Document:

Exhibit 10.2

 

EXECUTION VERSION

 

Loan Number: 1008459

 

SIXTH AMENDMENT TO TERM LOAN AGREEMENT

 

THIS SIXTH AMENDMENT TO TERM LOAN AGREEMENT (this “Amendment”), dated as of January 25, 2018, is made by and between RLJ LODGING TRUST, L.P., a limited partnership formed under the laws of the State of Delaware (the “Borrower”), RLJ LODGING TRUST, a Maryland real estate investment trust (the “Parent Guarantor”), each of the undersigned Subsidiary Guarantors (as defined in the Amended Term Loan Agreement (as defined below)), the Lenders party hereto (the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).

 

WHEREAS, the Borrower, the Parent Guarantor, the Administrative Agent and the financial institutions initially a signatory to the Existing Term Loan Agreement (as defined below) together with their successors and assigns under Section 13.6. of the Existing Term Loan Agreement have entered into that certain Term Loan Agreement dated as of November 20, 2012 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Term Loan Agreement”); capitalized terms used herein and not defined herein have the meanings provided in the Existing Term Loan Agreement as amended by this Amendment (the “Amended Term Loan Agreement”);

 

WHEREAS, the Borrower and the Parent Guarantor have requested that the Administrative Agent and the Lenders amend certain terms and conditions of the Existing Term Loan Agreement as described herein;

 

WHEREAS, the Existing Term Loan Agreement provides for a $225,000,000 term loan facility; and

 

WHEREAS, the Administrative Agent and the Lenders party to this Amendment (including each undersigned Lender that desires to become party to the Amended Term Loan Agreement (as defined below) as a “Lender” thereunder, as identified on the signature pages hereto as a “New Lender” (the “New Lender”)) have agreed to so amend certain terms and conditions of the Existing Term Loan Agreement to make certain agreed upon modifications on the terms and conditions set forth below in this Amendment.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

1.             New Lender.

 

(a)           Effective as set forth in Section 3 below, each undersigned New Lender agrees to purchase its Pro Rata Share of Loans pursuant to the terms of the Amended Term Loan Agreement in the principal amount of such New Lender’s Loans as

 

 

set forth on Schedule I to the Amended Term Loan Agreement.  Each New Lender not a party to the Existing Term Loan Agreement hereby acknowledges and agrees that, by its execution of this Amendment as a “New Lender”, (i) such New Lender will be deemed to be a party to the Amended Term Loan Agreement as a “Lender” and (ii) such New Lender shall have all of the obligations of a “Lender” under the Amended Term Loan Agreement and agrees to be bound by all of the terms, provisions and conditions applicable to “Lenders” contained in the Amended Term Loan Agreement, in each case, as if it had executed the same.

 

(b)           Each undersigned New Lender (i) represents and warrants that it is legally authorized to enter into this Amendment; (ii) confirms that it has received a copy of the Existing Term Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Sections 9.1. and 9.2. thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment; (iii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Amended Term Loan Agreement or any other instrument or document furnished pursuant hereto or thereto; (iv) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Amended Term Loan Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (v) if it is a Foreign Lender, confirms that it has delivered any documentation to the Administrative Agent and the Borrower required to be delivered by it pursuant to the terms of the Amended Term Loan Agreement, duly completed and executed by it.

 

2.             Amendments to Existing Term Loan Agreement.  Effective as set forth in Section 3 below, the Existing Term Loan Agreement is hereby amended as follows (as so amended, the Existing Term Loan Agreement shall continue in full force and effect):

 

(a)           The cover page of the Existing Term Loan Agreement is hereby amended (i) to add BBVA Compass Bank as a Documentation Agent and (ii) to include Capital One, National Association and BBVA Compass Bank as Joint Lead Arrangers and Joint Bookrunners.

 

(b)           Section 1.1. of the Existing Term Loan Agreement is hereby amended (i) to delete each of the definitions of “ICE” and “Loan Year” appearing therein in its entirety and (ii) to add or amend and restate, as applicable, each of the following defined terms in the appropriate alphabetical order:

 

“Applicable Margin” means (i) at any time prior to the Investment Grade Pricing Effective Date, the Leverage-Based Applicable Margin applicable thereto in effect at such time and (ii) at any time on and after the Investment Grade Pricing Effective Date, the Ratings-Based

 

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Applicable Margin applicable thereto in effect at such time. Notwithstanding the foregoing, during the six-month period commencing on the first day of the calendar month following the Borrower’s delivery of any Compliance Certificate pursuant to Section 9.3. reflecting that the Leverage Ratio exceeds 6.50 to 1.00 as of the end of the applicable four-quarter fiscal period, the Applicable Margin shall be increased by 0.35% for each Level.

 

“Arrangers” means Wells Fargo Securities, LLC, PNC Capital Markets LLC, Capital One, National Association and BBVA Compass Bank.

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code) the assets of any such “employee benefit plan” or “plan”.

 

“Capital One Term Loan Agreement” means that certain Term Loan Agreement, dated as of December 22, 2014, as amended by that certain First Amendment to Term Loan Agreement, dated as of June 1, 2015, that certain Second Amendment to Term Loan Agreement, dated as of November 12, 2015, that certain Third Amendment to Term Loan Agreement, dated as of April 28, 2016, that certain Fourth Amendment to Term Loan Agreement, dated as of August 31, 2017, and that certain Fifth Amendment to Term Loan Agreement, dated as of January 25, 2018, by and among the Borrower, the Parent Guarantor, Capital One, as administrative agent, and the lenders party thereto.

 

“Documentation Agent” means, collectively, Capital One, National Association and BBVA Compass Bank.

 

“Investment Grade Pricing Effective Date” means the first Business Day following the later of the date on which (a) the Investment Grade Ratings Criteria have been satisfied and (b) the Borrower has delivered to the Administrative Agent (and the Administrative Agent shall promptly provide a copy of such notice to the Lenders) a certificate signed by a Responsible Officer of the Borrower (i) certifying that the Investment Grade Ratings Criteria have been satisfied (which certification shall also set forth the Credit Rating(s) as in effect, if any, from each of S&P, Fitch and Moody’s as of such date) and (ii) notifying the Administrative Agent that the Borrower has irrevocably elected to have the Ratings-Based Applicable Margin apply to the pricing hereunder.

 

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“Level” has the meaning given that term in the definition of the terms “Leverage-Based Applicable Margin” and “Ratings-Based Applicable Margin”, as the context may require.

 

“Leverage-Based Applicable Margin” means the percentage rate set forth below corresponding to the level (each, a “Level”) into which the Leverage Ratio as determined in accordance with Section 10.1.(a) then falls:

 

	
Level
    	
 
    	
Leverage Ratio
    	
 
    	
Applicable Margin for
   LIBOR Loans
    	
 
    	
Applicable Margin for
   Base Rate Loans
    	
 
    
	
1
    	
 
    	
Less than 4.00 to 1.00
    	
 
    	
1.45
    	
%
    	
0.45
    	
%
    
	
2
    	
 
    	
Greater than or equal to 4.00 to 1.00 but less than   4.50 to 1.00
    	
 
    	
1.55
    	
%
    	
0.55
    	
%
    
	
3
    	
 
    	
Greater than or equal to 4.50 to 1.00 but less than 5.00   to 1.00
    	
 
    	
1.60
    	
%
    	
0.60
    	
%
    
	
4
    	
 
    	
Greater than or equal to 5.00 to 1.00 but less than   5.50 to 1.00
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    
	
5
    	
 
    	
Greater than or equal to 5.50 to 1.00 but less than   6.00 to 1.00
    	
 
    	
1.95
    	
%
    	
0.95
    	
%
    
	
6
    	
 
    	
Greater than or equal to 6.00 to 1.00
    	
 
    	
2.20
    	
%
    	
1.20
    	
%
    

 

The Leverage-Based Applicable Margin shall be determined by the Administrative Agent from time to time based on the Leverage Ratio as set forth in the Compliance Certificate most recently delivered by the Borrower pursuant to Section 9.3.  Any adjustment to the Leverage-Based Applicable Margin shall be effective as of the first day of the calendar month immediately following the month during which the Borrower delivers to the Administrative Agent the applicable Compliance Certificate pursuant to Section 9.3.  If the Borrower fails to deliver a Compliance Certificate pursuant to Section 9.3., the Leverage-Based Applicable Margin shall equal the percentages corresponding to Level 6, until the first day of the calendar month immediately following the month that the required Compliance Certificate is delivered.  Notwithstanding the foregoing, for the period from the Sixth Amendment Effective Date through but excluding the date on which the Administrative Agent first

 

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determines the Leverage-Based Applicable Margin as set forth above, the Leverage-Based Applicable Margin shall be determined based on Level 1.  Thereafter, such Leverage-Based Applicable Margin shall be adjusted from time to time as set forth in this definition.  The provisions of this definition shall be subject to Section 2.5.(c).

 

“LIBOR” means, subject to the implementation of a Replacement Rate in accordance with Section 5.2.(ii), with respect to any LIBOR Loan for any Interest Period, the rate of interest obtained by dividing (i) the rate of interest per annum determined on the basis of the rate for deposits in U.S. Dollars for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or a comparable or successor quoting service approved by the Administrative Agent) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period by (ii) a percentage equal to 1 minus the Statutory Reserve Rate; provided that if as so determined LIBOR (including, without limitation, any Replacement Rate with respect thereto) shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.  If, for any reason, the rate referred to in the preceding clause (i) does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then the rate to be used for such clause (i) shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in U.S. Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period; provided that if as so determined LIBOR shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.  Any change in the Statutory Reserve Rate shall result in a change in LIBOR on the date on which such change in such Statutory Reserve Rate becomes effective.  Notwithstanding the foregoing, unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 5.2.(ii), in the event that a Replacement Rate with respect to LIBOR is implemented, then all references herein to LIBOR shall be deemed to be references to such Replacement Rate.

 

“Managing Agent” means Raymond James.

 

“Maturity Date” means January 25, 2023.

 

“Post-Default Rate” means (a) in respect of any principal of the Loan, the rate otherwise applicable plus an additional two percent (2%) per annum and (b) with respect to any other Obligation (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), or any amount owing by a Lender to the Administrative Agent pursuant to Section 11.8., at a rate per annum equal to the Base Rate as in effect from

 

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time to time plus the Applicable Margin for Base Rate Loans plus two percent (2%).

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Ratings-Based Applicable Margin” means the percentage rate set forth below corresponding to the level (each, a “Level”) into which the Credit Rating then falls:

 

	
Level
    	
 
    	
Credit Rating
    	
 
    	
Applicable Margin for
   LIBOR Loans
    	
 
    	
Applicable Margin for
   Base Rate Loans
    	
 
    
	
1
    	
 
    	
A-/A3 or better
    	
 
    	
0.90
    	
%
    	
0.00
    	
%
    
	
2
    	
 
    	
BBB+/Baa1
    	
 
    	
0.95
    	
%
    	
0.00
    	
%
    
	
3
    	
 
    	
BBB/Baa2
    	
 
    	
1.10
    	
%
    	
0.10
    	
%
    
	
4
    	
 
    	
BBB-/Baa3
    	
 
    	
1.35
    	
%
    	
0.35
    	
%
    
	
5
    	
 
    	
Lower than BBB-/Baa3/Unrated
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    

 

During any period for which the Borrower or the Parent Guarantor, as applicable, has received three (3) Credit Ratings which are not equivalent, the Ratings-Based Applicable Margin will be determined by (a) the highest Credit Rating if the highest Credit Rating and the second highest Credit Rating differ by only one Level or (b) the average of the two highest Credit Ratings if they differ by two or more Levels (unless the average is not a recognized Level, in which case the Ratings-Based Applicable Margin will be based on the Credit Rating one Level below the Level corresponding to the highest Credit Rating).  During any period for which the Borrower or the Parent Guarantor, as applicable, has received only two (2) Credit Ratings and such Credit Ratings are not equivalent, the Ratings-Based Applicable Margin will be determined by (i) the highest Credit Rating if they differ by only one Level or (ii) the average of the two Credit Ratings if they differ by two or more Levels (unless the average is not a recognized Level, in which case the Ratings-Based Applicable Margin will be based on the Credit Rating one Level below the Level corresponding to the higher Credit Rating).  During any period for which the Borrower or the Parent Guarantor, as applicable, has received no Credit Rating from Fitch, if the Borrower or the Parent Guarantor, as applicable, also ceases to have a Credit Rating from one of S&P or Moody’s, then the Ratings-Based Applicable Margin shall be determined

 

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based on the remaining such Credit Rating.  Notwithstanding any Credit Rating from Fitch, during any period in which neither S&P nor Moody’s has provided a Credit Rating corresponding to Level 4 or better to the Borrower or the Parent Guarantor, as applicable, the Ratings-Based Applicable Margin shall be determined based on Level 5.

 

On the Investment Grade Pricing Effective Date, the Ratings-Based Applicable Margin shall be determined based upon the Credit Rating(s) specified in the certificate delivered pursuant to clause (b) of the definition of “Investment Grade Pricing Effective Date”.  Thereafter, any change in the Borrower’s or the Parent Guarantor’s Credit Rating, as applicable, which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following receipt by the Administrative Agent of written notice delivered by the Borrower or the Parent Guarantor, as applicable, in accordance with the Loan Documents that the Borrower’s or the Parent Guarantor’s Credit Rating, as applicable, has changed; provided, however, that if the Borrower or the Parent Guarantor, as applicable, has not delivered such required notice but the Administrative Agent becomes aware that the Borrower’s or the Parent Guarantor’s Credit Rating, as applicable, has changed, then the Administrative Agent may, in its sole discretion and upon written notice to the Borrower and the Lenders, adjust the Level effective as of the first day of the first calendar month following the date on which the Administrative Agent becomes aware that the Borrower’s or the Parent Guarantor’s Credit Rating, as applicable, has changed.

 

“Replacement Rate” has the meaning given that term in Section 5.2.(ii).

 

“Sixth Amendment Effective Date” means January 25, 2018.

 

“Syndication Agent” means PNC Bank, National Association.

 

(c)           Section 2.8.(a) of the Existing Term Loan Agreement is hereby amended and restated in its entirety as follows:

 

(a)           Optional. Subject to Section 5.4., the Borrower may prepay the Loan in full or in part at any time without premium or penalty.  The Borrower shall give the Administrative Agent written notice at least two (2) Business Days prior to the prepayment of any LIBOR Loan or one (1) Business Day prior to the prepayment of any Base Rate Loan.  Each voluntary partial prepayment of the Loan shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in excess thereof.

 

(d)           Section 2.8.(c) of the Existing Term Loan Agreement is hereby amended and restated in its entirety as follows:

 

(c)           Intentionally Omitted.

 

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(e)           Section 5.2. of the Existing Term Loan Agreement is hereby amended and restated in its entirety as follows:

 

Section 5.2.           Suspension of LIBOR Loans.

 

(i)  Anything herein to the contrary notwithstanding, unless and until a Replacement Rate is implemented in accordance with clause (ii) below, if, on or prior to the determination of LIBOR for any Interest Period:

 

(a)           the Administrative Agent shall determine (which determination shall be conclusive) that reasonable and adequate means do not exist for ascertaining LIBOR for such Interest Period;

 

(b)           the Administrative Agent reasonably determines (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of LIBOR are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein; or

 

(c)           the Administrative Agent reasonably determines (which determination shall be conclusive absent manifest error) that the relevant rates of interest referred to in the definition of LIBOR upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined are not likely to adequately cover the cost to the Lenders of making or maintaining LIBOR Loans for such Interest Period;

 

then the Administrative Agent shall give the Borrower and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of each current Interest Period for each outstanding LIBOR Loan, either prepay such Loan or Convert such Loan into a Base Rate Loan.

 

(ii)  Notwithstanding anything to the contrary in Section 5.2.(i) above, if the Administrative Agent has made the determination (such determination to be conclusive absent manifest error) that (a) the circumstances described in Section 5.2.(i)(a) or (i)(b) have arisen and that such circumstances are unlikely to be temporary, (b) any applicable interest rate specified herein is no longer a widely recognized benchmark rate for newly originated loans in Dollars in the U.S. syndicated loan market or (c) the applicable supervisor or administrator (if any) of any applicable interest rate specified herein or any Governmental Authority having or purporting to have jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which any applicable interest rate specified herein shall no longer be used for determining interest rates for loans in Dollars in the U.S. syndicated loan market, then the Administrative Agent may, to the extent practicable (in consultation with the Borrower and as determined by the Administrative Agent to be generally in accordance with

 

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similar situations in other transactions in which it is serving as administrative agent or otherwise consistent with market practice generally), establish a replacement interest rate (the “Replacement Rate”), in which case, the Replacement Rate shall, subject to the next two sentences, replace such applicable interest rate for all purposes under the Loan Documents unless and until (A) an event described in Section 5.2.(i)(a) or (i)(b), 5.2.(ii)(a), 5.2.(ii)(b) or 5.2.(ii)(c) occurs with respect to the Replacement Rate or (B) the Administrative Agent (or the Requisite Lenders through the Administrative Agent) notifies the Borrower that the Replacement Rate does not adequately and fairly reflect the cost to the Lenders of funding the Loans bearing interest at the Replacement Rate.  In connection with the establishment and application of the Replacement Rate, this Agreement and the other Loan Documents shall be amended solely with the consent of the Administrative Agent and the Borrower, as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 5.2.(ii).  Notwithstanding anything to the contrary in this Agreement or the other Loan Documents (including, without limitation, Section 13.7.), such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the delivery of such amendment to the Lenders, written notices from such Lenders that in the aggregate constitute Requisite Lenders, with each such notice stating that such Lender objects to such amendment (which such notice shall note with specificity the particular provisions of the amendment to which such Lender objects).  To the extent the Replacement Rate is approved by the Administrative Agent in connection with this clause (ii), the Replacement Rate shall be applied in a manner consistent with market practice.

 

(f)            Section 7.1.(n) of the Existing Term Loan Agreement is hereby amended to insert the following new sentence at the end thereof:

 

As of the Sixth Amendment Effective Date, the Borrower is not and will not be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans.

 

(g)           Section 9.4. of the Existing Term Loan Agreement is hereby amended to delete the “and” appearing at the end of clause (r) therein, delete the period (“.”) appearing at the end of clause (s) therein and insert “; and” in substitution therefor, and insert the following new Section 9.4.(t) after Section 9.4.(s) appearing therein:

 

(t)            From and after the Investment Grade Pricing Effective Date, promptly, upon any change in the Parent Guarantor’s or the Borrower’s Credit Rating, a certificate stating that such Credit Rating has changed and the new Credit Rating that is in effect.

 

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(h)           Article XII. of the Existing Term Loan Agreement is hereby amended to insert the following new Sections 12.11. and 12.12. immediately after Section 12.10. appearing therein:

 

Section 12.11.                      Rates.

 

The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR”.

 

Section 12.12.                      Additional ERISA Matters.

 

(a)         Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, that, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:

 

(i)      such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans;

 

(ii)     the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans and this Agreement;

 

(iii)    (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans and this Agreement; or

 

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(iv)    such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

(b)         In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, that, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that:

 

(i)      none of the Administrative Agent or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto);

 

(ii)     the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E);

 

(iii)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations);

 

(iv)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans and this Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder; and

 

(v)     no fee or other compensation is being paid directly to the Administrative Agent or any Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans or this Agreement.

 

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(c)         The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans and this Agreement, (ii) may recognize a gain if it extended the Loans for an amount less than the amount being paid for an interest in the Loans by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

(i)            Section 13.7.(b)(ii) of the Existing Term Loan Agreement is hereby amended and restated in its entirety as follows:

 

(ii)           reduce the principal of, or interest rates that have accrued or that will be charged (subject to the last sentence of Section 13.7.(f)) on the outstanding principal amount of, the Loan or other Obligations (other than a waiver of default interest and changes in calculation of the Leverage Ratio that may indirectly affect pricing); provided, however, that only the written consent of the Requisite Lenders shall be required (x) for the waiver of interest payable at the Post-Default Rate, retraction of the imposition of interest at the Post-Default Rate and amendment of the definition of “Post-Default Rate” and (y) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

 

(j)            Section 13.7.(f) of the Existing Term Loan Agreement is hereby amended to insert the following sentence at the end thereof:

 

Notwithstanding anything to the contrary in this Section 13.7., the Administrative Agent and the Borrower may, without the consent of any Lender, (x) enter into amendments or modifications to this Agreement or any of the other Loan Documents or (y) enter into additional Loan Documents, in each case, as the Administrative Agent reasonably deems appropriate in order to implement any Replacement Rate or otherwise effectuate the terms of Section 5.2.(ii) in accordance with the terms of Section 5.2.(ii).

 

(k)           Schedule I of the Existing Term Loan Agreement is hereby amended and restated in its entirety as set forth on Annex II hereto.

 

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3.             Conditions to Effectiveness. The effectiveness of this Amendment is subject to the satisfaction or waiver of the following conditions precedent:

 

(a)           The Administrative Agent shall have received:

 

(i)            counterparts of this Amendment duly executed and delivered by the Borrower and the other Loan Parties, the Administrative Agent, each New Lender, each Departing Lender and each Lender;

 

(ii)           an opinion of Hogan Lovells LLP, counsel to the Borrower and the other Loan Parties, addressed to the Administrative Agent and the Lenders and in form and substance reasonably satisfactory to the Administrative Agent;

 

(iii)          the certificate or articles of incorporation or formation, articles of organization, certificate of limited partnership or other comparable organizational document (if any) of each Loan Party certified as of a date not earlier than fifteen (15) days prior to the date hereof by the Secretary of State of the state of formation of such Loan Party (except that, if any such document relating to any Subsidiary Guarantor delivered to the Administrative Agent pursuant to the Existing Term Loan Agreement has not been modified or amended since the effective date (the “Fifth Amendment Effective Date”) of the Fifth Amendment to Term Loan Agreement, dated as of August 31, 2017, and remains in full force and effect, a certificate of the Secretary or Assistant Secretary (or other individual performing similar functions) of such Subsidiary Guarantor so stating may be delivered in lieu of delivery of a current certified copy of such document);

 

(iv)          a certificate of good standing (or certificate of similar meaning) with respect to each of the Parent Guarantor and the Borrower issued as of a date not earlier than fifteen (15) days prior to the date hereof by the Secretary of State of the state of formation of each such Loan Party and certificates of qualification to transact business or other comparable certificates issued as of a recent date by each Secretary of State (and any state department of taxation, as applicable) of each state in which such Loan Party is required to be so qualified and where failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

 

(v)           a certificate of incumbency signed by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party with respect to each of the officers of such Loan Party authorized to execute and deliver this Amendment;

 

(vi)          copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party of (A) the by-laws of such Loan Party, if a corporation, the operating

 

13

 

agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity (except that, if any such document delivered to the Administrative Agent pursuant to the Existing Term Loan Agreement has not been modified or amended since the Fifth Amendment Effective Date and remains in full force and effect, a certificate so stating may be delivered in lieu of delivery of another copy of such document) and (B) all corporate, partnership, member or other necessary action taken by such Loan Party to authorize the execution, delivery and performance of the Loan Documents to which it is a party;

 

(vii)         a certificate of a Responsible Officer of the Parent Guarantor or the Borrower certifying as to the conditions set forth in Section 6.2.(a), (b) and (d) of the Amended Term Loan Agreement on the date hereof and after giving effect to this Amendment and the transactions contemplated hereby;

 

(viii)        a Compliance Certificate dated as of the date hereof and calculated on a pro forma basis after giving effect to this Amendment for the Parent Guarantor’s fiscal quarter ending December 31, 2017 signed by the chief executive officer or chief financial officer of the Parent Guarantor;

 

(ix)          all fees and other amounts due and payable on or prior to the date hereof, including reimbursement or payment of all reasonable and documented out-of-pocket expenses (including fees and reasonable and documented out-of-pocket expenses of counsel for the Administrative Agent) required to be reimbursed or paid by the Borrower in connection with this Amendment; and

 

(x)           a copy of a duly executed amendment to the Revolving Credit Agreement, consistent with the modifications contemplated hereby.

 

(b)           In the good faith and reasonable judgment of the Administrative Agent:

 

(i)            there shall not have occurred or become known to the Administrative Agent or any of the Lenders any event, condition, situation or status since the date of the information contained in the financial and business projections, budgets, pro forma data and forecasts concerning the Borrower and its Subsidiaries most recently delivered to the Administrative Agent and the Lenders prior to the date hereof that has had or could reasonably be expected to result in a Material Adverse Effect;

 

(ii)           no litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding shall be pending or threatened in writing which could reasonably be expected to (A) result in a Material

 

14

 

Adverse Effect or (B) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect, the ability of the Borrower or any other Loan Party to fulfill its obligations under this Amendment and the Loan Documents to which it is a party;

 

(iii)          the Borrower and the other Loan Parties shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any Applicable Law or (B) any material agreement, document or instrument to which any Loan Party is a party or by which any of them or their respective properties is bound; and

 

(iv)          the Borrower and each other Loan Party shall have provided all information requested by the Administrative Agent and each Lender in order to comply with applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act.

 

The Administrative Agent shall notify in writing the Borrower and the Lenders of the effectiveness of this Amendment, and such notice shall be conclusive and binding.

 

4.             Representations and Warranties.  The Borrower and the Parent Guarantor each hereby certifies that: (a) no Default or Event of Default exists as of the date hereof or would exist immediately after giving effect to this Amendment; (b) the representations and warranties made or deemed made by the Borrower or any other Loan Party in any Loan Document to which such Loan Party is a party are true and correct in all material respects (unless any such representation and warranty is qualified by materiality, in which event such representation and warranty is true and correct in all respects) on and as of the date hereof, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and correct in all material respects (unless any such representation and warranty is qualified by materiality, in which event such representation and warranty was true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances permitted under the Loan Documents; (c) no consent, approval, order or authorization of, or registration or filing with, any third party (other than any required filing with the SEC, which the Borrower agrees to file in a timely manner or filings or recordations required in connection with the perfection of any Lien on the Collateral in favor of the Administrative Agent) is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained; and (d) this Amendment has been duly authorized, executed and delivered so that it constitutes the legal, valid and binding obligation of the Borrower and the Parent Guarantor, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations contained herein and as may be limited by equitable principles generally.  The Borrower and the Parent Guarantor each confirms that the Obligations

 

15

 

remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment.  Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any default or Event of Default under any Loan Document, or a waiver or release of any of the Lenders’ or the Administrative Agent’s rights and remedies (all of which are hereby reserved).

 

5.             Ratification.  Without in any way establishing a course of dealing by the Administrative Agent or any Lender, the Borrower, the Parent Guarantor and each Subsidiary Guarantor each hereby reaffirms and confirms its obligations under the Amended Term Loan Agreement, the Guaranty (solely with respect to the Parent Guarantor and the Subsidiary Guarantors) and the other Loan Documents to which it is a party and each and every such Loan Document executed by the undersigned in connection with the Existing Term Loan Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.  This Amendment is not intended to and shall not constitute a novation.  All references to the Existing Term Loan Agreement contained in the above-referenced documents shall be a reference to the Amended Term Loan Agreement and as the same may from time to time hereafter be amended, restated, supplemented or otherwise modified.

 

6.             GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

7.             Counterparts.  To facilitate execution, this Amendment and any amendments, waivers, consents or supplements may be executed in any number of counterparts as may be convenient or required.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart.  All counterparts shall collectively constitute a single document.  It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.

 

8.             Headings.  The headings of this Amendment are provided for convenience of reference only and shall not affect its construction or interpretation.

 

9.             Miscellaneous.  This Amendment shall constitute a Loan Document under the Amended Term Loan Agreement.  This Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.  Any determination that any provision of this Amendment or any application hereof is invalid, illegal, or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality, or enforceability of any other provisions of this Amendment.  Each of the Borrower and the Parent Guarantor represents and warrants that it has consulted with independent legal counsel of its selection in connection herewith and is not relying

 

16

 

on any representations or warranties of the Administrative Agent or its counsel in entering into this Amendment.

 

10.          Departing Lenders.  Certain Lenders have agreed that they shall no longer constitute Lenders under the Existing Term Loan Agreement as of the date hereof (each, a “Departing Lender”).  Each Lender that executes and delivers a signature page hereto that identifies it as a Departing Lender shall constitute a Departing Lender and, as of the date hereof, each applicable Departing Lender shall not be a Lender under the Amended Term Loan Agreement.  No Departing Lender shall have any rights, duties or obligations under the Amended Term Loan Agreement.  All amounts owing to a Departing Lender, including all accrued and unpaid interest and fees but excluding any outstanding Loans owed to such Departing Lender (which Loans shall be assigned and reallocated among the remaining Lenders as set forth below), shall be paid by the Borrower to such Departing Lender concurrently with payment of such amounts to the other applicable Lenders.  The consent of a Departing Lender is not required to give effect to the changes contemplated by this Amendment.  Each Departing Lender hereby assigns its Loans to the remaining Lenders as of the date hereof, and the Administrative Agent is hereby authorized to take such steps under the Amended Term Loan Agreement as reasonably required to give effect to the departure of the Departing Lenders, including, without limitation, reallocating outstanding obligations among the continuing Lenders ratably based on their respective Pro Rata Share of the Loans as set forth on Schedule I to the Amended Term Loan Agreement, and any related sales, assignments or other relevant actions in respect of each Departing Lender’s existing Loans.  The Borrower agrees with and consents to the foregoing.  For the avoidance of doubt, the term “Lender” excludes the Departing Lenders (except to the extent of any claim made by a Departing Lender pursuant to Sections 13.2. and 13.10. of the Amended Term Loan Agreement in its capacity as a “Lender” under the Existing Term Loan Agreement prior to such Lender becoming a Departing Lender).  Without limiting the foregoing, the parties hereto (including, without limitation, each Departing Lender) hereby agree that the consent of any Departing Lender shall be limited to the acknowledgements and agreements set forth in this Section 10 and shall not be required as a condition to the effectiveness of any other amendments, restatements, supplements or modifications to the Amended Term Loan Agreement or the Loan Documents.

 

REST OF PAGE INTENTIONALLY LEFT BLANK

 

17

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their authorized officers all as of the day and year first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
RLJ LODGING TRUST,   L.P.,
    
	
 
    	
a Delaware limited   partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
RLJ Lodging Trust,
    
	
 
    	
 
    	
a Maryland real estate   investment trust, its sole general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Ross H. Bierkan
    
	
 
    	
 
    	
Name: Ross H. Bierkan
    
	
 
    	
 
    	
Title: President and   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PARENT GUARANTOR:
    
	
 
    	
 
    
	
 
    	
RLJ LODGING TRUST,
    
	
 
    	
a Maryland real estate   investment trust
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ross H. Bierkan
    
	
 
    	
 
    	
Name: Ross H. Bierkan
    
	
 
    	
 
    	
Title: President and   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SUBSIDIARY GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RLJ III — C BUCKHEAD, INC.,
    
	
 
    	
a Texas corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ross H. Bierkan
    
	
 
    	
 
    	
Name: Ross H. Bierkan
    
	
 
    	
 
    	
Title: President and   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RLJ III — EM WEST PALM   BEACH, INC.,
    
	
 
    	
a Texas corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ross H. Bierkan
    
	
 
    	
 
    	
Name: Ross H. Bierkan
    
	
 
    	
 
    	
Title: President and   Treasurer
    

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
EACH OF THE REMAINING   SUBSIDIARY GUARANTORS LISTED ON ANNEX I HERETO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: RLJ LODGING TRUST,   L.P.,
    
	
 
    	
a Delaware limited   partnership, the direct or indirect holder of all controlling interests in   such Subsidiary Guarantor
    
	
 
    	
 
    
	
 
    	
By: RLJ LODGING TRUST,   a Maryland real estate investment trust, its sole general partner
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ross H. Bierkan
    
	
 
    	
 
    	
Name: Ross H. Bierkan
    
	
 
    	
 
    	
Title: President and   Chief Executive Officer
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
WELLS FARGO BANK,   NATIONAL ASSOCIATION, as Administrative Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark F. Monahan
    
	
 
    	
 
    	
Name: Mark F. Monahan
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION, as Syndication Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ William R. Lynch   III
    
	
 
    	
 
    	
Name: William R. Lynch   III
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION, as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara Heubner
    
	
 
    	
 
    	
Name: Barbara Heubner
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
COMPASS   BANK, an Alabama banking corporation, as a New Lender and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter E.   Rivadeneira
    
	
 
    	
 
    	
Name: Walter E.   Rivadeneira
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
BRANCH BANKING AND   TRUST COMPANY, as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Steve Whitcomb
    
	
 
    	
 
    	
Name: Steve Whitcomb
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
REGIONS BANK, as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ T. Barrett Vawter
    
	
 
    	
 
    	
Name: T. Barrett Vawter
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
 
    	
ROYAL BANK OF CANADA, as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Dan LePage
    
	
 
    	
 
    	
Name: Dan LePage
    
	
 
    	
 
    	
Title: Authorized   Signatory
    

 

[Signatures Continued on Next Page]

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

	
Accepted   to and Agreed:
    	
 
    
	
 
    	
 
    
	
The   undersigned is executing this signature page solely as a Departing   Lender in its acceptance of the termination of its commitments and   obligations under the Existing Term Loan Agreement as a “Lender” thereunder   and not as a Lender party hereto. The undersigned hereby acknowledges that   the Existing Term Loan Agreement shall be amended by this Amendment to which   this signature page is attached and the undersigned shall not constitute   a party thereto as a Lender other than for purposes of effectuating the   amendment of the Existing Term Loan Agreement.
    	
 
    
	
 
    	
 
    
	
RAYMOND   JAMES BANK, N.A., as a
    	
 
    
	
Departing   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Matthew Stein
    	
 
    
	
Name: Matthew Stein
    	
 
    
	
Title: Vice President
    	
 
    

 

[RLJ — Sixth Amendment to Term Loan Agreement]

 

 

ANNEX I

 

SUBSIDIARY GUARANTORS

 

	
 
    	
 
    	
Subsidiary Guarantor
    
	
1.
    	
 
    	
RLJ C Charleston HD, LLC
    
	
2.
    	
 
    	
RLJ C HOUSTON HUMBLE, LP
    
	
3.
    	
 
    	
RLJ C NY Upper Eastside, LLC
    
	
4.
    	
 
    	
RLJ C PORTLAND DT, LLC
    
	
5.
    	
 
    	
RLJ C WAIKIKI, LLC
    
	
6.
    	
 
    	
RLJ CABANA MIAMI BEACH, LLC
    
	
7.
    	
 
    	
RLJ DBT KEY WEST, LLC
    
	
8.
    	
 
    	
RLJ EM IRVINE, LP
    
	
9.
    	
 
    	
RLJ EM Waltham, LLC
    
	
10.
    	
 
    	
RLJ HGN Emeryville, LP
    
	
11.
    	
 
    	
RLJ HP Fremont, LP
    
	
12.
    	
 
    	
RLJ HP Madison DT, LLC
    
	
13.
    	
 
    	
RLJ HY ATLANTA MIDTOWN, LLC
    
	
14.
    	
 
    	
RLJ HyH Charlotte, LLC
    
	
15.
    	
 
    	
RLJ HyH Cypress, LP
    
	
16.
    	
 
    	
RLJ HyH Emeryville, LP
    
	
17.
    	
 
    	
RLJ HyH San Diego, LP
    
	
18.
    	
 
    	
RLJ HyH San Jose, LP
    
	
19.
    	
 
    	
RLJ HyH San Ramon, LP
    
	
20.
    	
 
    	
RLJ HyH Santa Clara, LP
    
	
21.
    	
 
    	
RLJ HyH Woodlands, LP
    
	
22.
    	
 
    	
RLJ II — AUSTIN SOUTH HOTELS, LP
    
	
23.
    	
 
    	
RLJ II — C AUSTIN AIR, LP
    
	
24.
    	
 
    	
RLJ II — C AUSTIN NW, LP
    
	
25.
    	
 
    	
RLJ II — C AUSTIN S, LP
    
	
26.
    	
 
    	
RLJ II — C CHICAGO MAG MILE, LLC
    
	
27.
    	
 
    	
RLJ II — C GOLDEN, LLC
    
	
28.
    	
 
    	
RLJ II — C HAMMOND, LLC
    
	
29.
    	
 
    	
RLJ II — C LONGMONT, LLC
    
	
30.
    	
 
    	
RLJ II — C LOUISVILLE CO, LLC
    
	
31.
    	
 
    	
RLJ II — C LOUISVILLE NE KY, LLC
    
	
32.
    	
 
    	
RLJ II — C MIDWAY, LLC
    
	
33.
    	
 
    	
RLJ II — C MIRAMAR, LLC
    

 

Annex I-1

 

 

	
 
    	
 
    	
Subsidiary Guarantor
    
	
34.
    	
 
    	
RLJ II — C MISHAWAKA, LLC
    
	
35.
    	
 
    	
RLJ II — C SALT LAKE, LLC
    
	
36.
    	
 
    	
RLJ II — C SUGARLAND, LP
    
	
37.
    	
 
    	
RLJ II — F AUSTIN S, LP
    
	
38.
    	
 
    	
RLJ II — F CHERRY CREEK, LLC
    
	
39.
    	
 
    	
RLJ II — F HAMMOND, LLC
    
	
40.
    	
 
    	
RLJ II — F KEY WEST, LLC
    
	
41.
    	
 
    	
RLJ II — F MIDWAY, LLC
    
	
42.
    	
 
    	
RLJ II — F SAN ANTONIO DT, LP
    
	
43.
    	
 
    	
RLJ II — HA CLEARWATER, LLC
    
	
44.
    	
 
    	
RLJ II — HA FORT WALTON BEACH, LLC
    
	
45.
    	
 
    	
RLJ II — HA GARDEN CITY, LLC
    
	
46.
    	
 
    	
RLJ II — HA MIDWAY, LLC
    
	
47.
    	
 
    	
RLJ II — HG MIDWAY, LLC
    
	
48.
    	
 
    	
RLJ II — HOLX MIDWAY, LLC
    
	
49.
    	
 
    	
RLJ II — INDY CAPITOL HOTELS, LLC
    
	
50.
    	
 
    	
RLJ II — MH DENVER S, LLC
    
	
51.
    	
 
    	
RLJ II — MH MIDWAY, LLC
    
	
52.
    	
 
    	
RLJ II — R AUSTIN NW, LP
    
	
53.
    	
 
    	
RLJ II — R AUSTIN PARMER, LP
    
	
54.
    	
 
    	
RLJ II — R AUSTIN S, LP
    
	
55.
    	
 
    	
RLJ II — R FISHERS, LLC
    
	
56.
    	
 
    	
RLJ II — R GOLDEN, LLC
    
	
57.
    	
 
    	
RLJ II — R HAMMOND, LLC
    
	
58.
    	
 
    	
RLJ II — R HOUSTON GALLERIA, LP
    
	
59.
    	
 
    	
RLJ II — R LONGMONT, LLC
    
	
60.
    	
 
    	
RLJ II — R LOUISVILLE CO, LLC
    
	
61.
    	
 
    	
RLJ II — R LOUISVILLE DT KY, LLC
    
	
62.
    	
 
    	
RLJ II — R LOUISVILLE NE KY, LLC
    
	
63.
    	
 
    	
RLJ II — R MERRILLVILLE, LLC
    
	
64.
    	
 
    	
RLJ II — R MIRAMAR, LLC
    
	
65.
    	
 
    	
RLJ II — R NOVI, LLC
    
	
66.
    	
 
    	
RLJ II — R PLANTATION, LLC
    
	
67.
    	
 
    	
RLJ II — R SALT LAKE CITY, LLC
    
	
68.
    	
 
    	
RLJ II — R SAN ANTONIO, LP
    
	
69.
    	
 
    	
RLJ II — R SUGARLAND, LP
    
	
70.
    	
 
    	
RLJ II — R WARRENVILLE, LLC
    

 

Annex I-2

 

 

	
 
    	
 
    	
Subsidiary Guarantor
    
	
71.
    	
 
    	
RLJ II — RH BOULDER, LLC
    
	
72.
    	
 
    	
RLJ II — RH PLANTATION, LLC
    
	
73.
    	
 
    	
RLJ II — S AUSTIN N, LP
    
	
74.
    	
 
    	
RLJ II — S LONGMONT, LLC
    
	
75.
    	
 
    	
RLJ II — S LOUISVILLE KY, LLC
    
	
76.
    	
 
    	
RLJ II — S MISHAWAKA, LLC
    
	
77.
    	
 
    	
RLJ II — S WESTMINSTER, LLC
    
	
78.
    	
 
    	
RLJ II — SLE MIDWAY, LLC
    
	
79.
    	
 
    	
RLJ III — DBT Columbia, LLC
    
	
80.
    	
 
    	
RLJ III — DBT Metropolitan Manhattan, LP
    
	
81.
    	
 
    	
RLJ III — EM Fort Myers, LLC
    
	
82.
    	
 
    	
RLJ III — EM Tampa DT, LLC
    
	
83.
    	
 
    	
RLJ III — F Washington DC, LLC
    
	
84.
    	
 
    	
RLJ III — HA Denver Tech Center, LLC
    
	
85.
    	
 
    	
RLJ III — HA Houston Galleria, LP
    
	
86.
    	
 
    	
RLJ III — HA West Palm Beach Airport, LLC
    
	
87.
    	
 
    	
RLJ III — HG New Orleans Convention Center, LLC
    
	
88.
    	
 
    	
RLJ III — HG West Palm Beach Airport, LLC
    
	
89.
    	
 
    	
RLJ III — HGN Durham, LLC
    
	
90.
    	
 
    	
RLJ III — HGN Hollywood, LP
    
	
91.
    	
 
    	
RLJ III — HGN Pittsburgh, LP
    
	
92.
    	
 
    	
RLJ III — R Columbia, LLC
    
	
93.
    	
 
    	
RLJ III — R National Harbor, LLC
    
	
94.
    	
 
    	
RLJ III - R Silver Spring, LLC
    
	
95.
    	
 
    	
RLJ III — RH Pittsburgh, LP
    
	
96.
    	
 
    	
RLJ III — St. Charles Ave Hotel, LLC
    
	
97.
    	
 
    	
RLJ R Atlanta Midtown, LLC
    
	
98.
    	
 
    	
RLJ R HOUSTON HUMBLE, LP
    
	
99.
    	
 
    	
RLJ S Hillsboro, LLC
    
	
100.
    	
 
    	
RLJ C SAN FRANCISCO, LP
    
	
101.
    	
 
    	
RLJ HS SEATTLE LYNWOOD, LLC
    
	
102.
    	
 
    	
RLJ HP WASHINGTON DC, LLC
    
	
103.
    	
 
    	
RLJ II — R OAK BROOK, LLC
    
	
104.
    	
 
    	
RLJ S HOUSTON HUMBLE, LP
    
	
105.
    	
 
    	
RLJ C HOUSTON HUMBLE GENERAL PARTNER, LLC
    
	
106.
    	
 
    	
RLJ EM IRVINE GENERAL PARTNER, LLC
    
	
107.
    	
 
    	
RLJ HP FREMONT GENERAL PARTNER, LLC
    
	
108.
    	
 
    	
RLJ HYH CYPRESS GENERAL PARTNER, LLC
    
	
109.
    	
 
    	
RLJ HYH EMERYVILLE GENERAL PARTNER, LLC
    

 

Annex I-3

 

 

	
 
    	
 
    	
Subsidiary Guarantor
    
	
110.
    	
 
    	
RLJ HYH SAN DIEGO GENERAL PARTNER, LLC
    
	
111.
    	
 
    	
RLJ HYH SAN JOSE GENERAL PARTNER, LLC
    
	
112.
    	
 
    	
RLJ HYH SAN RAMON GENERAL PARTNER, LLC
    
	
113.
    	
 
    	
RLJ HYH SANTA CLARA GENERAL PARTNER, LLC
    
	
114.
    	
 
    	
RLJ HYH WOODLANDS GENERAL PARTNER, LLC
    
	
115.
    	
 
    	
RLJ II — AUSTIN SOUTH HOTELS GENERAL PARTNER, LLC
    
	
116.
    	
 
    	
RLJ II — C AUSTIN AIR GENERAL PARTNER, LLC
    
	
117.
    	
 
    	
RLJ II — C AUSTIN NW GENERAL PARTNER, LLC
    
	
118.
    	
 
    	
RLJ II — C SUGARLAND GENERAL PARTNER, LLC
    
	
119.
    	
 
    	
RLJ II — F AUSTIN S GENERAL PARTNER, LLC
    
	
120.
    	
 
    	
RLJ II SENIOR MEZZANINE BORROWER, LLC
    
	
121.
    	
 
    	
RLJ II JUNIOR MEZZANINE BORROWER, LLC
    
	
122.
    	
 
    	
RLJ II — F SAN ANTONIO DT GENERAL PARTNER, LLC
    
	
123.
    	
 
    	
RLJ II — R AUSTIN NW GENERAL PARTNER, LLC
    
	
124.
    	
 
    	
RLJ II — R AUSTIN S GENERAL PARTNER, LLC
    
	
125.
    	
 
    	
RLJ II — R HOUSTON GALLERIA GENERAL PARTNER, LLC
    
	
126.
    	
 
    	
RLJ II — R SAN ANTONIO GENERAL PARTNER, LLC
    
	
127.
    	
 
    	
RLJ II — R SUGARLAND GENERAL PARTNER, LLC
    
	
128.
    	
 
    	
RLJ III — C BUCKHEAD PARENT, LLC
    
	
129.
    	
 
    	
RLJ III — EM WEST PALM BEACH PARENT, LLC
    
	
130.
    	
 
    	
RLJ III — HA HOUSTON GALLERIA GENERAL PARTNER, LLC
    
	
131.
    	
 
    	
RLJ III — HGN HOLLYWOOD GENERAL PARTNER, LLC
    
	
132.
    	
 
    	
RLJ III — RH PITTSBURGH GENERAL PARTNER, LLC
    
	
133.
    	
 
    	
RLJ R HOUSTON HUMBLE GENERAL PARTNER, LLC
    
	
134.
    	
 
    	
RLJ II — C AUSTIN S GENERAL PARTNER, LLC
    
	
135.
    	
 
    	
RLJ II — R AUSTIN PARMER GENERAL PARTNER, LLC
    
	
136.
    	
 
    	
RLJ II — S AUSTIN N GENERAL PARTNER, LLC
    
	
137.
    	
 
    	
RLJ C SAN FRANCISCO GENERAL PARTNER, LLC
    
	
138.
    	
 
    	
RLJ S HOUSTON HUMBLE GENERAL PARTNER, LLC
    
	
139.
    	
 
    	
RLJ III — DBT MET MEZZ BORROWER, LP
    
	
140.
    	
 
    	
RLJ III — DBT METROPOLITAN MANHATTAN GP, LLC
    
	
141.
    	
 
    	
RLJ III — DBT MET MEZZ BORROWER GP, LLC
    
	
142.
    	
 
    	
DBT MET HOTEL VENTURE, LP
    
	
143.
    	
 
    	
DBT MET HOTEL VENTURE GP, LLC
    
	
144.
    	
 
    	
RLJ III — DBT MET HOTEL PARTNER, LLC
    
	
145.
    	
 
    	
RLJ HGN EMERYVILLE GENERAL PARTNER, LLC
    
	
146.
    	
 
    	
RLJ III — HGN PITTSBURGH GENERAL PARTNER, LLC
    

 

Annex I-4

 

 

ANNEX II

 

SCHEDULE I
  LENDERS AND LOANS

 

	
Lenders
    	
 
    	
Loan
    	
 
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
41,250,000
    	
 
    
	
PNC Bank, National Association
    	
 
    	
$
    	
41,250,000
    	
 
    
	
Capital One, National Association
    	
 
    	
$
    	
41,250,000
    	
 
    
	
Compass Bank, an Alabama Banking Corporation
    	
 
    	
$
    	
41,250,000
    	
 
    
	
Regions Bank
    	
 
    	
$
    	
30,000,000
    	
 
    
	
Royal Bank of Canada
    	
 
    	
$
    	
20,000,000
    	
 
    
	
Branch Banking and Trust Company
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Total Loans
    	
 
    	
$
    	
225,000,000
    	
 
    
							

 

Annex II-1ufi-ex101_268.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 3rd day of November, 2017 (the “Effective Date”), is entered into by and between Mark McNeill (“Executive”) and Unifi, Inc. (the “Employer” and, collectively with its successors, subsidiaries and affiliated companies, the “Company”).

WHEREAS, Executive has heretofore been employed by a subsidiary of the Employer, up to and through the Effective Date, and, understanding and accepting the terms and conditions of Executive’s employment as set forth herein, Executive desires to accept employment with the Employer under the terms and restrictions as set forth herein; and 

WHEREAS, the Employer desires to retain the services of Executive on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1.Employment; Previous Agreements or Arrangements; Release of Claims.  Subject to the terms and conditions of this Agreement, the Employer agrees to employ Executive, and Executive agrees to be employed by the Employer, as the Effective Date, pursuant to the terms of this Agreement.  This Agreement supersedes and replaces in its entirety any employment agreement, oral or in writing, or comparable arrangements between the Employer or any subsidiary of the Employer and Executive in effect prior to the Effective Date, and any such agreements or arrangements shall be null and void.  Executive hereby relinquishes and unconditionally forfeits any claim or entitlement to any severance pay or other post-termination benefits pursuant to any agreement or arrangement other than as contemplated herein.

2.Position.  During the period of his employment hereunder, Executive agrees to serve the Company, and the Employer shall employ Executive, as Executive Vice President of Global Innovation.  If appointed or elected, Executive also shall serve as an officer, director and/or manager of one or more of the Employer’s subsidiaries and affiliated companies in such capacity or capacities as may be determined from time to time.

3.At-Will Employment and Duties.

(a)At-Will Employment.  Executive and the Employer agree that Executive’s employment by the Employer hereunder will be at-will (as defined under applicable law), and may be terminated at any time, for any reason, at the option of either party, subject to the provisions of this Agreement.

(b)Duties.  During the period of his employment hereunder and except for illness, reasonable vacation periods, and reasonable leaves of absence, Executive shall in good faith devote all of his business time, attention, skill and efforts to the business and affairs of the Company.  Executive’s duties shall be performed under the supervision of the Employer’s Chief Executive Officer.  The foregoing shall not be construed as prohibiting Executive from serving on corporate, civic or charitable boards or committees or making personal investments, so long as such activities do not materially interfere with the performance of Executive’s obligations to the Company as set forth herein.

 

 

4.Salary; Bonus; Reimbursement of Expenses; Other Benefits.

(a)Salary.  In consideration of the services to be rendered by Executive pursuant to this Agreement, the Employer shall pay, or cause to be paid, to Executive a base salary (the “Base Salary”) as established by or pursuant to authority granted by the Employer’s board of directors (the “Board”).  Executive’s initial Base Salary shall be $325,000.00 per annum.  The Base Salary shall be reviewed annually by or pursuant to authority granted by the Board in connection with its annual review of executive compensation to determine if such Base Salary should be increased for the following year in recognition of services to the Company.  The Base Salary shall be payable at such intervals in conformity with the Employer’s prevailing practice as such practice shall be established or modified from time to time.

(b)Bonuses; Additional Compensation.  Executive will be eligible to receive bonuses and to participate in compensation plans of the Employer in accordance with any plan or decision that the Board, or any committee or other person authorized by the Board, may in its sole discretion determine from time to time.  For the Employer’s 2018 fiscal year, Executive’s bonus will be equal to 30%, 50% and 100% of Base Salary for threshold, target and maximum levels of performance, respectively, and will be pro-rated for the period of Executive’s employment with the Employer during the fiscal year.

(c)Reimbursement of Expenses.  Executive shall be paid or reimbursed by the Employer, in accordance with and subject to the Employer’s general expense reimbursement policies and practices, for all reasonable travel and other business expenses incurred by Executive in performing his obligations under this Agreement.

(d)Other Benefits.  During the period of employment hereunder, Executive shall be entitled to participate in all other benefits of employment generally available to other executives of the Employer and those benefits for which such persons are or shall become eligible, when and as he becomes eligible therefore.  All outstanding unvested equity awards issued to Executive by the Employer shall vest in full upon a “Change of Control” (as such term is defined in the Unifi, Inc. 2013 Incentive Compensation Plan).

5.Termination of Employment.

(a)Termination as a Result of Executive’s Death or Disability.  Executive’s employment hereunder shall terminate automatically upon Executive’s death and may be terminated by the Employer upon Executive’s “Disability” (as hereinafter defined).  If Executive’s employment hereunder is terminated by reason of Executive’s death or Disability, Executive’s (or Executive’s estate’s) right to benefits under this Agreement will terminate as of the date of such termination and all of the Employer’s obligations hereunder shall immediately cease and terminate, except that (i) Executive or Executive’s estate, as the case may be, will be entitled to receive accrued Base Salary and benefits through the date of termination and (ii) all outstanding unvested equity awards issued to Executive by the Employer shall vest in full upon such termination of employment.  As used herein, Executive’s “Disability” shall have the meaning set forth in any long-term disability plan in which Executive participates, and in the absence thereof shall mean the determination in good faith by the Board that, due to physical or mental illness, Executive shall have failed to perform his duties on a full-time basis hereunder for one hundred eighty (180) consecutive days and shall not have returned to the performance of his duties hereunder on a full-time basis before the end of such period.  If Disability has occurred, termination of Executive’s employment hereunder shall occur within thirty (30) days after written notice of such termination is given (which notice may be given before the end of the one hundred eighty (180) day period described above so as to cause termination of employment to occur as early as the last day of such period).

2

 

 

(b)Termination by Executive for Good Reason or by the Employer other than as a Result of Executive’s Death or Disability or for Cause.

(i)Executive may terminate Executive’s employment hereunder for “Good Reason” (as hereinafter defined), if Good Reason exists, upon at least five (5) days prior written notice to the Employer, and the Employer may terminate Executive’s employment hereunder for any reason or for no reason, other than as a result of Executive’s death or Disability or for Cause (as hereinafter defined), in each case with the consequences set forth in this Section 5(b).

(ii)If Executive’s employment hereunder is terminated by Executive for Good Reason or by the Employer other than by reason of Executive’s death or Disability and other than for Cause, then, subject to Executive entering into and not revoking a release of claims in favor of the Employer and the Company pursuant to Section 5(e) below, and Executive fully complying with the covenants set forth in Section 6, Executive shall be entitled to the following benefits:

(1)Cash severance payments equal in the aggregate to twelve (12) months of Executive’s annual Base Salary at the time of termination, payable in twelve (12) equal monthly installments beginning at the end of the first full month following termination of employment.

(2)In the event Executive elects COBRA continuation coverage for the level of medical coverage he had in force at the time of his termination, the Employer shall reimburse Executive for the monthly cost of such continuation coverage until the earlier of (A) the date Executive ceases to maintain such continuation coverage in effect or (B) twelve (12) months from the termination of Executive’s employment.  

(iii)For purposes of this Agreement, “Good Reason” shall mean: (1) a material reduction (without Executive’s express written consent) in Executive’s title or responsibilities; (2) the requirement that Executive relocate to an employment location that is more than fifty (50) miles from his employment location on the Effective Date; (3) the Employer’s material breach (without Executive’s express written consent) of Sections 2 or 4 of this Agreement; or (4) following a Change of Control, Executive not being an officer of the ultimate surviving parent business entity resulting from such Change of Control transaction, in a substantially similar role to that performed by Executive for the Employer prior to such Change of Control, for a period of at least twelve (12) months thereafter; provided, that with respect to the foregoing clauses (1), (2) and (3), Executive has provided the Employer written notice of the event or circumstance purporting to constitute Good Reason within thirty (30) days of the event or circumstance occurring and the Employer has not cured such event or circumstance within fifteen (15) days following the date Executive provides such notice.  If the Employer thereafter intentionally repeats the breach it previously cured, such breach shall no longer be deemed curable.

(c)Termination by Executive other than for Good Reason.  Executive may terminate his employment with the Employer other than for Good Reason upon thirty (30) days prior written notice to the Employer, after which the Employer shall have no further obligation hereunder to Executive, except for payment of accrued Base Salary and benefits through the termination date.  If Executive so notifies the Employer of such termination, the Employer shall have the right to accelerate the effective date of such termination to any date after the Employer’s receipt of such notice, but such acceleration will not be deemed to constitute a termination of Executive’s employment by the Employer without Cause, and the consequences of such termination will continue to be governed by this subsection.

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(d)Termination by the Employer for Cause.  The Employer may terminate Executive’s employment under this Agreement at any time for “Cause” (as hereinafter defined) whereupon the Employer shall have no further obligation hereunder to Executive, except for payment of amounts of Base Salary and benefits  accrued through the termination date.  For purposes of this Agreement, “Cause” shall mean: (i) the continued willful failure by Executive to substantially perform his duties to the Company, (ii) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company or (iii) Executive’s material breach of Sections 3, 6 or 7 of this Agreement; provided, that with respect to any breach that is curable by Executive, as determined by the Board in good faith, the Employer has provided Executive written notice of the material breach and Executive has not cured such breach, as determined by the Board in good faith, within fifteen (15) days following the date the Employer provides such notice.

(e)Waiver and Release.  In consideration for and as a condition to the payments and benefits provided and to be provided under Section 5(b)(ii) of this Agreement other than those provided under Section 9 (indemnification), Executive agrees that Executive will, within thirty (30) days after the termination of Executive’s employment hereunder, deliver to the Employer a fully executed release agreement substantially in a form then used by and agreeable to the Employer and which shall fully and irrevocably release and discharge the Company, its directors, officers, and employees from any and all claims, charges, complaints, liabilities of any kind, known or unknown, owed to Executive, other than any rights Executive may have under the terms of this Agreement that survive such termination of employment and other than any vested rights of Executive under any of the Company’s employee benefit plans or programs that, by their terms, survive or are unaffected by such termination of employment.

6.Certain Covenants by Executive.

(a)Confidential Information.  Executive acknowledges that in his employment hereunder he will occupy a position of trust and confidence.  Executive shall not, except in the course of the good faith performance of his duties hereunder or as required by applicable law, without limitation in time or until such information shall have become public other than by Executive’s unauthorized disclosure, disclose to others or use, whether directly or indirectly, any Confidential Information (as hereinafter defined) regarding the Company.  For purposes of this Agreement, “Confidential Information” shall mean information about the Company or its clients or customers that was learned by Executive in the course of his employment by the Employer, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information and client and customer lists and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information, but excludes information (i) which is in the public domain through no unauthorized act or omission of Executive; or (ii) which becomes available to Executive on a non-confidential basis from a source other than the Company without breach of such source’s confidentiality or non-disclosure obligations to the Company.  Executive agrees to deliver or return to the Employer, at the Employer’s request at any time or upon termination or expiration of his employment or as soon thereafter as possible, (i) all documents, computer tapes and disks, records, lists, data, drawings, prints, notes and written information (and all copies thereof) furnished by the Company or prepared by Executive during the term of his employment by the Employer and (ii) all notebooks and other data relating to research or experiments or other work conducted by Executive in the scope of such employment.  Upon the date of termination of Executive’s employment hereunder, Executive shall, as soon as possible but no later than two (2) days after the date of termination, surrender to the Employer all Confidential Information in Executive’s possession and return to the Employer all Company property in Executive’s possession or control, including but not limited to, all paper records and documents, computer disks and access cards and keys to any Company facilities.

(b)Non-Competition.  During the period of Executive’s employment hereunder and for a period of twelve (12) months after the date of termination of his employment, Executive shall not, 

4

 

 

directly or indirectly, in the “Restricted Territory” (as hereinafter defined), without the prior written consent of the Employer, provide consultative services or otherwise provide services to (whether as an employee or a consultant, with or without pay) or, own, manage, operate, join, control, participate in, or be connected with (as a shareholder, partner, or otherwise), any business, individual, partner, firm, corporation, or other entity that is then a competitor of the Company (each such competitor a “Competitor of the Company”); provided, however, that the “beneficial ownership” by Executive, either individually or as a member of a “group,” as such terms are used in Rule 13d of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of not more than five percent (5%) of the voting stock of any publicly held corporation shall not alone constitute a violation of this Agreement.  For purposes of this Agreement, “Restricted Territory” shall mean: (i) the State of North Carolina, (ii) the other contiguous states of the United States of America, and (iii) any other jurisdiction in which the Company is doing or does business during Executive’s employment hereunder.  Executive and the Employer acknowledge and agree that the business of the Company extends throughout the contiguous states of the United States of America and internationally.

(c)Non-Solicitation of Customers and Suppliers.  During the period of Executive’s employment hereunder and for a period of twelve (12) months after the date of termination of Executive’s employment hereunder, Executive shall not, directly or indirectly, influence or attempt to influence customers or suppliers of the Company to divert any of their business to any Competitor of the Company.

(d)Non-Solicitation of Employees.  Executive recognizes that he possesses and will possess Confidential Information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company.  Executive recognizes that the information he possesses and will possess about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining customers, and has been and will be acquired by him because of his business position with the Company.  Executive agrees that, during the period of Executive’s employment hereunder and for a period of twelve (12) months thereafter, he will not, directly or indirectly, solicit, recruit, induce or encourage or attempt to solicit, recruit, induce, or encourage any employee of the Company (i) for the purpose of being employed by him or by any Competitor of the Company on whose behalf he is acting as an agent, representative or employee or (ii) to terminate his or her employment or any other relationship with the Company.  Executive also agrees that Executive will not convey any Confidential Information or trade secrets about other employees of the Company to any other person.

(e)Post-Termination Covenants by Executive.

(i)Upon the termination of Executive’s employment hereunder, regardless of (A) the date, cause, or manner of the Termination of Employment, (B) whether the Termination of Employment is with or without Cause or is a result of Executive’s resignation, or (C) whether the Employer provides severance benefits to Executive under this Agreement (the “Termination of Employment”), Executive shall resign and does resign (1) as a member of the Board if serving on the Board at that time and (2) from all positions as an officer, director or manager of the Company and from any other positions with the Company, with all such resignations to be effective upon the date of the Termination of Employment.

(ii)From and after the Termination of Employment, Executive agrees not to make any statements to the Company’s employees, customers, vendors, or suppliers or to any public or media source, whether written or oral, regarding Executive’s employment hereunder or termination from the Employer’s employment, except as may be approved in writing by an executive officer of the Employer in advance.  Executive further agrees not to make any statement (including to any media source, or to the Company’s suppliers, customers or employees) or take 

5

 

 

any action that would disrupt, impair, embarrass, harm or affect adversely the Company or any of the employees, officers, directors, or customers of the Company or place the Company or such individuals in any negative light.

(iii)From and after the Termination of Employment, Executive agrees to cooperate with and provide assistance to the Company and its legal counsel in connection with any litigation (including arbitration or administrative hearings) or investigation affecting the Company, in which, in the reasonable judgment of the Company’s counsel, Executive’s assistance or cooperation is needed.  Executive shall, when requested by the Company, provide testimony or other assistance and shall travel at the Company’s request in order to fulfill this obligation.  In connection with such litigation or investigation, the Company shall attempt to accommodate Executive’s schedule, shall reimburse Executive (unless prohibited by law) for any actual loss of wages in connection therewith, shall provide Executive with reasonable notice in advance of the times in which Executive’s cooperation or assistance is needed, and shall reimburse Executive for any reasonable expenses incurred in connection with such matters.

(f)Injunctive Relief.  It is expressly agreed that the Employer will or would suffer irreparable injury, for which a remedy in monetary damages alone would be inadequate, if Executive were to violate any of the provisions of this Section 6 and that the Employer would by reason of such violation be entitled to injunctive relief in a court of appropriate jurisdiction, and Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting Executive from so violating Section 6 of this Agreement, in addition to any and all damages or other remedies to which the Employer would be entitled at law or in equity.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other equitable or legal remedies for such breach or threatened breach, including the recovery of monetary damages from Executive.

(g)Executive’s Acknowledgement.  Executive acknowledges and agrees that (i) Executive is receiving additional compensation and benefits under this Agreement which serve as additional consideration for the covenants contained in this Agreement, (ii) the restrictive covenants in this Section 6 are reasonable in time, territory and scope, and in all other respects and (iii) should any part or provision of any covenant herein be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness, or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement.  The restrictive covenants contained herein shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Executive against the Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employer of these covenants.

(h)Protected Disclosures.  Pursuant to the Defend Trade Secrets Act of 2016 (8 U.S.C. § 1833(b)), Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, if Executive (i) files any document containing the trade secret under seal, and (ii) does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement, is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.  Notwithstanding any provision in any agreement between Executive and the Company, Executive may disclose any confidential or non-public information (i) to report possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the 

6

 

 

United States Congress and any agency Inspector General, or make other disclosures that are protected under the whistleblower provisions of federal law or regulation or (ii) as required by law or order by a court; provided, however, Executive agrees to notify the Company in advance if Executive is required to provide information or testimony in connection with any action brought by a non-governmental or non-regulatory person or entity.

 

(i)Survival of Provisions.  The obligations contained in this Section 6 shall survive the termination or expiration of Executive’s employment hereunder and shall be fully enforceable thereafter.

7.No Conflict.  Executive represents and warrants that Executive is not subject to any agreement, instrument, order, judgment or decree of any kind, or any other restrictive agreement of any character, which would prevent Executive from entering into this Agreement or would conflict with the performance of Executive’s duties pursuant to this Agreement.  Executive represents and warrants that Executive will not engage in any activity, which would conflict with the performance of Executive’s duties pursuant to this Agreement.

8.Notices.  Any notice, requests, demands and other communications to be given to a party in connection with this Agreement shall be in writing addressed to such party at such party’s “Notice Address,” which shall initially be as set forth below:

 

 

		
	
 If to the Company:
	
Unifi, Inc.

	
 
	
7201 West Friendly Avenue

	
 
	
Greensboro, North Carolina 27410

	
 
	
Attn:  Secretary

	
 
	
 

	
 If to Executive:
	
Mark McNeill

	
 
	
Most recent address reflected on

	
 
	
the Company’s payroll records

 

 

A party’s Notice Address may be changed or supplemented from time to time by such party by notice thereof to the other party as herein provided.  Any such notice shall be deemed effectively given to and received by a party on the first to occur of (a) the date on which such notice is actually delivered (whether by mail, courier, hand delivery, electronic or facsimile transmission or otherwise) to such party’s Notice Address and addressed to such party, if such delivery occurs on a business day, or if such delivery occurs on a day which is not a business day, then on the next business day after the date of such delivery, or (b) the date on which such notice is actually received by such party (or, in the case of a party that is not an individual, actually received by the individual designated in the Notice Address of such party).  For purposes of the preceding sentence, a “business day” is any day other than a Saturday, Sunday or U.S. federal public legal holiday.

9.Indemnification.

(a)General.  Subject to the limitations set forth in this Section 9, the Employer shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, Executive if Executive was or is made or is threatened to be made a party to or is otherwise involved in any pending, threatened or completed action, suit, arbitration, alternative dispute resolution proceeding, investigation, administrative hearing, or other proceeding, whether by or in the right of the Employer, any other Company, or any other person or entity, whether civil, criminal, administrative 

7

 

 

or investigative (a “Proceeding”) by reason of the fact that Executive is or was a director, officer, employee or agent of the Employer or is or was serving at the request of the Employer as a director, officer, member, employee or agent of any other Company or other enterprise, including service with respect to employee benefit plans, against all cost, expense, liability and loss (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by Executive or on Executive’s behalf in connection with any Proceeding and any appeal therefrom.  Executive’s rights under this Section 9 shall continue after Executive has ceased acting as a director, officer, member, employee or agent of a Company and shall inure to the benefit of the heirs, executors and administrators of Executive.  The Employer’s obligation to provide the indemnification set forth in this Section 9(a) shall be subject to Executive having acted in good faith and in a manner Executive reasonably believed to be in or not opposed to the best interests of any Company, and, with respect to any criminal action or proceeding, having had no reasonable cause to believe Executive’s conduct was unlawful.  The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Executive did not act in good faith and in a manner which Executive reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Executive’s conduct was unlawful.

(b)Advancement of Expenses.  Subject to the limitations set forth in this Section 9, the Employer shall pay the reasonable expenses (including reasonable attorneys’ fees) incurred by Executive in defending any Proceeding in advance of its final disposition; provided, however, that such advancement of expenses shall be made only upon receipt of an undertaking by Executive, in a form approved by the Employer, to repay all amounts advanced if it shall ultimately be determined that Executive is not entitled to be indemnified therefor.  Executive agrees to reimburse the Employer for all expenses advanced under this Section 9 in the event and only to the extent it shall ultimately be determined by a final adjudication that Executive is not entitled to be indemnified by the Employer for such expenses.

(c)Claims for Indemnification or Advancement; Determination of Eligibility.

(i)Any claim by Executive for indemnification or advancement of expenses under this Agreement shall be made in a writing delivered to the Employer, setting forth in reasonable detail the basis for such indemnification or advancement and the amount requested, and accompanied by appropriate documentation to support the amount so requested (or, in the case of advancement of expenses to be incurred, the basis on which such amount is to be determined).  A claim for advancement may include future expenses reasonably expected to be incurred, provided they are generally described in the claim, and provided that the Employer shall not be required to advance particular expenses covered by the claim until it has received appropriate substantiation that those expenses have been incurred and are appropriately included within the advances approved by the Employer pursuant to this Section 9(c).

(ii)Promptly upon its receipt of a written claim for advancement of expenses to which Executive is entitled hereunder, and within sixty (60) days after its receipt of a written claim for indemnity to which Executive is entitled hereunder, the Employer shall pay such advancement (and any future related submissions for advancement of expenses as they are incurred) or such claim for indemnity in full to or as directed by Executive.  If and to the extent it is required by law that the Employer make any particular determination as to Executive’s eligibility to receive such advancements or indemnity, or whether Executive has met the standards set forth in Section 9(a) hereof, the Employer shall make such determination as promptly as practicable in good faith and in accordance with such requirements of law, and in any event within sixty (60) days after its receipt of the claim from Executive.  In the event that the Employer fails to make such determination as to Executive’s eligibility, or makes a determination that Executive is ineligible for 

8

 

 

indemnification or advancement of expenses hereunder, within such sixty (60)-day period, then Executive may seek such determination from a court of competent jurisdiction.  In any such proceeding, the Employer shall have the burden of proving that Executive was not entitled to the requested indemnification or advancement of expenses, and any prior determination by the Employer to the contrary shall be to no effect and shall not be given any weight by the court, it being the intention of the parties that any determination by the court as to Executive’s eligibility for and entitlement to indemnification or advancement of expenses hereunder shall be made de novo based upon the terms of this Agreement and the evidence presented to such court.

(d)Limitations on Claims.  In addition to the limitations on indemnification set forth in Section 9(a) above, the Employer shall not be obligated pursuant to this Agreement:

(i)To indemnify or advance expenses to Executive with respect to a Proceeding initiated by Executive, except (i) for Proceedings authorized or consented to by the Board; or (ii) in the event a claim for indemnification or payment of expenses (including attorneys’ fees) made under this Agreement is not paid in full within sixty (60) days after a written claim therefor has been received by the Employer, Executive may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim, including attorneys’ fees.  In any such action, the Employer shall have the burden of proving that Executive was not entitled to the requested indemnification or payment of expenses under applicable law or this Agreement.

(ii)To indemnify Executive for any expenses incurred by Executive with respect to any Proceeding instituted by Executive to enforce or interpret this Agreement, unless Executive is successful in establishing Executive’s right to indemnification in such Proceeding, in whole or in part; provided, however, that nothing in this Section 9(d)(ii) is intended to limit the Employer’s obligation with respect to the advancement of expenses to Executive in connection with any Proceeding instituted by Executive to enforce or interpret this Agreement, as provided in Section 9(c) above.

(iii)To indemnify Executive in connection with proceedings or claims involving the enforcement of the provisions of this Agreement (other than as otherwise specifically provided for in this Section 9) or any other employment, severance or compensation plan or agreement that Executive may be a party to, or beneficiary of, with the Employer or any other Company.

(iv)To indemnify Executive on account of any proceeding with respect to which final judgment is rendered against Executive for payment or an accounting of profits arising from the purchase or sale by Executive of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, any similar successor statute, or similar provisions of state statutory law or common law.

(e)Non-Exclusivity of Rights.  The right conferred on Executive by this Section 9 shall not be exclusive of any other rights which Executive may have or hereafter acquire under any statute, provision of the Employer’s articles of incorporation or bylaws, agreement, vote of shareholders or disinterested directors or otherwise, or under any insurance maintained by the Employer; but such rights in the aggregate shall not entitle Executive to duplicative multiple recoveries.  No amendment or alteration of the Employer’s articles of incorporation or bylaws or any other agreement shall adversely affect the rights provided to Executive under this Section 9.

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(f)Savings Clause.  If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Employer shall nevertheless indemnify Executive as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Employer, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

10.Dispute Resolution.

(a)Any dispute between Executive and the Employer arising out of this Agreement or the performance or nonperformance hereof (except with respect to Section 9), shall, upon the demand of either Executive or the Employer, be settled by binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association as in effect at the time the arbitration is commenced and the provisions of this subsection:

(i)The arbitration shall be conducted in Greensboro, North Carolina by a panel of three impartial arbitrators selected in accordance with such rules, unless the parties shall hereafter mutually agree in writing to have the arbitration conducted by a single arbitrator.

(ii)In conducting the arbitration and rendering their award, the arbitrators shall give effect to the terms of this Agreement, including the choice of applicable law, shall give effect to any other agreement of the parties relating to the conduct of the arbitration, and shall give effect to applicable statutes of limitations.

(iii)The costs of the arbitration, including the fees and expenses of the arbitrators and of the American Arbitration Association, shall be allocated to such parties as, and in such proportions as, the arbitrators shall determine to be just and equitable, which determination shall be set forth in the award.

(iv)Judgment upon the award of the arbitrators may be entered by any court of competent jurisdiction.

(b)Nothing in this Section 10 shall preclude any party from applying to a court of competent jurisdiction for, and obtaining if warranted, preliminary or ancillary relief pending the conduct of such arbitration, or an order to compel the arbitration provided for herein.

(c)Any claim arising out of Section 9, including a claim by Executive for indemnification or advancement of expenses thereunder, shall be brought before the state courts of the State of North Carolina pursuant to Section 12.

11.Assignment; Successors.  This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided that, this Agreement shall be binding upon and, subject to the provisions hereof, inure to the benefit of any successor of the Employer and such successor shall be deemed substituted for the Employer under the terms of this Agreement; but any such substitution shall not relieve the Employer of any of its obligations under this Agreement.  As used in this Agreement, the term “successor” shall include any person, firm, corporation, or like business entity which at any time, whether by merger, purchase or otherwise, acquires all or a controlling interest in the assets or business of the Employer.

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12.Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of North Carolina, without giving effect to its principles of conflict of laws.  Executive and the Employer each hereby irrevocably consent that both parties are subject to the jurisdiction of the state courts of the State of North Carolina for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement, and further agree that the sole and exclusive venue for any such dispute shall be the General Court of Justice, Superior Court Division, in Guilford County, North Carolina.

13.Withholding.  The Employer shall make such deductions and withhold such amounts from each payment made to Executive hereunder as may be required from time to time by law, governmental regulation or order.

14.Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

15.Waiver; Modification.  Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.  This Agreement shall not be modified in any respect except by a writing executed by each party hereto.

16.Severability.  The parties have entered into this Agreement for the purposes herein expressed, with the intention that this Agreement be given full effect to carry out such purposes.  Therefore, consistent with the effectuation of the purposes hereof, the invalidity or unenforceability of any provision hereof or part thereof shall not affect the validity or enforceability of any other provision hereof or any other part of such provision.

17.Entire Agreement.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior agreements between them with respect to the subject matter hereof.  Without limiting the generality of the foregoing, the obligations under this Agreement with respect to any termination of employment of Executive, for whatever reason, supersede any severance or related obligations of the Company in any policy, plan or practice of the Company or any agreement between Executive and the Company.

18.Counterparts.  This Agreement may be executed by the parties hereto in multiple counterparts and shall be effective as of the Effective Date when each party shall have executed and delivered a counterpart hereof, whether or not the same counterpart is executed and delivered by each party.  When so executed and delivered, each such counterpart shall be deemed an original and all such counterparts shall be deemed one and the same document.  Transmission of images of signed signature pages by facsimile, e-mail or other electronic means shall have the same effect as the delivery in person of manually signed documents.

19.Compliance with Section 409A.  This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), to the extent applicable.  Notwithstanding any provision herein to the contrary, this Agreement shall be interpreted, operated and administered consistent with this intent.  Each separate installment under this Agreement shall be treated as a separate payment for purposes of determining whether such payment is subject to or exempt from compliance with the requirements of Section 409A.  In addition, in the event that Executive is a “specified employee” within the meaning of Section 409A (as determined in accordance with the methodology established by the Employer as in effect on the date of termination of Executive’s employment hereunder), any payment or benefits hereunder that are nonqualified deferred compensation subject to the 

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requirements of Section 409A shall be provided to Executive no earlier than six (6) months after the date of Executive’s “separation from service” within the meaning of Section 409A.

 

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IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto signed this Agreement, as of the Effective Date.

“Employer”:

Unifi, Inc.

	
By: /s/ KEVIN D. HALL  

	
Name:  Kevin D. Hall

Title:  Chief Executive Officer

	
 

“Executive”:

	
 

	
/s/ MARK MCNEILL   

	
Name:  Mark McNeill

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