THIRD MODIFICATION AGREEMENT
Exhibit
10.1
THIRD
MODIFICATION AGREEMENT
This
THIRD MODIFICATION
AGREEMENT (the “Modification Agreement”) is
made effective as of November 11, 2009, by and among XXXXXXXX XXXXX CO., a Utah
corporation (“Borrower”), whose address is
0000 Xxxx Xxxxxxx Xxxx., Xxxx Xxxx Xxxx, Xxxx 00000, each undersigned Guarantor,
and JPMORGAN CHASE BANK,
N.A., a national banking association (“Lender”), whose address is
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000.
RECITALS:
A. Lender
has previously extended to Borrower a revolving line of credit loan (the “Loan”) in the maximum
principal amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00), as
reduced from time to time, pursuant to a Revolving Line of Credit Agreement
dated as of March 14, 2007 (as amended and modified from time to time, the
“Loan Agreement”), and
evidenced by a Secured Promissory Note dated March 14, 2007 (as amended and
modified from time to time, the “Note”). Capitalized
terms used herein without definition shall have the meanings given to such terms
in the Loan Agreement and Note.
B. Repayment
of the Loan is guaranteed pursuant to the terms of a Repayment Guaranty dated as
of March 14, 2007 (as amended and modified from time to time, the “Guaranty”), executed by FRANKLIN DEVELOPMENT
CORPORATION, a Utah corporation, XXXXXXXX XXXXX TRAVEL, INC., a
Utah corporation, and XXXXXXXX
XXXXX CLIENT SALES, INC., a Utah corporation (individually and
collectively, as the context requires, and jointly and severally, “Guarantor”), in favor of
Lender.
C. The Loan
Agreement, Note, Guaranty, and all other agreements, documents, and instruments
governing, evidencing, securing, guaranteeing or otherwise relating to the Loan,
as modified in this Modification Agreement, are sometimes referred to
individually and collectively as the “Loan Documents.”
D. Subject
to the terms and conditions contained herein, Borrower and Lender now desire to
modify the Loan Documents to: (i) increase the interest rate applicable under
the Loan Documents from the LIBO Rate in effect from time to time plus 2.00% per
annum to the LIBO Rate in effect from time to time plus 3.50% per annum; (ii)
modify the funded debt to EBITDAR ratio and the fixed charge coverage ratio as
set forth herein; (iii) modify certain provisions regarding the expiration date
of Letters of Credit issued under the Loan Agreement; (iv) require the delivery
of monthly financial statements as set forth herein; and (v) make such other
modifications as are set forth herein.
AGREEMENT:
For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Guarantor and Lender agree as follows:
1. ACCURACY
OF RECITALS. Each of Borrower and each Guarantor acknowledges
the accuracy of the Recitals which are incorporated herein by
reference.
2. MODIFICATION
OF LOAN DOCUMENTS. The Loan Documents are modified as
follows:
(a) Interest Rate
Increase. The definition of “Interest Rate” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
“Interest Rate” means a
variable rate equal to the LIBO Rate in effect from time to time plus Three and
One-Half Percent (3.50%) per annum.
(b) Financial
Covenants.
(1) Funded Debt to EBITDAR
Ratio. Section 6.8(a) of the Loan Agreement is hereby amended
to provide that the funded debt to EBITDAR ratio described therein shall not be
greater than (A) 4.00 to 1.00 as of the end of the fiscal quarter of Borrower
ending on November 30, 2009, and (B) 3.75 to 1.00 as of the end of the fiscal
quarter of Borrower ending on February 28, 2010.
(2) Fixed Charge Coverage
Ratio. Section 6.8(b) of the Loan Agreement is hereby amended
to provide that the fixed charge coverage ratio described therein shall not be
less than (A) 1.25 to 1.00 as of the end of the fiscal quarter of Borrower
ending on November 30, 2009 and (B) 1.50 to 1.00 as of the end of the
fiscal quarter of Borrower ending on February 28, 2010.
(c) Letters of
Credit. The second sentence of Section 3.1(a) of the Loan
Agreement is hereby amended and restated as follows:
Unless
otherwise approved by Lender, Letters of Credit (i) will expire on the earlier
of the date stated therein or thirty (30) days prior to the Maturity Date; and
(ii) will not exceed, in the aggregate stated amount outstanding at any time,
the lesser of (A) Letter of Credit Limit or (B) the difference between the Loan
Amount and the then outstanding principal balance of the Loan.
(d) Monthly Financial
Statements. Section 6.7 of the Loan Agreement is hereby
amended by adding the following as a new subsection (e):
(e) Monthly Financial
Statements. Within thirty (30) days of the end of each
calendar month, the complete consolidated financial statements of the
Consolidated Entities which shall consist of a balance sheet, statements of
income, cash flow and retained earnings, and a schedule of contingent
liabilities as of the end of each such monthly period, such financial statements
to be certified as true and correct by the president or chief financial officer
of Borrower.
(e) Conforming
Modifications. Each of the Loan Documents is modified to be
consistent herewith and to provide that it shall be a default or an Event of
Default thereunder if Borrower shall fail to comply with any of the covenants of
Borrower herein or if any representation or warranty by Borrower herein or by
any guarantor in any related Consent and Agreement of Guarantor(s) is materially
incomplete, incorrect, or misleading as of the date hereof. In order
to further effect certain of the foregoing modifications, Borrower and Guarantor
agree to execute and deliver such other documents or instruments as Lender
reasonably determines are necessary or desirable.
(f) References. Each
reference in the Loan Documents to any of the Loan Documents shall be a
reference to such document as modified herein or as modified on or about the
date hereof.
3. RATIFICATION
OF LOAN DOCUMENTS AND COLLATERAL. The Loan Documents are
ratified and affirmed by Borrower and shall remain in full force and effect as
modified herein. Any property or rights to or interests in property
granted as security in the Loan Documents shall remain as security for the Loan
and the obligations of Borrower in the Loan Documents.
4. FEES AND
EXPENSES.
(a) Fees and
Expenses. In consideration of Lender’s agreement to amend the
Loan Documents as set forth herein, and in addition to any other fees or amounts
payable by Borrower hereunder, Borrower has agreed to pay to Lender (i) all
legal fees and expenses incurred by Lender in connection herewith; and (ii) all
other costs and expenses incurred by Lender in connection with executing this
Modification Agreement and otherwise modifying the Loan
Documents. Borrower acknowledges and agrees that such fees are fully
earned and nonrefundable as of the date this Modification Agreement is executed
and delivered by the parties hereto.
(b) Method of
Payment. Such fees shall be paid by Borrower to Lender on the
date hereof or at such later date as such fees, costs and expenses are incurred
by Lender. Borrower and Lender agree and acknowledge that the
foregoing shall not relieve Borrower of its obligation to make future monthly
payments of interest and other amounts as required under the terms of the
Loan.
5. BORROWER
REPRESENTATIONS AND WARRANTIES. Each of Borrower and Guarantor
represents and warrants to Lender: (a) No default or event of default
under any of the Loan Documents as modified herein, nor any event, that, with
the giving of notice or the passage of time or both, would be a default or an
event of default under the Loan Documents as modified herein has occurred and is
continuing; (b) There has been no material adverse change in the financial
condition of Borrower or Guarantor or any other person whose financial statement
has been delivered to Lender in connection with the Loan from the most recent
financial statement received by Lender; (c) Each and all representations and
warranties of Borrower and Guarantor in the Loan Documents are accurate on the
date hereof; (d) Neither Borrower nor Guarantor has any claims, counterclaims,
defenses, or set-offs with respect to the Loan or the Loan Documents as modified
herein; (e) The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower and Guarantor, enforceable against Borrower and
Guarantor in accordance with their terms; (f) Each of Borrower and each
Guarantor is validly existing under the laws of the State of its formation or
organization, has not changed its legal name as set forth above, and has the
requisite power and authority to execute and deliver this Modification Agreement
and to perform the Loan Documents as modified herein; (g) The execution and
delivery of this Modification Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower and Guarantor; and (h) This Modification Agreement
has been duly executed and delivered on behalf of Borrower and
Guarantor.
6. BORROWER
AND GUARANTOR COVENANTS. Each of Borrower and Guarantor
covenants with Lender:
(a) Each of
Borrower and Guarantor shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this Modification Agreement.
(b) Each of
Borrower and Guarantor fully, finally, and forever releases and discharges
Lender and its successors, assigns, directors, officers, employees, agents, and
representatives from any and all actions, causes of action, claims, debts,
demands, liabilities, obligations, and suits, of whatever kind or nature, in law
or equity, that either Borrower or Guarantor has or in the future may have,
whether known or unknown, (i) in respect of the Loan, the Loan Documents, or the
actions or omissions of Lender in respect of the Loan or the Loan Documents and
(ii) arising from events occurring prior to the date of this Modification
Agreement.
(c) Contemporaneously
with the execution and delivery of this Modification Agreement, Borrower has
paid to Lender all of the internal and external costs and expenses incurred by
Lender in connection with this Modification Agreement (including, without
limitation, inside and outside attorneys, appraisal, appraisal review,
processing, title, filing, and recording costs, expenses, and
fees).
(d) On or
prior to the execution and delivery of this Modification Agreement, each of
Borrower and Guarantor shall have executed and delivered, or caused to be
executed and delivered, to Lender, each in form and substance satisfactory to
Lender, such other documents, instruments, resolutions, subordinations, and
other agreements as Lender may require in its sole discretion.
7. EXECUTION
AND DELIVERY OF AGREEMENT BY LENDER. Lender shall not be bound
by this Modification Agreement until (a) Lender has executed and delivered this
Modification Agreement to Borrower and Guarantor, (b) each of Borrower and
Guarantor has performed all of the obligations of Borrower and Guarantor under
this Modification Agreement to be performed contemporaneously with the execution
and delivery of this Modification Agreement, if any, and (c) Borrower has paid
all fees and costs required under Section 4 hereof.
8. INTEGRATION,
ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR
WAIVER. The Loan Documents as modified herein contain the
complete understanding and agreement of Borrower, Guarantor and Lender in
respect of the Loan and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations. No
provision of the Loan Documents as modified herein may be changed, discharged,
supplemented, terminated, or waived except in a writing signed by the parties
thereto.
9. BINDING
EFFECT. The Loan Documents, as modified herein, shall be
binding upon and shall inure to the benefit of Borrower, Guarantor and Lender
and their successors and assigns; provided, however, neither
Borrower nor Guarantor may assign any of its rights or delegate any of its
obligations under the Loan Documents and any purported assignment or delegation
shall be void.
10. CHOICE OF
LAW. THIS MODIFICATION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF UTAH WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SALT
LAKE, STATE OF UTAH OR, AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN
WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF THE
PARTIES WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
11. COUNTERPART
EXECUTION. This Modification Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document. Signature pages
may be detached from the counterparts and attached to a single copy of this
Modification Agreement to physically form one document. Receipt by the Lender of
an executed copy of this Modification Agreement by facsimile shall constitute
conclusive evidence of execution and delivery of the Modification by the
signatory thereto.
[Remainder
of Page Intentionally Left Blank]
DATED as
of the date first above stated.
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XXXXXXXX
XXXXX CO.
a
Utah corporation
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By:
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/s/ Xxxxxxx X. Xxxxx |
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Chief
Financial Officer
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“Borrower”
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FRANKLIN
DEVELOPMENT CORPORATION
a
Utah corporation
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By:
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/s/ Xxxxxxx X. Xxxxx |
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Vice
President
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XXXXXXXX
XXXXX TRAVEL, INC.
a
Utah corporation
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By:
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/s/ Xxxxxxx X. Xxxxx |
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Vice
President
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XXXXXXXX
XXXXX CLIENT SALES, INC.
a
Utah corporation
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By:
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/s Xxxxxxx X. Xxxxx |
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Vice
President
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“Guarantor”
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JPMORGAN
CHASE BANK, N.A.
a
national banking association
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By:
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/s/ Xxxx X. Xxxxxxx |
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Name:
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Xxxx
X. Xxxxxxx
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Title:
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Senior
Vice President
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“Lender”
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