EXHIBIT 10.6
FORM OF
CREDIT AGREEMENT
Dated as of ___________, 1998
among
CAVANAUGHS HOSPITALITY LIMITED PARTNERSHIP,
U. S. BANK NATIONAL ASSOCIATION
as Administrative Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
CONTENTS
ARTICLE I. DEFINITIONS...................................... 1
1.1 Certain Defined Terms............................. 1
1.2 Other Interpretive Provisions..................... 20
1.3 Accounting Principles............................. 22
ARTICLE II. THE LOANS......................................... 22
2.1 Revolving Line of Credit.......................... 22
2.2 Manner of Borrowing............................... 23
2.3 Agent's Right to Fund............................. 24
2.4 Loan Accounts..................................... 24
2.5 Interest Rate Elections........................... 25
2.6 Mandatory Prepayments of Loans.................... 26
(a) Asset Dispositions.......................... 26
(b) Event of Loss............................... 26
(c) Debt Issuance............................... 27
(d) General..................................... 27
(e) Reduction in Commitment..................... 27
2.7 Repayment......................................... 28
2.8 Interest.......................................... 28
2.9 Agency and Underwriting Fees...................... 29
2.10 Commitment Fees................................... 29
2.11 Late Charge....................................... 29
2.12 Computation of Interest and Fees.................. 29
2.13 Payments by the Borrower.......................... 30
2.14 Sharing of Payments, Etc.......................... 30
2.15 Security.......................................... 31
2.16 Borrowing Base.................................... 31
2.17 No Prepayment Charges............................. 32
ARTICLE III. LETTERS OF CREDIT................................. 32
3.1 Letters of Credit................................. 32
3.2 Manner of Requesting Letters of Credit............ 32
3.3 Indemnification; Increased Costs.................. 33
3.4 Payment by the Borrower........................... 34
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY............ 34
4.1 Taxes............................................. 34
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4.2 Illegality........................................ 36
4.3 Increased Costs and Reduction of Return........... 36
4.4 Funding Losses.................................... 37
4.5 Inability to Determine Rates...................... 38
4.6 Certificates of Lenders........................... 38
4.7 Survival 38
ARTICLE V. CONDITIONS PRECEDENT.............................. 38
5.1 Conditions of Initial Loans....................... 38
(a) Credit Agreement and Notes.................. 39
(b) Resolutions; Incumbency..................... 39
(c) Organization Documents; Good Standing....... 39
(d) Legal Opinions.............................. 39
(e) Payment of Fees............................. 40
(f) Collateral Documents........................ 40
(g) Insurance Policies.......................... 41
(h) Certificate................................. 41
(i) Compliance Certificate...................... 41
(j) Initial Public Offering..................... 41
(k) Notice of Borrowing; Reimbursement Agreement 41
(l) Guaranty.................................... 41
(m) Other Documents............................. 42
(n) Payment of Indebtedness..................... 42
(o) Eligible Real Property...................... 42
5.2 Conditions to Subsequent Loans.................... 42
(a) Interest Rate Notice........................ 42
(b) Notice of Borrowing; Reimbursement Agreement 42
(c) Continuation of Representations and
Warranties................................ 43
(d) No Existing Default......................... 43
(e) Satisfaction of Previous Conditions......... 43
(f) Further Assurances.......................... 43
5.3 Conditions to Become Eligible Real Property....... 43
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.................... 46
6.1 Existence and Power............................... 46
6.2 Authorization; No Contravention................... 46
6.3 Governmental Authorization........................ 47
6.4 Binding Effect.................................... 47
6.5 Litigation........................................ 47
6.6 No Default........................................ 47
6.7 ERISA Compliance.................................. 48
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6.8 Use of Proceeds; Margin Regulations.................................... 49
6.9 Title to Properties.................................................... 49
6.10 Taxes.................................................................. 49
6.11 Financial Condition.................................................... 49
6.12 Environmental Matters.................................................. 50
6.13 Collateral Documents................................................... 51
6.14 Regulated Entities..................................................... 51
6.15 No Burdensome Restrictions............................................. 51
6.16 Copyrights, Patents, Trademarks and Licenses, Etc...................... 51
6.17 Subsidiaries........................................................... 52
6.18 Insurance.............................................................. 52
6.19 Solvency............................................................... 52
6.20 Full Disclosure........................................................ 52
ARTICLE VII. AFFIRMATIVE COVENANTS.................................................. 53
7.1 Financial Statements................................................... 53
7.2 Certificates; Other Information........................................ 54
7.3 Notices................................................................ 54
7.4 Preservation of Existence, Etc......................................... 56
7.5 Maintenance of Property................................................ 56
7.6 Insurance.............................................................. 57
7.7 Payment of Obligations................................................. 57
7.8 Compliance With Laws................................................... 57
7.9 Compliance With ERISA.................................................. 58
7.10 Inspection of Property and Books and Records........................... 58
7.11 Environmental Laws..................................................... 58
7.12 Use of Proceeds........................................................ 59
7.13 Appraisals............................................................. 59
7.14 Further Assurances..................................................... 59
7.15 Minimum Parcels of..................................................... 61
ARTICLE VIII. NEGATIVE COVENANTS..................................................... 61
8.1 Limitation on Liens.................................................... 62
8.2 Disposition of Assets.................................................. 64
8.3 Consolidations and Mergers............................................. 65
8.4 Loans and Investments.................................................. 65
8.5 Limitation on Indebtedness............................................. 66
8.6 Transactions With Affiliates........................................... 67
8.7 Use of Proceeds........................................................ 67
8.8 Contingent Obligations................................................. 67
8.9 Lease Obligations...................................................... 68
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8.10 Restricted Payments................................................................... 68
8.11 ERISA................................................................................. 69
8.12 Change in Business.................................................................... 69
8.13 Accounting Changes.................................................................... 69
8.14 Financial Covenants................................................................... 69
(a) Funded Debt Ratio............................................................. 69
(b) Interest Coverage Ratio....................................................... 69
(c) Fixed Charge Coverage Ratio................................................... 70
(d) Capitalization Ratio.......................................................... 70
(e) Total Assets.................................................................. 70
8.15 Subordinated Debt..................................................................... 70
ARTICLE IX. EVENTS OF DEFAULT..................................................................... 70
9.1 Event of Default...................................................................... 70
(a) Nonpayment.................................................................... 70
(b) Representation or Warranty.................................................... 70
(c) Specific Defaults............................................................. 71
(d) Other Defaults................................................................ 71
(e) Cross-Default................................................................. 71
(f) Insolvency; Voluntary Proceedings............................................. 71
(g) Involuntary Proceedings....................................................... 72
(h) ERISA......................................................................... 72
(i) Monetary Judgments............................................................ 72
(j) NonMonetary Judgments......................................................... 73
(k) Violation of Lockup Agreement................................................. 73
(l) Adverse Change................................................................ 73
(m) Invalidity of Subordination Provisions........................................ 73
(n) Collateral.................................................................... 73
9.2 Remedies.............................................................................. 73
9.3 Rights Not Exclusive.................................................................. 74
9.4 Certain Financial Covenant Defaults................................................... 74
ARTICLE X. THE AGENT............................................................................... 75
10.1 Appointment and Authorization......................................................... 75
10.2 Delegation of Duties.................................................................. 75
10.3 Liability of Agent.................................................................... 75
10.4 Reliance by Agent..................................................................... 76
10.5 Notice of Default..................................................................... 76
10.6 Credit Decision....................................................................... 77
10.7 Indemnification of Agent.............................................................. 77
10.8 Agent in Individual Capacity.......................................................... 78
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10.9 Successor Agent................................................................ 78
10.10 Withholding Tax................................................................ 79
10.11 Collateral Matters............................................................. 80
ARTICLE XI. LETTER OF CREDIT RISK PARTICIPATIONS........................................... 81
11.1 Sale of Risk Participations.................................................... 81
11.2 Procedure for Purchases........................................................ 81
11.3 Payment Obligations............................................................ 81
(c) Reimbursements to Lenders.............................................. 82
ARTICLE XII. MISCELLANEOUS.................................................................. 82
12.1 Amendments and Waivers......................................................... 82
12.2 Notices........................................................................ 83
12.3 No Waiver; Cumulative Remedies................................................. 84
12.4 Costs and Expenses............................................................. 84
12.5 Borrower Indemnification....................................................... 85
12.6 Marshalling; Payments Set Aside................................................ 86
12.7 Successors and Assigns......................................................... 86
12.8 Assignments, Participations, Etc............................................... 86
12.9 Set-off........................................................................ 88
12.10 Automatic Debits of Fees....................................................... 89
12.11 Notification of Addresses, Lending Offices, Etc................................ 89
12.12 Counterparts................................................................... 89
12.13 Severability................................................................... 89
12.14 No Third Parties Benefited..................................................... 89
12.15 Conditions Not Fulfilled....................................................... 90
12.16 Governing Law and Jurisdiction................................................. 90
12.17 Waiver of Jury Trial........................................................... 91
12.18 Entire Agreement............................................................... 91
SCHEDULES
---------
Schedule 2.1 Commitments
Schedule 6.5 Litigation
Schedule 6.7 ERISA
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.17 Subsidiaries and Minority Interests
Schedule 6.18 Insurance Matters
Schedule 7.14 Filing Jurisdictions
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Schedule 8.1 Permitted Liens
Schedule 8.5 Permitted Indebtedness
Schedule 8.8 Contingent Obligations
Schedule 12.2 Lending Offices, Addresses for Notices
EXHIBITS
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Exhibit A Form of Compliance Certificate
Exhibit B Form of Deed of Trust
Exhibit C Form of Guaranty
Exhibit D Form of Indemnification Agreement
Exhibit E Form of Interest Rate Notice
Exhibit F Form of Note
Exhibit G Form of Security Agreements
Exhibit H Form of Legal Opinion of Borrower's Counsel
Exhibit I Form of Assignment and Acceptance
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of ___________, 1998, among
CAVANAUGHS HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Borrower"), the several financial institutions from time to time party to this
Agreement (collectively, the "Lenders"; individually, a "Lender"), and U. S.
BANK NATIONAL ASSOCIATION, as administrative agent for the Lenders.
WHEREAS, the Lenders have agreed to make available to the Borrower a
secured revolving loan facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I. DEFINITIONS
1.1 CERTAIN DEFINED TERMS
The following Terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Borrower or the Subsidiary is the
surviving entity.
"Adjusted Net Income" means, for any applicable period, the aggregate of
all amounts which, in accordance with GAAP, would be included as net income (or
net loss (including any extraordinary losses other than extraordinary noncash
losses)) on a consolidated statement of income of CHC and its Subsidiaries for
such period; provided, however, that "Adjusted Net Income" shall exclude (a) the
effect of any extraordinary or other nonrecurring gain outside the ordinary
course of business, (b) any write-up in the value of any asset (to the extent
such write-up exceeds any write-down taken in connection with the same
transaction or event which gave rise to such write-up), and (c) any adjustments
to net income for minority ownership interests in other Persons.
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"Adjusted Tangible Net Worth" means the sum of (a) the total net worth of
CHC and its Subsidiaries determined in accordance with GAAP, less (b) the amount
of all intangible assets, plus (c) the Adjustment to Book Value.
"Adjustment to Book Value" means an amount equal to (a) the appraised value
of all real property (including improvements thereon) owned by CHC and its
Subsidiaries as of the last day of the applicable period, less (b) the net book
value of such real property (including improvements thereon), less (c) an amount
equal to all federal, state and local income and gross receipts taxes that would
be payable in the event that such real property (including improvements thereon)
were sold during the applicable period, assuming for purposes of such
calculation that the amount of the gain is an amount equal to the amount of
clause (a) less the amount of clause (b). For purposes of determining the
appraised value of such real property, the most recent M.A.I. appraisals of such
real property that have been approved by the Agent in writing in its reasonable
discretion shall be used. The Agent reserves the right, in its discretion or at
the request of the Required Lenders, to require reappraisals of any real
property at the Borrower's sole cost, provided that once an appraisal of a
parcel of real property has been approved by the Agent in writing, the Agent may
not require a reappraisal of such real property for one year from the date of
the approved appraisal. In the event that there is no approved appraisal of any
parcel of real property, then there shall be no Adjustment to Book Value for
such parcel of real property.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Agent" means U. S. Bank in its capacity as administrative agent for the
Lenders hereunder, and any successor administrative agent arising under Section
10.9.
"Agent-Related Persons" means U. S. Bank and any successor agent arising
under Section 10.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 12.2 in relation to the Agent, or such other address as the Agent may
from time to time specify.
"Agreement" means this Credit Agreement.
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"Approved Appraised Value" means the most recent M.A.I. appraised value of
an Eligible Real Property that (a) was ordered by the Agent, (b) has been
approved by the Agent in writing in its reasonable discretion, and (c) is in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act.
"Assignee" has the meaning specified in Section 12.8(a).
"Attorney Costs" means and includes all fees and disbursements of any law
firm or other external counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S) 101, et seq.).
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"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Borrower on the same day by the Lenders under Article II, and,
other than in the case of Reference Rate Loans, having the same Interest Period.
"Borrowing Base" means an amount equal to 60% of the Collateral Pool Value.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Seattle, Washington are authorized or required by law
to close and, if the applicable Business Day relates to any LIBOR Rate Loan,
means such a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capitalization Ratio" means, as of the last day of the applicable period,
the ratio of (a) the Indebtedness of CHC and its Subsidiaries to (b) the sum of
(i) the Indebtedness of CHC and its Subsidiaries, plus (ii) Adjusted Tangible
Net Worth.
"Cash Equivalents" means (i) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (ii) certificates of deposit,
eurodollar time deposits, overnight bank deposits, bankers' acceptances and
repurchase agreements of any Lender or any other commercial bank whose unsecured
long-term debt obligations are rated at least A-1 by Standard & Poor's Ratings
Service Group, a division of the McGraw Hill Companies, Inc., and any successor
thereto ("S&P") or A-3 by Xxxxx'x Investors Service, Inc. having maturities of
one year or less from the date of acquisition, and (iii) commercial paper rated
at least A-1 by S&P or P-1 by
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Xxxxx'x Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"CHC" means Cavanaughs Hospitality Corporation, a Washington corporation,
and its successors.
"Closing Date" means the date on which all conditions precedent set forth
in Section 5.1 are satisfied or waived by all Lenders (or, in the case of
Section 5.1(e), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower, CHC and its
Subsidiaries in or upon which a lien now or hereafter exists in favor of the
Lenders, or the Agent on behalf of the Lenders, whether under this Agreement or
under any other documents executed by any such Person and delivered to the Agent
or the Lenders.
"Collateral Documents" means, collectively, (i) the Security Agreements,
the Deeds of Trust, and all other security agreements, mortgages, deeds of
trust, patent and trademark assignments, lease assignments, guarantees and other
similar agreements between the Borrower, CHC or any Subsidiary and the Lenders
or the Agents for the benefit of the Lenders now or hereafter delivered to the
Lenders or the Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the Uniform Commercial Code or comparable
law) against the Borrower, CHC or any Subsidiary as debtor in favor of the
Lenders or the Agent for the benefit of the Lenders as secured party, and (ii)
any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"Collateral Pool Value" means the sum of the Approved Appraised Values of
all Eligible Real Property from time to time.
"Commitment" means the sum of (a) an amount equal to the lesser of (i)
$80,000,000 or (ii) the sum of (A) the gross proceeds from the sale of shares of
CHC common stock in the initial public offering of such stock, (B) the gross
proceeds from
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the sale by CHC of shares of CHC common stock during the 30-day period following
the initial public offering of CHC common stock pursuant to the exercise of an
option by the underwriter in the initial public offering of such stock to
purchase shares of such stock to cover overallotments in the initial public
offering and (C) an amount equal to [NEED TO INCLUDE A DESCRIPTION OF THE
SPOKANE XXXXXXX HOTEL TRANSACTION; THE CONCEPT HAS BEEN APPROVED BY U. S. BANK],
less (b) the amount of mandatory prepayments made in accordance with Section
2.6.
"Commitment Fee Percentage" means the percentage determined in accordance
with the following matrix and based upon the quarterly financial statements of
the Borrower provided to the Agent in accordance with the terms of this
Agreement for the preceding fiscal quarter; provided, however, that if the
Borrower has not delivered its financial statements for the previous fiscal
quarter as of the date that the commitment fee is payable pursuant to Section
2.10, then a Commitment Fee Percentage of .30% shall apply:
--------------------------------------------------------------------------------------------
Level Level I Level II Level III Level IV
--------------------------------------------------------------------------------------------
Funded Debt **3.00 *3.00 **3.50 *3.50 **4.0 *4.0
Ratio
--------------------------------------------------------------------------------------------
Commitment .25% .25% .25% .30%
Fee Percentage
--------------------------------------------------------------------------------------------
* means greater than or equal to
** means less than
"Commitment Letter" means that certain letter dated as of November 26,
1997, between the Agent and the Borrower, together with all amendments to the
Commitment Letter.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit A.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligation") of another Person (the "primary obligor"),
including any obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to advance or
provide funds for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance
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sheet item, level of income or financial condition of the primary obligor, (iii)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (iv) otherwise to assure
or hold harmless the holder of any such primary obligation against loss in
respect thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered, or such services are ever
performed or tendered, or (d) in respect of any Swap Contract. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof,
and in the case of other Contingent Obligation, shall be equal to the maximum
reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Deed of Trust" means a deed of trust or mortgage executed by the Borrower
or a Subsidiary in favor the Agent as agent for the Lenders pursuant to Section
5.3, in a form approved by the Agent, as well as all amendments to the
foregoing. Any Deeds of Trust encumbering real property in the State of
Washington and executed concurrently with the execution of this Agreement shall
be substantially in the form of Exhibit B.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease, conveyance or other disposition of
any property, other than sales or other dispositions expressly permitted under
Section 8.2(a)(i), (ii), (iii) or (iv), and (b) the sale or transfer by the
Borrower, CHC or any Subsidiary of the Borrower of any equity securities issued
by any Subsidiary of the Borrower and held by such transferor Person for cash or
cash equivalents.
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"Dollars," "dollars" and "$" each mean lawful money of the United States.
"EBITDA" means, with respect to the CHC and its Subsidiaries for any
applicable period, Adjusted Net Income for such period, plus, to the extent
deducted in determining Adjusted Net Income for such period, the aggregate
amount of (i) Interest Expense, (ii) federal, state, local and foreign income
taxes and (iii) depletion, depreciation and amortization of tangible and
intangible assets. In the event that the Borrower has consummated any
Acquisition during the applicable period, "EBITDA" shall include the EBITDA from
the Person acquired (or the portion thereof allocable to the portion of the
Person acquired) for such period, provided that the Borrower has delivered to
the Agent documentation deemed adequate by the Agent to verify such EBITDA, as
well as a Compliance Certificate on a pro forma basis and pro forma financial
statements on a consolidating basis approved by the Agent. Subject to approval
of the Required Lenders confirmed in writing by the Agent, any such pro forma
Compliance Certificate and pro forma financial statements may exclude expenses
of the acquired Person that will terminate upon completion of the Acquisition.
An example of such an expense that may be excluded is the franchise fee under a
franchise agreement that will be terminated upon completion of the Acquisition.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
the United States, or any state thereof; (b) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
country in which it is organized or another country which is also a member of
the OECD; (c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person
of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary; or (d) a finance company, insurance company, other financial
institution or fund, reasonably acceptable to the Agent, which has a combined
capital and surplus in excess of $100,000,000, which is regularly engaged in
making, purchasing or investing in loans of the Type proposed to be assigned to
such assignee; provided, however, that no Eligible Assignee shall be an
Affiliate or competitor of the Borrower, or an Affiliate of such competitor.
"Eligible Real Property" means each parcel of real property and related
improvements (a) that has been approved by the Agent in writing in its sole
discretion, (b) the fee title interest of which is owned by the Borrower, (c)
that is fully developed and improved and with respect to which there has been
issued a certificate of
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occupancy, (d) in which the Agent, for the benefit of the Lenders, holds a first
priority Deed of Trust to secure the Obligations, (e) with respect to which the
Agent has obtained the Collateral Documents described in Section 5.3, (f) with
respect to which the Approved Appraised Value has been established, and (g) that
is not encumbered by any Liens other than Permitted Liens.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or non-
sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in or from property owned
or in the possession or control of the Borrower, CHC or any Subsidiary.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substance Control Act, and the Emergency Planning and Community
Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower, CHC or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial
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employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations which is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by the Borrower, CHC or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower,
CHC or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the definition
of "LIBOR Rate."
"Event of Default" means any of the events or circumstances specified in
Section 9.1.
"Event of Loss" means, with respect to any Eligible Real Property, any of
the following: (a) any loss, destruction or damage of such property; (b) any
pending or threatened institution of any proceedings for the condemnation or
seizure of such property or for the exercise of any right of eminent domain; or
(c) any actual condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, of such property, or confiscation of such property
or the requisition of the use of such property.
"Exchange Act" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for any relevant day
such rate is not so published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Financial Covenants" means the financial covenants set forth in Section
8.14.
9
"Financial Transaction Liability" means (a) any overdraft on any account
maintained by the Borrower with Agent, (b) liabilities owing by the Borrower to
the Agent with respect to bank card services and (c) liabilities incurred by the
Agent as a result of automated clearing house transactions for the account of
the Borrower.
"Fixed Charge Coverage Ratio" means the ratio of (a) for the applicable
period, the sum of (i) EBITDA less (ii) an amount equal to 4% of the aggregate
of all amounts which, in accordance with GAAP, would be included as gross
revenue on a consolidated statement of income of CHC and its Subsidiaries, to
(b) for the applicable period, the sum of (i) scheduled payments of principal on
Indebtedness of CHC and its Subsidiaries (including the portion of payments on
capitalized leases allocable to principal, but excluding (A) mandatory
prepayments of the Loans required under Section 2.6, and (B) balloon payments
made with the proceeds of Indebtedness permitted pursuant to Section 8.5),
whether or not made, (ii) Interest Expense, (iii) income and gross receipts
taxes paid in cash or cash equivalents, (iv) dividends and distributions paid in
cash or cash equivalents (excluding distributions of cash made by the Borrower
to CHC in an amount necessary to allow CHC to pay income and gross receipts
taxes on the taxable income of the Borrower that is recognized by CHC for tax
purposes), plus (v) payments made to redeem or otherwise acquire for value any
partnership units of the Borrower or shares of capital stock of CHC or any
warrants, rights or options to acquire such partnership units or shares.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Funded Debt Ratio" means the ratio of (a) the Indebtedness of CHC and its
Subsidiaries as of the last day of the applicable period, to (b) EBITDA for the
applicable period.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances at the applicable time.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other
10
entity owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guaranty" means a guaranty executed by CHC and in favor Agent as agent for
the Lenders pursuant to Section 5.1(l), in substantially the form of Exhibit C,
together with all amendments thereto.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Hazardous Materials" means all those substances that are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum-
derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all noncontingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligation with respect to capital leases; (g)
all net obligations with respect to Swap Contracts; (h) all reimbursement
obligations under outstanding Letters of Credit; (i) all indebtedness referred
to in clauses (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (j) all Guaranty Obligation in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (g) above.
"Indemnification Agreement" means an indemnification agreement executed by
the Borrower in favor Agent as agent for the Lenders pursuant to Section 5.3, in
substantially the form of Exhibit D, together with all amendments thereto.
11
"Indemnified Liabilities" has the meaning specified in Section 12.5.
"Indemnified Person" has the meaning specified in Section 12.5.
"Independent Auditor" has the meaning specified in Section 7.1(a).
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"Interest Coverage Ratio" means the ratio of (a) EBITDA for the applicable
period, to (b) Interest Expense for the applicable period.
"Interest Expense" means, for any applicable period, the aggregate
consolidated interest expense (both cash and non-cash and determined without
regard to original issue discount) of CHC and its Subsidiaries for such period,
as determined in accordance with GAAP, including, to the extent allocable to
interest expense in accordance with GAAP, (a) all other fees paid or owed with
respect to the issuance or maintenance of Contingent Obligations (including
letters of credit of CHC and its Subsidiaries), (b) net costs or benefit under
Swap Contracts of CHC and its Subsidiaries and (c) the portion of any payments
made in respect of obligation in respect of capitalized leases of CHC and its
Subsidiaries allocable to interest expense.
"Interest Margin" means the number of basis points per annum determined in
accordance with the following matrix and based upon the quarterly financial
statements of the Borrower provided to the Agent in accordance with the terms of
this Agreement for the preceding fiscal quarter. Adjustments shall be made 45
days after the end of each fiscal quarter (when quarterly financial statements
are required to be delivered to the Agent); provided, however, that if the
Borrower has not delivered its financial statements for the previous fiscal
quarter within 45 days of the end of such fiscal quarter, then the Interest
Margin in effect for the previous fiscal quarter shall continue to apply unless
the Agent exercises its right to impose interest at the default rate as provided
for in this Agreement:
12
----------------------------------------------------------------------------------------
Level Level I Level II Level III Level IV
----------------------------------------------------------------------------------------
Funded Debt **3.00 *3.00 **3.50 *3.50 **4.0 *4.0
Ratio
----------------------------------------------------------------------------------------
Reference 0 0 25 37.5
Margin
-----------------------------------------------------------------------------------------
LIBOR Margin 165 185 210 235
-----------------------------------------------------------------------------------------
*means greater than or equal to
**means less than
The margins set forth above shall apply unless there exists an Event of Default,
in which case the Agent may elect to impose the default rate as provided for in
this Agreement. Notwithstanding the foregoing, the Interest Margin for the
first six months following the date of the initial advance of a Loan to the
Borrower, shall be the higher of (a) the Interest Margin applicable in
accordance with the matrix set forth above or (b) the Interest Margin applicable
under Level II of the matrix set forth above.
"Interest Payment Date" means, as to any Loan other than a Reference Rate
Loan, the last day of each Interest Period applicable to such Loan and, as to
any Reference Rate Loan, the last Business Day of each calendar quarter and each
date such Loan is converted into another Type of Loan; provided, however, that
if any Interest Period for a LIBOR Rate Loan exceeds three months, the date that
falls three months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any LIBOR Rate Loan, the period commencing
on the Interest Rate Election Date on which the Loan is made, converted into or
continued as a LIBOR Rate Loan, and ending on the date one, two, three or six
months thereafter as selected by the Borrower in its Interest Rate Notice;
provided that:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of a LIBOR Rate Loan, the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the preceding
Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
13
(c) no Interest Period shall extend beyond the Maturity Date.
"Interest Rate Election Date" means any date as of which, under Section
2.5, the Borrower (a) obtains Loans, (b) converts Loans of one Type to another
Type, or (c) continues as Loans of the same Type, but with a new Interest
Period, Loans having Interest Periods expiring on such date.
"Interest Rate Notice" means a notice in substantially the form of
Exhibit E.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Lender" has the meaning specified in the introductory clause hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender specified as its "Lending Office" or "Domestic Lending Office" or "LIBOR
Lending Office," as the case may be, on Schedule 12.2, or such other office or
offices as the Lender may from time to time notify the Borrower and the Agent.
"Letter of Credit" means a stand-by letter of credit issued by the Agent
pursuant to Section 3.2 hereof for the account of the Borrower.
"Letter of Credit Usage" means as of any date of determination, the sum of
(a) the aggregate face amount of all outstanding unmatured Letters of Credit,
plus (b) the aggregate amount of all payments made by Agent under Letters of
Credit and not yet reimbursed by the Borrower pursuant to Section 3.4 hereof.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/16th of 1%) determined by the Agent as follows:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
14
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"LIBOR" means the average offered rate for deposits in United States
Dollars (rounded upwards, if necessary, to the nearest 1/16 of 1%) for
delivery of such deposits on the first day of an Interest Period of a LIBOR
Rate Loan, for the number of days comprised therein, which appears on the
Reuters Screen LIBO Page as of 11:00 a.m., London time (or such other time
as of which such rate appears) on the day that is two Business Days
preceding the first day of the Interest Period or the rate for such
deposits determined by the Agent at such time based on such other published
service of general application as shall be selected by the Agent for such
purpose; provided, that in lieu of determining the rate in the foregoing
manner, the Agent may determine the rate based on rates offered to the
Agent for deposits in United States Dollars (rounded upwards, if necessary,
to the nearest 1/16 of 1%) in the interbank eurodollar market at such time
for delivery on the first day of the Interest Period for the number of days
comprised therein.
The LIBOR Rate shall be adjusted automatically as to all LIBOR Rate
Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"LIBOR Rate Loan" means a Loan that bears interest based on the LIBOR Rate.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Lender to the Borrower under
Article II, and may be a Reference Rate Loan or a LIBOR Rate Loan (each, a
"Type" of Loan).
15
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
the Guaranty, the Reimbursement Agreements, the Commitment Letter and all other
documents delivered to the Agent or any Lender in connection herewith.
"Margin Stock" means "margin stock" as such term is defined in Regulation
G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower or the Borrower, CHC and
its Subsidiaries taken as a whole; (b) a material impairment of the ability of
the Borrower, CHC or any Subsidiary to perform under any Loan Document and to
avoid any Event of Default; or (c) a material adverse effect upon (i) the
legality, validity, binding effect or enforceability against the Borrower, CHC
or any Subsidiary of any Loan Document, or (ii) the perfection or priority of
any lien granted under any of the Collateral Documents.
"Maturity Date" means the earlier of (i) _____________, 2003 and (ii) the
date the Obligations are accelerated pursuant to Section 9.2 hereof.
"Multiemployer Plan" means a "multiemployer plan," within the meaning of
Section 4001(a)(3) of ERISA, to which the Borrower, CHC or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Net Issuance Proceeds" means, as to any issuance of debt by any Person,
cash proceeds and non-cash proceeds received or receivable by such Person in
connection therewith, net of reasonable out-of-pocket costs and expenses paid or
incurred in connection therewith in favor of any Person not an Affiliate of such
Person.
"Net Proceeds" means, as to any Disposition by a Person, proceeds in cash,
checks or other cash equivalent financial instruments as and when received by
such Person, net of: (a) the direct costs relating to such Disposition
excluding amounts payable to such Person or any Affiliate of such Person, (b)
sale, use or other transaction taxes paid or payable by such Person as a direct
result thereof, and (c) amount a required to be applied to repay principal,
interest and prepayment premiums and penalties on Indebtedness secured by a lien
on the asset which is the subject of such Disposition to the extent such Lien is
permitted hereunder. "Net Proceeds" shall also include proceeds paid on account
of any Event of Loss, net of (x) all money actually applied to repair or
reconstruct the damaged property or property affected by the condemnation or
taking, (y) all of the costs and expenses reasonably incurred in connection with
the collection of such proceeds, award or other
16
payments, and (z) any amounts retained by or paid to parties having superior
rights to such proceeds, awards or other payments. Notwithstanding the
foregoing, "Net Proceeds" of a Disposition described in Section 8.2(a)(v) shall
be an amount equal to the amount calculated in accordance with Section
8.2(a)(v)(A).
"Nonrecourse Indebtedness" means Indebtedness with respect to which there
is no recourse to any of the assets of the Borrower, CHC or any Subsidiary other
than the assets encumbered by a Permitted Lien, with customary exceptions to the
nonrecourse nature of such Indebtedness approved by the Agent in writing, which
approval shall not be unreasonably withheld.
"Note" means a promissory note executed by the Borrower in favor a Lender
pursuant to Section 2.4, in substantially the form of Exhibit F, together with
all renewals and amendments thereto.
"Notice of Borrowing" means a written or oral request for a Loan from the
Borrower delivered to the Agent in the manner, at the time, and containing the
information required by the terms of Section 2.2 hereof.
"Obligation" means all advances, debts, liabilities, obligation, covenants
and duties arising under any Loan, Letter of Credit or Loan Document owing by
the Borrower, CHC or any Subsidiary to any Lender, the Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising.
"Organization Documents" means (a) for any limited partnership, the limited
partnership agreement, the certificate of formation, and all applicable
resolutions of the board of directors (or any committee thereof) of such limited
partnership and (b) for any corporation, the certificate or articles of
incorporation, the bylaws, any certificate of determination or instrument
relating to the rights of preferred shareholders of such corporation, any
shareholder rights or similar agreement, and all applicable resolutions of the
board of directors (or any committee thereof) of such corporation.
"Other Taxes" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in Section 12.8(d).
17
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Borrower sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 8.1.
"Person" means an individual, partnership, corporation, limited liability
company, limited liability partnership, business trust, joint stock company,
trust, unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower sponsors or maintains or to which the Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Reference Rate" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by U. S. Bank, as its
"reference lending rate." The "reference lending rate" shall mean the rate
announced by U. S. Bank from time to time as its reference lending rate for
commercial loans within the United States (but is not intended to be the lowest
rate of interest charged by U. S. Bank in connection with extensions of credit
to debtors or any classification of debtors). Any change in the reference rate
announced by U. S. Bank shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Reference Rate Loan" means a Loan that bears interest based on the
Reference Rate.
"Pro Rata Share" means, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Lender's Commitment divided by the combined Commitments of all
Lenders.
"Reimbursement Agreement" has the meaning specified in Section 3.2(c).
"Reportable Event" means, any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the 30-
day notice requirement under ERISA has been waived in regulations issued by the
PBGC.
"Required Lenders" means at any time Lenders then holding in excess of 66
2/3% of the then aggregate unpaid principal amount of the Loans, or, if no such
18
principal amount is then outstanding, Lenders then having Pro Rata Shares
greater than 66 2/3% of the Commitments.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the president of
the Borrower, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the Borrower, or any other officer
having substantially the same authority and responsibility.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Security Agreements" means a security agreements executed by the Borrower
and CHC and in favor Agent as agent for the Lenders pursuant to Section 5.1(f),
in substantially the form of Exhibit G, together with all amendments thereto.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Washington Uniform Fraudulent Transfer Act; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon its property and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (d)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Debt" shall mean Indebtedness of the Borrower or CHC which is
subordinated to the Obligations of the Borrower, CHC and the Subsidiaries
hereunder in right of payment, exercise of remedies or both, on terms and
conditions agreed to in writing by the Agent and the Required Lenders.
19
"Subsidiary" of a Person means any corporation association, partnership,
limited liability company, limited liability partnership, joint venture or other
business entity of which more than 50% of the voting stock membership interests
or other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, surety bonds and similar
instruments.
"Swap Contract" means any agreement (including any master agreement and any
agreement, whether or not in writing, relating to any single transaction) that
is an interest rate swap agreement, basis swap, forward rate agreement,
commodity swap, commodity option, equity or equity index swap or option, bond
option, interest rate option, forward foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross-currency rate swap
agreement, currency option or any other, similar agreement (including any option
to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by each Lender's
net income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender or the Agent, as the case may be, is organized or
maintains a lending office.
"Title Insurance Policy" means an American Land Title Association extended
coverage mortgagee's policy of title insurance (1992 form) insuring the validity
and first priority (subject only to exceptions agreed to in writing by the
Agent) of the lien of the applicable Deed of Trust against the real property
described therein, in an amount equal to or greater than 60% of the Approved
Appraised Value, and with such endorsements as the Agent deems necessary in its
sole discretion, issued by a title insurance company reasonably acceptable to
the Agent, dated as of the date of the recording of such Deed of Trust, and in a
form acceptable to the Agent.
"Type" has the meaning specified in the definition of "Loan."
"UCC" means the Uniform Commercial Code as in effect in the State of
Washington.
20
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"U. S. Bank" means U. S. Bank National Association, a national banking
association.
1.2 OTHER INTERPRETIVE PROVISIONS
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding," and the word "through"
means "to and including."
(iv) The term "property" includes any kind of property or asset,
real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
21
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower,
CHC and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Lenders or the Agent merely because of
the Agent's or Lenders' involvement in their preparation.
(h) Each reference hereunder to Subsidiaries is effective at such time and
to the extent that the Borrower has existing Subsidiaries (as defined herein).
1.3 ACCOUNTING PRINCIPLES
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of the Borrower or CHC (as the case may be).
(c) In the event that GAAP changes during the term of this Agreement such
that the Financial Covenants contained in Section 8.14 would then be calculated
in a different manner or with different components or with components that are
calculated differently, (i) the parties hereto agree to enter into negotiations
with respect to amendments to this Agreement to conform those covenants as
criteria for evaluating CHC's and its Subsidiaries' financial condition to
substantially the same criteria as were effective prior to such change in GAAP,
and (ii) the Borrower and CHC shall be deemed to be in compliance with the
affected Financial Covenants contained in Section 8.14 during the 60 days
following any change in GAAP if and to the extent that the Borrower would have
been in compliance therewith under GAAP as in effect immediately before such
change; provided, however, that this paragraph shall not be deemed to require
the Borrower, the Agent or the Lenders to agree to modify any provision of this
Agreement or any of the other Loan Documents to reflect any such change to GAAP
and, if, after such 60 days, the parties, in their sole discretion, fail to
reach agreement on such modifications, the terms of this Agreement will remain
unchanged and the compliance by the Borrower and CHC with the Financial
22
Covenants contained in Section 8.14 will be calculated in accordance with GAAP
as in effect immediately before such change.
ARTICLE II. THE LOANS
2.1 REVOLVING LINE OF CREDIT
(a) Subject to the terms and conditions of this Agreement, each Lender
hereby severally agrees to make loans (each such loan, a "Loan") to the Borrower
from time to time on Business Days prior to the Maturity Date in amounts equal
to such Lender's Pro Rata Share of each requested loan, provided that, after
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giving effect to any requested loan the aggregate of all Loans from such Lender
will not exceed at any one time outstanding (a) such Lender's Pro Rata Share of
the Commitment less (b) its Pro Rata Share of the Letter of Credit Usage. The
Loans described in this Section 2.1 constitute a revolving credit and within the
amount and time specified, the Borrower may pay, prepay and reborrow. The amount
of each Lender's Pro Rata Share of the Commitment is set forth in Schedule 2.1.
(b) Within 30 days of the date of the funding of the initial public
offering of the common stock of CHC, the Borrower shall deliver to the Agent a
calculation the amount of the Commitment in accordance with the definition
thereof set forth in Section 1.1, together with such supporting evidence of the
calculation as requested by the Agent. The Agent shall promptly review the
calculation and deliver to the Borrower and each Lender written notice that
shall establish the amount of the Commitment in accordance with the definition
thereof. Notwithstanding the Definition of "Commitment" set forth in Section
1.1, until the Agent delivers such written notice to the Borrower and each
Lender, the amount of the Commitment shall be an amount equal to the sum of (i)
an amount equal to the lesser of (A) $80,000,000 or (B) the gross proceeds from
the sale of shares of CHC common stock in the initial public offering of such
stock, less (ii) the amount of mandatory prepayments made in accordance with
Section 2.6.
(c) Upon not fewer than ten days' prior written notice to the Agent, the
Borrower may elect to reduce the amount of the Commitment; provided, however
that any such reduction in the Commitment shall be permanent.
2.2 MANNER OF BORROWING
For each requested Loan, the Borrower shall give the Agent a Notice of
Borrowing specifying the date of a requested borrowing and the amount thereof.
Borrower may give a written or oral Notice of Borrowing on the same day it
wishes any Reference Rate Loan to be made if said Notice of Borrowing is
received by Agent
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no later than 10:00 a.m. (Seattle time) on the date of the requested borrowing.
If the Borrower shall elect to have interest accrue on a Loan at a rate indexed
to the LIBOR Rate by giving an Interest Rate Notice in respect of such
borrowing, the Notice of Borrowing shall be given prior to 10:00 a.m. (Seattle
time) on a Business Day at least three Business Days prior to the requested date
of borrowing. Requests for borrowing, or confirmations thereof, received after
the designated hour will be deemed received on the next succeeding Business Day.
Each such Notice of Borrowing shall be irrevocable and shall be deemed to
constitute a representation and warranty by Borrower that as of the date of such
notice the statements set forth in Article VI are true and correct in all
material respects and that no Default or Event of Default has occurred and is
continuing. On receipt of a Notice of Borrowing, the Agent shall promptly notify
each Lender by telephone, telex or facsimile of the date of the requested
borrowing and the amount thereof. Each Lender shall before 12:00 noon (Seattle
time) on the date of the requested borrowing, pay such Lender's Pro Rata Share
of the aggregate principal amount of the requested borrowing in immediately
available funds to the Agent at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
Upon fulfillment to the Agent's satisfaction of the applicable conditions set
forth in Article V, and after receipt by the Agent of such funds, the Agent will
either (a) promptly make such funds available to the Borrower at a general
checking account maintained by the Borrower at the Agent, or at such other place
as may be designated by the Borrower in a writing delivered to the Agent; (b) if
requested by the Borrower in writing to do so, will apply such funds against the
Borrower's obligations to make payments of interest accruing under this
Agreement, the Notes or any other Loan Document; or (c) at the Agent's election,
apply such proceeds to the satisfaction of Borrower's obligations arising under
Section 3.4.
2.3 AGENT'S RIGHT TO FUND
Unless the Agent shall have received notice from a Lender prior to 12:00
noon (Seattle time) on the date of any requested borrowing that such Lender will
not make available to the Agent its Pro Rata Share of the requested Borrowing,
the Agent may assume that such Lender has made such funds available to the Agent
on the date such Loan is to be made in accordance with Section 2.2 hereof and
the Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Lender
shall not have so made such portion available to the Agent, the Borrower and
such Lender, jointly and severally, agree to pay to the Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (a) in the case of the Borrower, the interest
rate applicable to such Loan and (b) in the case of such Lender, the Federal
Funds Rate. Any such repayment by the Borrower shall
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be without prejudice to any rights it may have against a Lender that has failed
to make available its funds for any requested borrowing. The failure of any
Lender to make available its Pro Rata Share of a requested Borrowing shall not
relieve any other Lender of any obligation hereunder to make available its Pro
Rata Share of a requested Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make available such Lender's Pro Rata Share of a
requested Borrowing.
2.4 LOAN ACCOUNTS
The Loan made by each Lender shall be evidenced by a Note and one or more
loan accounts or records maintained by such Lender in the ordinary course of
business. The loan accounts or records maintained by the Agent and each Lender
shall be conclusive absent manifest error of the amount of the Loans made by the
Lenders to the Borrower and the interest and payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Loans.
2.5 INTEREST RATE ELECTIONS
(a) The Borrower may, upon irrevocable written notice to the Agent in
accordance with Section 2.5(b):
(i) elect, as of any Business Day, in the case of new LIBOR Rate
Loans or any Reference Rate Loans, or as of the last day of the applicable
Interest Period, in the case of any existing LIBOR Rate Loans, to make or
convert any such Loans (or any part thereof (A) in the case of a conversion
to a LIBOR Rate Loan, in an amount not less than $1,000,000, or that is in
an integral multiple of $100,000 in excess thereof or (B) in the case of a
conversion to a Reference Rate Loan, in an amount not less than $250,000)
into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $100,000 in excess thereof).
(b) The Borrower shall deliver an Interest Rate Notice to be received by
the Agent not later than 10:00 p.m. (Seattle time) at least (i) three Business
Days in advance of the Interest Rate Election Date, if the Loans are to be made,
converted into or continued as LIBOR Rate Loans; and (ii) one Business Day in
advance of the
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Interest Rate Election Date, if the Loans are to be converted into Reference
Rate Loans, specifying:
(A) the proposed Interest Rate Election Date;
(B) the aggregate amount of Loans to be made, converted or renewed;
(C) the Type of Loans resulting from the proposed making, conversion
or continuation; and
(D) other than in the case of Reference Rate Loans, the duration of
the requested Interest Period.
(c) If the Borrower does not specify an interest rate election in any
Notice of Borrowing, the Loans made pursuant to such Notice of Borrowing shall
constitute Reference Rate Loans.
(d) If upon the expiration of any Interest Period applicable to LIBOR Rate
Loans, the Borrower has failed to timely select a new Interest Period to be
applicable to such LIBOR Rate Loans, or if any Default or Event of Default then
exists, the Borrower shall be deemed to have elected to convert such LIBOR Rate
Loans into Reference Rate Loans effective as of the expiration date of such
Interest Period.
(e) the Agent will promptly notify each Lender of its receipt of an
Interest Rate Notice, or, if no timely notice is provided by the Borrower, the
Agent will promptly notify each Lender of the details of any automatic
conversion. All conversions and continuations shall be made ratably according
to the respective outstanding principal amounts of the Loans with respect to
which the notice was given held by each Lender.
(f) Unless the Required Lenders otherwise agree, during the existence of a
Default or Event of Default, the Borrower may not elect to have a Loan made,
converted into or continued as a LIBOR Rate Loan.
(g) There may not be more than six different Interest Periods in effect at
any time.
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2.6 MANDATORY PREPAYMENTS OF LOANS
(a) ASSET DISPOSITIONS
If the Borrower, CHC or any Subsidiary shall at any time or from time to
time make or agree to make a Disposition then (i) the Borrower shall promptly
notify the Agent of such proposed Disposition (including the amount of the
estimated Net Proceeds to be received by the Borrower, CHC or such Subsidiary in
respect thereof) and (ii) concurrently with receipt by the Borrower, CHC or the
Subsidiary of the Net Proceeds of such Disposition, the Borrower shall prepay
the Loans in an aggregate amount equal to the amount of such Net Proceeds;
provided, however, that no such prepayment shall be required to the extent, in
each case, such Net Proceeds are from the Disposition of personal property and
are to be used within 90 days of receipt thereof to purchase replacement assets;
provided further, that such prepayment shall be required only if (i) such Net
Proceeds exceed $500,000 or (ii) the aggregate of all Net Proceeds theretofore
received by the Borrower during the preceding 12 months and not reinvested or
used to make a prepayment hereunder exceeds $500,000.
(b) EVENT OF LOSS
If the Borrower, CHC or any Subsidiary shall at any time or from time to
time suffer an Event of Loss, then (i) the Borrower shall promptly notify the
Agent of such Event of Loss (including the amount of the estimated Net Proceeds
to be received by the Borrower, CHC or such Subsidiary in respect thereof) and
(ii) promptly upon, and in no event later than two (2) Business Days after,
receipt by the Borrower, CHC or the Subsidiary of the Net Proceeds of such Event
of Loss, the Borrower shall either (i) prepay the Loans in an aggregate amount
equal to the amount of such Net Proceeds or (ii) deposit an aggregate amount
equal to the amount of such Net Proceeds into an interest bearing blocked
account maintained with the Agent pending release for usage by the Borrower in a
manner, and during the time, specified in the proviso below; provided, however,
that no such prepayment shall be required to the extent, in each case, such Net
Proceeds are used within 90 days of receipt thereof to repair, replace or
restore the assets, if any, relating to such Event of Loss.
(c) DEBT ISSUANCE
If the Borrower or CHC shall incur additional Indebtedness after the date
of this Agreement (other than Indebtedness permitted under Section 8.5, the
Borrower shall promptly notify the Agent of the estimated Net Issuance Proceeds
of such issuance or incurrence to be received by the Borrower in respect
thereof. Promptly upon, and in no event later than three days after, receipt by
the Borrower of Net
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Issuance Proceeds of such issuance or incurrence, the Borrower shall prepay the
Loans in an aggregate amount equal to the amount of such Net Issuance Proceeds.
(d) GENERAL
Any prepayments pursuant to this Section 2.6 shall be applied first to any
Reference Rate Loans then outstanding and then to LIBOR Rate Loans with the
shortest Interest Periods remaining; provided, however, that if the amount of
Reference Rate Loans then outstanding is not sufficient to satisfy the entire
prepayment requirement, the Borrower may, at its option, place any amounts which
it would otherwise be required to use to prepay LIBOR Rate Loans on a day other
than the last day of the Interest Period therefor in an interest-bearing account
pledged to the Agent for the benefit of the Lenders until the end of such
Interest Period at which time such pledged amounts will be applied to prepay
such LIBOR Rate Loans. The Borrower shall pay, together with each prepayment
under this Section 2.6, accrued interest on the amount prepaid and any amounts
required pursuant to Section 4.4.
(e) REDUCTION IN COMMITMENT
Concurrently with the making of each mandatory prepayment pursuant to this
Section 2.6, the amount of the Commitment shall be automatically reduced by an
amount equal to the amount of the mandatory prepayment, and each Lender's
Commitment shall be reduced proportionately based upon each Lender's Pro Rata
Share.
2.7 REPAYMENT
(a) The Borrower shall repay to the Lenders from time to time such amounts
of principal as may be necessary to ensure that at all times the sum of the then
outstanding principal balance of all Loans and the Letter of Credit Usage is
equal to or less than the lesser of (i) the amount of the then applicable
Commitment or (ii) the Borrowing Base.
(b) The Borrower shall repay the Loans in full, together with all accrued
and unpaid interest thereon, on the Maturity Date.
2.8 INTEREST
(a) Each Loan shall bear interest on the outstanding principal amount
thereof from the Closing Date at a rate per annum equal to the LIBOR Rate or the
Reference Rate, as the case may be (and subject to the Borrower's right to
convert to other Types of Loans under Section 2.5), plus the Interest Margin.
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(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans under
Section 2.6 for the portion of the Loans so prepaid and upon payment (including
prepayment) in full thereof and, during the existence of any Event of Default,
interest shall be paid on demand of the Agent at the request or with the consent
of the Required Lenders.
(c) Notwithstanding subsection (a) of this Section, while any Event of
Default exists or after acceleration, the Borrower shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Loans, at a rate per annum which is
determined by adding 2% per annum to the Interest Margin then in effect for such
Loans.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Borrower to any Lender hereunder shall be subject to the limitation that
payments of interest and late charges shall not be required, for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest that may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrower shall pay such Lender interest at the
highest rate permitted by applicable law.
2.9 AGENCY AND UNDERWRITING FEES
The Borrower shall pay agency fees and underwriting fees to the Agent as
required by the Commitment Letter.
2.10 COMMITMENT FEES
On the last day of each fiscal quarter during the term of the Loans, and on
the date that the Loans are repaid in full and the Commitments are terminated
upon the election of the Borrower pursuant to Section 2.1(c) or as otherwise
provided in this Agreement, Borrower shall pay to the Agent for the ratable
benefit of the Lenders commitment fees an the amount equal to Commitment Fee
Percentage per annum of the sum of (i) the average unused portion of the
Commitment during each period, to be calculated based upon the amount of the
Commitment during such period, less (ii) the sum of the then outstanding
principal balance of all Loans and the Letter of Credit Usage during such
period. The fee paid pursuant to this Section 2.10 shall be deemed fully earned
when due and non-refundable when paid without regard to any voluntary or
involuntary prepayment of the Loans (or any portion thereof), the failure to
satisfy the conditions of lending or the termination of any Commitment.
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2.11 LATE CHARGE
If any payment of principal or interest required under any of the Loans is
five days or more past due, the Borrower will be charged, for the ratable
benefit of the Lenders, a late charge of 5% of the delinquent payment or $5,
whichever is greater, for each such late payment. The five-day period provided
for herein shall not be construed as a waiver of any Default or Event of Default
resulting from any late payment under any of the Loans.
2.12 COMPUTATION OF INTEREST AND FEES
(a) All computations of interest and commitment fees shall be made on the
basis of a year of 360 days and actual days elapsed. Interest and commitment
fees shall accrue during each period during which interest or commitment fees
are computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest error.
The Agent will, at the request of the Borrower or any Lender, deliver to the
Borrower or the Lender, as the case may be, a statement showing the quotations
used by the Agent in determining any interest rate and the resulting interest
rate.
2.13 PAYMENTS BY THE BORROWER
(a) All payments to be made by the Borrower shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein, all
payments by the Borrower shall be made to the Agent for the account of the
Lenders at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 10:00 p.m. (Seattle time) on the date
specified herein. The Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share so expressly provided herein) of such
payment in like funds as received. Any payment received by the Agent later than
10:00 p.m. (Seattle time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
30
(c) Unless the Agent receives notice from the Borrower prior to the date on
which any payment is due to the Lenders that the Borrower will not make such
payment in full as and when required, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made
such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
this Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
(d) Any payment made by the Borrower hereunder shall be applied
first, against any Financial Transaction Liability of the Borrower owing to the
-----
Agent; second, against fees, expenses and indemnities due hereunder or under any
------
other Loan Document; third, against interest due on matured obligations in
-----
respect of any Letter of Credit, if any; fourth, against interest due on amounts
------
in default on any Loan, if any; fifth, against interest due on any Loan; sixth,
----- -----
against matured obligations in respect of any Letter of Credit, if any; seventh,
-------
against Loan principal amounts in default; and eighth, against Loan principal.
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2.14 SHARING OF PAYMENTS, ETC.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans made by it any payment (whether voluntary,
involuntary, through this exercise of any right of set-off, or otherwise) in
excess of its Pro Rata Share, such Lender shall immediately (a) notify the Agent
of such fact, and (b) purchase from the other Lenders such participations in the
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment pro rata with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share
(according to the proportion of (a) the amount of such paying Lender's required
repayment to (b) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 12.9) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Agent will keep records (which shall be conclusive
and binding in the absence of manifest error)
31
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.
2.15 SECURITY
All Obligations of the Borrower, CHC and the Subsidiaries under this
Agreement, the Notes and all other Loan Documents shall be secured in accordance
with the Collateral Documents.
2.16 BORROWING BASE
(a) The sum of (i) the outstanding balance of principal of the Loans, plus
(ii) the Letter of Credit Usage shall at no time exceed an amount equal to the
Borrowing Base.
(b) The Borrower shall submit to U. S. Bank a calculation of the Borrowing
Base (i) within 45 days of the end of each fiscal quarter of the Borrower as of
the last day of such fiscal quarter and (ii) with each Notice of Borrowing for
Loans in excess of $4,000,000 in the aggregate or request for the issuance of a
Letter of Credit in a face amount in excess of $4,000,000.
(c) If at any time the sum of (i) the outstanding balance of principal of
the Loans, plus (ii) the Letter of Credit Usage shall exceed the Borrowing Base,
the Borrower shall repay such outstanding portion of the Loans in an amount
equal to such excess within one Business Day. The Borrower's failure to do so
shall constitute an Event of Default.
2.17 NO PREPAYMENT CHARGES
Except as provided in Section 4.4, the Borrower may pay or prepay any Loan
without charge.
ARTICLE III. LETTERS OF CREDIT
3.1 LETTERS OF CREDIT
Upon the Borrower's request prior to the Maturity Date, the Agent shall
issue one or more standby letters of credit for the Borrower's account in
accordance with the terms and conditions of this Section 3.
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3.2 MANNER OF REQUESTING LETTERS OF CREDIT
(a) From time to time prior to the Maturity Date, the Borrower may request
that the Agent issue standby letters of credit for the Borrower's account or
extend or renew any existing Letters of Credit. Each such request will be made
by delivering a written request for the issuance, extension or renewal of such a
letter of credit to the Agent not later than 12:00 noon (Seattle time) one
Business Day prior to the date a new letter of credit is to be issued or an
existing Letter of Credit is to be extended or renewed. Each such request shall
be deemed to constitute a representation and warranty by the Borrower that as of
the date of such request, the representations and warranties set forth in
Article V are true and correct and that no Default or Event of Default has
occurred and is continuing. Each such request shall specify the face amount of
the requested letter of credit, the proposed date of expiration for such letter
of credit, the name of the intended beneficiary thereof, and whether such letter
of credit is an extension or renewal of a Letter of Credit.
(b) Each letter of credit requested hereunder (i) shall be in a face amount
such that after issuance of such letter of credit, the Letter of Credit Usage
does not exceed $5,000,000; (ii) shall be in a face amount such that after
issuance of such letter of credit, the sum of the Letter of Credit Usage and the
then outstanding principal balance of the Loans does not exceed an amount equal
to the Commitment; and (iii) shall have an expiration date not later than the
Maturity Date.
(c) At the request of the Agent, the Borrower shall execute a letter of
credit application and reimbursement agreement ("Reimbursement Agreement"), in
the standard form then used by the Agent, in respect of each letter of credit
requested hereunder.
(d) Subject to the satisfaction of the conditions precedent set forth in
Section 4 and the Borrower's compliance with the terms of this Section 3.2, the
Agent shall issue and deliver the requested letter of credit to the Borrower or
to the Borrower's designated beneficiary at such address as the Borrower may
specify. New Letters of Credit and extensions or renewals of any existing
Letters of Credit shall contain terms and conditions customarily included in the
Agent's letters of credit and shall otherwise be in a form acceptable to the
Agent.
(e) For each Letter of Credit issued by the Agent hereunder, the Borrower
shall pay on the date such Letter of Credit is issued (i) to the Agent for the
ratable benefit of the Lenders, a letter of credit fee in a per annum amount
equal to the number of basis points of the face amount of the Letter of Credit
equal to the LIBOR Margin as of the date of the issuance of the Letter of Credit
and (ii) to the Agent for its
33
own account an administrative fee equal to ten basis points of the face amount
of the Letter of Credit.
(f) In the event of any conflict between the terms of any Reimbursement
Agreement and the terms of this Agreement, the terms of this Agreement shall
control.
3.3 INDEMNIFICATION; INCREASED COSTS
(a) The Borrower agrees to indemnify the Agent on demand for any and all
costs, expenses, or damages incurred by the Agent, directly or indirectly,
arising out of the issuance of any Letter of Credit, including, without
limitation, any costs of maintaining reserves in respect thereof and any premium
rates imposed by the Federal Deposit Insurance Corporation in connection
therewith. A certificate as to such costs, expenses or damages submitted to the
Borrower by the Agent shall be final, conclusive and binding, absent manifest
error.
(b) If at any time after the date hereof the introduction of or any change
in applicable law, rule, or regulation or in the interpretation or the
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by the Agent with any
requests directed by any such Government Authority (whether or not having the
force of law) shall, with respect to any Letter of Credit, subject the Agent to
any Tax or impose, modify or deem applicable any reserve, special deposit or
similar requirements against assets of, deposits with or for the account of,
credit extended by the Agent or shall impose on the Agent any other conditions
affecting the Letters of Credit and the result of any of the foregoing is to
increase the cost to the Agent of issuing a Letter of Credit or to reduce the
amount of any sum received or receivable by the Agent hereunder with respect to
the Letters of Credit, then, upon demand by the Agent, the Borrower shall pay to
the Agent such additional amount or amounts as will compensate the Agent for
such increased cost or reduction. A certificate submitted to the Borrower by the
Agent setting forth the basis for the determination of such additional amount or
amounts shall be final, conclusive and binding, absent manifest error.
(c) The Borrower agrees to indemnify and hold the Agent harmless from and
against any and all (i) Taxes and other fees payable in connection with Letters
of Credit or the provisions of this Agreement relating thereto, and (ii) any and
all actions, claims, damages, losses, liabilities, fines, penalties, costs and
expenses of every nature, including reasonable attorneys' fees, suffered or
incurred by the Agent otherwise arising out of or relating to this Article III,
or any Letter of Credit; provided, however, said indemnification shall not apply
to the extent that any such action, claim,
34
damage, loss, liability, fine, penalty, cost or expense arises solely out of or
is based solely upon the Agent's willful misconduct or gross negligence.
3.4 PAYMENT BY THE BORROWER
The Borrower agrees to fully reimburse the Agent for all amounts paid under
any Letter of Credit together with interest thereon at the rate applicable to
Reference Rate Loans from the date such payment is made until the date the Agent
notifies the Borrower that such payment was made. Such reimbursement shall be
made in immediately available funds to Agent at 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 not later than 12:00 noon (Seattle time) on the date the
Borrower is first notified by the Agent that payment has been made under the
Letter of Credit; provided, that, if the Agent so elects pursuant to the terms
--------
of Section 9.2, following the occurrence of an Event of Default, the face amount
of each Letter of Credit shall become immediately due and payable. If the
Borrower should default in its obligations to reimburse the Agent or to make any
other payment required hereunder, (i) interest shall accrue on the unpaid amount
thereof at the rate applicable to Reference Rate Loans during the existence of
an Event of Default from the date such amount becomes due and payable until
payment in full by the Borrower; and (ii) the Agent, in its sole discretion, may
deem such default to constitute a Notice of Borrowing for the amount of the
unreimbursed obligation together with accrued interest thereon, and, subject to
the terms and conditions hereof, may advance a Loan to the Borrower and
immediately apply the proceeds thereof in satisfaction of the Borrower's
obligations under this Section 3.4. Interest on unpaid amounts shall be
calculated on the basis of a year of 360 days and actual days elapsed.
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 TAXES
(a) Any and all payments by the Borrower to each Lender or the Agent under
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, the Borrower shall
pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Lender and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
the Lender or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification
35
shall be made within 30 days after the date the Lender or the Agent makes
written demand therefor.
(c) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay to each Lender or the Agent for the
account of such Lender, at the time interest is paid, all additional
amounts which the respective Lender specified as necessary to preserve the
after-tax yield the Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) Within 30 days after the date of any payment by the Borrower of Taxes
or Other Taxes, the Borrower shall furnish the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to subsection (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrower which may thereafter accrue, if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.
4.2 ILLEGALITY
(a) If any Lender determines that the introduction of any Requirement of
Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central
36
bank or other Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable Lending Office to make LIBOR Rate Loans, then, on
notice thereof by the Lender to the Borrower through the Agent, any obligation
of that Lender to make LIBOR Rate Loans shall be suspended until the Lender
notifies the Agent and the Borrower that the circumstances giving rive to such
determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR Rate
Loan, the Borrower shall, upon its receipt of notice of such fact and demand
from such Lender (with a copy to the Agent), prepay in full such LIBOR Rate
Loans of that Lender then outstanding, together with interest accrued thereon
and amounts required under Section 4.4, either on the last day of the Interest
Period thereof, if the Lender may lawfully continue to maintain such LIBOR Rate
Loans to such day, or immediately, if the Lender may not lawfully continue to
maintain such LIBOR Rate Loan. If the Borrower is required to so prepay any
LIBOR Rate Loan, then concurrently with such prepayment, the Borrower shall
borrow from the affected Lender, in this amount of such repayment, a Reference
Rate Loan.
(c) If the obligation of any Lender to make or maintain LIBOR Rate Loans
has been so terminated or suspended, the Borrower may elect, by giving notice to
the Lender through the Agent that all Loans which would otherwise be made by the
Lender as LIBOR Rate Loans shall be instead Reference Rate Loans.
(d) Before giving any notice to the Agent under this Section, the affected
Lender shall designate a different Lending Office with respect to its LIBOR Rate
Loans if such designation will avoid the need for giving such notice or making
such demand and will not, in the judgment of the Lender, be illegal or otherwise
disadvantageous to the Lender.
4.3 INCREASED COSTS AND REDUCTION OF RETURN
(a) If any Lender determines that, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any LIBOR Rate Loans, then the Borrower shall be liable
for, and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such Lender, additional
amounts as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
37
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Lender (or
its Lending Office) or any corporation controlling the Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Lender or any corporation controlling the
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Lender to the Borrower through the Agent,
the Borrower shall pay to the Lender, from time to time as specified by the
Lender, additional amounts sufficient to compensate the Lender for such
increase.
4.4 FUNDING LOSSES
The Borrower shall reimburse each Lender and hold each Lender harmless from
any loss or expense which the Lender may sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any payment of
principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow the Loans as requested in a
Borrowing Notice, or to continue or convert a Loan after the Borrower has given
(or is deemed to have given) an Interest Rate Notice;
(c) the prepayment (including pursuant to Section 2.6) or other payment
(including after acceleration thereof) of a LIBOR Rate Loan on a day that is not
the last day of the relevant Interest Period; or
(d) the automatic conversion under Section 2.5 of any LIBOR Rate Loan to a
Reference Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Borrower to the Lenders under this Section
and under Section 4.3(a), each LIBOR Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the LIBOR Rate for
such LIBOR Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for
38
a comparable period, whether or not such LIBOR Rate Loan is in fact so funded.
4.5 INABILITY TO DETERMINE RATES
If the Agent determines that for any reason adequate and reasonable means
do not exist for determining the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Rate Loan, or that the LIBOR Rate applicable
pursuant to Section 2.8(a) for any requested Interest Period with respect to a
proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to any
Lender of funding such Loan, the Agent will promptly so notify the Borrower and
each Lender. Thereafter, the obligation of the Lenders to make or maintain
LIBOR Rate Loans hereunder shall be suspended until the Agent revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Interest Rate Notice then submitted by it. If the Borrower does not revoke such
Notice, the Lenders shall make, convert or continue the Loans, as proposed by
the Borrower, in the amount specified in the applicable notice submitted by the
Borrower, but such Loans shall be made, converted or continued as Reference Rate
Loans instead of LIBOR Rate Loans.
4.6 CERTIFICATES OF LENDERS
Any Lender claiming reimbursement or compensation under this Article IV
shall deliver to the Borrower (with a copy to the Agent) a certificate setting
forth in reasonable detail the amount payable to the Lender hereunder and such
certificate shall be conclusive and binding on the Borrower in the absence of
manifest error.
4.7 SURVIVAL
The agreements and obligations of the Borrower in this Article IV shall
survive this payment of all other Obligations.
ARTICLE V. CONDITIONS PRECEDENT
5.1 CONDITIONS OF INITIAL LOANS
This obligation of each Lender to make the initial advance to the Borrower
under the Loans hereunder or the obligation of the Agent to issue the first
Letter of Credit is subject to the condition that the Agent has received on or
before the Closing Date all of the following, in form and substance satisfactory
to the Agent and each Lender, and with sufficient copies for each Lender:
39
(a) CREDIT AGREEMENT AND NOTES
This Agreement and the Notes duly executed by each party thereto;
(b) RESOLUTIONS; INCUMBENCY
(i) Copies of the resolutions of the board of directors or other
governing body of the Borrower, CHC and each Subsidiary that may become
party to a Loan Document authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or an Assistant Secretary
of such Person; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Borrower, CHC and each Subsidiary that may become party to a Loan Document
certifying the names and true signatures of the officers of the Borrower,
CHC or such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered by
it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING
Each of the following documents:
(i) the Organization Documents of the Borrower, CHC and each
Subsidiary party to any Loan Document as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of the Borrower, CHC or
such Subsidiary as of the Closing Date; and
(ii) a good standing certificate for the Borrower, CHC and each
Subsidiary party to any Loan Document from the Secretary of State (or
similar, applicable Governmental Authority) of its state of organization
and each state where the Borrower, CHC or such Subsidiary is qualified to
do business as a foreign entity as of a recent date;
(d) LEGAL OPINIONS
An opinion of counsel to the Borrower and CHC and each Subsidiary party to
any Loan Document as in effect on the Closing Date, addressed to the Agent and
the Lenders, substantially in the form of Exhibit H;
40
(e) PAYMENT OF FEES
Evidence of payment by the Borrower of all accrued and unpaid fees, costs
and expenses to the extent then due and payable on the Closing Date, together
with Attorney Costs of U. S. Bank to the extent invoiced prior to or on the
Closing Date; including any such costs, fees and expenses arising under or
referenced in Sections 2.9 and 12.4;
(f) COLLATERAL DOCUMENTS
The Collateral Documents, executed by the Borrower, CHC and each
Subsidiary, in appropriate form for recording, where necessary, together with:
(i) acknowledgment copies of all UCC-1 financing statements filed,
registered or recorded to perfect the security interests of the Agent for
the benefit of the Lenders, or other evidence satisfactory to the Agent
that there has been filed, registered or recorded all financing statements
and other filings, registrations and recordings necessary and advisable to
perfect the Liens of the Agent for the benefit of the Lenders in accordance
with applicable law;
(ii) written advice relating to such lien and judgment searches as
the Agent shall have requested, and such termination statements or other
documents as may be necessary to confirm that the Collateral is subject to
no other Liens in favor of any Persons (other than Permitted Liens);
(iii) funds sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 financing statements;
(iv) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, tenants, franchisors,
licensors and other Persons party to material contracts relating to any
Collateral as to which the Agent shall be granted a Lien for the benefit of
the Lenders, as requested by the Agent or any Lender;
(v) evidence that all other actions necessary or, in the opinion
of the Agent or the Lenders, desirable, to perfect and protect the first
priority security interest created by the Collateral Documents and to
enhance the Agent's ability to preserve and protect its interests in and
access to the Collateral, have been taken;
41
(g) INSURANCE POLICIES
Standard lenders' payable endorsements and insurance certificates with
respect to the insurance policies or other instruments or documents evidencing
insurance coverage on the properties of the Borrower in accordance with Section
7.6;
(h) CERTIFICATE
A certificate signed by a Responsible Officer, dated as of the Closing
Date, stating that:
(i) the representations and warranties contained in Article VI are
true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result from
making the requested Loans or the issuance of the requested Letter of
Credit; and
(iii) there has occurred since October 31, 1997, no event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect;
(i) COMPLIANCE CERTIFICATE
A Compliance Certificate signed by a Responsible Officer, dated as of the
Closing Date;
(j) INITIAL PUBLIC OFFERING
Evidence acceptable to the Agent that the CHC (i) has completed its initial
public offering of common stock and (ii) has received and transferred to the
Borrower the net proceeds from such initial public offering;
(k) NOTICE OF BORROWING; REIMBURSEMENT AGREEMENT
A Notice of Borrowing (in the case of requested Loans) or a request for a
Letter of Credit and a Reimbursement Agreement (in the case of a requested
Letter of Credit) executed by the Borrower, and in each such case calculating
the Borrowing Base;
(l) GUARANTY
The Guaranty duly executed by CHC;
42
(m) OTHER DOCUMENTS
Such other approvals, opinions, documents or materials as the Agent or any
Lender may request;
(n) PAYMENT OF INDEBTEDNESS
(i) Except for (A) the Commitment of U. S. Bank set forth in this
Agreement and (B) any outstanding capital or operating leases from U. S.
Bank to the Borrower or CHC, payment in full of all Indebtedness of the
Borrower and CHC to U. S. Bank and cancellation of any outstanding
commitments to advance additional Indebtedness to the Borrower or CHC; and
(ii) Evidence that all other Indebtedness not permitted by Section
8.5 has been paid in full; and
(o) ELIGIBLE REAL PROPERTY
All Collateral Documents for not fewer than four parcels of Eligible Real
Property.
5.2 CONDITIONS TO SUBSEQUENT LOANS
The obligation of each Lender to make Loans to the Borrower, the Agent to
issue a Letter of Credit, or the Lenders to continue or convert any Loan under
Section 2.5 after the initial Loans have been advanced or the initial issuance
of a Letter of Credit hereunder is subject to the satisfaction of the following
conditions precedent on the applicable date:
(a) INTEREST RATE NOTICE
In the case of a conversion of a Loan into another Type of Loan or the
continuation of an interest rate election as of the end of an Interest Period,
the Agent shall have received an Interest Rate Notice executed by the Borrower;
(b) NOTICE OF BORROWING; REIMBURSEMENT AGREEMENT
The Agent shall have received, duly executed by the Borrower, a Notice of
Borrowing (in the case of requested Loans) or a request for a Letter of Credit
and a Reimbursement Agreement (in the case of a requested Letter of Credit), in
each such case calculating the Borrowing Base;
43
(c) CONTINUATION OF REPRESENTATIONS AND WARRANTIES
The representation and warranties in Article VI shall be true and correct
on and as of each such Interest Rate Election Date, date of Notice of Borrowing
or request for a Letter of Credit with the same effect as if made on and as of
such date (except to the extent such representations and warranties solely and
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date);
(d) NO EXISTING DEFAULT
No Default or Event of Default shall exist or shall result from such
continuation, conversion, making of Loans or issuance of a Letter of Credit;
(e) SATISFACTION OF PREVIOUS CONDITIONS
The conditions set forth in Section 5.1 shall have been previously
satisfied or waived by the Agent in writing;
(f) FURTHER ASSURANCES
To the extent not previously delivered, all other documents, agreements and
instruments from or with respect to the Borrower or any other Person that may be
called for hereunder shall be duly executed and delivered to the Agent,
including but not limited to all documents, agreements and instruments deemed
necessary by the Agent to perfect a security interest for the benefit of the
Lenders in collateral acquired after the date of this Agreement that is intended
to be encumbered pursuant to the Collateral Documents. For the purposes of this
Agreement, the waiver of delivery of any document, agreement, or instrument from
or with respect to the Borrower or any other Person does not constitute a
continuing waiver with respect to the obligation tofulfill the conditions
precedent set forth in this Section 5.2 except as otherwise specifically
provided.
Each Interest Rate Notice, Notice of Borrowing or request for a Letter of Credit
(as the case may be) submitted by the Borrower hereunder shall constitute a
representation and warranty by the Borrower hereunder, as of the date of each
such notice and as of each Interest Rate Election Date, as applicable, that the
conditions in this Section 5.2 are satisfied.
5.3 CONDITIONS TO BECOME ELIGIBLE REAL PROPERTY
The Borrower may elect that a parcel of real property owned by the Borrower
or a Subsidiary shall become Eligible Real Property subject to (a) making a
written request of the Agent therefor, (b) meeting the conditions set forth in
the definition of
44
"Eligible Real Property," and (c) the condition that the Agent has received all
of the following with respect to such parcel of real property, in form and
substance satisfactory to the Agent and each Lender, and with sufficient copies
for each Lender:
(i) a Deed of Trust encumbering the parcel of real property, duly
executed by the Borrower or Subsidiary that owns the parcel of real
property;
(ii) acknowledgment copies of all UCC-1 financing statements filed,
registered or recorded to perfect the security interests of the Agent for
the benefit of the Lenders, or other evidence satisfactory to the Agent
that there has been filed, registered or recorded all financing statements
and other filings, registrations and recordings necessary and advisable to
perfect the Liens of the Agent for the benefit of the Lenders in accordance
with applicable law;
(iii) written advice relating to such lien and judgment searches as
the Agent shall have requested, and such termination statements or other
documents as may be necessary to confirm that the Collateral is subject to
no other Liens in favor of any Persons (other than Permitted Liens);
(iv) funds from the Borrower sufficient to pay or reimburse the
Agent for all out-of-pocket costs and expenses connected with the parcel of
real property becoming Eligible Real Property, including, without
limitation, appraisal fees, inspection fees, fees for environmental and
other third party inspections and reports, fees for the Title Insurance
Policy to issue with respect to such parcel of real property, escrow fees
(if any), any filing or recording tax or fee in connection with the Deed of
Trust and all UCC-1 financing statements;
(v) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, tenants, franchisors,
licensors and other Persons party to material contracts relating to the
parcel of real property as to which the Agent shall be granted a Lien for
the benefit of the Lenders, as requested by the Agent or any Lender;
(vi) evidence that all other actions necessary or, in the opinion
of the Agent or the Lenders, desirable, to perfect and protect the first
priority security interest created by the Collateral Documents in the
parcel of real property and to enhance the Agent's ability to preserve and
protect its interests in and access to such Collateral, have been taken;
(vii) a Title Insurance Policy insuring the Deed of Trust;
45
(viii) a flood hazard determination in a form approved by the Agent
for the parcel of real property encumbered by a Deed of Trust;
(ix) (A) an environmental checklist in a form designated by the
Agent and approved by the Agent in writing after completion by the Borrower
or Subsidiary (as the case may be), (B) an environmental site assessment
approved by the Agent in writing performed by an engineer approved by the
Agent, (C) an Indemnification Agreement duly executed by the Borrower and
Subsidiary (if the parcel of real property is owned by a Subsidiary), and
(D) if the parcel of real property is being acquired with the proceeds of
Loans, a designation agreement executed by the Borrower in a form approved
by the Agent;
(x) lenders' payable endorsements and insurance certificates
with respect to the insurance policies related to such parcel of real
property or other instruments or documents evidencing insurance coverage on
the properties of the Borrower in accordance with Section 7.6 and the Deed
of Trust;
(xi) to the extent not previously delivered, copies of the
resolutions of the board of directors of the Borrower or Subsidiary (as the
case may be) authorizing the execution and delivery to the Agent of the
Collateral Documents with respect to such parcel real property;
(xii) to the extent not previously delivered, a certificate of the
Secretary or Assistant Secretary of the Borrower or Subsidiary (as the case
may be) certifying the names and true signatures of the officers of the
Borrower or Subsidiary authorized to execute, deliver and perform, as
applicable, the Collateral Documents with respect to such real property;
(xiii) to the extent not previously delivered, the Organization
Documents of the Borrower or Subsidiary (as the case may be), certified by
the Secretary or Assistant Secretary of the Borrower or Subsidiary (as the
case may be);
(xiv) to the extent not previously delivered, a good standing
certificate of the Borrower or Subsidiary (as the case may be) from the
Secretary of State (or similar, applicable Governmental Authority) of its
state of organization and each state where the Borrower or Subsidiary (as
the case may be) is qualified to do business as a foreign entity as of a
recent date; and
(xv) to the extent not previously delivered with respect to the
Collateral Documents in question and such other matters as the Agent may
46
reasonably request, an opinion of counsel to the Borrower or Subsidiary (as
the case may be) and addressed to the Agent and the Lenders, in a form
acceptable to the Agent.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender that:
6.1 EXISTENCE AND POWER
The Borrower, CHC and each of its Subsidiaries:
(a) is a limited partnership or corporation, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver and perform its obligation under the Loan Documents;
(c) is duly qualified as a foreign entity and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law; except, in each case
referred to in clause (c) or clause (d), to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
6.2 AUTHORIZATION; NO CONTRAVENTION
The execution, delivery and performance by the Borrower, CHC and its
Subsidiaries of this Agreement and each other Loan Document to which such Person
is party, have been duly authorized by all necessary action, and do not and will
not:
(a) contravene the terms of any of that Person's Organization Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
47
6.3 GOVERNMENTAL AUTHORIZATION
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority (except for recordings or
filings in connection with the Liens granted to the Agent under the Collateral
Documents) is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, the Borrower, CHC or any of its
Subsidiaries of the Agreement or any other Loan Document.
6.4 BINDING EFFECT
This Agreement and each other Loan Document to which the Borrower, CHC or
any of their Subsidiaries is a party constitute the legal, valid and binding
obligations of the Borrower, CHC and any of their Subsidiaries to the extent it
is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
6.5 LITIGATION
Except as specifically disclosed in Schedule 6.5, there are no actions,
suits proceedings, claims or disputes pending, or to the best knowledge of the
Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Borrower, CHC or its Subsidiaries
or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Borrower, CHC or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
6.6 NO DEFAULT
No Default or Event of Default exists or would result from the incurring of
any Obligation by the Borrower, CHC or any Subsidiary or from the grant or
perfection of
48
the Liens of the Agent and the Lenders on the Collateral. As of the Closing
Date, neither the Borrower, CHC nor any Subsidiary is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred after the Closing
Date, create an Event of Default under Section 9.1(e).
6.7 ERISA COMPLIANCE
Except as specifically disclosed in Schedule 6.7:
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which
is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Borrower,
nothing has occurred which would cause the loss of such qualification. The
Borrower, CHC and each ERISA Affiliate have made all required contributions to
any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower, CHC nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower, CHC nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
49
6.8 USE OF PROCEEDS; MARGIN REGULATIONS
The proceeds of the Loans are to be used solely for the purposes set forth
in and permitted by Section 7.12 and Section 8.7. Neither the Borrower, CHC nor
any Subsidiary is generally engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
6.9 TITLE TO PROPERTIES
The Borrower, CHC and each Subsidiary have good record and marketable title
in fee simple to, or valid leasehold interests in, all real property necessary
or used in the ordinary conduct of their respective businesses, except for such
defects in title as could not, individually or in the aggregate, have a Material
Adverse Effect. As of this Closing Date, the property of the Borrower, CHC and
its Subsidiaries is subject to no Liens, other than Permitted Liens.
6.10 TAXES
The Borrower, CHC and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Borrower, CHC or any
Subsidiary that would, if made, have a Material Adverse Effect.
6.11 FINANCIAL CONDITION
(a) The audited consolidated financial statements of CHC and its
Subsidiaries dated October 31, 1997, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for the fiscal quarter
ended on that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, subject to ordinary, good faith year end audit adjustments;
(ii) fairly present the financial condition of the CHC and its
Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
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(iii) except as specifically disclosed in Schedule 6.11, show all
material indebtedness and other liabilities, direct or contingent, of the
Borrower, CHC and their consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Contingent
Obligations.
(b) Since October 31, 1997, there has been no Material Adverse Effect.
6.12 ENVIRONMENTAL MATTERS
(a) Except as specifically disclosed in Schedule 6.12, the on-going
operations of the Borrower, CHC and each of its Subsidiaries comply in all
respects with all Environmental Laws, except such noncompliance which would not
(if enforced in accordance with applicable law) result in liability in excess of
$500,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 6.12, the Borrower, CHC
and each of their Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective ordinary course
operations, all such Environmental Permits are in good standing, and the
Borrower, CHC and each of their Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 6.12, none of the
Borrower, CHC any of their Subsidiaries or any of their respective present
property or operations, is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in Schedule 6.12, there are no
Hazardous Materials or other conditions or circumstances existing with respect
to any property of the Borrower, CHC or any Subsidiary, or arising from
operations prior to the Closing Date, of the Borrower, CHC or any of their
Subsidiaries that would reasonably be expected to give rive to Environmental
Claims with a potential liability of the Borrower, CHC and their Subsidiaries in
excess of $500,000 in the aggregate for any such condition, circumstance or
property. In addition, (i) neither the Borrower, CHC nor any Subsidiary has any
underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site, and (ii) the Borrower, CHC and their Subsidiaries
have notified all of their employees of the existence, if any, of any
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health hazard arising from the conditions of their employment and have met all
notification requirements under Title III of CERCLA and all other Environmental
Laws.
6.13 COLLATERAL DOCUMENTS
(a) The provisions of each of the Collateral Documents are effective to
create in favor of the Agent for the benefit of the Lenders, a legal, valid and
enforceable security interest in all right, title and interest of the Borrower,
CHC and their Subsidiaries in the collateral described therein; and Deeds of
Trust have been delivered to the Agent for recording in the real estate records
of the county in which the real property to be encumbered thereby is located;
and financing statements have been delivered to the Agent for filing in the
offices in all of the jurisdictions listed in the schedule to the Security
Agreements and executed Patent Assignments, Trademarks Assignments and Copyright
Assignments have been delivered to the Agent for filing in the U.S. Patent and
Trademark Office and the U.S. Copyright Office and upon the filing of such
assignments and such financing statements in such offices, the Agent, for the
benefit of the Lenders, will have a perfected first priority security interest
in the Collateral.
(b) All representations and warranties of the Borrower, CHC and any of
their Subsidiaries party thereto contained in the Collateral Documents are true
and correct.
6.14 REGULATED ENTITIES
None of the Borrower, CHC, any Person controlling the Borrower or CHC, or
any Subsidiary, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. The Borrower is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
6.15 NO BURDENSOME RESTRICTIONS
Neither the Borrower, CHC nor any Subsidiary is a party to or bound by any
Contractual Obligation, or subject to any restriction in any Organization
Document, or any Requirement of Law, which could reasonably be expected to have
a Material Adverse Effect.
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6.16 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC.
The Borrower, CHC and their Subsidiaries own or are licensed or otherwise
have the right to use all of the patents, trademarks, service marks, trade
names, copyrights, contractual franchises, authorizations and other rights that
are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of
the Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower, CHC or any Subsidiary infringes upon any rights held
by any other Person. Except as specifically disclosed in Schedule 6.5, no claim
or litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Borrower,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.17 SUBSIDIARIES
The Borrower and CHC have no Subsidiaries other than those specifically
disclosed in part (a) of Schedule 6.17 hereto and have no equity investments in
any other corporation or entity other than those specifically disclosed in part
(b) of Schedule 6.17.
6.18 INSURANCE
Except as specifically disclosed in Schedule 6.18, the properties of the
Borrower, CHC and their Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Borrower, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses, including business interruption
insurance for a period of not less than 12 months, and owning similar properties
in localities where the Borrower, CHC or such Subsidiary operates.
6.19 SOLVENCY
The Borrower, CHC and each of their Subsidiaries are Solvent.
6.20 FULL DISCLOSURE
None of the representations or warranties made by the Borrower, CHC or any
Subsidiary in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report,
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statement or certificate furnished by or on behalf of the Borrower, CHC or any
Subsidiary in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of the Borrower to the Lenders
prior to the Closing Date), contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
ARTICLE VII. AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment to make Loans or issue
Letters of Credit hereunder, or any Loan, Letter of Credit or other Obligation
shall remain unpaid or unsatisfied, unless the Required Lenders waive compliance
in writing:
7.1 FINANCIAL STATEMENTS
The Borrower shall deliver to the Agent, in form and detail satisfactory to
the Agent and the Required Lenders, with sufficient copies for each Lender:
(a) as soon as available, but not later than 90 days after the end of each
fiscal year, a copy of the audited consolidated balance sheet of the Borrower,
CHC and their Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Coopers &
Xxxxxxx L.L.P. or another nationally recognized independent public accounting
firm ("Independent Auditor") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted
or limited examination by the Independent Auditor of any material portion of the
Borrower's, CHC's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the end of each
of the first three fiscal quarters of each fiscal year a copy of the unaudited
consolidated balance sheet of the Borrower, CHC and their Subsidiaries as of the
end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the results of
operations of the Borrower, CHC and the Subsidiaries;
54
(c) as soon as available, but not later than 45 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidating balance sheets of the Borrower, CHC and their Subsidiaries, and
the related consolidating statements of income, shareholders' equity and cash
flows for such quarter, all certified by a Responsible Officer as having been
developed and used in connection with the preparation of the financial statement
referred to in Section 7.1(b);
(d) as soon as available, but not later than 45 days after the end of each
fiscal quarter of each fiscal year, a copy of the unaudited operating statements
for each parcel of Eligible Real Property as of the end of such quarter for such
quarter and for the four quarters then ended, in such form and detail as
reasonably designated by the Agent, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments), the financial results of operations for each such
parcel of real property .
7.2 CERTIFICATES; OTHER INFORMATION
The Borrower shall furnish to the Agent, with sufficient copies for each
Lender:
(a) concurrently with the delivery of the financial statements referred to
in Section 7.1(a), a certificate of the Independent Auditor stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in Sections 7.1(a) and (b), a Compliance Certificate executed by a Responsible
Officer;
(c) promptly, copies of all financial statements and reports that the
Borrower or CHC sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10-K, 10-
Q and 8-K) that the Borrower, CHC or any Subsidiary may make to, or file with,
the SEC; and
(d) promptly, such additional information regarding the business,
financial, partnership or corporate affairs of the Borrower, CHC or any
Subsidiary as the Agent, at the request of any Lender, may from time to time
reasonably request.
7.3 NOTICES
The Borrower shall promptly notify the Agent and each Lender:
55
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(b) of (i) any breach or nonperformance of, or any default under, any
Contractual Obligation of the Borrower, CHC or any of their Subsidiaries which
could result in a Material Adverse Effect; and (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at any time between the
Borrower, CHC or any of their Subsidiaries and any Governmental Authority and
which, if adversely determined, could result in a Material Adverse Effect;
(c) of the commencement of, or any material development in, any litigation
or proceeding affecting the Borrower, CHC or any Subsidiary (i) in which the
amount of damages claimed is $2,000,000 (or its equivalent in another currency
or currencies) or more if any potential loss is not fully covered by insurance,
(ii) in which the amount of damages claimed is $10,000,000 (or its equivalent in
another currency or currencies) or more if any potential loss is fully covered
by insurance, (iii) in which injunctive or similar relief is sought and which,
if adversely determined, would reasonably be expected to have a Material Adverse
Effect, or (iv) in which the relief sought is an injunction or other stay of the
performance of this Agreement or any Loan Document;
(d) upon, but in no event later than ten days after, becoming aware of (i)
any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Borrower, CHC or any
Subsidiary or any of their respective properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Borrower, CHC or any Subsidiary that could
reasonably be anticipated to cause such property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws;
(e) of any other litigation or proceeding affecting the Borrower, CHC or
any of their Subsidiaries which the Borrower would be required to report to the
SEC pursuant to the Exchange Act, within four days after reporting the same to
the SEC;
(f) of any of the following events affecting the Borrower or CHC, together
with a copy of any notice with respect to such event that may be required to be
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to the Borrower with respect to such event:
(i) an ERISA Event;
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(ii) if any of the representations and warranties in Section 6.7
ceases to be true and correct;
(iii) the adoption of any new Pension Plan or other Plan subject to
Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan or other Plan
subject to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; or
(v) the commencement of contributions to any Pension Plan or
other Plan subject to Section 412 of the Code; and
(g) of any material change in accounting policies or financial reporting
practices by the Borrower, CHC or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action the Borrower, CHC or any affected Subsidiary
proposes to take with respect thereto and at what time. Each notice under
Section 7.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
7.4 PRESERVATION OF EXISTENCE, ETC.
The Borrower shall, and shall cause CHC and each of their Subsidiaries to:
(a) preserve and maintain in full force and effect its legal existence and
good standing under the laws of its state or jurisdiction of organization ;
(b) preserve and maintain in full force and effect all governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.3 and sales of assets permitted by Section
8.2;
(c) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the nonpreservation of which could reasonably be
expected to have a Material Adverse Effect.
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7.5 MAINTENANCE OF PROPERTY
The Borrower shall maintain, and shall cause CHC and each of their
Subsidiaries to maintain, and preserve all their property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, except as permitted by Section 8.2.
7.6 INSURANCE
In addition to insurance requirements set forth in the Collateral
Documents, the Borrower shall maintain, and shall cause CHC and each of their
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons including workers'
compensation insurance, public liability and property and casualty insurance
which amount shall not be reduced by the Borrower in the absence of 30 days'
prior notice to the Agent. All such insurance shall name the Agent as loss
payee/mortgagee and as additional insured, for the benefit of the Lenders, as
their interests may appear. Upon request of the Agent or any Lender, the
Borrower shall furnish the Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than once per calendar year) a certificate of
a Responsible Officer of the Borrower (and, if requested by the Agent, any
insurance broker of the Borrower) setting forth the nature and extent of all
insurance maintained by the Borrower, CHC and their Subsidiaries in accordance
with this Section or any Collateral Documents (and which, in the case of a
certificate of a broker, were placed through such broker).
7.7 PAYMENT OF OBLIGATIONS
The Borrower shall, and shall cause CHC and each of their Subsidiaries to,
pay and discharge as the same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Borrower, CHC or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and
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(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
7.8 COMPLIANCE WITH LAWS
The Borrower shall comply, and shall cause CHC and each of their
Subsidiaries to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
7.9 COMPLIANCE WITH ERISA
The Borrower shall, and shall cause CHC and each of their ERISA Affiliates
to: (a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law; (b)
cause each Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; and (c) make all required contributions to any Plan subject
to Section 412 of the Code.
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS
The Borrower shall maintain and shall cause CHC and each of their
Subsidiaries to maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower, CHC and such Subsidiary. The Borrower shall permit, and shall
cause CHC and each Subsidiary to permit, representatives and independent
contractors of the Agent to visit and inspect any of their respective
properties, to examine their respective limited partnership or corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss their respective affairs, finances and accounts with their
respective directors, officers, and independent public accountants, all at the
expense of the Borrower and at such reasonable times during normal business
hours, upon reasonable advance notice to the Borrower; provided, however, when
an Event of Default exists the Agent or any Lender may do any of the foregoing
at the expense of the Borrower at any time during normal business hours and
without advance notice.
7.11 ENVIRONMENTAL LAWS
(a) The Borrower shall, and shall cause CHC and each of their Subsidiaries
to, conduct their operations and keep and maintain its property in compliance
with all Environmental Laws.
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(b) Upon the written request of the Agent or any Lender, the Borrower shall
submit and cause CHC and each of their Subsidiaries to submit, to the Agent with
sufficient copies for each Lender, at the Borrower's sole cost and expense, at
reasonable intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report required pursuant to Section 7.3(d), that could,
individually or in the aggregate, result in liability in excess of $500,000.
7.12 USE OF PROCEEDS
The Borrower shall use the proceeds of the Loans for working capital,
Acquisitions permitted hereunder, funding operations, and other general
partnership purposes not in contravention of any Requirement of Law or of any
Loan Document.
7.13 APPRAISALS
(a) Prior to a parcel of real property becoming Eligible Real Property,
there shall be established for such parcel of real property the Approved
Appraisal Value based upon an appraisal thereof performed at the Borrower's sole
cost.
(b) In the event that a parcel of real property has constituted Eligible
Real Property for in excess of 18 months, the Agent may, in its discretion or at
the request of the Required Lenders, have such parcel of real property
reappraised, and upon the Agent's written approval of such reappraisal, the
reappraised value shall constitute the Approved Appraised Value for such parcel
of real property. Except as provided in Section 7.13(c), the cost of any such
reappraisal shall be borne by the Lenders based upon each Lender's Pro Rata
Share.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent may, in its discretion or at the request of the Required
Lenders, have any one or more parcels of Eligible Real Property reappraised, and
upon the Agent's written approval of any such reappraisal, the reappraised value
shall constitute the Approved Appraised Value for any such parcel of Eligible
Real Property. The Borrower shall reimburse the Agent for the cost of any such
reappraisal performed pursuant to this subsection upon demand.
(d) The Borrower shall cooperate with the Agent and its designated
appraisers in connection with all appraisals and reappraisals of real property
performed pursuant to this Agreement.
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7.14 FURTHER ASSURANCES
(a) The Borrower shall ensure that all written information, exhibits and
reports furnished to the Agent or the Lenders do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Lenders and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Required Lenders, the
Borrower shall (and shall cause CHC and any of their Subsidiaries to) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Lenders, as the case may be, may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Loan Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and Lenders the rights granted or now
or hereafter intended to be granted to the Lenders under any Loan Document or
under any other document executed in connection therewith.
(c) Within 20 days of the Closing Date, the Borrower shall deliver to the
Agent, lien search results evidencing the filing of Financing Statements (as
defined in the Security Agreements) in the jurisdictions listed in Schedule 7.14
hereto, naming the Borrower and CHC as "debtor" and the Agent as "secured party"
and confirming that no other financing statements have been filed with respect
to the Collateral in such jurisdictions (other than Permitted Liens) .
(d) Promptly upon any Person becoming after the date hereof a Subsidiary of
the Borrower, the Borrower:
(i) shall cause such Subsidiary to execute and deliver to the Agent
a guaranty of all of the Obligations in form and substance reasonably
acceptable to the Required Lenders and the Agent;
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(ii) shall cause such Subsidiary to execute and deliver to the Agent
a security agreement granting a security interest in all of such
Subsidiary's assets in favor of the Agent for the benefit of the Lenders as
security for the Obligations (including the obligations of such Subsidiary
under the guaranty referred to in clause (i) above), in form and substance
reasonably acceptable to the Required Lenders and the Agent and shall cause
to be delivered to the Agent with respect to such Subsidiary the documents
referred to in Section 5.1, mutatis mutandis, together with such opinions
------- --------
in form and substance and from counsel reasonably satisfactory to the
Agent, as the Agent may require; and
(iii) shall cause such Person that is the Borrower or an Affiliate
of the Borrower that is the direct owner of any shares of capital stock (or
other evidence of beneficial ownership) of such Subsidiary to execute and
deliver to the Agent a pledge agreement pledging in favor of the Agent for
the benefit of the Lenders as security for the Obligations, all of such
capital stock, in form and substance reasonably acceptable to the Required
Lenders and the Agent, and shall cause to be delivered to the Agent
certificates evidencing all of the issued and outstanding shares of capital
stock (or other evidence of beneficial ownership) of such Subsidiary,
together with undated stock powers (or similar instruments of transfer)
owned by such Persons duly executed in blank and appropriately completed
Uniform Commercial Code financing statements, if applicable, with respect
thereto (or, if any such shares of capital stock (or other evidence of
beneficial ownership) are not represented by certificates, confirmation and
evidence satisfactory to the Agent that the security interest in such
shares (or other such evidence) has been transferred and/or registered in
accordance with the laws of the applicable jurisdictions so as to create a
valid first-priority perfected security interest therein for the benefit of
the Agent and the Lenders) and together with such opinions in form and
substance and from counsel reasonably satisfactory to the Agent, as the
Agent may reasonably require;
provided, that in the case of an Acquisition where the Borrower, CHC and their
Affiliates acquire less than 100% of the common shares or other common voting
equity interests of a Person, the Borrower shall be required to provide the
security agreement and guaranty provided for in clauses (i) and (ii) above only
if consented to by a majority of the holders (other than the Borrower, CHC and
their Affiliates) of the common shares or other common voting equity interests
of such Person; provided, further, that the Borrower shall be required to make a
diligent and good faith request for such consent from such holders; provided,
further, if all of the common shares or other common voting equity interests of
such Person are subsequently acquired by the
00
Xxxxxxxx, XXX and their Affiliates, such Person shall promptly comply with
clauses (i) and (ii) above.
7.15 MINIMUM PARCELS OF
At all times that there are any Loans outstanding or there exists any
outstanding Letter of Credit, there shall be not fewer than four parcels of
Eligible Real Property.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any Lender shall have any Commitment to make Loans or issue
Letters of Credit hereunder, or any Loan, Letter of Credit or other Obligation
shall remain unpaid or unsatisfied, unless the Required Lenders waive compliance
in writing:
8.1 LIMITATION ON LIENS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, directly or indirectly, make, create, incur, assume or suffer to
exist any Lien upon or with respect to any part of its property (including,
without limitation, the partnership units of the Borrower owned by CHC), whether
now owned or hereafter acquired, other than the following ("Permitted Liens"):
(a) any Lien (other than a Lien on the Collateral) existing on property of
the Borrower, CHC or any Subsidiary on the Closing Date and set forth in
Schedule 8.1 securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
nonpayment thereof is permitted by Section 7.7, provided that no notice of lien
has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA and other than on the
Collateral) consisting of pledges or deposits required in the ordinary course
of
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business in connection with workers' compensation, unemployment insurance and
other social security legislation;
(f) Liens (other than Liens on the Collateral) on the property of the
Borrower, CHC or their Subsidiary securing (i) the nondelinquent performance of
bids, trade contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations of a like nature; in each case,
incurred in the ordinary course of business, provided all such Liens in the
aggregate would not (even if enforced) cause a Material Adverse Effect;
(g) Liens (other than Liens on the Collateral) consisting of judgment or
judicial attachment liens, provided that the enforcement of such Liens is
effectively stayed and all such liens in the aggregate at any time outstanding
for the Borrower, CHC and their Subsidiaries do not exceed $1,000,000;
(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Borrower, CHC and their Subsidiaries; provided that any
such easements, rights-of-way, restrictions and other similar encumbrances
related to Eligible Real Property shall be subject to the Agent's prior written
approval;
(i) Liens on assets of Persons that become Subsidiaries after the date of
this Agreement, provided, however, that such Liens existed at the time the
respective Persons became Subsidiaries and were not created in anticipation
thereof;
(j) purchase money security interests in equipment acquired or held by the
Borrower, CHC or their Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such equipment; provided that (i) any such Lien attaches
to such property concurrently with or within 20 days after the acquisition
thereof and (ii) such Lien attaches solely to the property so acquired in such
transaction;
(k) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Borrower in excess of those set forth by
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regulations promulgated by the FRB, and (ii) such deposit account is not
intended by the Borrower, CHC or any Subsidiary to provide collateral to the
depository institution; and
(m) Liens on real property used primarily in the hospitality business owned
by the Borrower, CHC or any Subsidiary that is not encumbered by any Deed of
Trust; provided that (i) any such Lien is approved by the Required Lenders, (ii)
any such Lien attaches to such real property concurrently with or within 20 days
after the acquisition thereof or such Lien is to secure Indebtedness the
proceeds of which are used to refinance acquisition Indebtedness with respect to
such real property, and (iii) such Lien attaches solely to such real property
and personal property located on such real property, as well as proceeds
thereof.
8.2 DISPOSITION OF ASSETS
(a) The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, directly or indirectly, sell, assign, lease, convey, transfer or
otherwise dispose of any property (including accounts and notes receivable, with
or without recourse) or enter into any agreement to do any of the foregoing,
except that so long as there exists no Default or Event of Default and so long
as the proposed disposition would not cause the occurrence of a Default or an
Event of Default there shall be permitted:
(i) dispositions of inventory or used, worn-out or surplus equipment
all in the ordinary course of business;
(ii) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied,
consistent with Section 2.6, to the purchase price of such replacement
equipment;
(iii) the sale of assets (whether in one or a series of related
transactions) for cash at a price equal to or greater than the fair market
value of such assets, provided that the aggregate purchase price does not
exceed $8,000,000;
(iv) the sale of assets (whether in one or a series of related
transactions) for cash at a price equal to or greater than the fair market
value of such assets and in excess of $8,000,000, provided that prior to
the completion of any such sale (A) the Borrower shall have delivered to
the Agent evidence deemed sufficient by the Required Lenders reflecting
that had such assets,
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together with all EBITDA generated by such assets and Indebtedness that is
to be repaid in connection with such sale, been excluded from the
financial statements of CHC for the four fiscal quarters immediately
preceding the scheduled closing date of the proposed sale, there would
have been compliance with each of the financial covenants set forth in
Section 8.14, and (B) the Required Lenders shall have reviewed and
approved such evidence and the Agent shall have so advised the Borrower in
writing;
(v) the sale of assets (whether in one or a series of related
transactions) for cash at a price equal to or greater than the fair market
value of such assets and in excess of $8,000,000 with respect to which the
requirements set forth in Section 8.2(a)(iv) are not satisfied, provided
that (A) prior to or concurrently with the completion of any such sale,
the Borrower shall repay the Loans and permanently reduce the Commitment
by an amount that would result in the pro forma compliance with each of
the financial covenants set forth in Section 8.14 as recalculated in
accordance with the provisions of Section 8.2(a)(iv) for the four fiscal
quarters immediately preceding the scheduled closing date of the proposed
sale, (B) prior to the completion of any such sale, the Borrower shall
have delivered to the Agent evidence deemed sufficient by the Required
Lenders reflecting such pro forma compliance, and (C) prior to the
completion of any such sale, the Required Lenders shall have reviewed and
approved such evidence and the Agent shall have so advised the Borrower in
writing; and
(vi) dispositions not otherwise permitted hereunder which are made
for fair market value; provided, that (A) the aggregate sales price from
such disposition shall be paid in cash, and (B) Net Proceeds thereof are
applied as set forth in Section 2.6 hereof.
(b) Notwithstanding the provisions of Section 8.2(a) to the contrary, the
Borrower shall not, and shall not suffer or permit CHC or any Subsidiary to,
directly or indirectly, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of related transactions) any property
(including accounts and notes receivable, with or without recourse) or enter
into any agreement to do any of the foregoing for an aggregate purchase price in
excess of $35,000,000 during any 12-month period.
8.3 CONSOLIDATIONS AND MERGERS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of
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(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person, except:
(a) any Subsidiary may merge with the Borrower, provided that the Borrower
shall be the continuing or surviving entity, or with any one or more
Subsidiaries, provided that if any transaction shall be between a Subsidiary and
a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing
or surviving entity; and
(b) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or another Wholly-Owned
Subsidiary.
8.4 LOANS AND INVESTMENTS
The Borrower shall not purchase or acquire, or suffer or permit CHC or any
Subsidiary to purchase or acquire, or make any commitment therefor, any capital
stock, equity interest, or any obligations or other securities of, or any
interest in, any Person, or make or commit to make any Acquisitions, or make or
commit to make any advance, loan, extension of credit or capital contribution to
or any other investment in, any Person including any Affiliate of the Borrower,
except for:
(a) investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries;
(d) investments made in connection with and constituting part of the
consideration paid for Acquisitions to the extent the same are not prohibited
under Section 8.7, provided that no Acquisition shall be consummated by the
Borrower, CHC or any Subsidiary unless the Borrower has demonstrated to the
reasonable satisfaction of the Required Lenders with pro forma financial
statements prepared to reflect such Acquisition that the Borrower will be in
compliance with the Financial Covenants.
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8.5 LIMITATION ON INDEBTEDNESS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, create, incur, assume, suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 8.8;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 8.5
and any refinance of such Indebtedness in an amount not to exceed the
outstanding principal balance thereof as of the Closing Date; provided that if
any such Indebtedness is Nonrecourse Indebtedness that is secured by assets not
used primarily in the hospitality business, then any Indebtedness to refinance
such Indebtedness shall be Nonrecourse Indebtedness;
(d) Indebtedness consisting of Subordinated Debt incurred after the Closing
Date;
(e) Nonrecourse Indebtedness incurred after the Closing Date;
(f) Indebtedness secured by a Lien permitted under Section 8.1(j) or (m);
and
(g) Indebtedness incurred in connection with leases permitted pursuant to
Section 8.9(a).
8.6 TRANSACTIONS WITH AFFILIATES
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, enter into any transaction with any Affiliate of the Borrower,
except upon fair and reasonable terms no less favorable to the Borrower, CHC or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person not an Affiliate of the Borrower, CHC or such Subsidiary.
8.7 USE OF PROCEEDS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, use any portion of the Loan proceeds, directly or indirectly, (a)
to purchase or carry Margin Stock, (b) to purchase or redeem any stock,
partnership units or other equity interest of the Borrower or CHC, (c) to repay
or otherwise refinance indebtedness of
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the Borrower or others incurred to purchase or carry Margin Stock, (d) to
extend credit for the purchase of purchasing or carrying any Margin Stock, (e)
to acquire any security in any transaction that is subject to Section 13 or 14
of the Exchange Act, (f) to finance or refinance any Acquisition in an amount in
excess of $25,000,000, (g) to finance or refinance Acquisitions in an aggregate
amount in excess of $50,000,000 in any 12-month period except as otherwise
approved in writing by Lenders holding 51% or more of the then aggregate unpaid
principal amount of the Loans, or, if no such principal amount is then
outstanding, Lenders then having Pro Rata Shares equal to or greater than 51% of
the Commitments, or (h) to finance or refinance the acquisition of any interest
in real property that is not used primarily in the hospitality business or the
acquisition of any Person whose primary business is not the hospitality business
except as otherwise approved by the Required Lenders and confirmed in writing by
the Agent.
8.8 CONTINGENT OBLIGATIONS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, create, incur, assume or suffer to exist any Contingent
Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Swap Contracts entered into in the ordinary course of business as bona
fide hedging transactions; and
(c) Contingent Obligations of the Borrower, CHC and their Subsidiaries
existing as of the Closing Date and listed in Schedule 8.8.
8.9 LEASE OBLIGATIONS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, create or suffer to exist any obligations for the payment of rent
for any property under lease or agreement to lease, except for:
(a) capital leases of the Borrower, CHC and of the Subsidiaries to finance
the acquisition of equipment; and
(b) operating leases entered into by the Borrower, CHC or any Subsidiary in
the ordinary course of business.
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8.10 RESTRICTED PAYMENTS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, declare or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock or partnership units (as the case may
be), or purchase, redeem or otherwise acquire for value any shares of its
capital stock or partnership units (as the case may be) or any warrants, rights
or options to acquire such shares or partnership units, now or hereafter
outstanding; except that (a) CHC or the Borrower may declare and make dividend
payments or other distributions payable solely in its common stock or
partnership units (as the case may be), (b) the Borrower may make distributions
to its partners in an amount necessary to allow CHC to pay income and gross
receipts taxes on the taxable income of the Borrower that is recognized by its
partners for tax purposes, provided that (i) at the time of making the
distribution there exists no Event of Default and (ii) after giving effect to
any proposed distribution, there would not exist any Event of Default, (c) CHC
and the Borrower may pay dividends and distributions to their shareholders or
partners (as the case may be) or purchase or redeem shares of capital stock or
partnership units (as the case may be), provided that (i) at the time of making
the dividend, distribution, purchase or redemption payment there exists no Event
of Default, (ii) after giving effect to the proposed payment, there would not
exist an Event of Default, (iii) as of the end of the fiscal quarter of CHC
immediately prior to the date of the proposed payment for the four fiscal
quarters then ended, the Funded Debt Ratio was less than 3.50:1.00, and (iv)
after giving effect to the proposed payment, the Capitalization Ratio would not
exceed 0.50:1.00, and (d) CHC may issue stock to partners of the Borrower in
exchange for partnership units of the Borrower.
8.11 ERISA
The Borrower shall not, and shall not suffer or permit any ERISA Affiliate
of the Borrower or CHC to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably be expected to result in liability of the Borrower
in an aggregate amount in excess of $500,000; or (b) engage in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
8.12 CHANGE IN BUSINESS
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, engage in any material line of business substantially different
from those lines of business carried on by the Borrower, CHC and their
Subsidiaries on the date hereof.
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8.13 ACCOUNTING CHANGES
The Borrower shall not, and shall not suffer or permit CHC or any
Subsidiary to, make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the fiscal year of the
Borrower, CHC or of any Subsidiary.
8.14 FINANCIAL COVENANTS
(a) FUNDED DEBT RATIO
As of the end of each fiscal quarter for the four fiscal quarters then
ended, the Funded Debt Ratio shall not exceed (i) 4.50:1.00 for each fiscal
quarter ending after the date of this Agreement through Xxxxx 00, 0000, (xx)
4.25:1.00 for each fiscal quarter ending on June 30, 2000 through March 31,
2001, and (iii) 4.00:1.00 for each fiscal quarter ending thereafter.
(b) INTEREST COVERAGE RATIO
As of the end of each fiscal quarter for the four fiscal quarters then
ended, the Interest Coverage Ratio shall not be less than (i) 2.00:1.00 for each
fiscal quarter ending after the date this Agreement through December 31, 1998,
and (ii) 2.25:1.00 for each fiscal quarter ending thereafter.
(c) FIXED CHARGE COVERAGE RATIO
As of the end of each fiscal quarter for the four fiscal quarters then
ended, the Fixed Charge Coverage Ratio shall not be less than 1.75:1.00.
(d) CAPITALIZATION RATIO
As of the end of each fiscal quarter, the Capitalization Ratio shall not
exceed 0.50:1.00.
(e) TOTAL ASSETS
As of the end of each fiscal quarter, the aggregate amount of gross assets
reflected on the CHC's balance sheet attributable to Persons other than the
Borrower shall not exceed 10% of the aggregate amount of gross assets reflected
on the CHC's balance sheet.
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8.15 SUBORDINATED DEBT
Not, and not permit CHC or any of their Subsidiaries to make any payment
(whether of principal, interest or otherwise) on any Subordinated Debt on any
day other than the stated, scheduled date for such payment set forth in the
documents and instruments evidencing such Subordinated Debt or in contravention
or violation of the subordination provisions thereof.
ARTICLE IX. EVENTS OF DEFAULT
9.1 EVENT OF DEFAULT
Any of the following shall constitute an "Event of Default":
(a) NONPAYMENT
The Borrower fails to pay, (i) when and as required to be paid herein, any
amount of principal of any Loan, or (ii) within five days after the same becomes
due, any interest, fee or any other amount payable hereunder or under any other
Loan Document; or
(b) REPRESENTATION OR WARRANTY
Any representation or warranty by the Borrower, CHC or any Subsidiary made
or deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Borrower, CHC or
any Subsidiary, or any Responsible Officer, furnished at any time under this
Agreement, or in or under any other Loan Document, is incorrect in any material
respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS
The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 7.3, 7.6 or 7.9 or in Article VIII other than
Sections 8.6 and 8.13, or the Borrower fails to perform or observe any term,
covenant or agreement contained in Section 7.1 or 7.2 within five days after
written notice is given to the Borrower by the Agent or any Lender; or
(d) OTHER DEFAULTS
The Borrower, CHC or any Subsidiary party thereto fails to perform or
observe any other term or covenant contained in this Agreement or any other Loan
Document,
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and such default shall continue unremedied for a period of 30 days
after the occurrence of such default; or
(e) CROSS-DEFAULT
The Borrower, CHC or any Subsidiary (i) fails to make any payment in
respect of any Indebtedness or Contingent Obligation having an aggregate
principal amount (including undrawn, committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure, if the effect of such failure, event or condition is
to cause, or to permit the holder or holders of such Indebtedness or beneficiary
or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS
The Borrower, CHC or any Subsidiary (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(g) INVOLUNTARY PROCEEDINGS
(i) Any involuntary Insolvency Proceeding is commenced or filed against the
Borrower, CHC or any Subsidiary, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial part of
the Borrower's, CHC's or any Subsidiary's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within 60 days after commencement, filing or levy; (ii) the Borrower, CHC or any
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order
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for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Borrower, CHC or any Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA
(i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000; or
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000; or (iii) the Borrower, CHC or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$500,000; or
(i) MONETARY JUDGMENTS
One or more noninterlocutory judgments, noninterlocutory orders, decrees or
arbitration awards is entered against the Borrower, CHC or any Subsidiary
involving in the aggregate a liability (i) (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents or
conditions, of $2,000,000 or more, or (ii) as to any single or related series of
transactions, incidents or conditions, of $10,000,000 or more (whether or not
covered by third-party insurance as to which the insurer does not dispute
coverage), and the same shall remain unpaid or unvacated and unstayed pending
appeal for a period of ten days after the entry thereof; or
(j) NONMONETARY JUDGMENTS
Any nonmonetary judgment, order or decree is entered against the Borrower,
CHC or any Subsidiary which does or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of ten consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(k) VIOLATION OF LOCKUP AGREEMENT
There occurs any breach of [describe the underwiter's lockup agreement] as
in effect on the date of the Closing Date; or
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(l) ADVERSE CHANGE
There occurs a Material Adverse Effect; or
(m) INVALIDITY OF SUBORDINATION PROVISIONS
The subordination provisions of any agreement or instrument governing any
Subordinated Debt is for any reason revoked or invalidated, or otherwise cease
to be in full force and effect, any Person contests in any manner the validity
or enforceability thereof or denies that it has any further liability or
obligation thereunder, or the Indebtedness hereunder is for any reason
subordinated or does not have the priority contemplated by this Agreement or
such subordination provisions; or
(n) COLLARTERAL
(i) Any provision of any Collateral Document shall for any reason
cease to be valid and binding on or enforceable against the Borrower, CHC
or any Subsidiary party thereto or the Borrower, CHC or any Subsidiary
shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or and
(ii) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security
interest subject only to Permitted Liens.
9.2 REMEDIES
If any Event of Default occurs, the Agent shall, at the request of, or may,
with the consent of, the Required Lenders,
(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without resentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) if any Letter of Credit is outstanding, declare an amount equal to the
Letter of Credit Usage immediately due and payable whereupon the same shall
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become immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and the obligation of the Agent and each Lender to issue
Letters of Credit shall automatically terminate and the unpaid principal amount
of all outstanding Loans and an amount equal to the Letter of Credit Usage,
together with all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Agent or any Lender. Amounts
paid or received hereunder in respect of issued and outstanding Letters of
Credit which exceed amounts paid by Agent under such Letters of Credit shall be
held (and applied) as cash collateral to secure the performance of all
obligations of the Borrower owing to the Agent in respect of Letters of Credits.
9.3 RIGHTS NOT EXCLUSIVE
The rights provided for in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
9.4 CERTAIN FINANCIAL COVENANT DEFAULTS
In the event that, after taking into account any extraordinary charge to
earnings taken or to be taken as of the end of any fiscal period of CHC (a
"Charge"), and if solely by virtue of such Charge, there would exist an Event of
------
Default due to the breach of any provision of Section 8.14 as of such fiscal
period end date, such Event of Default shall be deemed to arise upon the earlier
of (a) the date after such fiscal period and date on which CHC announces
publicly that it will take, is taking or has taken such Charge (including an
announcement in the form of a statement in a report filed with the SEC) or, if
such announcement is made prior to such fiscal period end date, the date that is
such fiscal period end date, and (b) the date the Borrower or CHC delivers to
the Agent its audited annual or unaudited quarterly financial statements in
respect of such fiscal period reflecting such Charge as taken.
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ARTICLE X. THE AGENT
10.1 APPOINTMENT AND AUTHORIZATION
Each Lender hereby irrevocably (subject to Section 10.9) appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
10.2 DELEGATION OF DUTIES
The Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects with reasonable care.
10.3 LIABILITY OF AGENT
None of the Agent-Related Persons shall (i) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by the Borrower, CHC or any Subsidiary or Affiliate of the
Borrower, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or for the value of or title to
any Collateral, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other
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Loan Document, or to inspect the properties, books or records of the
Borrower, CHC or any of the Borrower's Subsidiaries or Affiliates.
10.4 RELIANCE BY AGENT
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 5.1, each Lender that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lender.
10.5 NOTICE OF DEFAULT
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Agent for the
account of the Lenders, unless the Agent shall have received written notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The
Agent will notify the Lenders of its receipt of any such notice. The Agent shall
take such action with respect to such Default or Event of Default as may be
requested by the Required Lenders in accordance with Article IX; provided,
however, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such
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action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Lenders.
10.6 CREDIT DECISION
Each Lender acknowledges that none of the Agent-Related Persons has made
any representation or warranty to it, and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, CHC and their
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Lender. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower,
CHC and their Subsidiaries, the value of and title to any Collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower, CHC and their Subsidiaries. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower , CHC or their Subsidiaries which may come into
the possession of any of the Agent-Related Persons.
10.7 INDEMNIFICATION OF AGENT
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), in proportion to each Lender's Pro Rata Share, from
and against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including
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Attorney Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
10.8 AGENT IN INDIVIDUAL CAPACITY
U. S. Bank and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower, CHC and their Subsidiaries and Affiliates
as though U. S. Bank were not the Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, U. S. Bank or its Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower, CHC or such Subsidiary)
and acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, U. S. Bank shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
include U. S. Bank in its individual capacity.
10.9 SUCCESSOR AGENT
The Agent may, and at the request of the Required Lenders shall, resign as
Agent upon 30 days' notice to the Lenders. If the Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders which successor agent shall, if no Default or Event of
Default then exists, be approved by the Borrower. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Lenders and the Borrower, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article X and Sections 12.4 and 12.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent
by the date
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which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.
10.10 WITHHOLDING TAX
(a) If any Lender is a "foreign corporation, partnership or trust" within
the meaning of the Code and such Lender claims exemption from, or a reduction
of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Lender
agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the payment
of any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower to such Lender, such Lender agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Borrower to such Lender. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form 1001 as no longer valid.
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(c) If any Lender claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Borrower to such a
Lender, such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement to the
Agent.
10.11 COLLATERAL MATTERS
(a) The Agent is authorized on behalf of all the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Collateral
Documents.
(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations known to the Agent and payable under this
Agreement or any other Loan Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition not
prohibited hereunder; (iii) constituting
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property in which the Borrower, CHC or any Subsidiary owned no interest at the
time the Lien was granted or at any time thereafter; (iv) constituting property
leased to the Borrower, CHC or any Subsidiary under a lease which has expired or
been terminated in a transaction not prohibited under this Agreement or is about
to expire and which has not been, and is not intended by the Borrower, CHC or
such Subsidiary to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or ratified in
writing by the Required Lenders or all the Lenders, as the case may be, as
provided in Section 12.1(f). Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular types or
items of Collateral pursuant to this Section 10.11(b).
ARTICLE XI. LETTER OF CREDIT RISK PARTICIPATIONS
11.1 SALE OF RISK PARTICIPATIONS
The Agent agrees to sell to the Lenders, and upon issuance of any Letter of
Credit hereunder each Lender shall be deemed to have unconditionally and
irrevocably purchased from the Agent, an undivided risk participation in such
Letter of Credit in proportion to such Lender's Pro Rata Share.
11.2 PROCEDURE FOR PURCHASES
Via telephone or facsimile, the Agent will promptly advise each Lender of
each Letter of Credit issued hereunder. The Agent shall not have any duty to
ascertain or to inquire as to the accuracy of the information furnished by the
Borrower, or accuracy of the representations and warranties made by the Borrower
in any request for the issuance of such Letter of Credit nor shall the Agent
have any duty to confirm that all conditions precedent to the issuance of such
Letter of Credit have been fully satisfied.
11.3 PAYMENT OBLIGATIONS
(a) In the event Borrower fails to pay any amount due under Section 3.4 by
12:00 noon (Seattle time) on the date the Agent shall make demand for payment
thereof, the Lenders shall each, upon receipt of notice from Agent of such
failure, pay to the Agent their Pro Rata Share of such amount; provided,
however, if the Borrower pays a portion but less than all of the amount due
under Section 3.4, the Lenders shall each pay Agent only their respective Pro
Rata Shares of the difference between the amount due under Section 3.4 and the
amount paid by Borrower on account thereof. Each and every payment to be made by
the Lenders to the Agent under this Section 11.3(a) shall be made by federal
wire transfer in immediately available funds. If any Lender receives notice from
Agent by 1:30 p.m. (Seattle time) on any Business
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Day of its obligation to make payments under this subsection, then such Lender
shall make such payment no later than 2:00 p.m. (Seattle time) on the day such
notice is received. If any Lender receives such notice after 1:30 p.m. (Seattle
time) on any Business Day, then such Lender shall make such payment by no later
than 1:00 p.m. (Seattle time) on the next succeeding Business Day. If any Lender
fails to make such payment by the date and time required, its obligation shall
bear interest from and including the date when such payment was due until paid
at the per annum rate equal to the Federal Funds Rate.
(b) The Agent shall promptly remit to the Lenders, via federal wire
transfer of funds, the Lenders' respective Pro Rata Share of any amounts (other
than fees and expense reimbursements) received from or for the account of the
Borrower in respect of any Letter of Credit; provided, however, the Agent shall
not remit to any Lender any amounts received from or for the account of the
Borrower in respect of a Letter of Credit unless, prior to Agent's receipt of
such funds, such Lender has paid its Pro Rata Share of such amounts pursuant to
Section 11.3(a). In the event Agent is required to refund any amount which is
paid to it or received by it from or for the account of the Borrower, then
Lenders, to the extent they shall have previously received their share of such
amount, agree to repay to Agent their respective Pro Rata Share of such amount.
(c) REIMBURSEMENTS TO LENDERS
Borrower agrees to reimburse any Lender for amounts paid by such Lender to
Agent pursuant to Section 11.3(a). Any amounts received from or for the account
of Borrower by any Lender in respect of the aforesaid reimbursement obligation
shall reduce Borrower's payment obligation to Agent under Section 3.4. Any
amounts received from or for the account of Borrower by Agent in satisfaction of
its obligations under Section 3.4 shall reduce pro tanto Borrower's
reimbursement obligation to Lenders under this Section 11.3(c).
ARTICLE XII. MISCELLANEOUS
12.1 AMENDMENTS AND WAIVERS
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by the Borrower, CHC or
any applicable Subsidiary therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the Agent at the written
request of the Required Lenders) and the Borrower and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver,
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amendment, or consent shall, unless in writing and signed by all
the Lenders and the Borrower and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 9.2), unless such Lender has consented
thereto in writing;
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment (including without limit mandatory prepayments) of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on
any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Lenders or any of them
to take any action hereunder; or
(e) amend the definition of "Required Lenders," this Section, or Section
2.14, or any provision herein providing for consent or other action by all
Lenders; or
(f) release any material portion of the Collateral except as otherwise may
be provided herein or in the Collateral Documents or except where the consent of
the Required Lenders only is specifically provided for;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Commitment Letter may be
amended, or rights or privileges thereunder waived, in a writing executed by the
parties thereto.
12.2 NOTICES
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Borrower by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 12.2, and (ii) shall be followed promptly by
delivery of a hard copy original
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thereof) and mailed, faxed or delivered, to the address or facsimile number
specified for notices on Schedule 12.2; or, as directed to the Borrower or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Agent.
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered by overnight (next-
day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except that notices pursuant
to Article II or X shall not be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Lenders herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrower. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Borrower
to give such notice and the Agent and the Lenders shall not have any liability
to the Borrower or other Person on account of any action taken or not taken by
the Agent or the Lenders in reliance upon such telephonic or facsimile notice.
The obligation of the Borrower to repay the Loans shall not be affected in any
way or to any extent by any failure by the Agent and the Lenders to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Agent and the Lenders of a confirmation which is at variance with the terms
understood by the Agent and the Lenders to be contained in the telephonic or
facsimile notice.
12.3 NO WAIVER; CUMULATIVE REMEDIES
No failure to exercise and no delay in exercising, on the part of the Agent
or any Lender, any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
12.4 COSTS AND EXPENSES
The Borrower shall:
(a) whether or not the transactions contemplated hereby are consummated,
pay or reimburse U. S. Bank (including in its capacity as Agent) within five
Business days after demand (subject to Section 5.1(e)) for all costs and
expenses incurred by U. S. Bank (including in its capacity as Agent) in
connection with the development,
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preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, and the grant of Liens on any Collateral after
the date of this Agreement, including reasonable Attorneys Cost incurred by U.
S. Bank (including in its capacity as Agent) with respect to the foregoing;
provided that the Borrower shall not be required to reimburse U. S. Bank for
such costs and expenses (including Attorneys Costs, but excluding the costs and
expenses described in Section 12.4(b)) incurred through the date of this
Agreement in excess of $55,000; and
(b) whether or not the transactions contemplated hereby are consummated,
and whether incurred or demand for payment is made prior to, concurrently with
or after the date of this Agreement, pay or reimburse U. S. Bank (including in
its capacity as Agent) within five Business days after demand (subject to
Section 5.1(e)) for all costs and expenses incurred by U. S. Bank (including in
its capacity as Agent) in connection with any Collateral or proposed Collateral,
including, without limitation, appraisal fees (including the allocated cost of
internal appraisal services), inspection fees, fees for environmental and other
third party inspections and reports, fees for the Title Insurance Policies,
escrow fees, any filing or recording tax or fee, lien search fees, and
(c) pay or reimburse the Agent and each Lender within five Business Days
after demand (subject to Section 5.1(e)) for all costs and expenses (including
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
12.5 BORROWER INDEMNIFICATION
(a) Whether or not the transactions contemplated hereby are consummated,
the Borrower shall indemnify, defend and hold the Agent-Related Persons, and
each Lender and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such Person in any
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way relating to or arising out of this Agreement or any document contemplated by
or referred to herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Borrower shall
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting solely from the gross negligence or willful
misconduct of such Indemnified Person. The agreements and obligations set forth
in this Section shall survive payment of all other Obligations.
(b) At the election of any Indemnified Person, the Borrower shall defend
such Indemnified Person using legal counsel satisfactory to such Indemnified
Person in such Person's sole discretion, at the sole cost and expense of the
Borrower. All amounts owing under this Section shall be paid within 30 days
after demand.
12.6 MARSHALLING; PAYMENTS SET ASIDE
Neither the Agent nor the Lenders shall be under any obligation to xxxxxxxx
any assets in favor of the Borrower or any other Person or against or in payment
of any or all of the Obligations. To the extent that the Borrower makes a
payment to the Agent or the Lenders, or the Agent or the Lenders exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Agent upon demand its Pro Rata Share
of any amount so recovered from or repaid by the Agent.
12.7 SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the Agent
and each Lender.
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12.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Lender may, with the written consent of the Agent and the Borrower
which shall not be unreasonably withheld, conditioned or delayed, at any time
assign and delegate to one or more Eligible Assignees (provided that no written
consent of the Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Assignee that is an Affiliate of such
Lender) (each an "Assignee") all, or any ratable part of all, of the Loans, the
Commitments and the other rights and obligations of such Lender hereunder, in a
minimum amount of the lesser of $5,000,000 or the entire amount of the
Commitment of such Lender; provided, however, that the Borrower and the Agent
may continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrower and the Agent by
such Lender and the Assignee; (ii) such Lender and its Assignee shall have
delivered to the Borrower and the Agent an Assignment and Acceptance in the form
of Exhibit I ("Assignment and Acceptance") together with any Note or Notes
subject to such assignment and (iii) the assignor Lender or Assignee has paid to
the Agent a processing fee in the amount of $3,500.
(b) Subject to the conditions set forth in Section 12.8(a), from and after
the date that the Agent notifies the assignor Lender that it has received (and
provided its consent with respect to) an executed Assignment and Acceptance, (i)
the Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Subject to the conditions set forth in Section 12.8(a), within five
Business Days after its receipt of notice by the Agent that it has received an
executed Assignment and Acceptance, the Borrower shall execute and deliver to
the Agent, new Notes evidencing such Assignee's assigned Loans and Commitment
and, if the assignor Lender has retained a portion of its Loans and its
Commitment, replacement Notes in the principal amount of the Loans retained by
the assignor Lender (such Notes to be in exchange for, but not in payment of,
the Notes held by such Lender). Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the
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resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
---------
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "originating Lender") hereunder and under the other Loan
Documents; provided, however, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Borrower and the Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Lenders
as described in the first proviso to Section 12.1. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections 4.1,
4.3 and 12.5 as though it were also a Lender hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Lender may
at any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and the Note held by it in favor of
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 C.F.R. (S) 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
(f) The Borrower agrees to actively assist and cooperate with U. S. Bank in
the initial syndication of the Loans, including assistance in the preparation
and review of information and participation in one or more meetings with
prospective lenders.
12.9 SET-OFF
In addition to any rights and remedies of the Lenders provided by law, if
an Event of Default exists or the Loans have been accelerated, each Lender is
authorized
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at any time and from time to time, without prior notice to the Borrower, any
such notice being waived by the Borrower to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of the Borrower
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower and
the Agent 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.
12.10 AUTOMATIC DEBITS OF FEES
With respect to any agency fee, underwriting fee or other fee, or any other
cost or expense (including Attorney Costs) due and payable to the Agent under
the Loan Documents, the Borrower hereby irrevocably authorizes U. S. Bank to
debit any deposit account of the Borrower with U. S. Bank in an amount such that
the aggregate amount debited from all such deposit accounts does not exceed such
fee or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in U. S. Bank's sole discretion)
and such amount not debited shall be deemed to be unpaid. No such debit under
this Section shall be deemed a set-off.
12.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC.
Each Lender shall notify the Agent in writing of any changes in the address
to which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Agent shall
reasonably request.
12.12 COUNTERPARTS
This Agreement may be executed in any number of separate counterparts, each
of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument.
12.13 SEVERABILITY
The illegality or unenforceability of any provision of this Agreement or
any instrument or agreement required hereunder shall not in any way affect or
impair the
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legality or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
12.14 NO THIRD PARTIES BENEFITED
This Agreement is made and entered into for the sole protection and legal
benefit of the Borrower, the Lenders, the Agent and the Agent-Related Persons,
and their permitted successors and assigns, and no other Person shall be direct
or indirect legal beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any of the other Loan Documents.
12.15 CONDITIONS NOT FULFILLED
If any requested loan is not borrowed, or any requested letter of credit is
not issued owing to nonfulfillment of any condition precedent specified in
Article V or, in the case of letters of credit, any additional conditions
specified in Article III, no party hereto shall be responsible to any other
party for any damage or loss by reason thereof, except that the Borrower shall
in any event be liable to pay the fees, Taxes, and expenses for which it is
obligated hereunder. If for any other reason the Commitment of any Lender is
not borrowed or any requested letter of credit is not issued, neither the Agent
nor any Lender (other than the Lender failing to make its Loan as required
hereunder) shall be responsible to the Borrower for any damage or loss by reason
thereof, nor shall any other Lender or the Borrower be excused from their
performance hereunder.
12.16 GOVERNING LAW AND JURISDICTION
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF WASHINGTON; PROVIDED THAT THE AGENT AND
THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. DEEDS OF TRUST
SHALL BE GOVERNED BY THE LAW OF THE STATE IN WHICH THE REAL PROPERTY ENCUMBERED
THEREBY IS LOCATED.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE XXXXX XX XXXXXXXXXX XX
XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT OF WASHINGTON, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE
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AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
----- --- ----------
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
BORROWER, THE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
WASHINGTON LAW.
12.17 WAIVER OF JURY TRIAL
THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
12.18 ENTIRE AGREEMENT
This Agreement, together with the other Loan Documents, embodies the entire
agreement and understanding among the Borrower, the Lenders and the Agent, and
supersedes all prior to contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in ______________________ by their proper and duly
authorized officers as of the day and year first above written.
CAVANAUGHS HOSPITALITY LIMITED PARTNERSHIP
By: Cavanaughs Hospitality Corporation,
General Partner
By
------------------------------
Title
---------------------------
U. S. BANK NATIONAL ASSOCIATION, as Agent
By
--------------------------------
Title
-----------------------------
U. S. BANK NATIONAL ASSOCIATION, as a Lender
By
--------------------------------
Title
-----------------------------
[OTHER BANKS]
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SCHEDULE 2.1
COMMITMENTS
AND PRO RATA SHARES
BANK COMMITMENT PRO RATA SHARE
U. S. Bank $ __000,000 ___%
TOTAL $ __000,000 100%
1
SCHEDULE 12.2
LIBOR AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
The Borrower
Cavanaughs Hospitality Limited Partnership
000 X. Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The Agent
U. S. Bank National Association
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
U. S. Bank, as a Bank
Domestic Lending Office and LIBOR Lending Office:
U. S. Bank National Association
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
1
