EXHIBIT 10.1
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is
entered into as of February 1, 2005, by and between WESTCOAST HOSPITALITY
CORPORATION, a Washington corporation ("Borrower"), and XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank").
RECITALS
A. Borrower and Bank are party to a Credit Agreement dated as of October
24, 2003 (as amended to the date hereof, the "Existing Credit Agreement"),
pursuant to which Bank has provided Borrower with a line of credit in the
maximum principal amount of Seven Million Dollars ($7,000,000.00) (the "Existing
Facility").
B. Borrower and Bank wish to amend and restate the Existing Credit
Agreement to, among other things, restructure the Existing Facility and to
increase Bank's overall commitments to Borrower.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree that the
Existing Credit Agreement shall be amended and restated as of the date hereof to
read in its entirety as follows:
ARTICLE I
CREDIT TERMS
SECTION 1.1. LINE OF CREDIT A.
(a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including January 3, 2007, not to exceed at any time the aggregate
principal amount of Four Million Dollars ($4,000,000.00) ("Line of Credit A"),
the proceeds of which shall be used first, to repay the outstanding principal
balance of the Existing Facility and second, for working capital purposes.
Borrower's obligation to repay advances under Line of Credit A shall be
evidenced by a promissory note dated as of February 1, 2005 ("Line of Credit A
Note"), all terms of which are incorporated herein by this reference.
(b) Borrowing and Repayment. Borrower may from time to time during the
term of Line of Credit A borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit A Note; provided, however,
that the total outstanding borrowings under Line of Credit A shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above. Notwithstanding the foregoing, however: the outstanding principal balance
of Line of Credit A shall not at any time exceed the lesser of: (i) fifty-five
percent (55%) of the value of the Line of Credit A Real Property Collateral (as
defined in Section 1.5 hereof), as determined by Bank after receipt and review
of appraisals prepared by independent appraiser(s) utilizing methodology
satisfactory to Bank in its discretion; or (ii) subject to the provisions of
Section 4.9 (e) hereof, the principal amount required to maintain the Line of
Credit A Collateral Debt Service Ratio at not less than 1.35 to 1.00.
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(c) Letter of Credit Subfeature. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue or cause
an affiliate to issue standby letters of credit for the account of Borrower to
finance Borrower's working capital requirements (each, a "Letter of Credit" and
collectively, "Letters of Credit"); provided, however, that the aggregate
undrawn amount of all outstanding Letters of Credit shall not at any time exceed
Five Hundred Thousand Dollars ($500,000.00). The form and substance of each
Letter of Credit shall be subject to approval by Bank, in its sole discretion.
Each Letter of Credit shall be issued for a term not to exceed three hundred
sixty-five (365) days, as designated by Borrower; provided, however, that no
Letter of Credit shall have an expiration date subsequent to December 31, 2006.
The undrawn amount of all Letters of Credit shall be reserved under the Line of
Credit and shall not be available for borrowings thereunder. Each Letter of
Credit shall be subject to the additional terms and conditions of the Letter of
Credit agreements, applications and any related documents required by Bank in
connection with the issuance thereof. Each drawing paid under a Letter of Credit
shall be deemed an advance under the Line of Credit and shall be repaid by
Borrower in accordance with the terms and conditions of this Agreement
applicable to such advances; provided however, that if advances under the Line
of Credit are not available, for any reason, at the time any drawing is paid,
then Borrower shall immediately pay to Bank the full amount drawn, together with
interest thereon from the date such drawing is paid to the date such amount is
fully repaid by Borrower, at the rate of interest applicable to advances under
the Line of Credit. In such event Borrower agrees that Bank, in its sole
discretion, may debit any account maintained by Borrower with Bank for the
amount of any such drawing.
(d) Request for Replacement or Release of Real Property Collateral. At
any time during the term of Line of Credit A, so long as no Event of Default
exists, Borrower may request that Bank release certain Line of Credit A Real
Property Collateral and/or replace certain Line of Credit A Real Property
Collateral with other real property held by Borrower or its subsidiaries or
affiliates. Such request shall be in writing and shall be delivered to Bank in
accordance with the provisions of Section 7.2 hereof. Bank agrees to timely
consider such request upon receipt, however, any determination to release and/or
replace any Line of Credit A Real Property Collateral shall be made in Bank's
sole and absolute discretion based upon such appraisals and other information as
Bank may deem appropriate to review. The inclusion of this Section 1.1(d) shall
in no way be deemed a commitment by Bank to honor all or any part of Borrower's
request.
SECTION 1.2. LINE OF CREDIT B.
(a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including June 30, 2006, not to exceed at any time the aggregate
principal amount of Sixteen Million Dollars ($16,000,000.00), or such lesser
amount as shall from time to time be available ("Line of Credit B"), the
proceeds of which shall be used first, to repay the outstanding principal
balance of the Existing Facility, and second, for working capital purposes.
Borrower's obligation to repay advances under Line of Credit B shall be
evidenced by a promissory note dated as of February 1, 2005 ("Line of Credit B
Note"), all terms of which are incorporated herein by this reference.
(b) Reductions in Commitment. Notwithstanding the maximum principal
amount for Line of Credit B set forth in Section 1.2 (a) above, the maximum
principal amount available under Line of Credit B shall be reduced automatically
and without further notice on the first business day following the payment by
Borrower to Bank of a Release Price in accordance with the terms of Section 1.6
hereof, by an amount equal to such Release Price.
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(c) Borrowing and Repayment. Borrower may from time to time during the
term of Line of Credit B borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit B Note; provided, however,
that the total outstanding borrowings under Line of Credit B shall not at any
time exceed the maximum principal amount available thereunder, as set forth in
Sections 1.2 (a) and 1.2 (b) above. Notwithstanding the foregoing, however; the
outstanding principal balance of Line of Credit B plus, so long as the Kalispell
Outlaw Hotel is a part of the Line of Credit B Real Property Collateral, the
Outlaw Senior Debt, shall not at any time exceed the lesser of: (i) the
aggregate of sixty-five percent (65%) of the value of the Yakima Gateway Hotel
plus forty-five percent (45%) of the value of all other Line of Credit B Real
Property Collateral, both as determined by Bank after receipt and review of
appraisals prepared by independent appraiser(s) utilizing methodology
satisfactory to Bank in its discretion); or (ii) commencing December 31, 2005,
subject to the provisions of Section 4.9 (f) hereof, the amount required to
maintain Line of Credit B Collateral Debt Service Ratio at not less than 1.35 to
1.00. As used herein, the terms "Kalispell Outlaw Hotel", "Outlaw Senior Debt,"
"Yakima Gateway Hotel" and "Line of Credit B Real Property Collateral" shall
have the meanings ascribed to them in Section 1.5 hereof.
(d) Reappraisal; Remargining. Borrower agrees that beginning December
31, 2005, Bank shall have the option, at Borrower's cost, to require a new
appraisal of all of the Line of Credit B Real Property Collateral, which
appraisals shall be issued by an appraiser or appraisers acceptable to Bank and
shall be in form, substance and reflecting values satisfactory to Bank, in its
discretion. If any such new appraisals reflect a Loan to Value Ratio greater
than the aggregate of 65% for the Yakima Gateway Hotel plus 45% for all other
Line of Credit B Real Property Collateral, then Borrower shall either:
(i) within 30 calendar days following written demand from Bank,
prepay the outstanding principal balance of Line of Credit Note
B in an amount sufficient to meet said Loan to Value Ratio; or
(ii) pledge such additional real property collateral to Bank of a
type and pursuant to documentation in form and substance
satisfactory to Bank, as Bank shall require to provide
collateral support for Line of Credit B that, in Bank's
determination, is substantially equivalent to said Loan to Value
Ratio.
For purposes hereof, the term "Loan to Value Ratio" shall mean, as of any date
of determination, the sum of the outstanding principal balance of the Line of
Credit B Note plus, so long as the Kalispell Outlaw Hotel is a part of the Line
of Credit B Real Property Collateral, the Outlaw Senior Debt divided by the sum
of the updated appraised values of the Line of Credit B Real Property
Collateral.
SECTION 1.3. INTEREST/FEES.
(a) Interest. The outstanding principal balance of each credit subject
hereto shall bear interest, and the amount of each drawing paid under any Letter
of Credit shall bear interest, at the rate of interest set forth in each
promissory note or other instrument or document executed in connection
therewith.
(b) Prime Rate. The term "Prime Rate" shall mean at any time the rate of
interest most recently announced within Bank at its principal office as its
Prime Rate, with the understanding that the Prime Rate is one of Bank's base
rates and serves as the basis upon which effective
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rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof in such internal publication or
publications as Bank may designate. Each change in the rate of interest shall
become effective on the date each Prime Rate change is announced within Bank.
(c) Computation and Payment. Interest shall be computed on the basis of
a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.
(d) Commitment Fees. Borrower shall pay the following non-refundable
commitment fees to Bank: (i) an annual fee for Line of Credit A equal to Five
Thousand Dollars ($5,000.00), payable upon execution of this Agreement and each
January 1 thereafter; and (ii) a fee for Line of Credit B equal to Fifty-six
Thousand Six Hundred Sixty-six Dollars ($56,666.00), payable upon execution of
this Agreement.
(e) Unused Commitment Fee. Borrower shall pay to Bank at the end of
each calendar month an unused commitment fee equal to four tenths of one percent
(.40%) per annum (computed on the basis of a 360-day year, actual days elapsed)
on the average daily unused amount of Line of Credit A, which shall be
calculated on a monthly basis by Bank and shall be due and payable by Borrower
within ten (10) days after each billing is sent by Bank.
(f) Letter of Credit Fees. Borrower shall pay to Bank fees upon the
issuance of each Letter of Credit, upon the payment or negotiation of each
drawing under any Letter of Credit and upon the occurrence of any other activity
with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank's standard fees and charges then in effect for such
activity.
SECTION 1.4. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all principal, interest and fees due under each credit subject hereto by
charging Borrower's deposit account number 4050003334 with Bank for the full
amount thereof. Should there be insufficient funds in any such deposit account
to pay all such sums when due, the full amount of such deficiency shall be
immediately due and payable by Borrower.
SECTION 1.5. COLLATERAL. As security for all indebtedness of Borrower to
Bank under Line of Credit A, Borrower shall cause WestCoast Hospitality Limited
Partnership (the "Partnership") to grant to Bank a security interest of first
priority in Borrower's Line of Credit A Real Property Collateral (as defined
below) and all products, profits, rents and proceeds of such Line of Credit A
Real Property Collateral.
As security for all indebtedness of Borrower to Bank under Line of
Credit B, Borrower shall cause the Partnership, Red Lion Hotels, Inc. ("RL
Hotels, Inc.") and Red Lion Properties, Inc. ("RL Properties, Inc.") to grant to
Bank a security interest of first priority in their Line of Credit B Real
Property Collateral (as defined below, and with the sole exception of the
Kalispell Outlaw Hotel, which shall be a security interest second only in
priority to the lien of U. S. Bank on the Kalispell Outlaw Hotel to secure debts
of the Partnership to U. S. Bank (collectively, the "Outlaw Senior Debt")) and
all products, profits, rents and proceeds of such Line of Credit B Real Property
Collateral.
As security for all indebtedness of Borrower to Bank under Line of
Credit A and Line of Credit B, Borrower hereby grants to Bank a security
interest in all of Borrower's personal property and the proceeds thereof,
including, but not limited to, accounts receivable, notes
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receivable, chattel paper (including electronic chattel paper), deposit
accounts, documents, equipment, financial assets, general intangibles (including
payment intangibles), goods, health-care insurance receivables, instruments,
inventory, investment property, letter of credit rights, supporting obligations,
trademarks and vehicles. As security for all indebtedness of Borrower to Bank
under Line of Credit A and Line of Credit B, Borrower shall cause the
Partnership, RL Hotels, Inc., RL Properties, Inc., WestCoast Hotels, Inc. ("WC
Hotels, Inc.") and Xxxxxxxxxxx.xxx, Inc. ("TW, Inc.") each to grant to Bank a
security interest of first priority in all of their personal property and the
proceeds thereof, including, but not limited to, accounts receivable, chattel
paper (including electronic chattel paper), deposit accounts, documents,
equipment, financial assets, general intangibles (including payment
intangibles), goods, health-care insurance receivables, instruments, inventory,
investment property, letter of credit rights, supporting obligations, trademarks
and vehicles.
As used herein, "Line of Credit A Real Property Collateral" shall mean,
collectively: (a) that certain real property owned by the Partnership and
located at 000 X. Xxxxx, Xxxx Xxxxx, Xxxxx ("Templin's Red Lion Inn"); (b) that
certain real property owned by the Partnership and located at 0000 Xxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxxxx ("Pocatello Red Lion Inn") and (c) any property
approved by Bank to replace any of the foregoing under Section 1.1(d) hereof.
As used herein, "Line of Credit B Real Property Collateral" shall mean,
collectively: (a) that certain real property owned by RL Hotels, Inc. located at
000 X. Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx ("Aberdeen Red Lion Inn"); (b) that
certain real property owned by RL Hotels, Inc. and located at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx Xxxxx, Xxxxxx ("Klamath Red Lion Inn"); (c) that certain real
property owned by RL Properties, Inc. and located at 0000 XX Xxxxxxx 0 Xxxx,
Xxxxxxxxx, Xxxxxxx ("Kalispell Red Lion Inn"); (d) that certain real property
owned by the Partnership and located at 0 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
("Yakima Gateway Hotel"); (e) that certain real property owned by the
Partnership and located at 0000 Xxxxxxx 00 Xxxxx, Xxxxxxxxx, Xxxxxxx ("Kalispell
Outlaw Hotel"); (f) that certain real property owned by RL Hotels, Inc. and
located at 000 X.X. Xxxxx Xxxxxx, Xxxx, Xxxxxx (the "Bend Red Lion Inn"); (g)
that certain real property owned by the Partnership and located at 000 X.
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the "Spokane Ridpath Hotel"); (h) that
certain real property leased by the Partnership and located at 0000 X.X. Xxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxx (the "Hillsboro Red Lion Inn"), if Borrower requests
that the Hillsboro Red Lion Inn become Line of Credit B Real Property
Collateral; and (i) any property approved by Bank to be added as collateral
pursuant to the provisions of Section 1.2 (c) hereof. The Line of Credit A Real
Property Collateral and the Line of Credit B Real Property Collateral shall be
collectively referred to herein as the "Real Property Collateral."
All of the foregoing shall be evidenced by and subject to the terms of
such security agreements, financing statements, deeds of trust and other
documents as Bank shall reasonably require, all in form and substance
satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for
all costs and expenses incurred by Bank in connection with any of the foregoing
security, including without limitation, filing and recording fees and costs of
appraisals, audits and title insurance.
SECTION 1.6. PARTIAL RELEASE OF LINE OF CREDIT B REAL PROPERTY
COLLATERAL.
Borrower and the other WestCoast Entities (as such term is defined in
Section 2.4 hereof) may from time to time during the term of this Agreement wish
to sell certain of the Line of Credit B Real Property Collateral. In connection
with such sale, Bank shall release its lien on any
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given Line of Credit B Real Property Collateral, subject to satisfaction of all
of the following conditions, as determined by Bank:
(a) No Event of Default, and no condition or event or act which with the
giving of notice or the passage of time or both would constitute an Event of
Default, shall exist or shall have occurred and be continuing hereunder or under
any of the other Loan Documents (as such term is defined in Section 2.2 hereof).
(b) Borrower shall have delivered to Bank a copy of the purchase and
sale agreement for each Line of Credit B Real Property Collateral to be sold.
(c) Borrower shall have paid to Bank a Release Price (as defined below)
for each Line of Credit B Real Property Collateral subject to sale, which
Release Price shall be applied by Bank to reduce the principal balance
outstanding under Line of Credit B. As used herein, "Release Price" shall mean
the following for each of the Line of Credit B Real Property Collateral, each of
which shall be subject to reappraisal in accordance with the terms and
conditions of this Agreement:
Kalispell Red Lion Inn $ 495,000.00*
Klamath Red Lion Inn $ 990,000.00*
Aberdeen Red Lion Inn $ 990,000.00*
Spokane Xxxxxxx Hotel $6,165,000.00
Kalispell Outlaw Hotel $1,800,000.00
Hillsboro Red Lion Inn $ 720,000.00
Bend Red Lion Inn $ 990,000.00
Yakima Gateway Hotel $4,030,000.00
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* Value is subject to validation by Bank's internal real estate appraisal
department.
(d) Bank shall have been issued such endorsements to its policies of
title insurance as Bank may require, in form and substance satisfactory to Bank.
SECTION 1.7. GUARANTIES. All indebtedness of Borrower to Bank hereunder
shall be guaranteed jointly and severally by the Partnership, WC Hotels, Inc.,
TW, Inc., RL Hotels, Inc., and RL Properties, Inc., as evidenced by and subject
to the terms of guaranties in form and substance satisfactory to Bank.
SECTION 1.8. SUBORDINATION OF DEBT. All obligations of the WestCoast
Entities for the Trust Preferred Offering shall at all times be subordinate in
right of repayment to all obligations of the WestCoast Entities to Bank. As used
herein, "Trust Preferred Offering" shall mean that certain issuance of trust
preferred securities by Borrower through WestCoast Hospitality Capital Trust in
the aggregate amount of $46,000,000.00, all terms of which have been publicly
disclosed by Borrower in writing prior to the date hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue
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in full force and effect until the full and final payment, and satisfaction and
discharge, of all obligations of Borrower to Bank subject to this Agreement.
SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the State of Washington, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.
SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.
SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.
SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower or any subsidiaries or affiliates
of Borrower shown as consolidated with Borrower on Borrower's financial
statements (Borrower, together with such subsidiaries or affiliates, shall be
referred to individually herein as a "WestCoast Entity" and collectively herein
as the "WestCoast Entities") other than those disclosed by Borrower to Bank in
writing prior to the date hereof.
SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The consolidated
financial statement of the WestCoast Entities, dated September 30, 2004, a true
copy of which has been delivered by Borrower to Bank prior to the date hereof,
(a) is complete and correct and presents fairly the financial condition of the
WestCoast Entities, (b) discloses all liabilities of the WestCoast Entities that
are required to be reflected or reserved against under generally accepted
accounting principles, whether liquidated or unliquidated, fixed or contingent,
and (c) has been prepared in accordance with generally accepted accounting
principles consistently applied. Since the date of such financial statement
there has been no material adverse change in the financial condition of the
WestCoast Entities, nor have any of the WestCoast Entities mortgaged, pledged,
granted a security interest in or otherwise encumbered any of its assets or
properties except in favor of Bank or as otherwise disclosed to and permitted by
Bank in writing.
SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year, nor any knowledge of any pending adjustments of income tax payable by any
other WestCoast Entity with respect to any year.
SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower is a party or by which Borrower may be
bound that requires the
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subordination in right of payment of any of Borrower's obligations subject to
this Agreement to any other obligation of Borrower.
SECTION 2.8. PERMITS, FRANCHISES. Borrower and each of the other
WestCoast Entities possesses, and will hereafter possess, all permits, consents,
approvals, franchises and licenses required and rights to all trademarks, trade
names, patents, and fictitious names, if any, necessary to enable it to conduct
the business in which it is now engaged in compliance with applicable law.
SECTION 2.9. ERISA. Borrower and each of the other WestCoast Entities is
in compliance in all material respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended or recodified from
time to time ("ERISA"); neither Borrower nor any of the other WestCoast Entities
has violated any provision of any defined employee pension benefit plan (as
defined in ERISA) maintained or contributed to by Borrower or such other
WestCoast Entity (each, a "Plan"); no Reportable Event as defined in ERISA has
occurred and is continuing with respect to any Plan initiated by Borrower or any
other WestCoast Entity; Borrower and each WestCoast Entity has met its minimum
funding requirements under ERISA with respect to each Plan; and each Plan will
be able to fulfill its benefit obligations as they come due in accordance with
the Plan documents and under generally accepted accounting principles.
SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower and each of the other
WestCoast Entities is in compliance in all material respects with all applicable
federal or state environmental, hazardous waste, health and safety statutes, and
any rules or regulations adopted pursuant thereto, which govern or affect any of
Borrower's or such WestCoast Entity's operations and/or properties, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Federal Resource Conservation and Recovery Act of 1976, and the Federal
Toxic Substances Control Act, as any of the same may be amended, modified or
supplemented from time to time. None of the operations of Borrower or any other
WestCoast Entity is the subject of any federal or state investigation evaluating
whether any remedial action involving a material expenditure is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment. Borrower has no material contingent liability in connection with
any release of any toxic or hazardous waste or substance into the environment.
SECTION 2.12. REAL PROPERTY COLLATERAL. Except as disclosed by Borrower
to Bank in writing prior to the date hereof, with respect to the Real Property
Collateral:
(a) All taxes, governmental assessments, insurance premiums, and water,
sewer and municipal charges, and rents (if any) which previously became due and
owing in respect thereof have been paid as of the date hereof.
(b) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to any such lien) which affect all or any interest in any Real
Property Collateral and which are or may be prior to or equal to the lien
thereon in favor of Bank.
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(c) None of the improvements which were included for purpose of
determining the appraised value of any of the Real Property Collateral lies
outside of the boundaries and/or building restriction lines thereof, and no
improvements on adjoining properties materially encroach upon any such Real
Property Collateral.
(d) There is no pending, or to the best of Borrower's knowledge
threatened, proceeding for the total or partial condemnation of all or any
portion of any of the Real Property Collateral, and all such Real Property
Collateral is in good repair and free and clear of any damage that would
materially and adversely affect the value thereof as security and/or the
intended use thereof.
ARTICLE III
CONDITIONS
SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF LINE OF CREDIT A. The
obligation of Bank to extend credit under Line of Credit A is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental to the
extension of Line of Credit A by Bank shall be satisfactory to Bank's counsel.
(b) Loan and Security Documentation. Bank shall have received, in form
and substance satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and the Line of Credit A Note.
(ii) Security Agreement.
(iii) Third Party Security Agreements (5).
(iv) Continuing Guaranties (5).
(v) Corporate Resolution: Borrowing and Certificate of Incumbency for
Borrower.
(vi) Corporate Resolution: Continuing Guaranty (4).
(vii) Corporate Resolution: Third Party Collateral (4).
(viii) Certificates of Incumbency (4).
(ix) Partnership, Joint Venture or Association Certificate: Third Party
Collateral.
(x) Partnership, Joint Venture or Association Certificate: Guaranty.
(xi) Such other documents as Bank may require under any other Section of this
Agreement.
(c) Real Property Documentation. Bank shall have received, in form and
substance satisfactory to Bank, two Modifications to Deed of Trust pertaining to
the Line of Credit A Real Property Collateral, duly executed.
(d) Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower or any other WestCoast Entity, nor any material decline, as determined
by Bank, in the market value of any collateral required hereunder or a
substantial or material portion of the assets of Borrower or any such WestCoast
Entity.
(e) Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all real and personal property collateral required under
Section 1.5 hereof, in form,
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substance, amounts, covering risks and issued by companies satisfactory to Bank,
and where required by Bank, with loss payable endorsements in favor of Bank,
including, without limitation, policies of fire and extended coverage insurance
covering all Line of Credit A Real Property Collateral required hereby, with
replacement cost and mortgagee loss payable endorsements, and such policies of
insurance against specific hazards affecting any such real property as may be
required by governmental regulation or Bank.
(f) Appraisals. Bank has obtained, at Borrower's cost, appraisals of the
Line of Credit A Real Property Collateral and all improvements thereon, issued
by an appraiser acceptable to Bank and in form, substance and reflecting values
satisfactory to Bank. The appraisals show values for the following properties
comprising the Line of Credit A Real Property Collateral as set forth below:
Xxxxxxx'x Red Lion Inn $ 6,000,000.00
Pocatello Red Lion Inn $ 2,100,000.00*
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* Value is subject to validation by Bank's internal real estate appraisal
department.
(g) Title Insurance. Bank shall have received an ALTA Policy of Title
Insurance, with such endorsements as Bank may require, issued by a company and
in form and substance satisfactory to Bank, in such amount as Bank shall
require, insuring Bank's lien on the Line of Credit A Real Property Collateral
to be of the priority set forth in Section 1.5 hereof, subject only to such
exceptions as Bank shall approve in its discretion, with all costs thereof to be
paid by Borrower.
(h) Payment of Taxes. Borrower shall have delivered to Bank all evidence
required by Bank to establish the current payment in full of all real property
taxes relating to the Line of Credit A Real Property Collateral, and, if
required by Bank, evidence that Borrower has established adequate means for
payment of future real property taxes relating to the Line of Credit A Real
Property Collateral, including, without limitation, tax service contracts.
(i) Environmental Reports. Bank shall have obtained, at Borrower's cost,
environmental reports relating to the Line of Credit A Real Property Collateral
required by Bank, issued by consultants acceptable to Bank and in form and
substance satisfactory to Bank.
(j) Partial Funding. Notwithstanding any provision to the contrary in
this Section 3.1, Bank shall extend credit to Borrower under Line of Credit A
with respect to any of the Line of Credit A Real Property Collateral, subject to
all of the limitations contained in Section 1.1 hereof, provided that all
conditions set forth in Sections 3.1 (a), 3.1 (b), and 3.1 (e) have been
fulfilled to Bank's satisfaction and all conditions set forth in Sections 3.1
(c), 3.1 (e), 3.1 (f), 3.1 (g), 3.1 (h) and 3.1 (i) have been fulfilled to
Bank's satisfaction with respect to such Line of Credit A Real Property
Collateral.
SECTION 3.2. CONDITIONS OF INITIAL EXTENSION OF LINE OF CREDIT B. The
obligation of Bank to extend credit under Line of Credit B is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental to the
extension of Line of Credit B by Bank shall be satisfactory to Bank's counsel.
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(b) Loan and Security Documentation. Bank shall have received, in form
and substance satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and the Line of Credit B Note.
(ii) Security Agreement.
(iii) Third Party Security Agreements (5).
(iv) Continuing Guaranties (5).
(v) Corporate Resolution: Borrowing and Certificate of Incumbency for
Borrower.
(vi) Corporate Resolution: Continuing Guaranty (4).
(vii) Corporate Resolution: Third Party Collateral (4).
(viii) Certificates of Incumbency (4).
(ix) Partnership, Joint Venture or Association Certificate: Third
Party Collateral.
(x) Partnership, Joint Venture or Association Certificate: Guaranty.
(xi) Such other documents as Bank may require under any other Section
of this Agreement.
(c) Real Property Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following documents pertaining to
the Line of Credit B Real Property Collateral, duly executed:
(i) Deeds of Trust (5).
(ii) Modifications to Deed of Trust (3).
(iii) Consent by Lessor of Real Property.
(d) Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower or any other WestCoast Entity, nor any material decline, as determined
by Bank, in the market value of any collateral required hereunder or a
substantial or material portion of the assets of Borrower or any such WestCoast
Entity.
(e) Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all real and personal property collateral required under
Section 1.5 hereof, in form, substance, amounts, covering risks and issued by
companies satisfactory to Bank, and where required by Bank, with loss payable
endorsements in favor of Bank, including, without limitation, policies of fire
and extended coverage insurance covering all Line of Credit B Real Property
Collateral required hereby, with replacement cost and mortgagee loss payable
endorsements, and such policies of insurance against specific hazards affecting
any such real property as may be required by governmental regulation or Bank.
(f) Appraisals. Bank has obtained, at Borrower's cost, appraisals of the
Line of Credit B Real Property Collateral and all improvements thereon, issued
by an appraiser acceptable to Bank and in form, substance and reflecting values
satisfactory to Bank. The appraisals show values for the following properties
comprising the Line of Credit B Real Property Collateral as set forth below:
Kalispell Red Lion Inn $ 1,100,000.00*
Klamath Red Lion Inn $ 2,200,000.00*
Aberdeen Red Lion Inn $ 2,200,000.00*
Spokane Xxxxxxx Hotel $13,700,000.00
Kalispell Outlaw Hotel $ 4,000,000.00
Hillsboro Red Lion Inn $ 1,600,000.00
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Bend Red Lion Inn $ 2,200,000.00
Yakima Gateway Hotel $ 6,200,000.00
----------
* Value is subject to validation by Bank's internal real estate appraisal
department.
(g) Title Insurance. Bank shall have received an ALTA Policy of Title
Insurance, with such endorsements as Bank may require, issued by a company and
in form and substance satisfactory to Bank, in such amount as Bank shall
require, insuring Bank's lien on the Line of Credit B Real Property Collateral
to be of the priority set forth in Section 1.5 hereof, subject only to such
exceptions as Bank shall approve in its discretion, with all costs thereof to be
paid by Borrower.
(h) Payment of Taxes. Borrower shall have delivered to Bank all evidence
required by Bank to establish the current payment in full of all real property
taxes relating to the Line of Credit B Real Property Collateral, and, if
required by Bank, evidence that Borrower has established adequate means for
payment of future real property taxes relating to the Line of Credit B Real
Property Collateral, including, without limitation, tax service contracts.
(i) Environmental Reports. Bank shall have obtained, at Borrower's cost,
environmental reports relating to the Line of Credit B Real Property Collateral
required by Bank, issued by consultants acceptable to Bank and in form and
substance satisfactory to Bank.
(j) Certification of Outlaw Senior Debt. Borrower shall have delivered
to Bank a statement of the Outlaw Senior Debt as of the date hereof, including,
without limitation, all principal, interest, fees and other charges, in form and
substance satisfactory to Bank and certified by the President or Chief Financial
Officer of Borrower as accurate.
(k) Partial Funding. Notwithstanding any provision to the contrary in
this Section 3.2, Bank shall extend credit to Borrower under Line of Credit B
with respect to any of the Line of Credit B Real Property Collateral, subject to
all of the limitations contained in Section 1.2 hereof, provided that all
conditions set forth in Sections 3.2 (a), 3.2 (b), and 3.2 (e) have been
fulfilled to Bank's satisfaction and all conditions set forth in Sections 3.2
(c), 3.2 (e), 3.2 (f), 3.2 (g), 3.2 (h), 3.2 (i) and 3.2 (k) have been fulfilled
to Bank's satisfaction with respect to such Line of Credit B Real Property
Collateral.
SECTION 3.3. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:
(a) Compliance. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.
(b) Documentation. Bank shall have received all additional documents
which it may reasonably require in connection with such extension of credit.
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ARTICLE IV
AFFIRMATIVE COVENANTS
Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:
SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein, and unless as otherwise provided
herein, immediately upon demand by Bank, the amount by which the outstanding
principal balance of any credit subject hereto exceeds any limitation on
borrowings applicable thereto.
SECTION 4.2. ACCOUNTING RECORDS. Maintain, and cause each of the WestCoast
Entities to maintain, adequate books and records in accordance with generally
accepted accounting principles consistently applied, and permit any
representative of Bank, at any reasonable time, to inspect, audit and examine
such books and records, to make copies of the same, and to inspect the Real
Property Collateral and any other property securing the obligations hereunder.
SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail satisfactory to Bank:
(a) not later than 90 days after and as of the end of each fiscal year, a
consolidated audited financial statement of the WestCoast Entities, prepared by
a certified public accountant acceptable to Bank, to include a Balance Sheet, an
Income Statement, a Statement of Cash Flow, an Auditor's Report and all
supporting schedules and footnotes; provided that for purposes of this Section
4.3, and as of the date of this Agreement, Bank has approved BDO Xxxxxxx, LLP as
a certified public accountant acceptable to Bank, but reserves the right to
require a change in such certified public accountant should circumstances so
warrant;
(b) not later than 45 days after and as of the end of each of the first,
second and third calendar quarters, a consolidated financial statement of the
WestCoast Entities, prepared by Borrower, to include a Balance Sheet, an Income
Statement, and a Statement of Cash Flow;
(c) contemporaneously with each annual and quarterly financial statement
of the WestCoast Entities required hereby, a certificate of compliance certified
by a senior financial officer of Borrower that said financial statements are
accurate and that there exists no Event of Default nor any condition, act or
event which with the giving of notice or the passage of time or both would
constitute an Event of Default;
(d) not later than 45 days after and as of the end of each calendar
quarter for such quarter and for the four quarters then ended, an operating
statement for each parcel of Real Property Collateral, prepared by Borrower;
(e) from time to time such other information as Bank may reasonably
request, including, without limitation: (i) copies of rent rolls and other
information with respect to the Real Property Collateral; (ii) copies of all
financial statements and reports that the Borrower sends to its shareholders;
and (iii) copies of all financial statements and regular, periodical or special
reports
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(including Forms 10-K, 10-Q and 8-K) that any WestCoast Entity may make to or
file with the Securities Exchange Commission.
SECTION 4.4. COMPLIANCE. Preserve and maintain, and cause all other
WestCoast Entities to preserve and maintain, all licenses, permits, governmental
approvals, rights, privileges and franchises necessary for the conduct of its
respective business; and comply, and cause all other WestCoast Entities to
comply, with the provisions of all documents pursuant to which such entity is
organized and/or which govern such entity's continued existence and with the
requirements of all laws, rules, regulations and orders of any governmental
authority applicable to such entity and/or its business.
SECTION 4.5. INSURANCE. Maintain and keep in force, and cause all other
WestCoast Entities to maintain and keep in force, insurance of the types and in
amounts customarily carried in lines of business similar to that of such entity,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to Bank, and deliver to Bank from time to
time at Bank's request schedules setting forth all insurance then in effect.
SECTION 4.6. FACILITIES. Keep, and cause all other WestCoast Entities to
keep, all properties useful or necessary to such entity's business in good
repair and condition, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained.
SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due, and
cause all other WestCoast Entities to pay and discharge when due, any and all
indebtedness, obligations, assessments and taxes, both real or personal,
including, without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower or such WestCoast
Entity may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Borrower or such WestCoast Entity has made provision, to
Bank's satisfaction, for eventual payment thereof in the event Borrower or such
WestCoast Entity is obligated to make such payment.
SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower or any other WestCoast Entity
with a claim in excess of $2,000,000.00 if not fully covered by insurance, and
in excess of $10,000,000.00 if fully covered by insurance.
SECTION 4.9. FINANCIAL CONDITION. Maintain the financial condition of the
WestCoast Entities as follows, using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein), with compliance determined
commencing with the consolidated financial statements of the WestCoast Entities
for the period ending December 31, 2004:
(a) Tangible Net Worth. Tangible Net Worth not at any time less than
$115,000,000.00, with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt (including the Trust Preferred
Offering), less any intangible assets.
(b) Total Liabilities to Tangible Net Worth Ratio. Total Liabilities
divided by Tangible Net Worth not at any time greater than 2.00 to 1.0, with
"Total Liabilities" defined as the aggregate of current liabilities and
non-current liabilities less subordinated debt, and with "Tangible Net Worth" as
defined above.
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(c) Funded Debt to EBITDA Ratio. Funded Debt divided by EBITDA not greater
than (i) 5.75 to 1.00 as of December 31, 2005 and at the end of each fiscal
quarter thereafter through September 30, 2006 for the four fiscal quarters then
ended and (ii) 5.00 to 1.00 as of the end of the fiscal quarter ending December
31, 2006 and at the end of each fiscal quarter thereafter, for the four fiscal
quarters then ended. As used herein, "EBITDA" shall be defined as net profit
before tax, less gains on asset sales, plus losses on asset sales, plus interest
expense (net of capitalized interest), plus depreciation and amortization
expense, plus non-capitalized conversion and rebranding expense, plus other
non-cash expenses, less other non-cash income. In the event of an acquisition,
the EBITDA shall include the most recent four-quarter EBITDA (as defined herein)
of the acquired property. As used herein, "Funded Debt" shall be defined as the
sum of all obligations for borrowed money (excluding the Trust Preferred
Offering plus all capital lease obligations of the WestCoast Entities.
(d) EBITDA Coverage Ratio. EBITDA divided by Debt Service not less than
(i) 1.20 to 1.00 as of December 31, 2004 and at the end of each fiscal quarter
thereafter through June 30, 2005 for the four fiscal quarters then ended and
(ii) 1.25 to 1.00 as of the end of the fiscal quarter ending September 30, 2005
and at the end of each fiscal quarter thereafter, for the four fiscal quarters
then ended. As used herein, "Debt Service" shall be defined as total interest
expense and dividends on preferred stock for the most recent four quarters
ended, plus the current maturity of long-term debt ("CMLTD") which shall be
based on the CMLTD (including subordinated debt and capital leases but excluding
indebtedness outstanding under Line of Credit A and Line of Credit B) within the
Balance Sheet dated 12-months prior to the most recent quarter ended, less that
portion of balloon payments within CMLTD that exceeds normally scheduled
payments. In the event of an acquisition, Debt Service shall include the Debt
Service (as defined herein) of the acquired property.
(e) Line of Credit A Collateral Debt Service Ratio. Line of Credit A
Collateral Debt Service Ratio not less than 1.35 to 1.00, determined at each
fiscal quarter end for the four fiscal quarters then ended, defined as EBITDA
contributed by Line of Credit A Real Property Collateral divided by 10% of the
outstanding aggregate principal balance of Line of Credit A. Notwithstanding the
foregoing, however, Borrower shall not be in violation of this Section 4.9 (e)
if, within forty-five (45) days following the end of any fiscal quarter for
which the Line of Credit A Collateral Debt Service Ratio is less than 1.35 to
1.00, Borrower prepays the outstanding principal balance of Line of Credit A in
an amount sufficient to bring the Line of Credit A Collateral Debt Service Ratio
to not less than 1.35 to 1.00.
(f) Line of Credit B Collateral Debt Service Ratio. Commencing December
31, 2005, Line of Credit B Collateral Debt Service Ratio not less than 1.35 to
1.00, determined at each fiscal quarter end for the four fiscal quarters then
ended, defined as EBITDA contributed by Line of Credit B Real Property
Collateral divided by 10% of the outstanding aggregate principal balance of Line
of Credit B. Notwithstanding the foregoing, however, Borrower shall not be in
violation of this Section 4.9 (f) if, within forty-five (45) days following the
end of any fiscal quarter for which the Line of Credit B Collateral Debt Service
Ratio is less than 1.35 to 1.00, Borrower prepays the outstanding principal
balance of Line of Credit B in an amount sufficient to bring the Line of Credit
B Collateral Debt Service Ratio to not less than 1.35 to 1.00.
SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five (5)
business days after the occurrence of each such event or matter) give written
notice to Bank in reasonable detail of: (a) the occurrence of any Event of
Default, or any condition, event or act which with the giving of notice or the
passage of time or both would constitute an Event of
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Default; (b) any change in the name or the organizational structure of Borrower
or any other WestCoast Entity; (c) the occurrence and nature of any Reportable
Event or Prohibited Transaction, each as defined in ERISA, or any funding
deficiency with respect to any Plan; or (d) any termination or cancellation of
any insurance policy which Borrower or any other WestCoast Entity is required to
maintain, or any uninsured or partially uninsured loss through liability or
property damage, or through fire, theft or any other cause affecting Borrower's
or any other West Coast Entity's property.
SECTION 4.11. PRIMARY DEPOSITORY RELATIONSHIPS. It is the intention of the
WestCoast Entities to maintain their primary depository relationships with Bank,
provided that such depository banking relationships are subject to reasonable
and customary terms and conditions for relationships of that type.
ARTICLE V
NEGATIVE COVENANTS
Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:
SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof, or for
acquisitions.
SECTION 5.2. INVESTMENTS/CAPITAL EXPENDITURES. Make any investments in or
acquisitions of new properties (either directly or indirectly through ownership
interests in any corporation, partnership, limited liability company or other
entity making such investment), nor permit any other WestCoast Entity to make
any investments in or acquisitions of new properties (either directly or
indirectly through ownership interests in any corporation, partnership, limited
liability company or other entity making such investment), in excess of: (a)
$8,000,000.00 in the aggregate for all WestCoast Entities combined during any
fiscal year in which Bank remains committed to extend credit to Borrower under
Line of Credit B; and (b) $15,000,000.00 in the aggregate for all WestCoast
Entities combined during any fiscal year in which Bank is not committed to
extend credit to Borrower under Line of Credit B.
SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist,
or permit any other WestCoast Entity to create, incur, assume or permit to
exist, any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower to Bank,
(b) any other liabilities of Borrower existing as of, and disclosed to Bank
prior to, the date hereof, and (c) other indebtedness for capital expenditures,
leases and investments permitted under Section 5.2 hereof.
SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; nor permit any other WestCoast Entity to
merge into or consolidate with any other entity (other than internal mergers or
consolidations of one or more WestCoast Entities which do not result in any
change in the beneficial ownership of such WestCoast Entities by Borrower); make
any change in the nature of Borrower's business as conducted as of the date
hereof that would materially adversely affect Borrower's operations,
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nor permit any other WestCoast Entity to make any change in the nature of such
WestCoast Entity's business as conducted as of the date hereof that would
materially adversely affect the operations of the WestCoast Entities on a
consolidated basis; acquire all or substantially all of the assets of any other
entity, nor permit any other WestCoast Entity to acquire all or substantially
all of the assets of another entity except as permitted under Section 5.2
hereof; nor sell, lease, transfer or otherwise dispose of, nor permit any other
WestCoast Entity to sell, lease, transfer or otherwise dispose of, assets having
value in excess of ten percent (10%) of total assets of Borrower and the
WestCoast Entities on a consolidated, book value basis, except: (a) in the
ordinary course of business; (b) in connection with internal reorganizations
that do not result in any change in beneficial ownership of such assets by
Borrower; and (c) any other proposed sales, leases, transfers or dispositions by
any WestCoast Entity publicly disclosed prior to the date hereof or disclosed to
Bank in writing prior to the date hereof.
SECTION 5.5. GUARANTIES. Guarantee or become liable in any way, nor permit
any other WestCoast Entity to guarantee or become liable in any way, as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, any liabilities or obligations of any other person or entity,
except: (a) any of the foregoing in favor of Bank; (b) guarantees or other
liabilities entered into in connection with the Trust Preferred Offering; (c)
guarantees of obligations of WestCoast Entities that are consolidated for tax
and accounting purposes; and (d) guarantees of third party debt, so long as the
liability under such guarantees does not at any time exceed $2,500,000.00 in the
aggregate, nor pledge or hypothecate any assets of Borrower or any WestCoast
Entity with a consolidated book value at any time in excess of $2,500,000.00 in
the aggregate as security for, any liabilities or obligations of any other
person or entity.
SECTION 5.6. LOANS, ADVANCES. Make any loans or advances to any person or
entity, nor permit any WestCoast Entity to make any loans or advances to any
person or entity, except: (a) any of the foregoing existing as of, and disclosed
to Bank prior to, the date hereof (including those contained in the financial
statements delivered to Bank prior to the date hereof); (b) loans or advances by
Borrower and/or the other WestCoast Entities not at any time to exceed
$5,000,000.00 in the aggregate; and (c) loans or advances by any of the
WestCoast Entities to any other WestCoast Entity that are consolidated for tax
and accounting purposes.
SECTION 5.7. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist
in favor of any other creditor a security interest in, or lien upon, all or any
portion of Borrower's or any other WestCoast Entity's assets that constitute the
collateral of Bank.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:
(a) Borrower shall fail to pay within three (3) business days after the
date due any principal, interest, fees or other amounts payable under any of the
Loan Documents.
(b) Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other party
under this Agreement or any other Loan Document shall prove to be incorrect,
false or misleading in any material respect when furnished or made.
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(c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of thirty (30) days from its occurrence; provided,
however, if such default which by its nature can be cured relates specifically
to restoration or repair obligations for the Real Property Collateral, such
default shall continue for a period of ninety (90) days from its occurrence;
(d) Any default in the payment or performance of any obligation, or any
defined event of default, by Borrower or any other WestCoast Entity under the
terms of any contract or instrument involving obligations in excess of
$5,000,000.00, individually or in the aggregate (other than any of the Loan
Documents) pursuant to which Borrower or any WestCoast Entity has incurred any
debt or other liability to any person or entity, including Bank.
(e) The filing of a notice of judgment lien against Borrower or any other
WestCoast Entity; or the recording of any abstract of judgment against Borrower
or any other WestCoast Entity in any county in which Borrower or such WestCoast
Entity has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower or any other WestCoast Entity; or the entry of a judgment
against Borrower or any WestCoast Entity; provided, however, that such
judgments, liens, levies, writs, executions and other process involve debts of
or claims against Borrower or any other WestCoast Entity in excess of
$5,000,000.00, individually or in the aggregate for all such judgments, liens,
levies, writs, executions and other process against Borrower and any other
WestCoast Entity combined, and within twenty (20) days after the creation
thereof, or at least ten (10) days prior to the date on which any assets could
be lawfully sold in satisfaction thereof, such debt or claim is not satisfied or
stayed pending appeal and insured against in a manner satisfactory to Bank;.
(f) Borrower or any other WestCoast Entity shall become insolvent, or
shall suffer or consent to or apply for the appointment of a receiver, trustee,
custodian or liquidator of itself or any of its property, or shall generally
fail to pay its debts as they become due, or shall make a general assignment for
the benefit of creditors; Borrower or any other WestCoast Entity shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect
a plan or other arrangement with creditors or any other relief under the
Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time ("Bankruptcy Code"), or under any state or federal
law granting relief to debtors, whether now or hereafter in effect; or any
involuntary petition or proceeding pursuant to the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors is filed or commenced against Borrower or any other WestCoast
Entity, or Borrower or any other WestCoast Entity shall file an answer admitting
the jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any other WestCoast Entity shall be adjudicated a
bankrupt, or an order for relief shall be entered against Borrower or any other
WestCoast Entity by any court of competent jurisdiction under the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors.
(g) There shall exist or occur any event or condition which Bank
reasonably and in good faith believes materially impairs, or is substantially
likely to materially impair, the prospect of payment or performance by Borrower
of its obligations under any of the Loan Documents.
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(h) The dissolution or liquidation of Borrower or any other WestCoast
Entity, unless previously approved by Bank in writing; or Borrower or any other
WestCoast Entity, or any of their respective directors, stockholders or members,
shall take action reasonably likely to effect the dissolution or liquidation of
Borrower or such WestCoast Entity without the prior written approval of Bank.
(i) The sale, transfer, hypothecation, assignment or encumbrance, whether
voluntary, involuntary or by operation of law, without Bank's prior written
consent, of all or any part of or interest in the Real Property Collateral,
except for leases to third parties of portions of the Real Property Collateral
in the ordinary course of business.
(j) Bank, reasonably and in good faith, believes all or a material portion
of the collateral described in Section 1.5 hereof to be in substantial danger of
misuse, dissipation, commingling, loss, theft, damage or destruction or
otherwise in substantial jeopardy.
SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.
SECTION 7.2. NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement or the other Loan Documents must be in writing delivered to each party
at the following address:
BORROWER WESTCOAST HOSPITALITY CORPORATION
AND ANY OTHER 000 X. Xxxxx Xxxxx Xxxxx
XXXXXXXXX Xxxxxxx, Xxxxxxxxxx 00000
ENTITY:
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BANK: XXXXX FARGO BANK, NATIONAL ASSOCIATION
000 X. Xxxx Xx., Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.
SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all reasonable allocated costs of Bank's in-house counsel),
expended or incurred by Bank in connection with (a) the negotiation and
preparation of this Agreement and the other Loan Documents, Bank's continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.
SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided, however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, any
guarantor hereunder or the business of such guarantor, or any collateral
required hereunder.
SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.
SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.
SECTION 7.7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.
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SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.
SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
SECTION 7.11. ARBITRATION.
(a) Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a
location in Washington selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. Section 91 or
any similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected
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according to the Rules, and who shall not render an award of greater than
$5,000,000.00. Any dispute in which the amount in controversy exceeds
$5,000,000.00 shall be decided by majority vote of a panel of three arbitrators;
provided, however, that all three arbitrators must actively participate in all
hearings and deliberations. The arbitrator will be a neutral attorney licensed
in the State of Washington or a neutral retired judge of the state or federal
judiciary of Washington, in either case with a minimum of ten years experience
in the substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining
any claim. In any arbitration proceeding the arbitrator will decide (by
documents only or with a hearing at the arbitrator's discretion) any pre-hearing
motions, which are similar to motions to dismiss for failure to state a claim or
motions for summary adjudication. The arbitrator shall resolve all disputes in
accordance with the substantive law of Washington and may grant any remedy or
relief that a court of such state could order or grant within the scope hereof
and such ancillary relief as is necessary to make effective any award. The
arbitrator shall also have the power to award recovery of all costs and fees, to
impose sanctions and to take such other action as the arbitrator deems necessary
to the same extent a judge could pursuant to the Federal Rules of Civil
Procedure, the Washington Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.
(e) Discovery. In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the dispute being arbitrated and must be completed
no later than 20 days before the hearing date and within 180 days of the filing
of the dispute with the AAA. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject to final determination by
the arbitrator upon a showing that the request for discovery is essential for
the party's presentation and that no alternative means for obtaining information
is available.
(f) Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.
(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.
(h) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
WESTCOAST HOSPITALITY XXXXX FARGO BANK,
CORPORATION NATIONAL ASSOCIATION
By: By:
-------------------------- ------------------------------------
Xxxxxx X. Xxxxxx Xxxxx Xxxxxxxx
President and Chief Senior Relationship Manager
Executive Officer
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