EXHIBIT 10(15)
AMENDMENT NUMBER ONE
TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is entered into as of October 3, 2001, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Agent"), with a place of business
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, as Agent for the Lenders (as defined herein), and as a Lender, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders", and together with
Agent, as the "Lender Group"), and THE HOTEL GROUP, INC., a Kansas corporation
("Borrower"), and SHOLODGE, INC., a Tennessee corporation ("Holdings"), with its
chief executive office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, with reference to the following:
WHEREAS, Borrower and Holdings previously entered into that
certain Loan and Security Agreement, dated as of August 27, 1999 (as amended,
restated, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), with Agent and Lenders pursuant to which Lenders have made certain
loans and financial accommodations available to Borrower and Holdings;
WHEREAS, Borrower and Holdings have requested that Agent and
the Lenders amend the Loan Agreement;
WHEREAS, subject to the terms and conditions set forth herein,
Agent and the Lenders are willing to so amend the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Defined Terms. All terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Loan Agreement.
2. Amendments To The Loan Agreement.
(a) Section 1.1 of the Loan Agreement hereby is
amended as follows:
(i) The definition of "Additional Pledged Notes"
hereby is amended and restated in its entirety to read as
follows:
"Additional Pledged Notes" means the notes, itemized
on Schedule A-1, pledged by an Obligor in support of the
increase in the Maximum Facility
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Amount above $30,000,000 as a result of an increase in the
Maximum Revolver Amount above $20,000,000, and such term shall
also include notes pledged by an Obligor pursuant to Section
4.5.
(ii) The definition of "Applicable NOI Multiple"
is hereby amended and restated in its entirety to read as
follows:
"Applicable NOI Multiple" means the following stated
NOI numbers set forth below under the heading "NOI Multiple"
with respect to the specified levels of Subordinated
Indebtedness set forth below:
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Amount of Subordinated Indebtedness NOI Multiple
----------------------------------------------------------------
>$50,000,000 5.0
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>$30,000,000 and <$50,000,000 4.0
-
----------------------------------------------------------------
<$30,000,000 3.0
-
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(iii) The definition of "Applicable Prepayment
Premium" hereby is deleted in its entirety.
(iv) The definition of "Baseline NOI" hereby is
amended and restated in its entirety to read as follows:
"Baseline NOI" means (i) from the Closing Date to the
Maximum Facility Amount Availability Date, the NOI
attributable to the Underlying Real Property Collateral which
secures the Pledged Notes, (ii) after the Maximum Facility
Amount Availability Date, the NOI attributable to the
Underlying Real Property Collateral which secures the Pledged
Notes and the Additional Pledged Notes, all as set forth on
Schedule A-1, and (iii) from time to time, the NOI
attributable to additional parcels of Real Property Collateral
added by amendment to Schedule A-1 as set forth in this
Agreement.
(v) The definition of "Jonesboro Property"
hereby is deleted in its entirety.
(vi) The definition of "Maximum Revolver Amount"
hereby is amended and restated in its entirety to read as
follows:
"Maximum Revolver Amount" means $20,000,000 or such
larger amount as may be approved from time to time by the
Lender Group (it being understood that there is currently no
present agreement to approve or consider any such larger
amount).
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(vii) The definition of "Maximum Facility Amount
Availability Date" hereby is amended and restated in its
entirety to read as follows:
"Maximum Facility Amount Availability Date" means
that date upon which all of the conditions precedent as set
forth in Section 3.2 to the Lenders' commitment to increase
the Maximum Facility Amount above $30,000,000 as a result of
an increase in the Maximum Revolver Amount above $20,000,000
have been either satisfied or waived by the Lender Group.
(viii) The definition of "Real Property Collateral"
hereby is amended and restated in its entirety to read as
follows:
"Real Property Collateral" means the Real Property
owned in fee by an Obligor identified on Schedule A-1, as the
same may be amended or modified from time to time to reflect
the provision of additional Real Property Collateral to secure
the Obligations as set forth in Section 2.1(c), 3.9 or 4.5."
(ix) The definition of "Total Maximum Commitment
Amount" hereby is amended and restated in its entirety to read
as follows:
"Total Maximum Commitment Amount" means, for each
Lender, the Dollar amount of the obligation of such Lender to
make Advances and to make its portion of the Term Loan, as
such amount is set forth opposite the name of such Lender
under the caption Total Maximum Commitment on Schedule C-1, in
an aggregate amount of $30,000,000.
(x) The definition of "Unencumbered Asset Value"
hereby is amended by deleting from the parenthetical appearing
in subsection (v) of such definition the language ", such as
Murfreesboro and ▇▇▇▇▇▇▇, which until they are directly
secured by real property".
(xi) The following definitions hereby are added
in alphabetical order:
"Aggregate NOI" shall have the meaning set forth in
the definition "Go-forward Reserve".
"Average Quarterly NOI Decline" shall mean the
quotient obtained by dividing (a) the result of (i) the
quotient obtained by dividing (A) the result of (x) the
Aggregate NOI for the immediately preceding four quarters (the
"Most Recent NOI") subtracted from (y) the Aggregate NOI for
the equivalent four quarter period for the immediately
preceding year (the "Previous NOI") by (B) the Previous NOI
multiplied by (ii) the Most Recent NOI by (b) 4.
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"Go-forward Reserve" shall mean the reserve against
the Borrowing Base to be established at such time as the
Interim Reserve is terminated following the delivery to the
Agent of the collateral reporting set forth in Section 6.2(e)
for the period ending December 31, 2001. Such reserve shall be
in an amount equal to the greater of (a) the product of 5
times the result of (i) the actual total NOI generated by the
Real Property Collateral and the Underlying Real Property
Collateral securing repayment of Eligible Notes (the
"Aggregate NOI") for the immediately preceding four quarters
subtracted from (ii) the Aggregate NOI for the four quarters
ended the immediately preceding quarter prior to the last
quarter in the period set forth in (a)(i) above or (b) the
product of 5 times the Average Quarterly NOI Decline. Schedule
1.1 sets forth an example of the calculation of the Go-forward
Reserve.
"Interim Reserve" shall mean the reserve against the
Borrowing Base established pursuant to Section 2.1(b) by the
Agent for the period commencing on October 3, 2001 and ending
on the date that the collateral reporting set forth in Section
6.2(e) for the period ending December 31, 2001 has been
delivered to the Agent. Such reserve shall be in an amount
equal to the Aggregate NOI for the twelve months ending August
31, 2001. Section 1.1 sets forth an example of the calculation
of the Interim Reserve.
(b) Section 2.1(b) hereby is amended and
restated in its entirety to read as follows:
"Anything to the contrary in this Section 2.1 notwithstanding,
Agent shall have the right to establish reserves in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including without
limitation, the Go-Forward Reserve, the Interim Reserve, and reserves with
respect to (i) sums that the Obligors are required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and have failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
the Obligors to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral, which Lien or trust, in the reasonable determination of
Lender (from the perspective of an asset-based lender), would be likely to have
a priority superior to the Liens of Agent, for the benefit of the Lender Group
(such as landlord liens, ad valorem taxes, or sales taxes where given priority
under applicable law) in and to such item of the Collateral. Agent shall notify
Borrower in writing as soon as is practicable following the establishment of any
such reserve or any change in the amount thereof, which notice shall set forth
in reasonable detail the amount of such reserve and the reason for the
establishment thereof (provided that no such notification shall be required for
the Go-forward Reserve or the Interim Reserve)."
(c) Section 2.6(a) hereby is amended by:
(i) deleting from clause (i) thereof the number
"0.50" and inserting "2.50" in lieu thereof; and
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(ii) deleting from clause (ii) thereof the number
"0.50" and inserting "1.00" in lieu thereof.
(d) Section 2.11(d) hereby is amended by
deleting the dollar amount "$1,500" and inserting "$3,500" in lieu therof.
(e) Section 3.2 hereby is amended and restated
in its entirety to read as follows:
"3.2 Conditions Precedent to inclusion of the
Additional Pledged Notes in the Borrowing Base and the Making
of Loans on or after the Maximum Facility Amount Availability
Date. The following shall be conditions precedent to the
inclusion of the Additional Pledged Notes as set forth on
Schedule A-1 in the calculation of the Borrowing Base and the
making of Advances on or after the Maximum Facility Amount
Availability Date:
(a) Agent shall have received each of the
following documents, in form and substance satisfactory to
Agent, duly executed, and each such document shall be in full
force and effect:
(i) the Additional Pledged Notes;
(ii) the Additional Pledged Deeds of Trust;
(iii) the Additional Pledged Note Endorsements;
(iv) the Additional Pledged Deed of Trust
Assignments;
(v) the Additional Pledged Title Policies;
(vi) the Additional Pledged Title Policy
Assignment Endorsements;
(vii) the Additional Pledged Note Obligor
Notifications;
(viii) the FF&E Bank Notification Letters; and
(ix) the Additional Pledged Note Estoppels;
(b) Agent shall have received real estate
appraisals, in form and substance, and from real estate
appraisers, satisfactory to Agent in its Permitted Discretion
with respect to each parcel of Underlying Real Property
Collateral encumbered by an Additional Pledged Deed of Trust;
(c) Agent shall have received title reports and
title insurance policies, in form and substance, and from
title companies, satisfactory to
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Agent in its Permitted Discretion with respect to each
additional parcel of Underlying Real Property Collateral;
(d) Agent shall have received an opinion of
Obligors' counsel in form and substance satisfactory to Agent
in its Permitted Discretion;
(e) Agent shall have received a Phase I
environmental report with respect to each parcel of Underlying
Real Property Collateral encumbered by an Additional Pledged
Deed of Trust, the environmental consultants retained for such
reports, the scope of the reports, and the results of the
reports shall be satisfactory to Agent, in its Permitted
Discretion;
(f) Agent shall have received, to its
satisfaction, in its Permitted Discretion, an assignment for
the benefit of the Lenders of the FF&E Reserves maintained by
each Mortgagor of each parcel of Underlying Real Property
Collateral which is subject to an Additional Pledged Deed of
Trust;
(g) Agent shall have completed its business,
legal, and collateral due diligence, including, but not
limited to, (i) a collateral audit and review of each
Obligor's books and records and verification of each Obligor's
representations and warranties to the Lender Group, the
results of which shall be satisfactory to each Lender in each
Lender's Permitted Discretion, and (ii) a review of the
financial and business performance of each Shoney's Inn
operated on the Underlying Real Property Collateral securing
the Additional Pledged Notes and the determination of the
Baseline NOI, the results of which shall be reasonably
satisfactory to each Lender in each Lender's Permitted
Discretion;
(h) Agent shall have syndicated to its
satisfaction the increase in Commitments from the Interim
Facility Amount to the Maximum Facility Amount and, to the
extent necessary to reach the Total Maximum Commitment,
Joining Lenders, as defined in the Joinder Agreement, shall
have been admitted to the credit facility as provided in
Section 14.3;
(i) Agent shall have determined, to its
satisfaction in its Permitted Discretion, the right of Agent,
on behalf of the Lender Group, to change the flag under which
the lodging operations are conducted on the Real Estate
Collateral in the event Agent enters into possession and
control thereof as a result of the exercise of remedies with
respect to a Mortgage upon default by an Obligor, or the
Additional Pledged Notes or the Additional Pledged Deeds of
Trust upon default by a Mortgagor;
(j) Agent shall have received such estoppel
letters from the purchasers of the Underlying Real Property
Collateral securing repayment of the Additional Pledged Notes,
with respect to the status of the
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Additional Pledged Notes as of the Maximum Facility Amount
Availability Date as Agent shall require in its Permitted
Discretion; and
(k) Agent shall have determined, to Agent's
satisfaction in its Permitted Discretion, that the Additional
Pledged Notes are cross-collateralized and cross-defaulted
each to each other and to each Pledged Note;
(l) Obligors shall have utilized their best
efforts to obtain for the benefit of the Lender Group estoppel
letters, in form and substance satisfactory to the Agent in
its Permitted Discretion, from each ground lessor with respect
to the Underlying Real Property Collateral securing repayment
of the Additional Pledged Notes, if any, stating that the
ground lease is in full force and effect, that the ground
lessor agrees to send copies of any notices of default sent to
the ground lessee also to Agent, and that the Agent has the
right to cure any such default applicable to a mortgagee under
the applicable ground lease;
(m) Agent and ShoLodge Franchise shall have
entered into an agreement, in form and substance acceptable to
Agent in its Permitted Discretion, whereby ShoLodge Franchise
agrees to (i) provide to Agent, at such time as any notice is
sent to the Mortgagor/licensee, a copy of any notices sent to
the Mortgagor/licensee under the applicable license agreement
for the use of the Shoney's Inn marks with respect to lodging
operations on the Underlying Real Property Collateral securing
repayment of the Additional Pledged Notes, and to permit Agent
to cure any default by the Mortgagor/licensee under the
applicable license agreement within the time periods provided
in the license agreement, and (ii) to license to Agent the use
of the Shoney's Inn marks, upon the same terms and conditions
set forth in the applicable license agreement, in the event
that the Agent comes into possession of any such Underlying
Real Property Collateral; and
(n) all other documents and legal matters in
connection with the transactions contemplated by this
Agreement shall have been delivered, executed, or recorded and
shall be in form and substance satisfactory to Agent in its
Permitted Discretion."
(f) Section 3.6 hereby is amended by deleting
the first sentence thereof and inserting the following in lieu thereof: "This
Agreement shall become effective upon the execution and delivery hereof by
Obligors and the Lender Group and shall continue in full force and effect for a
term ending on September 30, 2004 (the "Maturity Date").
(g) Section 3.8 hereby is amended by:
(i) deleting from the initial sentence thereof
the words "together with the Applicable
Prepayment Premium" and
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inserting the words "without premium or
penalty" in lieu thereof;
(ii) deleting the second sentence thereof in its
entirety; and
(iii) deleting the last three sentences thereof in
their entirety. .
(h) Section 3.9 hereby is amended and restated
in its entirety to read as follows:
"3.9 Note Default and Remedies.
(a) Upon the occurrence of a default under one
or more of the Notes and/or the instruments securing the
indebtedness evidenced thereby, the Obligors shall have the
right, in their discretion, to take such action as is deemed
appropriate to collect the Indebtedness evidenced by such
Notes, including, without limitation, the exercise of all
remedies under the instruments securing the indebtedness
evidenced by such Notes. All proceeds received from the
exercise of such remedies shall be Collections governed by the
provisions of Section 2.7. Notwithstanding anything to the
contrary contained in this Agreement, the Obligors shall have
5 days to cure any Overadvance created by such a default, in
accordance with Section 2.5.
(b) If an Obligor, directly or indirectly,
acquires the Underlying Real Property Collateral securing
repayment of a Note following the exercise of its remedies as
set forth in subsection 3.9(a), or by reason of a deed in lieu
of such exercise of remedies, Obligors may, for a period of 10
days following such acquisition, pledge the Underlying Real
Property Collateral which previously secured repayment of such
Note (which shall then be Real Property Collateral hereunder).
Such additional Real Property Collateral may be added to the
Collateral securing the Obligations through an amendment to
this Agreement and as set forth in Section 4.5. Thereafter,
such Real Property Collateral shall be included in the
determintion of the Borrowing Base and the NOI from such Real
Property Collateral shall be included in the NOI for Real
Estate Collateral."
(i) Section 4.4 hereby is amended by:
(i) deleting from the next to last sentence
thereof the language "(iii) the Obligors
shall maintain the released Note free and
clear of all Liens or other encumbrances,
and (iv)" and inserting the language "and
(iii)" in lieu thereof; and
(ii) deleting the last sentence thereof in its
entirety and inserting in lieu thereof the
following:
"Any Note so released from being considered
Collateral shall, however, be included in
the calculation of Unencumbered Asset
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Value provided such Note is free and clear
of Liens or other encumbrances."
(j) Section 4.5 hereby is amended by inserting
between the words "any time" and "and from time to time" the words "in
accordance with Section 2.1(c) or Section 3.9".
(k) Section 6.2(e) hereby is amended and
restated in its entirety as follows:
"(e) on a monthly basis and within 50 days of the
end of the month,
(i) a calculation of the NOI, on the basis of
the immediately preceding twelve months,
derived by the respective Mortgagor from the
hotel operations for each parcel of
Underlying Real Property Collateral, and by
Holdings or Borrower, as the case may be,
with respect to any parcel of Real Property
Collateral; and
(ii) an analysis, accompanied by appropriate
calculations and discussion, as required by
Agent in its Permitted Discretion, of the
occupancy rate, average daily room rate, and
revenue per available room derived by the
respective Mortgagor from the hotel
operations for each parcel of Underlying
Real Property Collateral, and by Holdings or
Borrower, as the case may be, with respect
to any parcel of Real Property Collateral."
(l) Section 7.20 hereby is amended by:
(i) deleting from the first sentence of
subparagraph (b) thereof the dollar amount
"$100,000,000" and inserting "$90,000,000"
in lieu thereof; and
(ii) deleting the second sentence of subparagraph
(b) thereof in its entirety.
(m) Section 14.3(a) hereby is amended by
deleting the last sentence thereof in its entirety.
(n) Schedule A-1 of the Loan Agreement hereby is
deleted in its entirety and the new Schedule A-1 attached hereto shall be
inserted in lieu thereof.
(o) Schedule C-1 of the Loan Agreement hereby is
deleted in its entirety and the new Schedule C-1 attached hereto shall be
inserted in lieu thereof.
(p) Schedule 1.1 hereby is added to the Loan
Agreement.
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(q) Schedule 5.20 of the Loan Agreement hereby
is amended by adding thereto the addendum to Schedule 5.20 attached hereto.
(r) Exhibit B-1 of the Loan Agreement hereby is
amended by deleting from paragraph R thereof the language "[$46.5 MILLION]" and
inserting "[$30 MILLION]" in lieu thereof.
(p) Exhibit C-2 of the Loan Agreement hereby is
amended by deleting from paragraph 2(b) of Schedule 3 thereto the dollar amount
"$100,000,000" and inserting "$90,000,000" in lieu thereof.
3. Conditions Precedent to Amendment. The satisfaction of each of
the following, unless waived or deferred by Agent in its sole discretion, shall
constitute conditions precedent to the effectiveness of this Amendment and each
and every provision hereof:
(a) Agent shall have received this Amendment,
duly executed by the parties hereto, and the same shall be in full force and
effect.
(b) Agent shall have received a reaffirmation
and consent substantially in the form attached hereto as Exhibit A (the
"Consent"), duly executed and delivered by each Guarantor.
(c) The representations and warranties in this
Amendment, the Loan Agreement and the other Loan Documents shall be true and
correct in all respects on and as of the date hereof, as though made on such
date (except to the extent that such representations and warranties relate
solely to an earlier date).
(d) After giving effect to this Amendment, no
Event of Default or event which with the giving of notice or passage of time
would constitute an Event of Default shall have occurred and be continuing on
the date hereof, nor shall result from the consummation of the transactions
contemplated herein.
(e) No injunction, writ, restraining order, or
other order of any nature prohibiting, directly or indirectly, the consummation
of the transactions contemplated herein shall have been issued and remain in
force by any Governmental Authority against Borrower, Holdings, Agent or any
Lender, or any of their respective Affiliates.
(f) Agent shall have received an amendment fee
in the amount of $300,000, which amount Borrower and Holdings authorize Agent,
for the benefit of the Lender Group, to charge to the Loan Account.
(g) Borrower shall have complied with the
following with respect to each Pledged Note or Real Estate Collateral added to
Schedule A-1 of the Loan Agreement pursuant to this Amendment:
5.20 - 10
(1) Agent shall have received each of the
following documents, as applicable, in form and substance
satisfactory to Agent, duly executed, and each such document
shall be in full force and effect:
(i) the Pledged Notes;
(ii) the Pledged Deeds of Trust;
(iii) the Pledged Note Endorsements;
(iv) the Pledged Deed of Trust
Assignments;
(v) the Pledged Title Policies;
(vi) the Pledged Title Policy Assignment
Endorsements;
(vii) the Pledged Note Obligor
Notifications; and
(viii) the Pledged Note Estoppels.
(2) Agent shall have received real estate
appraisals, in form and substance, and from real estate
appraisers, satisfactory to Agent with respect to each
additional parcel of Real Estate Collateral.
(3) Agent shall have received title reports and
title insurance policies, in form and substance, and from
title companies, satisfactory to Agent with respect to each
additional parcel of Underlying Real Property Collateral.
(4) Agent shall have received an opinion of
Obligor's counsel in form and substance satisfactory to Agent
in its Permitted Discretion.
(5) Agent shall have received such environmental
reports with respect to the additional Real Estate Collateral,
the environmental consultants retained for such reports, the
scope of the reports, and the results of the reports shall be
satisfactory to Agent, in its Permitted Discretion.
(6) Agent shall have received, to its
satisfaction, an assignment for the benefit of Lenders of the
FF&E Reserves, if any, maintained by each Mortgagor of each
additional parcel of Underlying Real Property Collateral which
is subject to a Pledged Deed of Trust.
(7) Agent shall have determined, to its
satisfaction in its Permitted Discretion, the right of Agent,
on behalf of the Lender Group, to change the flag under which
the lodging operations are conducted on the Real Estate
Collateral in the event Agent enters into possession and
control thereof as a result of the exercise of remedies with
respect to a Mortgage upon default by an Obligor, or the
Pledged Notes or the Pledged Deeds of Trust upon default by a
Mortgagor.
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(8) Agent shall have received such estoppel
letters from the purchasers under the Motel Purchase
Agreement, with respect to the status of any Pledged Notes as
of the date of the inclusion thereof in the calculation of the
Borrowing Base as Agent shall require in its Permitted
Discretion.
(9) Agent and ShoLodge Franchise shall have
entered into an agreement, in form and substance acceptable to
Agent in its Permitted Discretion, whereby ShoLodge Franchise
agrees to (i) provide to Agent, at such time as any notice is
sent to the Mortgagor/licensee, a copy of any notices sent to
the Mortgagor/licensee under the applicable license agreement
for the use of the Shoney's Inn marks with respect to lodging
operations on the Underlying Real Property, and to permit
Agent to cure any default by the Mortgagor/licensee under the
applicable license agreement within the time periods provided
in the license agreement, and (ii) to license to Agent the use
of the Shoney's Inn marks, upon the same terms and conditions
set forth in the applicable license agreement, in the event
that the Agent comes into possession of any Underlying Real
Property Collateral.
4. Representations and Warranties. Each of the Borrower and
Holdings hereby represents and warrants to the Agent that (a) the execution,
delivery, and performance of this Amendment and of the Loan Agreement, as
amended hereby, are within its powers, have been duly authorized by all
necessary action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or Governmental Authority, or of the terms of its Governing Documents, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected, (b) this Amendment and the Loan Agreement,
as amended hereby, constitute its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, and (c) this Amendment has
been duly executed and delivered by it.
5. Choice of Law. The validity of this Amendment, its
construction, interpretation and enforcement, the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance
with the laws of the State of California.
6. Counterparts; Telefacsimile Execution. This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment or Consent by telefacsimile shall be effective as delivery of a
manually executed counterpart of this Amendment or such Consent. Any party
delivering an executed counterpart of this Amendment or the Consent by
telefacsimile also shall deliver a manually executed counterpart of this
Amendment or Consent, as applicable, but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Amendment or the Consent.
7. Effect on Loan Documents.
5.20 - 12
(a) The Loan Agreement, as amended hereby, and each of
the other Loan Documents shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all
respects. The execution, delivery, and performance of this Amendment shall not,
except as expressly set forth herein, operate as a waiver of or, except as
expressly set forth herein, as an amendment of, any right, power, or remedy of
Agent or any Lender under the Loan Agreement, as in effect prior to the date
hereof. The waivers, consents, and modifications herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other
than those on which the same are based, shall not excuse future non-compliance
with the Loan Agreement, and shall not operate as a consent to any further or
other matter, under the Loan Documents.
(b) Upon and after the effectiveness of this Amendment,
each reference in the Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof" or words of like import referring to the Loan Agreement, and each
reference in the other Loan Documents to "the Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Loan Agreement,
shall mean and be a reference to the Loan Agreement as modified and amended
hereby.
(c) To the extent that any terms and conditions in any of
the Loan Documents shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.
8. Further Assurances. Each of Borrower and Holdings shall
execute and deliver all agreements, documents, and instruments, in form and
substance satisfactory to Agent, and take all actions as Agent may reasonably
request from time to time, to perfect and maintain the perfection and priority
of Agent's security interests in the Collateral (for the benefit of the Lender
Group) and to fully consummate the transactions contemplated under this
Amendment and the Loan Agreement.
9. Entire Agreement. This Amendment, together with all other
instruments, agreements, and certificates executed by the parties in connection
herewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.
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5.20 - 13
IN WITNESS WHEREOF, the parties have entered into this
Amendment as of the date first above written.
SHOLODGE, INC., a Tennessee corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Executive Vice President
THE HOTEL GROUP, INC., a Kansas corporation
By /s/ ▇▇▇▇▇ ▇. Gout
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Title: Executive Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By /s/ Davies Gannon
-------------------------------------------------
Title:
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5.20 - 14
