operation, and
maintenance thereof and all activities thereon at all times comply with all
applicable Legal Requirements, unless the failure to do so could not reasonably
be likely to result in a Material Property Event. No Collateral Property shall
be dependent on any other property or premises or any interest therein other
than such Collateral Property to fulfill any requirement of any Legal
Requirement, unless the failure to do so could not reasonably be likely to
result in a Material Property Event. No improvement upon or use of any part of
any Collateral Property shall become a nonconforming use under any zoning Legal
Requirement or similar Legal Requirement or ordinance, unless such nonconforming
use could not reasonably be likely to result in a Material Adverse Event. Each
Obligor holding title to a Collateral Property shall preserve in force all
requisite zoning, utility, building, health, environmental, and operating
permits from the Governmental Authorities having jurisdiction over the
Collateral Property, unless the failure to do so could not reasonably be likely
to result in a Material Adverse Event. If any Obligor receives a notice or claim
from any person that any Collateral Property, or any use, activity, operation,
or maintenance thereof or thereon, is not in compliance with any Legal
Requirement the noncompliance with which is reasonably likely to result in a
Material Adverse Event, then such Obligor to promptly furnish a copy of such
notice or claim to Administrative Agent.
9.21 MAINTENANCE, REPAIR, AND RESTORATION. Each Obligor holding title to a
Collateral Property shall keep the Collateral Property in first class order,
repair, operating condition, and appearance, causing all necessary repairs,
renewals, replacements, additions, and improvements to be promptly made, and not
allow any of the Collateral Property to be misused, abused or wasted or to
deteriorate, except where the failure to do so could not reasonably be expected
to result in a Material Property Event. Notwithstanding the foregoing, no such
Obligor will, (a) without the prior written consent of Administrative Agent,
remove from the applicable Collateral Property any fixtures or personal property
owned by such Obligor except such as is replaced by such Obligor by an article
of equal suitability and value, owned by such Obligor, free and clear of any
Lien (other than Permitted Liens) or security interest, or (b) without the prior
written consent of Required Lenders, make any structural alteration to the
applicable Collateral Property, or any other alteration thereto, which could
reasonably be expected to result in a Material Property Event. If any act or
occurrence of any kind or nature (including any condemnation or any casualty for
which insurance was not obtained or obtainable) shall result in damage to or
loss or destruction of any Collateral Property that constitutes a Material
Property Event, then the applicable Obligor shall give prompt notice thereof to
Administrative Agent (of which Administrative Agent shall promptly notify the
Lenders) and such Obligor shall promptly, at its sole cost and expense and
regardless of whether insurance or condemnation proceeds (if any) shall be
available or sufficient for the purpose, secure such Collateral Property as
necessary and commence and continue diligently to completion to restore, repair,
replace and rebuild such Collateral Property as nearly as
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commercially reasonable to its value, condition and character immediately prior
to the damage, loss, or destruction.
9.22 OPERATION OF PROPERTY. Each Obligor holding title to a Collateral
Property shall operate the applicable Collateral Property in a good and
workmanlike manner and in accordance with all Legal Requirements and will pay
all fees or charges of any kind in connection therewith, except where the
failure to do so could not reasonably be expected to result in a Material
Property Event. Each such Obligor will keep the applicable Collateral Property
occupied so as not to impair the insurance carried thereon, and, except as could
not reasonably be expected to result in a Material Property Event, will not use
or occupy or conduct any activity on, or allow the use or occupancy of or the
conduct of any activity on, the applicable Collateral Property in any manner
which violates any Legal Requirement or which constitutes a public or private
nuisance or which makes void, voidable, or cancelable, or increases the premium
of, any insurance then in force with respect thereto. No such Obligor will
initiate or consent to any zoning reclassification of the applicable Collateral
Property or seek any variance under existing zoning ordinances applicable to the
applicable Collateral Property or use or permit the use of the applicable
Collateral Property in such a manner which would result in such use becoming a
nonconforming use under applicable zoning ordinances or other Legal Requirement.
No such Obligor will impose any easement, restrictive covenant, or encumbrance
upon any Collateral Property, execute or file any subdivision plat or
condominium declaration affecting any Collateral Property, or consent to the
annexation of any Collateral Property to any municipality, without the prior
written consent of Administrative Agent. No such Obligor will do or allow to be
done any act whereby the value of any part of any Collateral Property may be
lessened to an extent that would constitute a Material Property Event. Each such
Obligor will preserve, protect, renew, extend, and retain all material rights
and privileges granted for or applicable to the applicable Collateral Property.
Without the prior written consent of Administrative Agent, there shall be no
drilling or exploration for or extraction, removal or production of any mineral,
hydrocarbon, gas, natural element, compound or substance (including sand and
gravel) from the surface or subsurface of the Collateral Properties regardless
of the depth thereof or the method of mining or extraction thereof. Each such
Obligor will cause all debts and liabilities of any character (including without
limitation all debts and liabilities for labor, material, and equipment
(including software embedded therein) and all debts and charges for utilities
servicing each Collateral Property) incurred in the construction, maintenance,
operation and development of the Collateral Properties to be promptly paid,
unless the failure to so is not reasonably likely to result in a Material
Property Event.
9.23 DELIVERY OF LEASING INFORMATION AND DOCUMENTS.
(A) Borrower shall cause the Initial Collateral Property Owner to (i)
notify Administrative Agent of any material modification, amendment or
termination of any Existing Lease, and (ii) use commercially reasonable efforts
to obtain and deliver to Administrative Agent such estoppel certificates and
subordination and attornment agreements executed by tenants under each such
Existing Lease (and guarantors, if any) in such forms as Administrative Agent
from time to time may reasonably require.
(B) Borrower shall, or shall cause each Obligor holding title to any
additional Collateral Property pledged pursuant to SECTION 2.7(A)(XI) to (i)
notify Administrative Agent of any material modification, amendment or
termination of any Lease executed in connection with such additional Collateral
Property, and (ii) use commercially reasonable efforts to obtain and deliver to
Administrative Agent such estoppel certificates and subordination and attornment
agreements executed by tenants under each such Lease (and guarantors, if any) in
such forms as Administrative Agent from time to time may reasonably require.
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9.24 COMPLIANCE AND DEFAULT. Each Obligor holding title to a Collateral
Property shall promptly notify Administrative Agent in writing of any failure by
any party to perform any material obligation under any Lease with respect to
such Collateral Property, any event or condition which would permit a tenant to
terminate or cancel any such Lease, or any notice given by a tenant with respect
to the foregoing, specifying in each case the action such Obligor has taken or
will take with respect thereto, but such notice shall only be required if such
nonperformance, event or condition could reasonably be expected to result in a
Material Property Event.
9.25 CONCERNING LEASES AND RENTS. Each Obligor holding title to a
Collateral Property shall, with respect to such Collateral Property: (a)
maintain good title to, and ownership of the entire landlord's interest in, the
Leases and Rents; (b) not default under any Lease if such default could
reasonably expected to result in a Material Property Event; (c) not assign
mortgage, pledge or otherwise encumber and allow no other person to acquire any
right, title, or interest in any Rents or Leases; (d) not without the prior
written consent of Administrative Agent, enter into any Lease with respect to
the Initial Collateral Property after the date hereof, other than with respect
to the Existing Commercial Lease Space; and (e) not without the prior written
consent of Administrative Agent, enter into any Lease with respect to any
additional Collateral Property after the date such additional Collateral
Property is pledged to Administrative Agent, for the benefit of Lenders, other
than Leases of space that is leased under Leases existing on such date or held
for lease on such date.
9.26 PROPERTY MANAGEMENT. Each Obligor shall keep each Management Agreement
with respect to any Collateral Property in full force and effect, and will not
permit or agree to the replacement of the Manager under any Management Agreement
with respect to any Collateral Property, unless approved by Required Lenders in
their sole discretion; provided however, that if such replacement manager is not
a Wholly-owned Subsidiary of Borrower, Required Lenders' consent shall also be
conditioned on the execution and delivery by Borrower, the applicable Obligor,
and such replacement manager of such additional documentation as Administrative
Agent shall require.
9.27 FRANCHISE AGREEMENTS. Each Obligor shall keep each Franchise Agreement
with respect to any Collateral Property in full force and effect, and will not
permit or agree to the replacement of the Franchisor under any Franchise
Agreement with respect to any Collateral Property, unless approved by Required
Lenders in their sole discretion; provided however, that if such replacement
franchisor is not a Wholly-owned Subsidiary of Borrower, Required Lenders'
consent shall also be conditioned on the execution and delivery by Borrower, the
applicable Obligor, and such replacement franchisor of such additional
documentation as Administrative Agent shall require.
9.28 SUBSIDIARY GUARANTIES. Borrower shall cause each Subsidiary Guarantor
to execute the Subsidiary Guaranty pursuant to SECTION 6.1 and, after the
Closing Date, for any Subsidiary that would qualify as a "SUBSIDIARY GUARANTOR"
pursuant to the terms of the definition thereof, cause such Subsidiary execute
the Subsidiary Guaranty and to provide to Administrative Agent such other
documentation required by Administrative Agent, all in form and substance
acceptable to Administrative Agent, within thirty (30) days after the date on
which such entity becomes a Subsidiary required to execute the Subsidiary
Guaranty.
9.29 APPRAISALS. Administrative Agent will be entitled to obtain an
Acceptable Appraisal of each Collateral Property or any part thereof at
Borrower's expense; provided that, unless an Event of
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Default shall have occurred and is continuing, Borrower shall be responsible for
the payment of only one such Acceptable Appraisal for each Collateral Property
every twenty-four (24) months.
9.30 INTEREST RATE HEDGING ARRANGEMENTS. Borrower shall, at any time in
which less than seventy-five percent (75%) of the Consolidated Debt is not
subject to a fixed rate of interest by the terms of such Debt, enter into
Interest Rate Hedging Arrangements with respect to such non fixed rate Debt.
SECTION 10 NEGATIVE COVENANTS. Borrower covenants and agrees to perform,
observe, and comply with each of the following covenants, from the Closing Date
and so long thereafter as Lenders are committed to make any Credit Extensions
under this Agreement and thereafter until the payment in full of all Principal
Debt (and termination of all outstanding LCs, if any) and payment in full of all
other interest, fees, and other amounts of the Obligation then due and owing,
unless Borrower receives a prior written consent to the contrary by
Administrative Agent as authorized by Required Lenders (or all Lenders if
required under SECTION 14.11):
10.1 EMPLOYEE BENEFIT PLANS. Borrower shall not, and shall not permit any
ERISA Affiliate to, directly or indirectly, engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Tax
Code), and the Companies and their respective ERISA Affiliates shall not,
directly or indirectly, (a) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA with respect to any Employee Plan, (b)
permit any Employee Plan to be subject to involuntary termination proceedings
pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any
Multiemployer Plan, if such prohibited transaction, accumulated funding
deficiency, termination proceeding, or withdrawal would result in liability on
the part of any Obligor (individually or collectively) in excess of $5,000,000.
10.2 DEBT. Borrower shall not, and shall not permit any other Company to,
directly or indirectly, create, incur, guaranty, assume, or suffer to exist any
direct, indirect, fixed, or contingent liability for any Recourse Debt if, both
before and after giving effect to such Recourse Debt, the Commitment Usage would
exceed the Availability Amount.
10.3 LIENS. Borrower shall not, and shall not permit any other Company to,
directly or indirectly, (a) enter into or permit to exist any arrangement or
agreement which directly or indirectly prohibits any Company from creating or
incurring any Lien on any Collateral Property, other than the Loan Documents, or
(b) create, incur, or suffer or permit to be created or incurred or to exist any
Lien upon any Collateral Property, except:
(I) pledges or deposits made to secure payment of worker's
compensation, or to participate in any fund in connection with
worker's compensation, unemployment insurance, pensions, or other
social security programs;
(II) good-faith pledges or deposits made to secure performance of
bids, tenders, insurance or other contracts (other than for the
repayment of borrowed money), or leases, or to secure statutory
obligations, surety or appeal bonds, or indemnity, performance, or
other similar bonds as all such Liens arise in the ordinary course of
business of the Companies;
(III) encumbrances consisting of zoning restrictions, easements,
or other restrictions on the use of real property, none of which
impair in any material respect the use of such property
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by the Person in question in the operation of its business, and none
of which is violated by existing or proposed structures or land use;
(IV) Liens of landlords or of mortgagees of landlords, arising
solely by operation of law, on fixtures and movable property located
on premises leased in the ordinary course of business;
(V) the following, so long as the applicability, amount, or
validity thereof is being contested in good faith by appropriate
proceedings diligently conducted, reserves or other provisions
therefor required by GAAP have been made, levy and execution thereon
have been stayed and continue to be stayed, and they do not in the
aggregate materially detract from the value of the property of the
Person in question, or materially impair the use thereof in the
operation of its business: (A) claims and Liens for Taxes (other than
Liens relating to Environmental Laws or ERISA); (B) claims and Liens
upon, and defects of title to, real or personal property, including
any attachment of personal or real property or other legal process
prior to adjudication of a dispute of the merits; and (C) claims and
Liens of mechanics, materialmen, warehousemen, carriers, landlords, or
other like Liens;
(VI) Capital Leases and Liens securing Debt or purchase money
obligations for fixed or capital assets used solely in connection with
a Collateral Property; provided that (i) such Liens do not at any time
encumber any property other than the assets financed by such Debt,
(ii) the Debt secured thereby does not exceed the reasonable
acquisition cost of the assets being acquired on the date of
acquisition, and (iii) the aggregate amount of all such Debt shall not
exceed at any time $500,000.
10.4 TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall not permit
any other Company to, enter into any transaction with any of its Affiliates,
other than transactions with one or more other Companies (which may or may not
be on an arm's length basis) and transactions with other Affiliates in the
ordinary course of business and upon fair and reasonable terms not materially
less favorable than such Company could obtain or could become entitled to in an
arm's-length transaction with a Person that was not its Affiliate.
10.5 ASSIGNMENT. Borrower shall not, and shall not permit any other Company
to, assign or transfer any of its rights, duties, or obligations under any of
the Loan Documents.
10.6 FISCAL YEAR AND ACCOUNTING METHODS. Borrower shall not, and shall not
permit any other Company to, change its fiscal year for book accounting purposes
or its method of accounting, other than (a) immaterial changes in methods or as
required by GAAP, or (b) in connection with a Permitted Acquisition, such
changes to the newly-acquired entity so as to conform its fiscal year and its
method of accounting to those of the Companies.
10.7 GOVERNMENT REGULATIONS. Borrower shall not, and shall not permit any
other Company to, conduct its business in such a way that it will become subject
to regulation under the Investment Company Act of 1940, as amended, or any other
Legal Requirement (other than Regulations T, U, and X of the Board of Governors
of the Federal Reserve System) which regulates the incurrence of Debt.
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10.8 LOANS, ADVANCES, AND INVESTMENTS. Borrower shall not, and shall not
permit any other Company to, make any loan, advance, extension of credit, or
capital contribution to, make any investment in, or purchase or commit to
purchase any Stock or evidences of Debt of, or interests in, any other Person,
other than: (a) readily marketable, direct, full faith and credit obligations of
the United States of America, or obligations guaranteed by the full faith and
credit of the United States of America, maturing within not more than one year
from the date of acquisition; (b) short term certificates of deposit and time
deposits, which mature within one year from the date of issuance and which are
fully insured by the Federal Deposit Insurance Corporation; (c) commercial paper
maturing in 365 days or less from the date of issuance and rated either "P-1" by
Moody's, or "A-1" by S & P; (d) debt instruments of a domestic issuer which
mature in one (1) year or less and which are rated "A" or better by Moody's or
S&P on the date of acquisition of such investment; (e) demand deposit accounts
which are maintained in the ordinary course of business; (f) trade accounts
receivable which are for goods furnished or services rendered in the ordinary
course of business and are payable in accordance with customary trade terms; (g)
Permitted Acquisitions, (h) transactions with Subsidiaries listed on SCHEDULE 8
and existing on the Closing Date; (i) transactions with Subsidiaries acquired
after the Closing Date pursuant to a Permitted Acquisition; and (j) transactions
with Subsidiaries formed after the Closing Date provided that each such
Subsidiary complies with SECTION 9.28.
10.9 DISTRIBUTIONS.
(A) DISTRIBUTIONS. Borrower shall not, and shall not permit any other
Company to, directly or indirectly declare, make, or pay any Distribution other
than (i) Distributions by any Company to an Obligor, (ii) Distributions listed
in CLAUSE (D) of the definition of "PERMITTED DISTRIBUTIONS", and (iii) so long
as no Event of Default exists or would result therefrom, Permitted Distributions
other than Distributions listed in CLAUSE (D) of the definition of Permitted
Distributions.
(B) SUBORDINATED DEBT. Borrower shall not, and shall not permit any
other Company to, make any payment on any Subordinated Debt when it violates the
subordination provisions thereof.
10.10 RESTRICTIONS ON COMPANIES. Borrower shall not, and shall not permit
any other Company to, enter into or permit to exist any material arrangement or
agreement (other than the Loan Documents) which directly or indirectly prohibits
any Company from (a) declaring, making, or paying, directly or indirectly, any
Distribution to any other Company, (b) paying any Debt owed to any other
Company, (c) making loans, advances, or investments to any other Company, or (d)
transferring any of its property or assets to any other Company; provided,
however, that this SECTION 10.10 shall not prohibit any such arrangements
incurred or provided in favor of any holder of any Non-Recourse Debt of any
Subsidiary of Borrower or any Debt of any Subsidiary of Borrower to the extent
such arrangement applies only to such Subsidiary.
10.11 SALE OF ASSETS. Borrower shall not, and shall not permit any other
Company to, sell, assign, transfer, or otherwise dispose of any of its assets,
other than (a) sales of inventory in the ordinary course of business, (b) the
sale, discount, or transfer of delinquent accounts receivable in the ordinary
course of business for purposes of collection, (c) occasional sales of
immaterial assets for consideration not less than the fair market value thereof,
(d) dispositions of obsolete assets, and (e) dispositions of one or more
Properties or other assets provided that, both before and after giving effect to
any such disposition, Borrower is in compliance with each financial covenant set
forth in SECTION 10.18, and no Event of Default exists.
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10.12 SALE-LEASEBACK FINANCINGS. Borrower shall not, and shall not permit
any other Company to, enter into any sale-leaseback arrangement with any Person
pursuant to which such Company shall lease any asset (whether now owned or
hereafter acquired) if such asset has been or is to be sold or transferred by
any Company to any other Person, and the present value of the aggregate lease
payments thereunder would exceed $10,000,000.
10.13 MERGERS AND DISSOLUTIONS. Borrower shall not, and shall not permit
any other Company to, directly or indirectly, merge or consolidate with any
other Person, other than (a) as a result of a Permitted Acquisition, (b) mergers
or consolidations involving Borrower if Borrower is the surviving entity, and
(c) mergers among Wholly-owned Companies; provided that in any merger involving
Borrower (including a Permitted Acquisition effected as a merger), Borrower must
be the surviving entity, in any merger involving any Obligor holding title to a
Collateral Property, such Obligor must be the surviving entity, and in any
merger involving any other Company (including a Permitted Acquisition effected
as a merger), a Company must be the surviving entity. Borrower shall not, and
shall not permit any other Company to, liquidate, wind up, or dissolve (or
suffer any liquidation or dissolution), other than liquidations, wind ups, or
dissolutions incident to mergers permitted under this SECTION 10.13.
10.14 NEW BUSINESS. Borrower shall not, and shall not permit any other
Company to, directly or indirectly, permit or suffer to exist any material
change in the type of businesses in which it is engaged from the businesses of
the Companies as conducted on the Closing Date.
10.15 AMENDMENTS TO DOCUMENTS. Borrower shall not, and shall not permit any
other Obligor to: (a) amend or permit any amendments to any such Obligor's
Constituent Documents as in effect on the Closing Date, if such action could
adversely affect the rights of Credit Parties; or (b) violate the provisions of
its Constituent Documents, or modify, repeal, replace, or amend any provision of
its Constituent Documents, if such action could adversely affect the rights of
any Credit Party; provided however, Initial Collateral Property Owner may amend
its Constituent Documents solely for the purpose of removing the requirement of
an independent director.
10.16 CONTRACTS. Except as permitted by SECTION 10.17, and subject to
SECTIONS 9.26 and 9.27, without Administrative Agent's prior written approval as
to parties, terms, and all other matters, no Obligor holding title to a
Collateral Property shall, nor shall it permit any Manager to (a) enter into any
management, leasing, maintenance, or other contract pertaining to any Collateral
Property that is not unconditionally terminable by such Person or any successor
owner without penalty or payment on not more than thirty (30) days notice to the
other party thereunder, other than any such contract entered into in the
ordinary course of business that is customary in the industry, or (b) modify,
amend, or terminate any such contracts, nor default under any contract or permit
any contract to terminate by reason of any failure of such Person to perform
thereunder and shall promptly notify Administrative Agent of any default
thereunder. Borrower will deliver or cause to be delivered to Administrative
Agent, upon request of Administrative Agent, the names and addresses of all
persons or entities with whom each contractor has contracted or intends to
contract.
10.17 LEASE APPROVAL. Other than Leases of the Existing Commercial Lease
Space, no Obligor holding title to any Collateral Property shall enter into any
tenant Lease of space in the Improvements for such Collateral Property unless
approved by Administrative Agent prior to execution; provided however that,
notwithstanding the foregoing, each Lease of the Existing Commercial Lease
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Space shall (a) be entered into in the ordinary course of business with a bona
fide unrelated third party tenant; (b) reflect an arm's-length transaction at
then current market rate for comparable space; (c) contain no right to purchase
the Collateral Property, or any present or future interest therein; and (d) be
expressly subordinate to the applicable Mortgage (but subject to a standard
non-disturbance provision). In no event shall any approval by Administrative
Agent of a Lease be a representation of any kind, with regard to the Lease or
its adequacy or enforceability, or the financial capacity of any tenant or
guarantor.
10.18 FINANCIAL COVENANTS. As calculated for the Companies (x) on a
consolidated basis, and (y) for pro forma adjustments (1) attributable to
operations acquired (or sold) during such period as if such Acquisition (or
disposition) had occurred on the first day of such period, and (2) as if all
Debt outstanding as of the date of determination were outstanding during the
entire period ending on the date of determination:
(A) TOTAL LEVERAGE RATIO. Borrower shall not permit the Total Leverage
Ratio, as of the last day of any fiscal quarter of the Companies during the
following periods, to be greater than the ratio set forth opposite such period
below:
PERIOD RATIO
------ -----
Closing Date through 6.5 to 1.0
December 31, 2006
January 1, 2007 through 6.0 to 1.0
December 31, 2007
January 1, 2008 through 5.75 to 1.0
December 31, 2008
January 1, 2009 through 5.25 to 1.0
December 31, 2009
January 1, 2010 through 4.75 to 1.0
December 31, 2010
January 1, 2011 and 4.25 to 1.0
Thereafter
(B) SENIOR LEVERAGE RATIO. Borrower shall not permit the Senior
Leverage Ratio, as of the last day of any fiscal quarter of the Companies during
the following periods, to be greater than the ratio set forth opposite such
period below:
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PERIOD RATIO
------ -----
Closing Date through 5.5 to 1.0
December 31, 2006
January 1, 2007 through 5.0 to 1.0
December 31, 2007
January 1, 2008 through 4.75 to 1.0
December 31, 2008
January 1, 2009 through 4.25 to 1.0
December 31, 2009
January 1, 2010 through 3.75 to 1.0
December 31, 2010
January 1, 2011 and 3.25 to 1.0
Thereafter
(C) INTEREST COVERAGE. Borrower shall not permit the Interest Coverage
Ratio, as of the last day of any fiscal quarter of the Companies during the
following periods, to be less than the ratio set forth opposite such period
below:
PERIOD RATIO
------ -----
Closing Date through 1.75 to 1.0
December 31, 2006
January 1, 2007 and 2.00 to 1.0
Thereafter
(D) DEBT SERVICE COVERAGE. Borrower shall not permit the Debt Service
Coverage Ratio, as of the last day of any fiscal quarter of the Companies during
the following periods, to be less than the ratio set forth opposite such period
below:
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PERIOD RATIO
------ -----
Closing Date through 1.50 to 1.0
December 31, 2006
January 1, 2007 and 1.75 to 1.0
Thereafter
SECTION 11 DEFAULT. The term "EVENT OF DEFAULT" means the occurrence of any one
or more of the following events:
11.1 PAYMENT OF OBLIGATION. The failure or refusal of any Obligor to pay
(a) any principal portion of the Obligation when the same becomes due (whether
by its terms, by acceleration, or as otherwise provided in the Loan Documents),
and (b) any other portion of the Obligation (other than principal as set forth
in subclause (a) above) when the same becomes due (whether by its terms, by
acceleration, or as otherwise provided in the Loan Documents) or any
indemnification and reimbursement obligations provided for in the Loan Documents
after demand therefor, and such failure continues for a period of five (5)
Business Days after the date such amount first became due or demand was first
made, as applicable.
11.2 COVENANTS. The failure or refusal of Borrower (and, if applicable, any
other Company) to punctually and properly perform, observe, and comply (other
than the covenants to pay the Obligation set forth in SECTION 11.1) with:
(I) any applicable covenant, condition, or agreement contained in
SECTION 9.3(F)(III), 9.28, 10.1, 10.2, 10.3, 10.5, 10.6, 10.7, 10.8,
10.9, 10.11, 10.12, 10.13, or 10.18; or
(II) any other covenant, condition, or agreement contained in
this Agreement (other than the covenants to pay the Obligation and the
covenants in CLAUSE (I) preceding), and such failure continues
unremedied for seven (7) days after notice from Administrative Agent
of such failure.
11.3 DEBTOR RELIEF. Any Company (a) fails to pay its Debts generally as
they become due, (b) voluntarily seeks, consents to, or acquiesces in the
benefit of any Debtor Relief Law, other than as a creditor or claimant, or (c)
becomes a party to or is made the subject of any proceeding provided for by any
Debtor Relief Law, other than as a creditor or claimant, that could suspend or
otherwise adversely affect the rights of any Credit Party granted in the Loan
Documents (unless, in the event such proceeding is involuntary, the petition
instituting same is dismissed within thirty (30) days after its filing).
11.4 JUDGMENTS AND ATTACHMENTS. Any Company fails, within sixty (60) days
after entry, to pay, bond, or otherwise discharge any judgment or order for the
payment of money in excess of $5,000,000 (individually or collectively) or to
secure the release of any warrant of attachment, sequestration, or similar
proceeding against any Company's assets having a value (individually or
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collectively) of $5,000,000 which is not stayed on appeal or being contested in
good faith by appropriate proceedings diligently conducted.
11.5 GOVERNMENT ACTION.
(A) A final non-appealable order is issued by any Governmental
Authority, including, but not limited to, the United States Justice Department,
seeking to cause any Company to divest a significant portion of its assets
pursuant to any antitrust, restraint of trade, unfair competition, industry
regulation, or similar Legal Requirements; or
(B) Any Governmental Authority shall condemn, seize, or otherwise
appropriate, or take custody or control of all or any substantial portion of the
assets of Borrower and its Subsidiaries on a consolidated basis.
11.6 MISREPRESENTATION. Any representation or warranty made by any Company
contained in any Loan Document shall at any time prove to have been incorrect in
any material respect when made.
11.7 CHANGE OF CONTROL. A Change in Control shall occur.
11.8 AUTHORIZATIONS.
(A) Any Authorization necessary for the ownership or operations of any
Company shall expire, and on or prior to such expiration, the same shall not
have been renewed or replaced by another Authorization authorizing substantially
the same operations by such Company, if such circumstance is reasonably likely
to result in a Material Adverse Event; or
(B) Any Authorization necessary for the ownership or operations of any
Company shall be canceled, revoked, terminated, rescinded, annulled, suspended,
or modified in a materially adverse respect, or shall no longer be in full force
and effect, or the grant or the effectiveness thereof shall have been stayed,
vacated, reversed, or set aside, if such circumstance is reasonably likely to
result in a Material Adverse Event; or
(C) Any Company is required by any Governmental Authority to halt
operations under any Authorization and such action shall continue uncorrected
for thirty (30) days after such Company has received notice thereof, if such
circumstance is reasonably likely to result in a Material Adverse Event; or
(D) Any Governmental Authority shall make any other final
non-appealable determination the effect of which would be to affect materially
and adversely the operations of the Borrower and its Subsidiaries considered as
a whole.
11.9 DEFAULT UNDER OTHER DEBT AND AGREEMENTS.
(A) Any Company fails to pay when due (after lapse of any applicable
grace periods) any Debt of such Company (other than the Obligation) in excess
(individually or collectively) of $10,000,000; and
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(B) Any default exists under any agreement (other than the Loan
Documents) to which any Company is a party, which has not been waived by the
parties thereto, the effect of which has been to cause, or to permit any Person
to cause, an amount of Debt of such Company in excess (individually or
collectively) of $10,000,000 to become due and payable by such Company (whether
by acceleration or by its terms).
11.10 EMPLOYEE BENEFIT PLANS.
(A) A "Reportable Event" or "Reportable Events," or a failure to make
a required installment or other payment (within the meaning of Section 412(n)(1)
of the Tax Code), shall have occurred with respect to any Employee Plan or Plans
that is expected to result in liability of Borrower to the PBGC or to a Plan in
an aggregate amount exceeding $5,000,000; or
(B) Borrower or any ERISA Affiliate has provided to any affected party
a sixty (60) day notice of intent to terminate an Employee Plan pursuant to a
distress termination in accordance with Section 4041(c) of ERISA if the
liability expected to be incurred as a result of such termination will exceed
$5,000,000; or
(C) A trustee shall be appointed by a United States district court to
administer any such Employee Plan; or
(D) the PBGC shall institute proceedings (including giving notice of
intent thereof) to terminate any such Employee Plan; or
(E) (i) Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred withdrawal liability
(within the meaning of section 4201 of ERISA) to such Multiemployer Plan, (ii)
Borrower or such ERISA Affiliate does not have reasonable grounds for contesting
such withdrawal liability or is not contesting such withdrawal liability in a
timely and appropriate manner and (iii) the amount of such withdrawal liability
specified in such notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with withdrawal liabilities
(determined as of the date or dates of such notification), exceeds $5,000,000;
or
(F) Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions of Borrower and its ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have been or are being terminated have been
or will be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an amount
exceeding $5,000,000.
11.11 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document
shall, at any time after its execution and delivery and for any reason, cease to
be in full force and effect in any material respect or be declared to be null
and void (other than in accordance with the terms hereof or thereof) or the
validity or enforceability thereof be contested by any Company party thereto or
any Company shall deny in writing that it has any or any further liability or
obligations under any Loan Document to which it is a party.
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11.12 ENVIRONMENTAL LIABILITY. If any event or condition shall occur or
exist with respect to any activity or substance regulated under the
Environmental Law and as a result of such event or condition, any Company shall
have incurred or in the opinion of the banks be reasonably likely to incur a
liability in excess of $5,000,000 liability during any consecutive twelve (12)
month period and Administrative Agent determines in its sole and absolute
discretion, that such liability is material.
11.13 COLLATERAL PROPERTIES. Any of the following occurs with respect to
any Collateral Property:
(A) any required permit, license, certificate or approval with respect
to such Collateral Property lapses or ceases to be in full force and effect
which could reasonably be expected to result in a Material Property Event;
(B) a Lien for the performance of work or the supply of materials
which is established against such Collateral Property which could reasonably be
expected to result in a Material Property Event, or any stop notice served on an
Obligor, the general contractor, Administrative Agent or a Lender, remains
unsatisfied or unbonded for a period of twenty (20) days after the date of
filing or service, if such circumstance could reasonably be expected to result
in a Material Property Event;
(C) except as provided in SECTION 9.8(B)(VII), the occurrence of any
condition or situation which, in the sole determination of Administrative Agent,
constitutes a danger to or impairment of such Collateral Property or the Lien of
the applicable Mortgage, if such condition or situation is not remedied within
ten (10) days after written notice to Borrower thereof or, if such condition or
situation is not capable of remedy within ten (10) days, Borrower does not
commence (or cause to be commenced) within such period of time reasonable steps
to remedy such condition or situation and thereafter diligently pursue such
remedy until it is completed as expeditiously as commercially reasonable;
(D) any sale, Lease, conveyance, assignment, pledge, encumbrance, or
transfer of all or any material part of such Collateral Property or any interest
therein, voluntarily or involuntarily, whether by operation of Legal Requirement
or otherwise, except: (A) sales or transfers of fixtures, equipment, systems,
machinery, furniture, furnishings, appliances, inventory, goods, building
materials, and supplies, which have become obsolete or worn beyond practical use
and which have been replaced by adequate substitutes, owned by an Obligor,
having a value equal to or greater than the replaced items when new; and (B) the
grant, in the ordinary course of business, of a leasehold interest in a part of
any Collateral Property to a tenant for occupancy, not containing a right or
option to purchase and not in contravention of any Loan Document. Required
Lenders may, in their sole discretion, waive a default under this paragraph, but
shall have no obligation to do so, and any waiver may be conditioned upon such
one or more of the following (if any) which Required Lenders may require, a
principal paydown on the Obligation, an increase in the rate of interest payable
under the Obligation, a modification of the term of the Obligation, and any
other modification of the Loan Documents which Required Lenders may require; or
(E) without the prior written consent of Administrative Agent, any
Obligor grants any easement or dedication, files any plat, condominium
declaration, or restriction, or otherwise encumbers such Collateral Property, or
seeks or permits any zoning reclassification or variance, unless such action is
expressly permitted by the Loan Documents or could not reasonably be expected to
result in a Material Property Event; or
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(F) such Collateral Property is abandoned; or
(G) a default or event of default occurs under any Lien, security
interest, or assignment covering such Collateral Property or any part thereof
(whether or not Administrative Agent has consented, and without hereby implying
Administrative Agent's consent, to any such Lien, security interest or
assignment not created hereunder), or the holder of any such Lien, security
interest, or assignment declares a default or institutes foreclosure or other
proceedings for the enforcement of its remedies thereunder; or
(H) any Governmental Authority shall require, or commence any
proceeding for, the demolition of any building or structure comprising a part of
such Collateral Property, or there is commenced any proceeding to condemn or
otherwise take pursuant to the power of eminent domain, or a contract for sale
or a conveyance in lieu of such a taking is executed which provides for the
transfer of, a material portion of such Collateral Property, including but not
limited to the taking (or transfer in lieu thereof) of any portion which would
result in the blockage or substantial impairment of access or utility service to
the Improvements or which would cause such Collateral Property to fail to comply
with any Legal Requirement.
SECTION 12 RIGHTS AND REMEDIES.
12.1 REMEDIES UPON DEFAULT.
(A) If an Event of Default exists under SECTION 11.3(C) or 11.3(D),
then the commitment to extend credit hereunder shall automatically terminate and
the entire unpaid balance of the Obligation shall automatically become due and
payable without any action or notice of any kind whatsoever.
(B) If any Event of Default exists, then Administrative Agent may
(and, subject to the terms of SECTION 13, shall upon the request of Required
Lenders) or Required Lenders may, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under SECTION
12.1(A), then declare the entire unpaid balance of the Obligation, or any part
thereof, immediately due and payable, whereupon it shall be due and payable;
(ii) terminate the commitments of Lenders to extend credit hereunder; (iii)
reduce any claim to judgment; (iv) to the extent permitted by all Legal
Requirements, exercise (or request each Lender to, and each Lender shall be
entitled to, exercise) the rights of offset or banker's Lien against the
interest of any Company in and to every account and other property of any
Company which are in the possession of any Credit Party to the extent of the
full amount of the Obligation (to the extent permitted by all Legal
Requirements, Borrower being deemed directly obligated to each Credit Party in
the full amount of the Obligation for such purposes); and (v) exercise any and
all other legal or equitable rights afforded by the Loan Documents, the Legal
Requirements of the State of New York, or any other applicable jurisdiction as
Administrative Agent shall deem appropriate, or otherwise, including, but not
limited to, the right to bring suit or other proceedings before any Governmental
Authority either for specific performance of any covenant or condition contained
in any of the Loan Documents or in aid of the exercise of any right granted to
any Credit Party in any of the Loan Documents.
12.2 COMPANY WAIVERS. To the extent permitted by all Legal Requirements,
each Obligor hereby waives presentment and demand for payment, protest, notice
of intention to accelerate, notice of
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acceleration, and notice of protest and nonpayment, and agrees that its
respective liability with respect to the Obligation (or any part thereof) shall
not be affected by any renewal or extension in the time of payment of the
Obligation (or any part thereof), by any indulgence, or by any release or change
in any security for the payment of the Obligation (or any part thereof).
12.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or
agreement of any Company is not performed in accordance with the terms of the
Loan Documents, while an Event of Default exists, then Administrative Agent may,
at its option (but subject to the approval of Required Lenders), perform or
attempt to perform such covenant, duty, or agreement on behalf of such Company.
In such event, any amount expended by Administrative Agent in such performance
or attempted performance shall be payable by Obligors, jointly and severally, to
Administrative Agent on demand, shall become part of the Obligation, and shall
bear interest at the Default Rate from the date of such expenditure by
Administrative Agent until paid. Notwithstanding the foregoing, it is expressly
understood that Administrative Agent does not assume, and shall never have,
except by its express written consent, any liability or responsibility for the
performance of any covenant, duty, or agreement of any Company.
12.4 DELEGATION OF DUTIES AND RIGHTS. The Credit Parties may perform any of
their duties or exercise any of their rights under the Loan Documents by or
through their respective Representatives.
12.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be deemed
to (a) give any Credit Party the right to exercise control over the assets
(including real property), affairs, or management of any Company, (b) preclude
or interfere with compliance by any Company with any Legal Requirement, or (c)
require any act or omission by any Company that may be harmful to Persons or
property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that any Credit Party acquiesces in any non-compliance by any
Company with any Legal Requirement or document, or that any Credit Party does
not expect any Company to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Laws. The Credit Parties have
no fiduciary relationship with or fiduciary duty to any Company arising out of
or in connection with the Loan Documents, and the relationship between the
Credit Parties, on the one hand, and the Companies, on the other hand, in
connection with the Loan Documents is solely that of debtor and creditor. The
power of the Credit Parties under the Loan Documents is limited to the rights
provided in the Loan Documents, which rights exist solely to assure payment and
performance of the Obligation and may be exercised in a manner calculated by the
Credit Parties in their respective good faith business judgment.
12.6 COURSE OF DEALING. The acceptance by any Credit Party at any time and
from time to time of partial payment on the Obligation shall not be deemed to be
a waiver of any Event of Default then existing. No waiver by any Credit Party of
any Event of Default shall be deemed to be a waiver of any other then-existing
or subsequent Event of Default. No delay or omission by any Credit Party in
exercising any right under the Loan Documents shall impair such right or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such right preclude other or further exercise
thereof, or the exercise of any other right under the Loan Documents or
otherwise.
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12.7 CUMULATIVE RIGHTS. All rights available to the Credit Parties under
the Loan Documents are cumulative of and in addition to all other rights granted
to the Credit Parties at law or in equity, whether or not the Obligation is due
and payable and whether or not the Credit Parties have instituted any suit for
collection, foreclosure, or other action in connection with the Loan Documents.
12.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by any
Credit Party from the exercise of any rights pertaining to the Obligation shall
be applied to the Obligation in the order and manner set forth in SECTION 3.11.
12.9 CERTAIN PROCEEDINGS. Borrower will promptly execute and deliver, or
cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers any
Credit Party may reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license, or
Authorization of any Governmental Authority or other Person necessary or
appropriate for the effective exercise of any rights under the Loan Documents.
Because Borrower agrees that the Credit Parties' remedies at law for failure of
Borrower to comply with the provisions of this SECTION 12.9 would be inadequate
and that such failure would not be adequately compensable in damages, Borrower
agrees that the covenants of this SECTION 12.9 may be specifically enforced.
12.10 EXPENSES; INDEMNIFICATION.
(A) Borrower agrees to pay on demand all costs and expenses of
Administrative Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Agreement, the
other Loan Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
Administrative Agent (including the cost of internal counsel) with respect
thereto and with respect to advising Administrative Agent as to its rights and
responsibilities under the Loan Documents. Borrower further agrees to pay on
demand all costs and expenses of the Credit Parties, if any (including, without
limitation, reasonable attorneys' fees and expenses and the cost of internal
counsel), in connection with the enforcement (whether through negotiations,
legal proceedings, or otherwise) of the Loan Documents and the other documents
to be delivered hereunder.
(B) INDEMNIFICATION. BORROWER SHALL INDEMNIFY ADMINISTRATIVE AGENT
(AND ANY SUB-AGENT THEREOF), EACH LENDER AND SWING LINE LENDER, AND EACH RELATED
PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
"INDEMNITEE") AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES (INCLUDING THE FEES,
CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE), AND SHALL
INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE FROM ALL FEES AND TIME CHARGES AND
DISBURSEMENTS FOR ATTORNEYS WHO MAY BE EMPLOYEES OF ANY INDEMNITEE, INCURRED BY
ANY INDEMNITEE OR ASSERTED AGAINST ANY INDEMNITEE BY ANY THIRD PARTY OR BY
BORROWER OR ANY OTHER OBLIGOR ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY
THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) ANY
BORROWING OR LC OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING
ANY REFUSAL BY ADMINISTRATIVE AGENT TO HONOR A DEMAND FOR
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PAYMENT UNDER AN LC IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO
NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LC), OR (III) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER
BROUGHT BY A THIRD PARTY OR BY BORROWER OR ANY OTHER OBLIGOR, AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO, PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES (X) ARE SUBJECT TO INDEMNIFICATION BY
THE TERMS OF ANY ENVIRONMENTAL INDEMNITY AGREEMENT, (Y) ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR
(Z) RESULT FROM A CLAIM BROUGHT BY BORROWER OR ANY OTHER OBLIGOR AGAINST AN
INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE'S OBLIGATIONS HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT, IF BORROWER OR SUCH OBLIGOR HAS OBTAINED A FINAL
AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT
OF COMPETENT JURISDICTION.
(C) No Credit Party or any Affiliate, officer, director, employee,
attorney, or agent of any Credit Party shall be liable for any error of judgment
or act done in good faith, or be otherwise liable or responsible under any
circumstances whatsoever (INCLUDING SUCH PERSON'S NEGLIGENCE), except for such
Person's gross negligence or willful misconduct. No Credit Party or any
Affiliate, officer, director, employee, attorney, or agent of any Credit Party
shall have any liability with respect to, and each Company hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damage suffered or incurred by any
Company or any of its Affiliates in connection with, arising out of, or in any
way related to this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Each Company hereby waives, releases, and agrees not to sue any Credit Party or
any Affiliate, officer, director, employee, attorney, or agent of any Credit
Party for exemplary or punitive damages in respect of any claim in connection
with, arising out of, or in any way related to this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the other Loan Documents.
(D) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
SECTION 12.10 shall survive the payment in full of the Obligation and all other
amounts payable under this Agreement.
SECTION 13 AGENT.
13.1 APPOINTMENT AND AUTHORITY. Each of the Lenders and the Swing Line
Lender hereby irrevocably appoints Calyon to act on its behalf as Administrative
Agent hereunder and under the other Loan Documents and authorizes Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to Administrative Agent by the terms hereof or thereof, together with
such actions and powers as are reasonably incidental thereto. The provisions of
this SECTION 13 are solely for the benefit of Administrative Agent, the Lenders
and the Swing Line Lender, and neither Borrower nor any other Obligor shall have
rights as a third party beneficiary of any of such provisions.
13.2 RIGHTS AS A LENDER. The Person serving as Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as
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though it were not Administrative Agent and the term LENDER or LENDERS shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as Administrative Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.
13.3 EXCULPATORY PROVISIONS. Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, Administrative
Agent:
(A) shall not be subject to any fiduciary or other implied duties,
regardless of whether an Event of Default has occurred and is continuing;
(B) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Administrative
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Loan Documents), provided that Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose Administrative Agent to liability or that is contrary to
any Loan Document or applicable law; and
(C) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity.
Administrative Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as Administrative
Agent shall believe in good faith shall be necessary, under the circumstances as
provided in SECTION 14.11 and SECTION 12) or (ii) in the absence of its own
gross negligence or willful misconduct. Administrative Agent shall be deemed not
to have knowledge of any Event of Default unless and until notice describing
such Event of Default is given to Administrative Agent by Borrower, a Lender or
the Swing Line Lender.
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in SECTION 7 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to Administrative
Agent.
13.4 RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement,
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instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) reasonably believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. Administrative Agent also may rely upon any statement made to
it orally or by telephone and reasonably believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the funding of a
Borrowing, or the issuance of an LC, that by its terms must be fulfilled to the
satisfaction of a Lender, Administrative Agent may presume that such condition
is satisfactory to such Lender unless Administrative Agent shall have received
notice to the contrary from such Lender prior to the funding of such Borrowing
or the issuance of such LC. Administrative Agent may consult with legal counsel
(who may be counsel for Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
13.5 DELEGATION OF DUTIES. Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by Administrative
Agent. Administrative Agent and any such sub agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of this Section shall apply to any
such sub agent and to the Related Parties of Administrative Agent and any such
sub agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
13.6 RESIGNATION OF ADMINISTRATIVE AGENT. Administrative Agent may at any
time give notice of its resignation to the Lenders, the Swing Line Lender and
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with Borrower, to appoint a successor,
which shall be a bank with an office in New York, or an Affiliate of any such
bank with an office in New York. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Swing Line Lender, appoint a successor Administrative Agent
meeting the qualifications set forth above provided that if Administrative Agent
shall notify Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through Administrative Agent shall instead be made by or to each Lender and
the Swing Line Lender directly, until such time as the Required Lenders appoint
a successor Administrative Agent as provided for above in this paragraph. Upon
the acceptance of a successor's appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Administrative Agent,
and the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this
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SECTION 13 and SECTION 12.10 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent. If
at any time during the term of this Agreement, Administrative Agent's Commitment
shall be $0.00, Administrative Agent shall offer to resign as Administrative
Agent.
13.7 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender
and the Swing Line Lender acknowledges that it has, independently and without
reliance upon Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Swing Line Lender also acknowledges that it will,
independently and without reliance upon Administrative Agent or any other Lender
or any of their Related Parties and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement, any other
Loan Document or any related agreement or any document furnished hereunder or
thereunder.
13.8 NO OTHER DUTIES, ETC. Anything herein to the contrary notwithstanding,
none of the Bookrunners, Arrangers or Syndication Agents listed on the cover
page hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as Administrative Agent, a Lender or the Swing Line Lender
hereunder.
13.9 COLLATERAL AND GUARANTY MATTERS. The Lenders irrevocably authorize
Administrative Agent, at its option and in its discretion:
(A) to release any Lien on any Collateral Property granted to or held
by Administrative Agent under any Loan Document (i) upon termination of the
Total Commitment and payment in full of all Obligations (other than contingent
indemnification obligations), (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document,
or (iii) subject to SECTION 14.11, if approved, authorized or ratified in
writing by the Required Lenders; and
(B) subject to SECTION 14.11, release any Guarantor from its
obligations under the Subsidiary Guaranty.
Upon request by Administrative Agent at any time, the Lenders will confirm in
writing Administrative Agent's authority to release or subordinate its interest
in particular types or items of property, or to release any Guarantor from its
obligations under the Subsidiary Guaranty pursuant to this SECTION 13.9.
SECTION 14 MISCELLANEOUS.
14.1 HEADINGS. The headings, captions, and arrangements used in any of the
Loan Documents are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify, or modify the terms of the Loan Documents, nor
affect the meaning thereof.
14.2 NONBUSINESS DAYS. In any case where any payment or action is due under
any Loan Document on a day which is not a Business Day, such payment or action
may be delayed until the next-succeeding Business Day, but interest and fees
shall continue to accrue in respect of any payment to which it is applicable
until such payment is in fact made; provided that if, in the case of any such
payment
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in respect of a Eurodollar Borrowing, the next-succeeding Business Day is in the
next calendar month, then such payment shall be made on the next-preceding
Business Day.
14.3 COMMUNICATIONS.
(A) NOTICES GENERALLY. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in PARAGRAPH (B) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
(I) if to Borrower or any other Obligor, to it at Red Lion Hotels
Corporation, 201 West North River Drive, Suite 100, Spokane,
Washington 99201, Attention of Chief Financial Officer (Telecopier No.
509-325-7324; Telephone No. 509-459-61000;
(II) if to Administrative Agent, to Calyon at Calyon Building,
13th Floor, 1301 Ave. of the Americas, New York, NY 10019, Attention:
Jan Hazelton, (Telecopier No. 212-261-7532; Telephone No.
212-261-3723;
(III) if to Swing Line Lender, to it at to Calyon at Calyon
Building, 13th Floor, 1301 Ave. of the Americas, New York, NY 10019,
Attention: Jan Hazelton, (Telecopier No. 212-261-7532; Telephone No.
212-261-3723; and
(IV) if to a Lender, to it at its address (or telecopier number)
set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in PARAGRAPH (B) below, shall be effective as provided in said
PARAGRAPH (B).
(B) ELECTRONIC COMMUNICATIONS. Notices and other communications to the
Lenders and Swing Line Lender hereunder may be delivered or furnished by
electronic communication (including e mail and Internet or intranet websites)
pursuant to procedures approved by Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or Swing Line Lender pursuant
to SECTION 2.4 if such Lender or Swing Line Lender, as applicable, has notified
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. Administrative Agent or Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.
Unless Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the
82
opening of business on the next Business Day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing CLAUSE (I) of notification that such notice or
communication is available and identifying the website address therefor.
(C) CHANGE OF ADDRESS, ETC. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
14.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document, instrument, or
other writing to be furnished under any provision of this Agreement must be in
form and substance and in such number of counterparts as may be reasonably
satisfactory to Administrative Agent and its counsel.
14.5 EXCEPTIONS TO COVENANTS. No Company shall take any action or fail to
take any action which is permitted as an exception to any of the covenants
contained in any Loan Document if such action or omission would result in the
breach of any other covenant contained in any of the Loan Documents.
14.6 SURVIVAL. All covenants, agreements, undertakings, representations,
and warranties made in any of the Loan Documents shall survive all closings
under the Loan Documents and, except as otherwise indicated, shall not be
affected by any investigation made by any party. All rights of, and provisions
relating to, reimbursement and indemnification of any Credit Party shall survive
termination of this Agreement and payment in full of the Obligation.
14.7 GOVERNING LAW. THE LEGAL REQUIREMENTS OF THE STATE OF NEW YORK AND OF
THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES
TO THE LOAN DOCUMENTS, AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION OF THE LOAN DOCUMENTS, OTHER THAN ANY LOAN DOCUMENT THAT BY ITS
EXPRESS TERMS PROVIDES FOR THE APPLICATION OF THE LEGAL REQUIREMENTS OF ANOTHER
JURISDICTION.
14.8 INVALID PROVISIONS. If any provision in any Loan Document is held to
be illegal, invalid, or unenforceable, then such provision shall be fully
severable; the appropriate Loan Document shall be construed and enforced as if
such provision had never comprised a part thereof; and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom. Each Credit Party and each Company
party to such Loan Document agree to negotiate, in good faith, the terms of a
replacement provision as similar to the severed provision as may be possible and
be legal, valid, and enforceable.
14.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF THE COMPANIES AND THE CREDIT
PARTIES SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED
BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM
TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY COMPANY
AND/OR ANY CREDIT PARTY (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS
THEY RELATED TO THE PAYMENT OF FEES AFTER THE CLOSING DATE)REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
83
BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
14.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY
HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN NEW YORK, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY
BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE
LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY NEW YORK
LEGAL REQUIREMENTS, (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
ALL LEGAL REQUIREMENTS, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN
DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES
ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) AGREES TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 14.3, (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS
OR THE OBLIGATION SHALL BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (G)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY ALL LEGAL REQUIREMENTS,
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
The scope of each of the foregoing waivers is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. The
Companies and each other party to this Agreement acknowledge that this waiver is
a material inducement to the agreement of each party hereto to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and each will continue to rely on each of such waivers in
related future dealings. The Companies and each other party to this Agreement
warrant and represent that they have reviewed these waivers with their legal
counsel, and that they knowingly and voluntarily agree to each such waiver
following consultation with legal counsel. THE WAIVERS IN THIS SECTION 14.10 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND
REPLACEMENTS TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. In the event of
Litigation, this Agreement may be filed as a written consent to a trial by the
court.
14.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.
(A) Except as otherwise specifically provided, (i) no amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by Borrower or any other Obligor therefrom, shall be
effective unless by an instrument in writing executed jointly by Borrower and
Required Lenders, and, acknowledged by Administrative Agent (such acknowledgment
not to be unreasonably withheld), and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given, and may only be supplemented by documents delivered or to be delivered in
accordance with the express terms hereof; provided, however, that no such
amendment, waiver or consent shall: (i) waive any condition set forth in SECTION
7.1(A) without the written consent of each Lender, (ii) extend or increase the
Commitment of any Lender without the written consent of such Lender, (iii)
postpone any date fixed by this
84
Agreement or any other Loan Document for any payment (excluding mandatory
prepayments) of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby, (iv) reduce the principal of,
or the rate of interest specified herein on, any Borrowing or LC, or (subject to
CLAUSE (IV) of the third proviso to this SECTION 14.11) any fees or other
amounts payable hereunder or under any other Loan Document, or change the manner
of computation of any financial ratio (including any change in any applicable
defined term) used in determining the Applicable Margin that would result in a
reduction of any interest rate on any Borrowing or any fee payable hereunder
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be necessary to
amend the definition of "DEFAULT RATE" or to waive any obligation of Borrower to
pay interest or LC fees as set forth in SECTIONS 5.3 and 5.4 at the Default
Rate, (v) change SECTION 3.11 or SECTION 12.8 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender, (vi) change any provision of this SECTION 14.11 or the definition
of "REQUIRED LENDERS" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder without the
written consent of each Lender, (vii) except as set forth in SECTION 6.1,
discharge any Subsidiary Guarantor without the written consent of each Lender,
or (viii) release all or a material portion of the Collateral Properties in any
transaction or series of related transactions without the written consent of
each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Administrative Agent in addition to the Lenders required
above, affect the rights or duties of Administrative Agent under any LC
Agreement relating to any LC issued or to be issued by it; (ii) no amendment,
waiver or consent shall, unless in writing and signed by Swing Line Lender in
addition to the Lenders required above, affect the rights or duties of Swing
Line Lender under this Agreement; (iii) no amendment, waiver or consent shall,
unless in writing and signed by Administrative Agent in addition to the Lenders
required above, affect the rights or duties of Administrative Agent under this
Agreement or any other Loan Document; and (iv) the letter agreement between
Administrative Agent and Borrower may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
(B) Any conflict or ambiguity between the terms and provisions herein
and terms and provisions in any other Loan Document shall be controlled by the
terms and provisions herein.
14.12 MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. It is not necessary that each Lender execute
the same counterpart so long as identical counterparts are executed by Borrower,
each Lender, and Administrative Agent. This Agreement shall become effective
when counterparts hereof shall have been executed and delivered to
Administrative Agent by each Lender, Administrative Agent, and Borrower, or,
when Administrative Agent shall have received telecopied, telexed, or other
evidence satisfactory to it that such party has executed and is delivering to
Administrative Agent a counterpart hereof.
14.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.
85
(A) SUCCESSORS AND ASSIGNS GENERALLY. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither Borrower
nor any other Obligor may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of Administrative Agent
and each Lender and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an assignee in accordance with the
provisions of PARAGRAPH (B) of this SECTION, (ii) by way of participation in
accordance with the provisions of PARAGRAPH (D) of this SECTION or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
PARAGRAPH (F) of this SECTION (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in PARAGRAPH (D) of this SECTION 14.13 and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(B) ASSIGNMENTS BY LENDERS. Any Lender may at any time assign to one
or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Borrowings at
the time owing to it); PROVIDED THAT any such assignment shall be subject to the
following conditions:
(I) MINIMUM AMOUNTS.
(A) in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Borrowings at
the time owing to it or in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund, no minimum amount
need be assigned; and
(B) in any case not described in PARAGRAPH (B)(I)(A) of this
SECTION 14.13, the aggregate amount of the Commitment (which for
this purpose includes Borrowings outstanding thereunder) or, if
the applicable Commitment is not then in effect, the principal
outstanding balance of the Borrowings of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is
delivered to Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date)
shall not be less than $1,000,000, unless each of Administrative
Agent and, so long as no Event of Default has occurred and is
continuing, Borrower otherwise consents (each such consent not to
be unreasonably withheld or delayed).
(II) PROPORTIONATE AMOUNTS. Each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement with respect to the
Borrowings or the Commitment assigned.
(III) REQUIRED CONSENTS. No consent shall be required for any
assignment except to the extent required by PARAGRAPH (B)(I)(B) of
this SECTION 14.13 and, in addition:
(A) the consent of Borrower (such consent not to be
unreasonably withheld or delayed) shall be required unless (x) an
Event of Default has occurred and is continuing at the
86
time of such assignment or (y) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund;
(B) the consent of the Administrative Agent (such consent
not to be unreasonably withheld or delayed) shall be required for
any assignment that increases the obligation of the assignee to
participate in exposure under one or more LCs (whether or not
then outstanding); and
(C) the consent of Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any
assignment in respect of the revolving facility.
(IV) ASSIGNMENT AND ASSUMPTION. The parties to each assignment
shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500,
and the assignee, if it is not a Lender, shall deliver to
Administrative Agent an Administrative Questionnaire.
(V) NO ASSIGNMENT TO BORROWER. No such assignment shall be made
to Borrower or any of Borrower's Affiliates or Subsidiaries.
(VI) NO ASSIGNMENT TO NATURAL PERSONS. No such assignment shall
be made to a natural person.
Subject to acceptance and recording thereof by Administrative Agent pursuant to
PARAGRAPH (C) of this SECTION 14.13, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of SECTIONS 4.1, 4.5, 4.6, and 12.10 with respect
to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with PARAGRAPH (D) of this SECTION
14.13.
(C) REGISTER. Administrative Agent, acting solely for this purpose as
an agent of Borrower, shall maintain at one of its offices in New York, New York
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Borrowings owing to, each Lender pursuant to the
terms hereof from time to time (the "REGISTER"). The entries in the Register
shall be conclusive, and Borrower, Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
87
(D) PARTICIPATIONS. Any Lender may at any time, without the consent
of, or notice to, Borrower or Administrative Agent, sell participations to any
Person (other than a natural person or Borrower or any of Borrower's Affiliates
or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Borrowings owing to it); provided that (i) such Lender
shall give written notice to Borrower of such participation (other than a
participation to any Affiliate of such Lender) no later than five (5) Business
Days after the date thereof, (ii) such Lender's obligations under this Agreement
shall remain unchanged, (iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iv) Borrower,
Administrative Agent, the Lenders, and Swing Line Lender shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver of any provision relating to amendments
requiring unanimous consent of the Lenders that affects such Participant.
Subject to PARAGRAPH (E) of this SECTION, Borrower agrees that each Participant
shall be entitled to the benefits of SECTIONS 4.1, 4.5, and 4.6 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to PARAGRAPH (B) of this SECTION. To the extent permitted by law, each
Participant also shall be entitled to the benefits of SECTION 3.12 as though it
were a Lender, provided such Participant agrees to be subject to SECTION 3.11 as
though it were a Lender.
(E) LIMITATIONS UPON PARTICIPANT RIGHTS. A Participant shall not be
entitled to receive any greater payment under SECTION 4.1 or 4.6 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of SECTION 4.6 unless Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of Borrower, to
comply with SECTION 4.6(D) as though it were a Lender.
(F) CERTAIN PLEDGES. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
14.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The obligations of each Company under the Loan Documents shall
remain in full force and effect until termination of the Total Commitment and
payment in full of the Principal Debt and of all interest, fees, and other
amounts of the Obligation then due and owing, (and termination of all
outstanding LCs with any Lender, if any, unless such Lender shall otherwise
consent) except that SECTIONS 4, 12, and 14, and any other provisions under the
Loan Documents expressly intended to survive by the terms hereof or by the terms
of the applicable Loan Documents, shall survive such termination. If at any time
any payment of the principal of or interest on any Note or any other amount
payable by any Company under any Loan Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Company or otherwise, then the obligations of each Company under the Loan
88
Documents with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
14.15 USA PATRIOT ACT NOTICE. Each Lender and Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "Patriot Act"), it is required to obtain,
verify and record information that identifies Borrower, which information
includes the name and address of Borrower and other information that will allow
such Lender or Administrative Agent, as applicable, to identify Borrower in
accordance with the Patriot Act.
14.16 REPLACEMENT OF LENDERS. If any Lender requests compensation under
SECTION 4.1, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 4.6, or if any Lender is a Defaulting Lender or a Non-Consenting Lender,
then Borrower may, at its sole expense and effort, upon notice to such Lender
and Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, SECTION 14.13), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:
(A) Borrower shall have paid to Administrative Agent the assignment
fee specified in SECTION 14.13(B)(IV);
(B) such Lender shall have received payment of an amount equal to its
outstanding Principal Debt, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or Borrower (in the case of all other amounts); and
(C) such assignment does not conflict with applicable Legal
Requirements.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
RED LION HOTELS CORPORATION,
a Washington corporation
By: /s/ Anupam Narayan
------------------------------------
Name: Anupam Narayan
Title: EVP & CFO
SIGNATURE PAGE TO CREDIT AGREEMENT
CALYON NEW YORK BRANCH,
as Administrative Agent
By: /s/ Jan Hazelton
------------------------------------
Name: Jan Hazelton
Title: Director
By: /s/ Joseph A. Asciolla
------------------------------------
Name: Joseph A. Asciolla
Title: Managing Director
SIGNATURE PAGE TO CREDIT AGREEMENT
CALYON NEW YORK BRANCH, as a Lender and
Swing Line Lender
By: /s/ Jan Hazelton
------------------------------------
Name: Jan Hazelton
Title: Director
By: /s/ Joseph A. Asciolla
------------------------------------
Name: Joseph A. Asciolla
Title: Managing Director
SIGNATURE PAGE TO CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Daniel P. Stegemoeller
------------------------------------
Name: Daniel P. Stegemoeller
Title: Sr. Banker
SIGNATURE PAGE TO CREDIT AGREEMENT
CIBC, INC., as a Lender
By: /s/ Jacques Cornet
------------------------------------
Name: Jacques Cornet
Title: Authorized Signatory
SIGNATURE PAGE TO CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ Charles Triandaeilou
------------------------------------
Name: Charles Triandaeilou
Title: V.P.
SIGNATURE PAGE TO CREDIT AGREEMENT
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Bruce Zavalney
------------------------------------
Name: Bruce Zavalney
Title: Vice Pres.
SIGNATURE PAGE TO CREDIT AGREEMENT
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
DATE: __________, _____
SUBJECT PERIOD: ________ended ________________, ______
ADMINISTRATIVE AGENT: Calyon New York Branch
BORROWER: Red Lion Hotels Corporation
This certificate is delivered under the Credit Agreement, dated as of September
____, 2006 (as amended, modified, supplemented, or restated from time to time,
the "AGREEMENT"), among Borrower, Administrative Agent, and Lenders party
thereto. Capitalized terms used herein and not otherwise defined herein shall
have the meaning given to such terms in the Agreement. The undersigned certifies
to Lenders that:
(a) the undersigned is a Responsible Officer of Borrower in the position(s) set
forth under the signature below;
(b) the Financial Statements of the Companies attached to this certificate were
prepared in accordance with GAAP, and present fairly in all material respects
the consolidated financial condition and results of operations of the Companies
as of, and for the [three, six, or nine months, or fiscal year] ended on,
____________, _____(the "SUBJECT PERIOD") [(except for the absence of complete
footnotes and subject to normal year-end audit adjustments)];
(c) a review of the activities of the Companies during the Subject Period has
been made under my supervision with a view to determining whether, during the
Subject Period, the Obligors have kept, observed, performed, and fulfilled all
of their respective obligations under the Loan Documents, and during the Subject
Period, (i) the Obligors kept, observed, performed, and fulfilled each and every
covenant and condition of the Loan Documents (except for the deviations, if any,
set forth on ANNEX A to this certificate) in all material respects, and (ii) no
Potential Default or Event of Default has occurred which has not been cured or
waived (except the Events of Default or Potential Defaults, if any, described on
ANNEX A to this certificate);
(d) the status of compliance by Borrower with SECTION 10.18(A) through (D) of
the Agreement at the end of the Subject Period is as set forth on ANNEX B to
this certificate; and
(e) during the Subject Period, each Schedule to each Loan Document that was
required to be revised or updated and supplied to Administrative Agent in
accordance with the terms of the Loan Documents has been so revised or updated
and supplied.
[Signature Page Follows]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedules and Exhibits
ANNEX A TO COMPLIANCE CERTIFICATE
DEVIATIONS FROM LOAN DOCUMENTS/
POTENTIAL DEFAULTS OR EVENTS OF DEFAULTS
(If none, so state.)
Schedules and Exhibits
ANNEX B TO COMPLIANCE CERTIFICATE
Status of Compliance with SECTION 10.18(A) through (D)of the Agreement
Borrower shall provide to Administrative Agent (for the benefit of Lenders)
detailed calculations, in form and substance reasonably acceptable to
Administrative Agent, demonstrating compliance with the following covenants:
SECTION 10.18(A) TOTAL LEVERAGE RATIO
1. Consolidated Debt: $__________
2. Cash not subject to any Lien, restriction, or
other encumbrance held by Borrower or a
Subsidiary Guarantor in excess of $5,000,000: $__________
3. Sum of Line 1 minus Line 2: $__________
4. Consolidated EBITDA: $__________
5. Total Leverage Ratio (Line 3 divided by Line 4): ___________
MAXIMUM PERMITTED: ___________
SECTION 10.18(B) SENIOR LEVERAGE RATIO
1. Consolidated Debt that is not Subordinated Debt: $__________
2. Cash not subject to any Lien, restriction, or
other encumbrance held by Borrower or a
Subsidiary Guarantor in excess of $5,000,000: $__________
3. Sum of Line 1 minus Line 2: $__________
4. Consolidated EBITDA: $__________
5. Senior Leverage Ratio (Line 3 divided by Line 4): ___________
MAXIMUM PERMITTED: ___________
SECTION 10.18(C) INTEREST COVERAGE RATIO
1. Consolidated EBITDA: $__________
2. Consolidated Interest Expense: $__________
3. Interest Coverage Ratio (Line 1 divided by Line 2): ___________
MINIMUM PERMITTED: ___________
SECTION 10.18(D) DEBT SERVICE COVERAGE RATIO
1. Consolidated EBITDA: $__________
2. Regularly scheduled principal payments on Debt(1): $__________
3. Consolidated Interest Expense: $__________
4. Debt Service (sum of Line 2 plus Line 3): $__________
- ----------
(1) Excluding scheduled payments of principal on Debt which pay such Debt in
full, but only to the extent such final payment is greater than the
scheduled principal payment immediately preceding such final payment.
Schedules and Exhibits
5. Debt Service Coverage Ratio (Line 1 divided by Line 4): ___________
MINIMUM PERMITTED: ___________
AVAILABILITY AMOUNT
1. Consolidated EBITDA: $__________
2. Scheduled principal payments on
Consolidated Debt that is not Subordinated Debt: $__________
3. Consolidated Interest Expense (other than interest
on Borrowings and Subordinated Debt): $__________
4. FF&E Reserve $__________
5. Cash Taxes for continuing operations: $__________
6. Free Cash Flow Amount:
(Line 1 minus Line 2 minus Line 3 minus Line 4
minus Line 5): $__________
7. Line 6 times five (5): $__________
8. Outstanding amount of all Recourse Debt
(other than the Obligation) of the Companies
that is not Subordinated Debt: $__________
9. Line 7 minus Line 8: $__________
10. Total Commitment: $__________
11. Availability Amount (lesser of Line 9 or Line 10): $__________
Schedules and Exhibits
EXHIBIT B-1
FORM OF REVOLVING CREDIT NOTE
September ____, 2006
FOR VALUE RECEIVED, the undersigned, RED LION HOTELS CORPORATION, a Washington
corporation ("BORROWER"), hereby promises to pay to the order of
_______________________ ("LENDER"), at the offices of CALYON NEW YORK BRANCH, as
Administrative Agent for Lender and others as hereinafter described, the
aggregate Principal Debt (other than under the Swing Line Subfacility) disbursed
by Lender to Borrower and outstanding and unpaid on the Maturity Date (together
with accrued and unpaid interest thereon).
This note has been executed and delivered under, and is subject to the terms of,
the Credit Agreement, dated as of September ____, 2006 (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), among Borrower,
Administrative Agent, and each Lender party thereto, and is one of the
"Revolving Credit Notes" referred to therein. Unless defined herein, capitalized
terms used herein that are defined in the Agreement have the meaning given to
such terms in the Agreement. Reference is made to the Agreement for provisions
affecting this note regarding applicable interest rates, principal and interest
payment dates, final maturity, voluntary and mandatory prepayments, acceleration
of maturity, exercise of rights, payment of attorneys' fees, court costs and
other costs of collection, certain waivers by Borrower and others now or
hereafter obligated for payment of any sums due hereunder and security for the
payment hereof.
THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA SHALL
GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER HEREUNDER AND THE VALIDITY,
CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF.
RED LION HOTELS CORPORATION,
a Washington corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedules and Exhibits
EXHIBIT B-2
FORM OF SWING LINE NOTE
September ____, 2006
FOR VALUE RECEIVED, the undersigned, RED LION HOTELS CORPORATION, a Washington
corporation ("BORROWER"), hereby promises to pay to the order of CALYON NEW YORK
BRANCH ("LENDER"), the aggregate principal amount of Swing Line Loans under the
Swing Line Subfacility disbursed by Lender to Borrower as set forth in the
Agreement and outstanding and unpaid on the Maturity Date (together with accrued
and unpaid interest thereon).
This note has been executed and delivered under, and is subject to the terms of,
the Credit Agreement, dated as of September ____, 2006 (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), among Borrower,
Lender and other lenders named therein, and is the "Swing Line Note" referred to
therein. Unless defined herein, capitalized terms used herein that are defined
in the Agreement have the meaning given to such terms in the Agreement.
Reference is made to the Agreement for provisions affecting this note regarding
applicable interest rates, principal and interest payment dates, final maturity,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
rights, payment of attorneys' fees, court costs and other costs of collection,
certain waivers by Borrower and others now or hereafter obligated for payment of
any sums due hereunder and security for the payment hereof.
THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA SHALL
GOVERN THE RIGHTS AND DUTIES OF BORROWER AND LENDER HEREUNDER AND THE VALIDITY,
CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF.
RED LION HOTELS CORPORATION,
a Washington corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedules and Exhibits
EXHIBIT C-1
FORM OF NOTICE OF BORROWING
_____________ ____, _____
To: Calyon New York Branch, as Administrative Agent
for the Lenders as defined in the Agreement
referred to below
Reference is made to the Credit Agreement, dated as of September ___, 2006 (as
amended, modified, supplemented, or restated from time to time, the
"AGREEMENT"), among the undersigned, the Lenders named therein, and
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement. The
undersigned hereby requests (select one):
[ ] A Borrowing [ ] A conversion or continuation of a
Borrowing
1. On _______________________________________ (a Business Day).
2. In the amount of $________________________.
3. Comprised of _____________________________.
[Type of Borrowing requested]
4. For Eurodollar Borrowings: with an Interest Period of ________ months.
The Borrowing, if any, requested herein complies with the requirements of
SECTION 2.1 of the Agreement.
Very truly yours,
RED LION HOTELS CORPORATION,
a Washington corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedules and Exhibits
EXHIBIT C-2
FORM OF NOTICE OF LC
Date: ___________, _____
To: Calyon New York Branch, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as September ____,
2006 (as amended, modified, supplemented, or restated from time to time, the
"AGREEMENT," the terms defined therein being used herein as therein defined),
among Red Lion Hotels Corporation, a Washington corporation ("BORROWER"), the
Lenders from time to time party thereto, and Calyon New York Branch, as
Administrative Agent.
The undersigned hereby requests an LC:
1. On _______________________________________ (a Business Day).
2. Beneficiary: _____________________________
3. Expiry Date: _____________________________
4. Face Amount: _____________________________
5. Purpose: ________________________________.
The LC requested herein complies with the requirements of SECTION 2.2(A) of the
Agreement.
RED LION HOTELS CORPORATION,
a Washington corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedules and Exhibits
EXHIBIT D
FORM OF OPINION OF COUNSEL
Schedules and Exhibits
EXHIBIT E
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "ASSIGNMENT AND ASSUMPTION") is dated
as of the Effective Date set forth below and is entered into by and between
[the][each](2) Assignor identified in ITEM 1 below ([the][each, an] "ASSIGNOR")
and [the][each](3) Assignee identified in ITEM 2 below ([the][each, an]
"ASSIGNEE"). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees](4) hereunder are several and not joint.](5)
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), receipt of a copy
of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and
Conditions set forth in ANNEX 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells
and assigns to [the Assignee][the respective Assignees], and [the][each]
Assignee hereby irrevocably purchases and assumes from [the Assignor][the
respective Assignors], subject to and in accordance with the Standard Terms and
Conditions and the Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor's][the
respective Assignors'] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any LCs, guarantees, and Swing Line Loans included in such facilities) and (ii)
to the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
CLAUSE (I) above (the rights and obligations sold and assigned by [the][any]
Assignor to [the][any] Assignee pursuant to CLAUSES (I) and (II) above being
referred to herein collectively as [the][an] "ASSIGNED INTEREST"). Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.
1. Assignor[s]: ________________________________
2. Assignee[s]: ________________________________
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]
3. Borrower: Red Lion Hotels Corporation, a Washington corporation
- ----------
(2) For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose
the second bracketed language.
(3) For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.
(4) Select as appropriate.
(5) Include bracketed language if there are either multiple Assignors or
multiple Assignees.
Schedules and Exhibits
4. Administrative Agent: Calyon New York Branch, as Administrative Agent
5. Credit Agreement: The Credit Agreement dated as of September ____,
2006, among Borrower, the Lenders parties thereto,
and Administrative Agent
6. Assigned Interest[s]: ________________________________
[7. Trade Date: ______________](6)
[Signature Pages follow]
- ----------
(6) To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.
Schedules and Exhibits
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR[S](7)
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ASSIGNEE[S](8)
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
- ----------
(7) Add additional signature blocks as needed.
(8) Add additional signature blocks as needed.
Consented to and Accepted:
CALYON NEW YORK BRANCH,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Consented to:
CALYON NEW YORK BRANCH,
as Swing Line Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Consented to:
RED LION HOTELS CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title: ]
--------------------------------
Schedules and Exhibits
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i)
it is the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Agreement or any other Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i)
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Agreement, (ii) it meets
all the requirements to be an assignee under Section 14.13(b)(iii), (v) and (vi)
of the Agreement (subject to such consents, if any, as may be required under
Section 14.13(b)(iii) of the Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Agreement as a Lender
thereunder and, to the extent of [the][the relevant] Assigned Interest, shall
have the obligations of a Lender thereunder, (iv) it is sophisticated with
respect to decisions to acquire assets of the type represented by the Assigned
Interest and either it, or the person exercising discretion in making its
decision to acquire the Assigned Interest, is experienced in acquiring assets of
such type, (v) it has received a copy of the Agreement, and has received or has
been accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 9.3 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Agreement, duly completed and
executed by [the][such] Assignee; and (b) agrees that (i) it will, independently
and without reliance on the Administrative Agent, [the][any] Assignor or any
other Lender, 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 Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy or email shall be effective as delivery of a manually executed
counterpart of this Assignment
Schedules and Exhibits
and Assumption. This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of New York.
Schedules and Exhibits
EXHIBIT F
JOINDER AGREEMENT
Re: Credit Agreement dated September ____, 2006 (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), by and among Red
Lion Hotels Corporation, a Washington corporation ("BORROWER"), the Lenders from
time to time party thereto, and Calyon New York Branch, as Administrative Agent.
Pursuant to SECTION 2.7 of the Agreement, the undersigned hereby (a) agrees to
become a "Lender" under the Agreement; and (b) joins in, becomes a party to, and
agrees to comply with and be bound by the terms and conditions of the Agreement,
to the same extent as if the undersigned were an original signatory thereto.
The undersigned (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Joinder Agreement and to consummate the transactions contemplated hereby and to
become a Subsequent Lender under the Agreement, (ii) it meets all requirements
of a Lender under the Agreement (subject to receipt of such consents as may be
required under the Agreement), (iii) it has received a copy of the Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 9.3 thereof, as applicable, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Joinder Agreement on the basis of which it has made such
analysis and decision independently and without reliance on Administrative Agent
or any other Lender, and (iv) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the
Agreement, duly completed and executed by the undersigned; and (b) agrees that
(i) it will, independently and without reliance on Administrative Agent or any
other Lender, 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 Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
Capitalized terms used and not defined herein shall have the meaning ascribed to
such terms in the Agreement.
This Joinder Agreement shall be binding upon the undersigned and its successors
and assigns. Delivery of an executed counterpart of a signature page of this
Joinder Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Joinder Agreement. This Joinder Agreement shall be
governed by, and construed in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
the ____ day of __________, 20____.
LENDER:
___________________, a ______________
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Schedules and Exhibits
EXHIBIT G
INCREASE CERTIFICATE
Re: Credit Agreement dated September ____, 2006 (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), by and among Red
Lion Hotels Corporation, a Washington corporation, the Lenders from time to time
party thereto, and Calyon New York Branch, as Administrative Agent.
Pursuant to SECTION 2.7 of the Agreement, the undersigned hereby agrees and
consents to an increase in its Commitment. After giving effect to such increase,
the Commitment of the undersigned will equal $_____________.
Capitalized terms used and not defined herein shall have the meaning ascribed to
such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this consent as of the ______
day of __________, 20____.
LENDER:
___________________, a ______________
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Schedules and Exhibits
EXHIBIT H
FORM OF GUARANTY
UNCONDITIONAL GUARANTY AGREEMENT
THIS UNCONDITIONAL GUARANTY AGREEMENT (this "GUARANTY") is executed as of
September ____, 2006, by each of the Subsidiaries of Red Lion Hotels
Corporation, a Washington corporation ("BORROWER") listed on SCHEDULE 1 attached
hereto or who become a party hereto pursuant to PARAGRAPH 20 below (each a
"GUARANTOR" and collectively, "GUARANTORS"), for the benefit of the Credit
Parties defined below.
RECITALS:
1. Borrower, may from time to time be indebted to Credit Parties pursuant to
that certain Credit Agreement dated of even date herewith (as amended, modified,
supplemented, or restated from time to time, the "AGREEMENT"), by and between
Borrower, Calyon New York Branch ("ADMINISTRATIVE AGENT"), as Administrative
Agent and Swing Line Lender, and the Lenders defined therein (Administrative
Agent and Lenders, together with their respective successors and assigns are
herein called "CREDIT PARTIES").
2. Capitalized terms used herein shall, unless otherwise indicated, have the
respective meanings set forth in the Agreement.
3. The Credit Parties are not willing to fund Borrowings under the Agreement or
otherwise extend credit to Borrower unless Guarantors unconditionally guarantee
payment of all present and future indebtedness and obligations of Borrower to
the Credit Parties under the Agreement and the Loan Documents.
4. Each Guarantor will, directly or indirectly, benefit from the Credit Parties'
extension of credit to Borrower.
NOW, THEREFORE, as an inducement to the Credit Parties to enter into the
Agreement and to fund Borrowings by Borrower thereunder, and to extend such
credit to Borrower as the Credit Parties may from time to time agree to extend,
and for other good and valuable consideration, the receipt and legal sufficiency
of which are hereby acknowledged, Guarantors hereby jointly and severally
guarantee payment of the Guaranteed Debt (hereinafter defined) as more
specifically described hereinbelow in SECTION 1 and hereby agree as follows:
SECTION 1
NATURE AND SCOPE OF GUARANTY
1. GUARANTY. Each Guarantor hereby absolutely and unconditionally guarantees,
jointly and severally, as a guarantee of payment and not merely as a guarantee
of collection, prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all existing
and future indebtedness and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, of Borrower to the Credit Parties arising under the
Agreement and all instruments, agreements and other documents of every kind and
nature now or hereafter executed in connection with the Agreement (including all
renewals, extensions and modifications thereof) (collectively, the "GUARANTEED
OBLIGATIONS"). Administrative Agent's books and records showing the amount of
the Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and in the absence of any manifest error shall be binding upon each
Guarantor and conclusive for the purpose of establishing the amount of the
Guaranteed Obligations. This
Schedules and Exhibits
Guaranty shall not be affected by the genuineness, validity, regularity or
enforceability of the Guaranteed Obligations or any instrument or agreement
evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any fact
or circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of any Guarantor under this Guaranty.
The obligations of each Guarantor hereunder shall be limited to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any
comparable provisions of any applicable state law.
2. NO SETOFF OR DEDUCTIONS; TAXES. Each Guarantor represents and warrants that
it is incorporated and resident in the United States of America. All payments by
any Guarantor hereunder shall be paid in full, without setoff or counterclaim or
any deduction or withholding whatsoever, including, without limitation, for any
and all present and future taxes. If any Guarantor must make a payment under
this Guaranty, such Guarantor represents and warrants that it will make the
payment from one of its U.S. resident offices to the Credit Parties so that no
withholding tax is imposed on the payment. If notwithstanding the foregoing, any
Guarantor makes a payment under this Guaranty to which withholding tax applies,
or any taxes (other than taxes on net income (a) imposed by the country or any
subdivision of the country in which any Credit Parties' principal office or
actual lending office is located and (b) measured by the United States taxable
income the Credit Parties would have received if all payments under or in
respect of this Guaranty were exempt from taxes levied by such Guarantor's
country) are at any time imposed on any payments under or in respect of this
Guaranty including, but not limited to, payments made pursuant to this PARAGRAPH
2, such Guarantor shall pay all such taxes to the relevant authority in
accordance with applicable law such that the Credit Parties receives the sum it
would have received had no such deduction or withholding been made and shall
also pay to the Credit Parties, on demand, all additional amounts which the
Credit Parties specify as necessary to preserve the after-tax yield the Credit
Parties would have received if such taxes had not been imposed. Guarantors shall
promptly provide Administrative Agent with an original receipt or certified copy
issued by the relevant authority evidencing the payment of any such amount
required to be deducted or withheld.
3. NO TERMINATION. This Guaranty is a continuing and irrevocable guaranty of all
Guaranteed Obligations now or hereafter existing and shall remain in full force
and effect until all Guaranteed Obligations and any other amounts payable under
this Guaranty are indefeasibly paid and performed in full and any commitments of
the Credit Parties or facilities provided by the Credit Parties with respect to
the Guaranteed Obligations are terminated. At Administrative Agent's option, all
payments under this Guaranty shall be made at Administrative Agent's Payment
Office in U.S. Dollars.
4. WAIVER OF NOTICES. Each Guarantor waives notice of the acceptance of this
Guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. Each Guarantor further waives presentment, protest, notice,
dishonor or default, demand for payment and any other notices to which any
Guarantor might otherwise be entitled.
5. SUBROGATION. No Guarantor shall exercise right of subrogation, contribution
or similar rights with respect to any payments it makes under this Guaranty
until all of the Guaranteed Obligations and any amounts payable under this
Guaranty are indefeasibly paid and performed in full and any commitments of the
Credit Parties or facilities provided by the Credit Parties with respect to the
Guaranteed Obligations are terminated. If any amounts are paid to any Guarantor
in violation of the foregoing limitation, then such amounts shall be held in
trust for the benefit of the Credit Parties and shall forthwith be paid to the
Credit Parties to reduce the amount of the Guaranteed Obligations, whether
matured or unmatured.
6. WAIVER OF SURETYSHIP DEFENSES. Each Guarantor agrees that Administrative
Agent on behalf of the Lenders may, at any time and from time to time, and
without notice to Guarantors, make any agreement with Borrower or with any other
person or entity liable on any of the Guaranteed Obligations or providing
collateral as security for the Guaranteed Obligations, for the extension,
renewal, payment,
Schedules and Exhibits
compromise, discharge or release of the Guaranteed Obligations or any collateral
(in whole or in part), or for any modification or amendment of the terms thereof
or of any instrument or agreement evidencing the Guaranteed Obligations or the
provision of collateral, all without in any way impairing, releasing,
discharging or otherwise affecting the obligations of any Guarantor under this
Guaranty. Each Guarantor waives any defense arising by reason of any disability
or other defense of Borrower or any other Guarantor, or the cessation from any
cause whatsoever of the liability of Borrower, or any claim that any Guarantor's
obligations exceed or are more burdensome than those of Borrower and waives the
benefit of any statute of limitations affecting the liability of any Guarantor
hereunder. Each Guarantor waives any right to enforce any remedy which any
Credit Party now has or may hereafter have against Borrower and waives any
benefit of and any right to participate in any security now or hereafter held by
the Credit Parties. Further, each Guarantor consents to the taking of, or
failure to take, any action which might in any manner or to any extent vary the
risks of any Guarantor under this Guaranty or which, but for this provision,
might operate as a discharge of any Guarantor.
7. EXHAUSTION OF OTHER REMEDIES NOT REQUIRED. The obligations of each Guarantor
hereunder are those of primary obligor, and not merely as surety, and are
independent of the Guaranteed Obligations. Each Guarantor waives diligence by
the Credit Parties and action on delinquency in respect of the Guaranteed
Obligations or any part thereof, including, without limitation any provisions of
law requiring the Credit Parties to exhaust any right or remedy or to take any
action against Borrower, any other guarantor or any other person, entity or
property before enforcing this Guaranty against any Guarantor.
8. REINSTATEMENT. Notwithstanding anything in this Guaranty to the contrary,
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any portion of the Guaranteed Obligations is
revoked, terminated, rescinded or reduced or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of Borrower or any
other person or entity or otherwise, as if such payment had not been made and
whether or not Administrative Agent is in possession of or has released this
Guaranty and regardless of any prior revocation, rescission, termination or
reduction.
9. SUBORDINATION. Each Guarantor hereby subordinates the payment of all
obligations and indebtedness of Borrower owing to such Guarantor, whether now
existing or hereafter arising, including but not limited to any obligation of
Borrower to such Guarantor as subrogee of the Credit Parties or resulting from
such Guarantor's performance under this Guaranty, to the indefeasible payment in
full of all Guaranteed Obligations. If Administrative Agent so requests, any
such obligation or indebtedness of Borrower to any Guarantor shall be enforced
and performance received by such Guarantor as trustee for the Credit Parties and
the proceeds thereof shall be paid over to Administrative Agent on account of
the Guaranteed Obligations, but without reducing or affecting in any manner the
liability of any Guarantor under this Guaranty.
10. STAY OF ACCELERATION. In the event that acceleration of the time for payment
of any of the Guaranteed Obligations is stayed, upon the insolvency, bankruptcy
or reorganization of Borrower or any other person or entity, or otherwise, all
such amounts shall nonetheless be payable by Guarantors immediately upon demand
by Administrative Agent.
11. EXPENSES. Guarantors shall pay on demand all out-of-pocket expenses
(including reasonable attorneys' fees and expenses and the allocated cost and
disbursements of internal legal counsel) in any way relating to the enforcement
or protection of the Credit Parties' rights under this Guaranty, including any
incurred in the preservation, protection or enforcement of any rights of the
Credit Parties in any case commenced by or against any Guarantor under the
Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute. The obligations of Guarantors under the preceding sentence shall
survive termination of this Guaranty.
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12. AMENDMENTS. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by
Administrative Agent and Guarantors.
13. NO WAIVER; ENFORCEABILITY. No failure by the Credit Parties to exercise, and
no delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy or
power hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law or in equity. The unenforceability or
invalidity of any provision of this Guaranty shall not affect the enforceability
or validity of any other provision herein.
14. ASSIGNMENT; GOVERNING LAWS; JURISDICTION. This Guaranty shall (a) bind each
Guarantor and its successors and assigns, provided that no Guarantor may assign
its rights or obligations under this Guaranty without the prior written consent
of Administrative Agent (and any attempted assignment without such consent shall
be void), (b) inure to the benefit of the Credit Parties and their successors
and assigns and the Credit Parties may, without notice to any Guarantor and
without affecting any Guarantor's obligations hereunder, assign or sell
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part, to the extent permitted by the Agreement and (c) be governed by the
internal laws of the State of New York. Each Guarantor hereby irrevocably (i)
submits to the non-exclusive jurisdiction of any United States Federal or State
court sitting in New York, New York in any action or proceeding arising out of
or relating to this Guaranty, and (ii) waives to the fullest extent permitted by
law any defense asserting an inconvenient forum in connection therewith. Service
of process by Administrative Agent in connection with such action or proceeding
shall be binding on each Guarantor if sent to such Guarantor by registered or
certified mail at its address specified below. Each Guarantor agrees that the
Credit Parties may disclose to any prospective purchaser and any purchaser of
all or part of the Guaranteed Obligations any and all information in the Credit
Parties' possession concerning any Guarantor, this Guaranty and any security for
this Guaranty.
15. CONDITION OF BORROWER. Each Guarantor acknowledges and agrees that it has
the sole responsibility for, and has adequate means of, obtaining from Borrower
such information concerning the financial condition, business and operations of
Borrower as Guarantors require, and that Credit Parties have no duty, and
Guarantors are not relying on the Credit Parties at any time, to disclose to
Guarantors any information relating to the business, operations or financial
condition of Borrower.
16. SETOFF. If and to the extent any payment is not made when due hereunder, the
Credit Parties may setoff and charge from time to time any amount so due against
any or all of Guarantors' accounts or deposits with any Credit Parties.
17. OTHER GUARANTEES. Unless otherwise agreed by Administrative Agent and
Guarantors in writing, this Guaranty is not intended to supersede or otherwise
affect any other guaranty now or hereafter given by Guarantors for the benefit
of the Credit Parties or any term or provision thereof.
18. REPRESENTATIONS AND WARRANTIES; COVENANTS. Certain representations and
warranties in the Agreement are applicable to each Guarantor or its assets or
operations, and each such representation and warranty is true and correct. In
addition, each Guarantor represents and warrants that by virtue of its
relationship with Borrower, the execution, delivery and performance of this
Guaranty is for the direct benefit of such Guarantor and it has received
adequate consideration for this Guaranty. Each Guarantor will comply with,
perform, and be bound by all covenants and agreements in the Agreement that are
applicable to it, its assets, or its operations, each of which is hereby
ratified and confirmed (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION AND
RELATED PROVISIONS IN SECTION 12.10 OF THE AGREEMENT); AND (ii) CONSENT TO AND
APPROVE THE VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL PROVISIONS OF
SECTION 14.10 OF THE AGREEMENT.
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19. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE
LAW, EACH GUARANTOR AND THE CREDIT PARTIES EACH WAIVE TRIAL BY JURY WITH RESPECT
TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS GUARANTY.
THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
20. ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall be each of the
Subsidiaries that are signatories hereto and that are listed on SCHEDULE 1
attached hereto. From time to time subsequent to the time hereof, additional
Subsidiaries may become parties hereto as additional Guarantors (each an
"ADDITIONAL GUARANTOR") pursuant to Section 9.28 of the Agreement by executing a
counterpart of this Guaranty in the form of EXHIBIT A attached hereto. Upon
delivery of any such counterpart to Administrative Agent, notice of which is
hereby waived by Guarantors, each such Additional Guarantor shall be a Guarantor
and shall be a party hereto as if such Additional Guarantor were an original
signatory hereof. Each Guarantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Guarantor hereunder, or by any election by Administrative Agent not to
cause any Subsidiary to become an Additional Guarantor hereunder. This Guaranty
shall be fully effective as to any Guarantor that is or becomes a party hereto
regardless of whether any such person becomes or fails to become or ceases to be
a Guarantor hereunder.
21. RELEASE OF GUARANTORS. Pursuant to Section 6.1 of the Agreement, any
Guarantor may be released from its obligations under this Guaranty Agreement by
Administrative Agent's execution of a Release of Guaranty in the form of EXHIBIT
B attached hereto. Each Guarantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the release of any other
Guarantor hereunder.
EXECUTED as of the day and year first above written.
GUARANTORS:
By:
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Name:
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Title:
---------------------------------
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SCHEDULE 1 TO FORM OF GUARANTY
INITIAL GUARANTORS
Red Lion Hotels Limited Partnership
Red Lion Hotels Franchising, Inc.
Red Lion Hotels Management, Inc.
Red Lion Hotels Holdings, Inc.
WHC809, LLC
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EXHIBIT A TO FORM OF GUARANTY
COUNTERPART TO GUARANTY
In witness whereof, the undersigned Additional Guarantor has caused this
Guaranty to be executed and delivered by its officer thereunto duly authorized
as of _______________, 20___.
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[NAME OF ADDITIONAL GUARANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT B TO FORM OF GUARANTY
FORM OF RELEASE OF GUARANTOR
In witness whereof, the undersigned Administrative Agent, for itself and on
behalf of each of the Credit Parties, hereby releases and discharges from any
and all obligations and liabilities______ of_________ to the Credit Parties
under that certain Unconditional Guaranty Agreement dated as of September ____,
2006, executed by the Subsidiaries of Red Lion Hotels Corporation described
therein in favor of the Credit Parties defined therein.
CALYON NEW YORK BRANCH, as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT I
FORM OF MORTGAGE FOR INITIAL COLLATERAL PROPERTY
AFTER RECORDING RETURN TO:
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
Attention:
-----------------------------
BE ADVISED THAT THE PROMISSORY NOTE SECURED BY THIS DEED
OF TRUST PROVIDES FOR A VARIABLE RATE OF INTEREST.
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS,
AND FIXTURE FILING
[Loan No. _________________________]
GRANTOR: WHC809, LLC
GRANTEE (LENDER): CALYON NEW YORK BRANCH, AS
ADMINISTRATIVE AGENT
GRANTEE (TRUSTEE):
LEGAL DESCRIPTION: SEE LEGAL DESCRIPTION ON ATTACHED
EXHIBIT A
ASSESSOR'S TAX PARCEL ID
NUMBER: 197570-0255-06
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THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND
FIXTURE FILING ("DEED OF TRUST") is made this ______ day of September, 2006,
among WHC809, LLC, a Delaware limited liability company, the address of which is
c/o Red Lion Hotels Corporation, 201 West North River Drive, Suite 100, Spokane,
Washington, 99201 ("GRANTOR"), [title insurance company]_, a
_________________________, the address of which is ____________________________,
and its successors in trust and assigns ("TRUSTEE"), and CALYON NEW YORK BRANCH,
as Administrative Agent, the address of which is ____________________
("BENEFICIARY").
1. GRANTING CLAUSE. Grantor, in consideration of the acceptance by Trustee
of the trust hereunder, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in order to secure
the obligations described in Section 3 below, grants, bargains, sells, and
conveys to Trustee and its successors in trust and assigns, forever, in trust,
with power of sale, all of Grantor's estate, right, title, interest, claim, and
demand in and to the property in the county of King, State of Washington,
described in Exhibit A attached hereto (the "LAND"), whether now existing or
hereafter acquired (all of the property described in all parts of this SECTION 1
and all additional property, if any, described in SECTION 2 is herein called the
"PROPERTY"):
1.1 Land and Appurtenances. The land described on EXHIBIT A hereto,
and all tenements, hereditaments, rights-of-way, easements, appendages, and
appurtenances thereto belonging or in any way appertaining, including without
limitation all of the right, title and interest of grantor in and to any
avenues, streets, ways, alleys, vaults, strips, or gores of land adjoining that
property, and all claims or demands of grantor either in law or in equity in
possession or expectancy of, in, and to that property; and
1.2 Improvements, Fixtures, and Personal Property. All buildings,
structures, and other improvements now or hereafter erected on the property
described in SECTION 1.1 above, and all facilities, fixtures, machinery,
apparatus, installations, goods, equipment, inventory, furniture, and other
properties of grantor of whatsoever nature (including without limitation all
heating, ventilating, air conditioning, plumbing and electrical equipment,
elevators and escalators, sprinkler systems, engines and motors, lighting,
laundry, cleaning, fire prevention and fire extinguishing equipment, ducts and
compressors, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors,
bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades,
venetian blinds, screens, paintings, hangings, pictures, divans, couches,
luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows,
blankets, glassware, silverware, food carts, cookware, dry cleaning facilities,
dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and
other drink dispensers, icemakers, radios, television sets, intercom and paging
equipment, electric and electronic equipment, dictating equipment, private
telephone systems, medical equipment, potted plants, lighting fixtures,
fittings, plants, apparatus, stoves, ranges, refrigerators, laundry machines,
tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards,
conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and
polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash
and fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment,
dishwashers, garbage disposals, building materials and supplies, and
construction forms, tools, and equipment), now or hereafter located in or used
or procured for use in connection with that property, it being the intention of
the parties that all property of the character hereinabove described that is now
owned or hereafter acquired by grantor and that is affixed or attached to,
stored upon, or used in connection with the property described in SECTION 1.1
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above shall be, remain, or become a portion of that property and shall be
covered by and subject to the lien of this deed of trust, together with all
contracts, agreements, permits, plans, specifications, drawings, surveys,
engineering reports, and other work products relating to the construction of the
existing or any future improvements on the property, any and all rights of
grantor in, to, or under any architect's contracts or construction contracts
relating to the construction of the existing or any future improvements on the
property, and any performance and/or payment bonds issued in connection
therewith, together with all trademarks, trade names, copyrights, computer
software, and other intellectual property used by grantor in connection with the
property or any symbols under which any of the property is operated or the
business of grantor at the property is conducted and all agreements now or
hereafter entered into by grantor with respect thereto, all agreements now or
hereafter entered into by grantor with any party with respect to architectural,
engineering, management, brokerage, promotional, marketing, or consulting
services rendered or to be rendered, with respect to the planning, design,
inspection, or supervision of the construction, development, management,
marketing, promotion, leasing, operation, or sale of any of the property and
including, without limitation, the management agreement by and between grantor
and Red Lion Hotels Franchising, Inc. dated September 13, 2006 and the
franchise license agreement by and between grantor and Red Lion Hotels
Franchising, Inc. dated September 13, 2006, all transferable or assignable
permits, licenses, franchises, certificates, and other rights and privileges
obtained by grantor in connection with the property or any operation related
thereto; and
1.3 Enforcement and Collection. Any and all rights of grantor without
limitation to make claim for, collect, receive, and receipt for any and all
rents, income, revenues, issues, royalties, and profits, including mineral, oil,
and gas rights and profits, insurance proceeds, condemnation awards, and other
moneys, payable or receivable from or on account of any of the property,
including interest thereon, or to enforce all other provisions of any other
agreement (including those described in SECTION 1.2 above) affecting or relating
to any of the property, to bring any suit in equity, action at law, or other
proceeding for the collection of such moneys or for the specific or other
enforcement of any such agreement, award, or judgment, in the name of grantor or
otherwise, and to do any and all things that grantor is or may be or become
entitled to do with respect thereto, provided, however, that no obligation of
grantor under the provisions of any such agreements, awards, or judgments shall
be impaired or diminished by virtue hereof, nor shall any such obligation be
imposed upon trustee or beneficiary; and
1.4 Accounts and Income. Any and all rights of grantor in any and all
accounts, rights to payment, contract rights, chattel paper, documents,
instruments, licenses, contracts, agreements, and general intangibles relating
to any of the property, including, without limitation, income and profits
derived from the operation of any business on the property or attributable to
services that occur or are provided on the property or generated from the use
and operation of the property; and
1.5 Leases and Rents. All leases, subleases, rental agreements,
registration cards and agreements, if any, and other agreements whether or not
in writing affecting the use, enjoyment or occupancy of the property heretofore
or hereafter entered into, and all extensions, amendments and modifications
thereto, whether before or after the filing by or against grantor of any
petition for relief under creditors' rights laws (defined below) (collectively,
the "LEASES") and all right, title and interest of grantor, its successors and
assigns therein and thereunder, including, without limitation, any guaranties of
the lessees' obligations thereunder, cash or securities
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deposited thereunder to secure the performance by the lessees of their
obligations thereunder and all rents, additional rents, revenues, issues,
registration fees, if any, and profits (including all oil and gas or other
mineral royalties and bonuses) from the property, all income, rents, room rates,
issues, profits, revenues, deposits, accounts and other benefits from operation
of the property, including, without limitation, all revenues and credit card
receipts collected from guest rooms, restaurants, bars, mini-bars, meeting
rooms, banquet rooms and recreational facilities and otherwise, all receivables,
customer obligations, installment payment obligations and other obligations now
existing or hereafter arising or created out of sale, lease, sublease, license,
concession or other grant of the right of the possession, use or occupancy of
all or any portion of the property, or personalty located thereon, or rendering
of services by grantor or any operator or manager of the property or the
commercial space located in the property or acquired from others including,
without limitation, from the rental of any office space, retail space,
commercial space, guest room or other space, halls, stores or offices, including
any deposits securing reservations of such space, exhibit or sales space of
every kind, license, lease, sublease and concession fees and rentals, health
club membership fees, food and beverage wholesale and retail sales, service
charges, vending machine sales and proceeds, if any, from business interruption
or other loss of income insurance relating to the use, enjoyment or occupancy of
the property whether paid or accruing before or after the filing by or against
grantor of any petition for relief under creditors rights laws and all proceeds
and other amounts paid or owing to grantor under or pursuant to any and all
contracts and bonds relating to the construction or renovation of the property
(collectively, the "RENTS") and all proceeds from the sale or other disposition
of the leases and the right to receive and apply the rents to the payment of the
debt. as used herein, the term "CREDITORS RIGHTS LAWS" shall mean any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to its debts or debtors; and
1.6 Insurance Proceeds. All insurance proceeds in respect of the Property
under any insurance policies covering the Property, including, without
limitation, the right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof, for damage to the Property; and
1.7 Condemnation Awards. All condemnation awards, including interest
thereon, which may heretofore and hereafter be made with respect to the Property
by reason of any taking or condemnation, whether from the exercise of the right
of eminent domain (including, but not limited to, any transfer made in lieu of
or in anticipation of the exercise of the right), or for a change of grade, or
for any other injury to or decrease in the value of the Property; and
1.8 Tax Certiorari. All refunds, rebates or credits in connection with
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction; and
1.9 Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or any business or activity
conducted on the Land and any part thereof and all right, title and interest of
Grantor therein and thereunder, including, without limitation, the right while
any Event of Default (defined below) exists, to receive and collect
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any sums payable to Grantor thereunder; and
1.10 Deposit Accounts. Any and all deposit accounts, bank accounts,
investment accounts, or securities accounts, now owned or hereafter acquired or
opened by Grantor, including, without limitation, the account of Grantor at
Calyon New York Branch, Account No. 01 53628 0024 00, and styled Red Lion Hotel
Fifth Avenue, Seattle FF&E Reserve Account," and any account which is a
replacement or substitute for any of such accounts, together with all monies,
instruments, certificates, checks, drafts, wire transfer receipts, and other
property deposited therein and all balances therein; and
1.11 Books and Records. All books and records of grantor relating to
the foregoing in any form and all computer software necessary or useful to
reading such books and records; and
1.12 Proceeds. All proceeds of any of the foregoing items set forth in
SECTIONS 1.1 through 1.11; and
1.13 Other Rights. Any and all other rights of Grantor in and to the items
set forth in SECTIONS 1.1 through 1.12.
2. SECURITY AGREEMENT. To the extent any of the property described in
SECTION 1 is personal property, Grantor, as debtor, grants to Beneficiary, as
secured party, a security interest therein together with a security interest in
all other personal property of Grantor of whatsoever nature that is located on,
used, or to be used in connection with any of the property described in SECTION
1, and any products or proceeds of any thereof, pursuant to the Uniform
Commercial Code of the state of Washington (the "UCC"), on the terms and
conditions contained herein. Beneficiary hereby assigns such security interest
to Trustee, in trust, for the benefit of Beneficiary to be dealt with as a
portion of the "PROPERTY" except as otherwise specified herein.
3. OBLIGATIONS SECURED. This Deed of Trust is given for the purpose of
securing:
3.1 Performance and Payment. The performance of the obligations
contained herein and the payment of (a) all borrowings under and as defined in
that certain credit agreement dated the date hereof, by and among Red Lion
Hotels Corporation, A Washington Corporation ("BORROWER"), Calyon New York
Branch, as administrative agent, and each lender (as defined therein) party
thereto (together with all extensions, renewals, modifications, or replacements
thereof, the "AGREEMENT"), initially in the aggregate maximum amount of
$50,000,000 and as such maximum amount may be increased upon the satisfaction of
certain conditions described in the agreement to an aggregate maximum amount of
$100,000,000, together with interest thereon and all other amounts of the
obligation defined therein, as evidenced by one or more promissory notes
(together with any and all extensions, renewals, modifications, or replacements
thereof, whether the same be in greater or lesser amounts, collectively, the
"NOTES" and individually, a "NOTE") (which notes are subject to provisions for a
variable rate of interest) of even date herewith made by borrower, payable to
the order of each lender, and (b) that certain unconditional guaranty agreement
dated the date hereof, executed by grantor and the other entities party thereto,
for the benefit of administrative agent, for the benefit of lenders (together
with all extensions, renewals, modifications, or replacements thereof, the
"GUARANTY"); and
3.2 Future Advances. The repayment of any and all sums advanced or
expenditures made by administrative agent or any lender subsequent to the
execution of this deed of trust for the maintenance or preservation of the
property or advanced or expended by
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administrative agent or any lender pursuant to any provision of this deed of
trust or the agreement subsequent to its execution, together with interest
thereon to the extent and at the rate provided in the agreement.
3.3 Exclusion From Secured Obligations. Notwithstanding anything to
the contrary set forth herein or in any other loan document (as defined in the
agreement), this deed of trust shall not secure the obligations of grantor or
borrower under that certain indemnity agreement dated as of even date herewith
made by grantor and borrower in favor of beneficiary (the "INDEMNITY AGREEMENT")
or the substantial equivalent of the obligations arising under the indemnity
agreement. all of such obligations (and substantial equivalents thereof) shall
constitute the separate, unsecured recourse obligations of grantor and borrower
and shall not be deemed to be evidenced by the notes or the agreement, or
secured by this deed of trust.
4. WARRANTIES AND COVENANTS OF GRANTOR. Grantor warrants, covenants, and
agrees:
4.1 WARRANTIES
(a) Grantor has full power and authority to grant the Property to
Trustee and warrants the Property to be free and clear of all liens,
charges, and other monetary encumbrances except for Permitted Liens (as
defined in the Agreement) and those appearing of record on the date hereof.
(b) None of the Property is used principally or at all for
agricultural or farming purposes.
(c) The Property is free from damage and no matter has come to
Grantor's attention (including, but not limited to, knowledge of any
construction defects or nonconforming work) that would materially impair
the value of the Property as security.
(d) The loan evidenced by the Notes and the Agreement, and secured by
this Deed of Trust, is primarily for commercial, industrial, or business
purposes and is not primarily for personal, family, or household purposes.
4.2 Preservation of Lien. Grantor will preserve and protect the
priority of this deed of trust as a first lien on the property.
4.3 Covenants Under Agreement. Grantor will comply with, perform, and
be bound by all covenants and agreements in the agreement that are applicable to
it, its assets (including, without limitation, the property), or its operations,
each of which is hereby ratified and confirmed (INCLUDING, WITHOUT LIMITATION,
THE INDEMNIFICATION AND RELATED PROVISIONS IN SECTION 12.10 OF THE CREDIT
AGREEMENT (SUBJECT TO SECTION 3.3 HEREOF)); AND (II) CONSENT TO AND APPROVE THE
VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL PROVISIONS OF SECTION 14.10
OF THE CREDIT AGREEMENT.
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4.4 Expenses. Grantor will pay all costs, fees, and expenses
reasonably incurred by beneficiary or trustee in connection with this deed of
trust.
4.5 Sale, Transfer, or Encumbrance of Property. Grantor shall not,
except in the ordinary course of business, without the prior written consent of
beneficiary, sell, transfer, or otherwise convey the property or any interest
therein, further encumber the property or any interest therein, or agree to do
any of the foregoing without first repaying in full the obligation under and as
defined in the agreement and all other sums secured hereby. Consent to any one
such occurrence shall not be deemed a waiver of the right to require consent to
any future occurrences.
4.6 Tax and Insurance Reserves. In addition to the payments required
by the agreement, grantor agrees to pay beneficiary, for the benefit of lenders,
while an event of default exists, and at beneficiary's request, such sums as
beneficiary may from time to time estimate will be required to pay, at least
thirty (30) days before due, the next due taxes, assessments, insurance
premiums, and similar charges affecting the property, less all sums already paid
therefor divided by the number of months to elapse before one month prior to the
date when such taxes, assessments, and premiums will become delinquent, such
sums to be held by beneficiary without interest or other income to the grantor
to pay such taxes, assessments and premiums. Should this estimate as to taxes,
assessments, and premiums prove insufficient, the grantor upon demand agrees to
pay beneficiary such additional sums as may be required to pay them before
delinquent.
If the total of the above-described payments in any one year shall exceed
the amounts actually paid by Beneficiary for taxes, assessments, and premiums,
such excess may be credited by Beneficiary on subsequent payments under this
section. If there shall be an Event of Default hereunder for which Beneficiary
elects to realize upon this Deed of Trust, then at any time after the Event of
Default and prior to the trustee's sale or sheriff's sale, Beneficiary may apply
any balance of funds it may hold pursuant to this SECTION 4.6 to any amount
secured by this Deed of Trust and in such order as Beneficiary may elect. If
Beneficiary does not so apply such funds at or prior to the trustee's sale or
sheriff's sale, the purchaser at such sale shall be entitled to all such funds.
If Beneficiary acquires the Property in lieu of realizing on this Deed of Trust,
the balance of funds it holds shall become the property of Beneficiary, for the
benefit of Lenders.
Any transfer in fee of all or a part of the Property shall automatically
transfer to the grantee all or a proportionate part of Grantor's rights and
interest in the fund accumulated hereunder.
4.7 LEASES
(a) Grantor will in all respects promptly and faithfully keep, perform
and comply with all of the terms, provisions, covenants, conditions, and
agreements in each of the Leases to be kept, performed, and complied with
by the lessor therein, and will require, demand, and strictly enforce, by
all available means, the prompt and faithful performance of and compliance
with all of the terms, provisions, covenants, conditions, and agreements in
the Leases to be performed and complied with by the lessees therein.
(b) Grantor shall not receive or collect any rents from any present or
future tenant of the Property or any part thereof in advance in excess of
one month's rent from the Property or collect a security deposit in excess
of two (2) months' rent.
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(c) In the event any lessee under any Lease which is not a residential
lease should be the subject of any proceeding under the United States
Bankruptcy Code or any other type of insolvency proceeding, Grantor
covenants and agrees that in the event Grantor has a claim in such
proceeding in respect of any such Lease, no settlement thereof shall be
made without the prior written consent of Beneficiary; and further that any
check in payment of damages for rejection of any such Lease shall be made
payable both to Grantor and Beneficiary; and Grantor hereby assigns any
such payment to Beneficiary and further covenants and agrees that upon
request of Beneficiary it will duly endorse to the order of Beneficiary any
such check, the proceeds of which will be applied to any portion of the
indebtedness secured by this Deed of Trust as Beneficiary may elect. In
addition, after the occurrence of and during the continuance of any Event
of Default, Beneficiary shall be entitled to assert, in its own name or in
the name of Grantor, any claim in respect of any such Lease in any such
proceeding.
(d) The foregoing provisions of this SECTION 4.7 shall not apply to
registration cards for overnight guests or to any agreements for the use of
banquet facilities or meeting rooms.
5. DEFAULT.
5.1 Definition. Any event of default as that term is defined in the
agreement shall be an "EVENT OF DEFAULT" hereunder.
5.2 Beneficiary's and Trustee's Right to Perform. While any event of
default exists, beneficiary or trustee, but without the obligation so to do and
without notice to or demand upon grantor and without releasing grantor from any
obligations hereunder, may make any payments or do any acts required of grantor
hereunder in such manner and to such extent as either may deem necessary to
protect the security hereof, beneficiary or trustee being authorized to enter
upon the property for such purposes; commence, appear in, and defend any action
or proceeding purporting to affect the security hereof or the rights or powers
of beneficiary or trustee; pay, purchase, contest, or compromise any
encumbrance, charge, or lien in accordance with the following paragraph; and in
exercising any such powers, pay necessary expenses, employ counsel, and pay a
reasonable fee therefor. All sums so expended shall be payable on demand by
grantor, be secured hereby and bear interest at the default rate (as defined in
the agreement) from the date advanced or expended until repaid.
Beneficiary or Trustee in making any payment herein is hereby authorized,
in the place and stead of the Grantor, in the case of a payment of taxes,
assessments, water rates, sewer rentals, and other governmental or municipal
charges, fines, impositions, or liens asserted against the Property, to make
such payment in reliance on any bill, statement, or estimate procured from the
appropriate public office without inquiry into the accuracy of the bill,
statement, or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien, or title or claim thereof; in the case of any apparent or
threatened adverse claim of title, lien, statement of lien, encumbrance, deed of
trust, claim, or charge Beneficiary or Trustee, as the case may be, shall be the
sole judge of the legality or validity of same; and in the case of a payment for
any other purpose herein and hereby authorized, but not enumerated in this
paragraph, such payment may be made whenever, in the sole judgment and
discretion of Trustee or Beneficiary, as the case may be, such advance or
advances shall seem necessary or desirable to protect the full security intended
to be created by this instrument, provided further, that in connection with any
such advance,
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Beneficiary at its option may and is hereby authorized to obtain a continuation
report of title prepared by a title insurance company, the cost and expenses of
which shall be repayable by the Grantor without demand and shall be secured
hereby.
5.3 Remedies On Default. Upon the occurrence of any event of default
all sums secured hereby shall become immediately due and payable, without notice
or demand, at the option of beneficiary and beneficiary may:
(a) Have a receiver appointed as a matter of right, without regard to
the sufficiency of the Property or any other security for the indebtedness
secured hereby and, without the necessity of posting any bond or other
security, such receiver shall take possession and control of the Property
and shall collect and receive all of the rents, issues, and profits
thereof;
(b) Foreclose this Deed of Trust as a mortgage or otherwise realize
upon the Property;
(c) Cause Trustee to exercise its power of sale;
(d) Sue on the Notes according to law; or
(e) To the extent permitted by law, including, without limitation, RCW
61.24.100, seek and obtain a deficiency judgment following the completion
of a judicial foreclosure or a trustee's sale of all or a portion of the
security for the obligations secured by this Deed of Trust.
5.4 No Waiver. By accepting payment of any sum secured hereby after
its due date, beneficiary does not waive its right either to require prompt
payment when due of all other sums so secured or to declare an event of default
for failure to do so.
5.5 Remedies Cumulative. The rights and remedies accorded by this deed
of trust shall be in addition to, and not in substitution of, any rights or
remedies available under now existing or hereafter arising applicable law or
under the agreement. all rights and remedies provided for in this deed of trust
or afforded by law or equity are distinct and cumulative and may be exercised
concurrently, independently or successively. The failure on the part of
Beneficiary to promptly enforce any right hereunder shall not operate as a
waiver of such right and the waiver of any default shall not constitute a waiver
of any subsequent or other default. Beneficiary shall be subrogated to the
claims and liens of those whose claims or liens are discharged or paid with the
loan proceeds hereof.
6. Trustee.
6.1 General Powers and Duties of Trustee. At any time or from time to
time, without liability therefor and without notice and without affecting the
liability of any person for the payment of the indebtedness secured hereby, upon
written request of beneficiary, payment of its own fees and presentation of this
deed of trust and the notes for endorsement (in case of full reconveyance, for
cancellation or retention), Trustee may:
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(a) Consent to the making of any map or plat of the Property;
(b) Join in granting any easement or creating any restriction thereon;
(c) Join in any subordination or other agreement affecting this Deed
of Trust or the lien or charge thereof; or
(d) Reconvey, without warranty, all or any part of the Property.
6.2 Reconveyance. Upon written request of Beneficiary stating that all
sums secured hereby have been paid, and upon surrender of this Deed of Trust and
the Notes to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the Property then held
hereunder. The recitals in any reconveyance executed under this Deed of Trust of
any matters of fact shall be conclusive proof of the truthfulness thereof. The
Grantee in such reconveyance may be described as "the person or persons legally
entitled thereto."
6.3 Powers and Duties on Default. Upon written request therefor by
Beneficiary specifying the nature of the default, or the nature of the several
defaults, and the amount or amounts due and owing, Trustee shall execute a
written notice of default and of its election to cause the Property to be sold
to satisfy the obligation secured hereby, and shall cause such notice to be
recorded and otherwise given according to law.
Notice of sale having been given as then required by law and not less than
the time then required by law having elapsed after recordation of such notice of
breach, Trustee, without demand on Grantor, shall sell the Property at the time
and place of sale specified in the notice, as provided by statute, either as a
whole or in separate parcels and in such order as it may determine, at public
auction to the highest and best bidder for cash in lawful money of the United
States, payable at time of sale. Grantor agrees that such a sale (or a sheriff's
sale pursuant to judicial foreclosure) of all the Property as real estate
constitutes a commercially reasonable disposition thereof, but that with respect
to all or any part of the Property that may be personal property Trustee shall
have and exercise, at Beneficiary's sole election, all the rights and remedies
of a secured party under the UCC. Whenever notice is permitted or required
hereunder or under the UCC, ten (10) days shall be deemed reasonable. Trustee
may postpone sale of all or any portion of the Property, and from time to time
thereafter may postpone such sale, as provided by statute. Trustee shall deliver
to the purchaser its deed and bill of sale conveying the Property so sold, but
without any covenant or warranty, express or implied. The recital in such deed
and bill of sale of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person other than Trustee, including Grantor or
Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of this trust,
including the cost of evidence of title search and title insurance and
reasonable counsel fees in connection with sale, Trustee shall apply the
proceeds of sale to payment of all sums secured hereby in such order as
Beneficiary may determine; and the remainder, if any, to the clerk of the
superior court of the county in which the sale took place, as provided in RCW
61.24.080.
6.4 Reassignment of SECURITY INTEREST. At the request of Beneficiary,
Trustee shall reassign to Beneficiary the security interest created hereby and
after such reassignment
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Beneficiary shall have the right, upon the occurrence and continuance of any
event of default, to realize upon the personal property subject to this deed of
trust, independent of any action of Trustee, pursuant to the UCC.
6.5 Acceptance of Trust. Trustee accepts this Trust when this Deed of
Trust, duly executed and acknowledged, is made a public record as provided by
law. Trustee is not obligated to notify any party hereto except Beneficiary of
pending sale under any other Deed of Trust or of any action or proceeding in
which Grantor, Beneficiary, or Trustee shall be a party unless brought by
Trustee.
6.6 Reliance. Trustee, upon presentation to it of an affidavit signed
by Beneficiary setting forth facts showing a default by Grantor under this Deed
of Trust, is authorized to accept as true and conclusive all facts and
statements therein, and to act thereon hereunder.
6.7 Replacement of Trustee. Beneficiary may, from time to time, as
provided by statute, appoint another Trustee in place and stead of Trustee
herein named, and thereupon Trustee herein named shall be discharged and the
Trustee so appointed shall be substituted as Trustee hereunder, with the same
effect as if originally named Trustee herein.
6.8 No Impairment of Right to Pursue Unsecured Obligations. The
foreclosure of this Deed of Trust or sale by Trustee of the Property through the
exercise of its power of sale granted hereunder shall not preclude or impair any
action to collect or enforce any obligation of Grantor or any Guarantor or other
party liable for any of the obligations secured by this Deed of Trust, or the
substantial equivalent of such obligation, which obligation is not secured by
this Deed of Trust including, without limitation, the obligations of Grantor
UNDER THE Indemnity Agreement and the obligations of each such guarantor under
its guaranty. All of such obligations (and all substantial equivalents of such
obligations) shall constitute separate recourse obligations of Grantor and each
such Guarantor or other party and shall not be deemed to be evidenced by the
Notes, the Agreement, or secured by this Deed of Trust.
7. APPLICATION OF RENTS. Grantor hereby gives to and confers upon
Beneficiary the right, power, and authority during the continuance of this Deed
of Trust to collect the rents, issues, and profits of the Property, reserving
unto Grantor the right, unless an Event of Default exists, to collect and retain
such rents, issues, and profits as they become due and payable. While an Event
of Default exists, Grantor's right to spend or retain any rents, issues, or
profits of the Property shall cease immediately and without notice or demand and
Beneficiary may at any time and without notice, either in person, by agent, or
by a receiver to be appointed by a court, without regard to the adequacy of any
security for the indebtedness hereby secured and without the necessity for
posting any bond or other security, enter upon and take possession of the
Property or any part thereof, or in its own name sue for or otherwise collect
such rents, issues, and profits, including those past due and unpaid, and apply
the same, less reasonable costs and expenses of operation and collection,
including reasonable attorneys' fees, upon any indebtedness secured hereby, and
in such order as Beneficiary may determine. The entering upon and taking
possession of the Property, the collection of such rents, issues, and profits
and the application thereof as aforesaid, shall not cure or waive any default or
notice of default hereunder or invalidate any act done pursuant to such notice.
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8. NOTICES.
8.1 TRUSTEE. ANY NOTICE OR DEMAND UPON TRUSTEE MAY BE GIVEN OR MADE
AT:
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8.2 Grantor and Beneficiary. Any notice to or demand upon Grantor
(including any notice of default or notice of sale) or notice to or demand upon
Beneficiary shall be deemed to have been sufficiently made for all purposes when
deposited in the United States Mail, postage prepaid, registered or certified,
return receipt requested, addressed as follows:
Grantor: WHC809, LLC
c/o Red Lion Hotels Corporation
201 W. North River Drive, Suite 100
Spokane, Washington 99201
Attention: General Counsel
Beneficiary: Calyon New York Branch
Calyon Building, 13th Floor
1301 Ave. of the Americas
New York, NY 10019
Attention: Jan Hazelton
or to such other address as may be filed in writing by Grantor or Beneficiary
with Trustee.
8.3 Waiver of Notice. The giving of notice may be waived in writing by
the person or persons entitled to receive such notice, either before or after
the time established for the giving of such notice.
9. MODIFICATIONS. Upon written request of any party then liable for any sum
secured hereby, Beneficiary reserves the right to extend the term, or otherwise
modify the terms, hereof, of the Notes, or of the Agreement as Beneficiary and
such person may from time to time deem appropriate and any such change shall not
operate to release, in any manner, the liability of the original Grantor or
Grantor's successors in interest.
10. SUCCESSORS AND ASSIGNS. All provisions herein contained shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties.
11. GOVERNING LAW; SEVERABILITY. This Deed of Trust shall be governed by
the law of the state of Washington. In the event that any provision or clause of
this Deed of Trust, the Agreement, or the Notes conflicts with applicable law,
the conflict shall not affect other provisions of this Deed of Trust, the
Agreement, or the Notes that can be given effect without the conflicting
provision and to this end the provisions of this Deed of Trust, the Agreement,
or the Notes are declared to be severable.
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12. GRANTOR'S RIGHT TO POSSESSION. Grantor may be and remain in possession
of the Property for so long as it is not in default hereunder and Grantor may,
while it is entitled to possession of the Property, use the same.
13. MAXIMUM INTEREST. No provision of this Deed of Trust, the Notes, the
Guaranty, or the Agreement shall require the payment or permit the collection of
interest in excess of the maximum permitted by law. If any excess of interest in
such respect is herein, or in the Notes, the Guaranty, or the Agreement provided
for, neither Grantor nor its successors or assigns shall be obligated to pay
that portion of such interest that is in excess of the maximum permitted by law,
and the right to demand the payment of any such excess shall be and is hereby
waived and this SECTION 13 shall control any provision of this Deed of Trust,
the Notes, the Guaranty, or the Agreement that is inconsistent herewith.
14. ATTORNEYS' FEES AND LEGAL EXPENSES. In the event of any Event of
Default under this Deed of Trust, or in the event that any dispute arises
relating to the interpretation, enforcement, or performance of any obligation
secured by this Deed of Trust, Beneficiary shall be entitled to collect from
Grantor on demand all fees and expenses incurred in connection therewith,
including but not limited to fees of attorneys, accountants, appraisers,
environmental inspectors, consultants, expert witnesses, arbitrators, mediators,
and court reporters. Without limiting the generality of the foregoing, Grantor
shall pay all such costs and expenses incurred in connection with (a)
arbitration or other alternative dispute resolution proceedings, trial court
actions, and appeals; (b) bankruptcy or other insolvency proceedings of Grantor,
any guarantor or other party liable for any of the obligations secured by this
Deed of Trust, or any party having any interest in any security for any of those
obligations; (c) judicial or nonjudicial foreclosure on, or appointment of a
receiver for, any of the Property; (d) postjudgment collection proceedings; (e)
all claims, counterclaims, cross-claims, and defenses asserted in any of the
foregoing whether or not they arise out of or are related to this Deed of Trust;
(f) all preparation for any of the foregoing; and (g) all settlement
negotiations with respect to any of the foregoing.
15. PREPAYMENT PROVISIONS. If at any time after default and acceleration of
the indebtedness secured hereby there shall be a tender of payment of the amount
necessary to satisfy such indebtedness by or on behalf of the Grantor, its
successors or assigns, the same shall be deemed to be a voluntary prepayment
such that the sum required to satisfy such indebtedness in full shall include,
to the extent permitted by law, the additional payment, if any, required under
the prepayment privilege as stated in the Notes.
16. TIME IS OF THE ESSENCE. Time is of the essence under this Deed of Trust
and in the performance of every term, covenant, and obligation contained herein.
17. MISCELLANEOUS.
17.1 Whenever the context so requires the singular number includes the
plural herein, and the impersonal includes the personal.
17.2 The headings to the various sections have been inserted for
convenient reference only and shall not modify, define, limit, or expand the
express provisions of this Deed of Trust.
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17.3 This Deed of Trust, the Notes, the Agreement, and the other loan
documents constitute the final expression of the entire agreement of the parties
with respect to the transactions set forth therein. No party is relying upon any
oral agreement or other understanding not expressly set forth in the loan
documents. The loan documents may not be amended or modified except by means of
a written document executed by the party sought to be charged with such
amendment or modification.
[END OF TEXT]
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DATED as of the day and year first above written.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW
GRANTOR:
WHC809, LLC
By:
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Name: Anupam Narayan
Title: Executive Vice President
State of __________ Section
Section
County of ___________ Section
On this the ____ day of September, 2006, before me, the undersigned
officer, personally appeared ______________, who acknowledged himself to be
the ____________ of ________________, a ________________, and that
[he][she], as such contained, being authorized so to do, executed the
foregoing Instrument for the purposes therein contained, by signing the
name of the corporation by [himself][herself] as ____________.
- ------------------------------------------
Printed Name:
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Notary Public, State of
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EXHIBIT A
The land is located in the county of King, state of Washington, and is described
as follows:
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