Exhibit 10.21
LOAN AND SECURITY AGREEMENT
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THIS AGREEMENT, made this _______ day of December, 2001, by and between
WHEELING CITY CENTER HOTEL, LLC, a West Virginia limited liability company, with
an office and place of business located in Wheeling, Ohio County, West Virginia
(hereinafter called "Borrower"), WESBANCO BANK, INC. (formerly Wesbanco Bank
Wheeling), a West Virginia banking corporation, having its principal office and
place of business located in Wheeling, Ohio County, West Virginia (hereinafter
called "Bank") and PELICAN PROPERTIES, INTERNATIONAL CORP., a Florida
corporation (hereinafter called "Pelican"), and XXXXXX HOUSE HOTEL & CONFERENCE
CENTER, LLC, a West Virginia limited liability company (hereinafter called
"XxXxxx") (Pelican and XxXxxx hereinafter collectively referred to as
"Guarantors").
WHEREAS, Borrower is desirous of obtaining loans in the aggregate
amount of Two Million Four Hundred Seventy-two Thousand Seven Hundred Sixteen
Dollars and Eighty-one Cents ($2,472,716.81) and will use said loan proceeds in
connection with an Exchange Agreement with XxXxxx wherein the Borrower has
issued to XxXxxx a membership interest in the Borrower in exchange for the fee
simple title to Ramada Plaza City Center Hotel located in Wheeling and these
certain assets including, but not limited to, the name "XxXxxx House Hotel and
Conference Center", all existing leases of real and personal property, all
fixtures, chattels and tangible personal property placed upon, attached to, or
used in connection with or in the operation of the XxXxxx Hotel and Conference
Center, as well as the appurtenant apartment building and parking garage, all as
more fully described in the Exchange Agreement attached hereto as Exhibit "A"
and made a part of this Agreement; and
WHEREAS, as an inducement to Bank to make such loans, the Guarantors
are willing to unconditionally guarantee payment of the aforesaid loans to the
Bank; and
WHEREAS, subject to the terms and conditions contained herein, the Bank
is willing to extend to the Borrower loans in that amount.
NOW, THEREFORE, WITNESSETH: That in consideration of the mutual
covenants contained herein, and with the intent to be legally bound hereby, the
parties hereto agree as follows:
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SECTION 1. LOAN
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1.1 CREDIT. Subject to the terms and conditions hereof, and relying on
the representations and warranties herein contained, Bank agrees to lend to
Borrower, contemporaneously with the execution and delivery of this Agreement,
the aggregate sum of Two Million Four Hundred Seventy-two Thousand Seven Hundred
Sixteen Dollars and Eighty-one Cents ($2,472,716.81), as hereinafter provided.
1.2 FIRST TERM NOTE. Subject to the terms and conditions hereof, the
Borrower shall borrow from the Bank, and the Bank shall lend to the Borrower,
the sum of Two Million Three Hundred Seventy-one Thousand Seven Hundred
Twenty-six Dollars and Fifty Cents ($2,371,726.50) on a term loan basis. Such
loan shall be evidenced by a promissory note in the form attached hereto as
Exhibit "B" (hereinafter referred to as "First Term Note"). Said First Term Note
shall bear interest at a fixed rate of Seven and One-Half Percent (7-1/2%) per
annum. The principal balance outstanding under the First Term Note shall be
amortized on the basis of a ______ (___) month term. Beginning on the 30th day
of ___________, 2001, and continuing on the same day of each month thereafter,
the Borrower shall make minimum monthly payments of Seventeen Thousand Seven
Hundred Thirty-six Dollars ($17,736.00), as principal and interest, for
__________ (___) consecutive months with a balloon payment of all remaining
principal and accrued but unpaid interest due and payable in full on the 30th
day of October, 2003.
1.3 SECOND TERM NOTE. The Borrower shall borrow from the Bank, and the
Bank shall lend to the Borrower, the sum of One Hundred Thousand Nine Hundred
Ninety Dollars and Thirty-one Cents ($100,990.31) on a term loan basis. Such
loan shall be evidenced by a Promissory Note in the form attached hereto as
Exhibit "C" (hereinafter referred to as "Second Term Note"). Said Second Term
Note shall bear interest at a variable rate equal to the Bank's Base Rate, plus
one percent (1%), per annum, fluctuating annually. The term Base Rate shall mean
the rate of interest announced by the Bank from time to time as its prevailing
commercial rate. Bank shall give Borrower notice of any change in the rate. The
principal balance outstanding under the Second Term Note shall be amortized on
the basis of a ______ (___) month term. Beginning on the 30th day of
___________, 2001, and continuing on the same day of each month thereafter, the
Borrower shall make minimum monthly payments of Three Thousand Four Hundred and
Ninety-two Dollars ($3,492.00), principal and interest for _____ (___)
consecutive months with a balloon payment of all remaining principal and accrued
but unpaid interest due and payable in full on the 30th day of May, 2004.
1.4 PREPAYMENT. Borrower shall have the right to prepay the Notes
outstanding under this Agreement in whole at any time, or in part from time to
time, without premium or penalty. Each prepayment of any note issued hereunder
shall be accompanied by the interest accrued on the principal amount so prepaid
to the date of such prepayment.
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1.5 SUBSTITUTIONS AND EXCHANGES. The term "Notes" as used in this
Agreement shall include the "First Term Note", "Second Term Note", and each
promissory note delivered under this Agreement by Borrower, and each promissory
note delivered in substitution or exchange for any such promissory note, and,
where applicable, shall include the singular number as well as the plural.
1.6 INTEREST AFTER DEFAULT. Upon the occurrence of an Event of Default
as defined in Section 8, the Bank may, in its sole discretion, increase the
interest rate on the Notes by two percentage points (200 basis points) above the
levels described in subsections 1.2 and 1.3 hereof. The interest rate on the
Notes will not exceed the maximum rate permitted by applicable law. Such
interest rate increase shall remain in effect until the Bank reasonably
concludes that such Event of Default has been cured.
SECTION 2. REPRESENTATIONS AND WARRANTIES
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To induce Bank to enter into this Agreement and to make the loan herein
provided for, Borrower and where specifically noted, Guarantors, represent and
warrant to Bank that:
2.1 EXISTENCE AND AUTHORITY. Borrower is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of West Virginia, and is duly qualified to do business, and is in good
standing as a foreign limited liability company in all jurisdictions where the
failure to so qualify is reasonably likely to have a material adverse effect
upon its business. Pelican is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, and is duly qualified
to do business, and is in good standing as a foreign corporation in all
jurisdictions where the failure to so qualify is reasonably likely to have a
material adverse effect upon its business. XxXxxx is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of West Virginia, and is duly qualified to do business, and is in good
standing as a foreign limited liability company in all jurisdictions where the
failure to so qualify is reasonably likely to have a material adverse effect
upon its business.
2.2 VALIDITY OF AGREEMENT, NOTES, SECURITY AGREEMENT AND DEED OF TRUST.
The making and performance by Borrower and Guarantors of this Agreement, the
Notes, Guaranty Agreements, Security Agreements, Financing Statements, and Deed
of Trust, to be delivered hereunder by them, are within their respective powers
and have been duly authorized by all necessary company or corporate action,
require no governmental approval, and do not contravene any law, articles of
organization, operating agreement, charter, bylaw, or contravene any restriction
binding upon them.
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2.3 LEGAL, VALID AND BINDING. This Agreement is, and each Note, the
Security Agreements, Financing Statements, Deed of Trust and Guaranty Agreements
hereunder, when duly executed and delivered for value, will be legal, valid and
binding obligations of the Borrower and the Guarantors, enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy or other similar laws and subject to general principles
of equity as to the availability of specific performance or injunctive relief.
2.4 PENDING LITIGATION. There are no actions, suits, investigations, or
proceedings pending or, to the knowledge and belief of the Borrower, threatened,
against or affecting the Borrower, the Guarantors, the business, operations,
properties, prospects, profits or condition (financial or otherwise) of the
Borrower or the Guarantors, nor any such proceeding pending before or by any
governmental department, commission, board, regulatory authority, bureau, agency
or instrumentality, domestic, foreign, federal, state or municipal (hereinafter
collectively "governmental agency") or any court, arbitrator or grand jury,
which are reasonably likely to result in any material adverse change in the
business, operations, properties, prospects, profits or condition (financial or
otherwise) of the Borrower or the Guarantors or in the ability of the Borrower
or the Guarantors to perform this Agreement or the Notes.
2.5 NONDEFAULT STATUS. To the knowledge and belief of the Borrower and
the Guarantors, they are not in default with respect to any judgment, order,
writ, injunction, decree, demand, rule or regulation of any court, arbitrator,
grand jury or of any governmental agency, default under which might have
consequences which would materially and adversely effect the business,
operations, properties, prospects, profits or condition (financial or otherwise)
of the Borrower and Guarantors.
2.6 FINANCIAL STATEMENTS. The financial statements, delivered to the
Bank, are true and correct as of the date thereof and fairly present the
financial condition of Borrower and the Guarantors as of the date thereof. Such
statements were prepared in all material respects in accordance with generally
accepted accounting principles ("GAAP"), consistently applied throughout the
periods presented, and are complete and correct. There has been no change in the
condition, financial or otherwise, of the Borrower or the Guarantors have, since
the date of each entity's latest financial statements, other than changes in the
ordinary course of business which have not, in the aggregate, been materially
adverse.
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2.7 RIGHT, TITLE AND INTEREST. Borrower and the Guarantors have, or
will have, good and marketable right, title and interest in and to all their
property including all the real and personal property (such real and personal
property being referred to herein as the "Property") described in this Agreement
and the Exhibits hereto, free and clear of all liens and encumbrances, except
such liens and encumbrances, if any, reflected in the financial statements of
the Borrower and the Guarantors heretofore delivered to the Bank.
2.8 COMPLIANCE WITH LAW. The Borrower and the Guarantors have, to the
best of their knowledge and belief, complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective properties, including without limitation, immigration and all
federal, state or local environmental laws pertaining to toxic or hazardous
substances or waste.
2.9 TAXES. All tax returns and reports of the Borrower and Guarantors
required by law to be filed have been duly filed, and all taxes, assessments,
fees and other governmental charges upon the Borrower and the Guarantors or upon
any of their property, including the Property, and upon any of the other assets,
income or franchises of the Borrower and the Guarantors, which are due and
payable, have been paid, or provision for the payment of the same has been made
by the Borrower and Guarantors.
2.10 MEMBERSHIP INTERESTS AND STOCK OWNERSHIP. The members of the
Borrower, and the names and percentages of ownership of the members, are as
follows:
MEMBERS OWNERSHIP
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Pelican Properties, International Corp. 100%
Pelican is a publicly traded corporation on the over-the-counter market
and has 5,975,851 shares of authorized capital stock:
STOCKHOLDERS NO. OF SHARES
------------ -------------
The names and percentages of ownership of the members of XxXxxx are as
follows:
MEMBERS OWNERSHIP
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Xxxxxx Xxxxxxxx Xxxxxxxx 50%
Xxxxxxxxx Xxx Xxxxxxxx 50%
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2.11 EMPLOYEE BENEFIT PLANS. No employee benefit plan (as such term is
defined in ERISA) from time to time maintained by the Borrower or trust created
thereunder, or any trustee or administrator thereof, has engaged in a
"prohibited transaction" (as such term is defined in Section 406 or Section
2003(a) of ERISA) which could subject such pension plan or any other pension
plan, any trust created thereunder, or any trustee or administrator thereof, or
any other party dealing with any pension plan or any such trust maintained by
Borrower to the tax or penalty on prohibited transactions imposed by Section 502
or Section 2003(a) of ERISA. No pension plan or trust created by Borrower has
been terminated, and there have been no "reportable events" (as that term is
defined in Section 4043 of ERISA) since the effective date of ERISA. No pension
plan or trust created by Borrower has incurred any "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA) whether or not
waived, since the effective date of ERISA. The Borrower is not, nor has it been,
a party to any multi-employer pension plan or benefit plan.
2.12 RIGHTS, LICENSES. The Borrower and Guarantors possess all patents,
patent rights or licenses, trademarks, trademark rights, trade names, trade name
rights, and copyrights which are required to conduct their businesses as now
conducted, or which is anticipated to be conducted, without known conflict with
the rights of others.
SECTION 3. PERSONAL PROPERTY AS COLLATERAL
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3.1 PERSONAL PROPERTY. As security for the payment when due of the
principal of and interest on each of the Notes issued hereunder and of each and
every other liability of the Borrower to the Bank (both those in existence and
those that may hereafter arise), the Borrower and, where specifically noted,
Guarantors hereby pledge and assign to the Bank and grant to the Bank a security
interest in all of the following property:
BORROWER:
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(A) A first lien security interest in all Accounts, Accounts
Receivable, Documents, Goods, Instruments, Inventory, Equipment,
Furniture, General Intangibles, Chattel Paper, and Fixtures, both those
in existence and those that shall hereafter arise, and all Proceeds of
the foregoing.
(B) Collateral Assignment of the following leases and all
rents to be derived therefrom:
(i) Lease dated May 1, 1998, from XxXxxx Hotel, Inc.
to Cafe La News for certain store front property;
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(ii) Lease dated ___________ from _____________ to
Hallmark Shop for certain store front property;
(iii) Lease dated _______________, by and between
XxXxxx Hotel, Inc. and Avis Rent-A-Car Company of Pittsburgh
for certain storefront property, an antenna and parking;
(iv) Lease dated February 1, 1988, by and between
XxXxxx Land Company and Mancan, Inc. d/b/a Manpower for
certain storefront property;
(v) The apartment tenants and each separate month to
month arrangements or separate lease agreements with respect
thereto;
(vi) Premise Lease and Food Service Agreement dated
February 23, 2001, by and between XxXxxx House Hotel &
Conference Center, LLC and Sparachane Enterprises, Inc.; and
(vii) Any and all successor Leases to the foregoing
and all other Leases with respect to the premises herein
described in Section 4.
XXXXXX:
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(A) A first lien security interest in all Accounts, Accounts
Receivable, Chattel Paper, Documents, Goods, Instruments, Inventory,
Equipment, Furniture, Furnishings, Fixtures, kitchen and bar
appliances, dishes, cooking utensils, beverage and food, General
Intangibles, and other items owned by XxXxxx in its operation within
the XxXxxx Hotel of the "Rio Lounge and Entertainment Complex", all
those in existence and those that shall hereafter arise, and all
Proceeds of the foregoing.
SECTION 4. REAL PROPERTY AS COLLATERAL
--------------------------------------
4.1 REAL ESTATE. Prior to or contemporaneously with the delivery
hereof, the Borrower shall have delivered to the Bank a real estate Deed of
Trust in the priority hereinafter specified constituting an enforceable lien
against the property hereinafter described, which said instrument shall secure
the payment, when due, of the notes issued hereunder, and of each and every
other liability of the Borrower to the Bank, both those now in existence and
those that may hereafter arise, as follows:
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A first lien against certain real estate and improvements known as the
XxXxxx House Hotel and Conference Center, including a 173 room
full-service hotel, together with an appurtenant apartment building
containing approximately 30 apartments, and an appurtenant seven-story
parking garage with parking spaces for approximately 225 vehicles,
located in the City of Wheeling, Ohio County, West Virginia (the
"XxXxxx Hotel"), and more particularly described on the attached
Exhibit "D".
SECTION 5. CONDITIONS OF LENDING
--------------------------------
5.1 CONDITIONS PRECEDENT. The obligation of the Bank to make loans
hereunder is subject to the condition precedent that the Bank shall have
received on or before the making of the first loan hereunder the following in
form and substance satisfactory to the Bank:
(A) Certificates dated the date of such loan and executed by
the appropriate Manager-Member of the Borrower, the Secretary of
Pelican and the Manager-Member of XxXxxx, evidencing the necessary
company and corporate action taken by the Borrower and the Guarantors
with respect to this Agreement and the borrowings hereunder;
(B) A signed copy of a favorable opinion of counsel for the
Borrower and the Guarantors dated the date of such loan as to the
matters referred to in Paragraphs 2.1, 2.2, 2.3, 2.4, 2.5 and 2.10
hereof, and as to such other matters as the Bank may reasonably
require;
(C) The financing statements and security agreements, and real
estate deed of trust on the property referred to in Sections 3 and 4
hereof;
(D) Guaranty Agreements executed by Pelican and XxXxxx,
whereby each entity unconditionally guarantees the payment, when due,
of the liabilities of the Borrower to the Bank arising hereunder.
(E) A Collateral Assignment of Lease Agreement whereby
Borrower shall collaterally transfer, assign, and deliver to the Bank
the aforesaid Leases and rents to secure the indebtedness of the
Borrower hereunder.
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(F) Certificates of Good Standing issued by the Secretary of
State of West Virginia for the Borrower and XxXxxx confirming the good
standing of each dated within sixty (60) days of the date of this
Agreement.
(G) Certificate of Good Standing issued by the Secretary of
State of Florida confirming the good standing of Pelican dated within
sixty (60) days of the date of this Agreement.
(H) Borrower shall consummate the exchange of the real
property and the assets of XxXxxx in accordance with that certain Deed
and Exchange Agreement attached hereto as Exhibit "A".
(I) Lender's title insurance policy issued by a title insurer
of Borrower's choice for an ALTA Loan Title Insurance Policy insuring
title to the real property for the full amount of the loan.
(J) Evidence of property, casualty and public liability
insurance providing coverage for the XxXxxx Hotel naming the Bank as an
additional insured and mortgagee with respect to the real estate and
improvements.
5.2 CONTINUING CONDITIONS. The obligation of the Bank to make each loan
hereunder is also subject to the condition precedent that on the date of the
making of such loan, the following statements shall be true:
(A) The representations and warranties contained in Section 2
are true and correct on and as of the date of such loan as though made
on and as of such date;
(B) No event has occurred and is continuing or would result
from the proposed loan which constitutes an event of default (as
hereinafter defined) hereunder or would constitute such an event of
default, but for the requirement that notice be given or time elapse,
or both.
SECTION 6. AFFIRMATIVE COVENANTS
--------------------------------
The Borrower and the Guarantors covenant and agree that during the term
of this Agreement and thereafter until all Notes issued hereunder, together with
all interest accrued thereon, shall have been paid in full, unless the prior
written consent of the Bank shall have been first obtained, they will:
6.1 MANAGEMENT. Maintain executive management satisfactory to the Bank;
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6.2 LIABILITIES. Pay when due each liability to which they or any of
their property is subject, or which is asserted against them, provided, however,
that each entity shall not be required to pay any such liability so long as the
validity thereof shall be contested in good faith by appropriate proceedings
diligently conducted (unless and until foreclosure, sale, distraint or other
similar proceeding shall have been commenced) and if such reserve or other
appropriate provisions, if any, as shall be required by good accounting practice
shall have been made therefore.
6.3 GOOD STANDING. Maintain their company or corporate qualification
and their good standing in each jurisdiction in which such Borrower and each
Guarantor own property or in which the nature of the business transacted by them
requires such qualification and where the failure to be so qualified would have
a material adverse effect on the Borrower or the Guarantors.
6.4 BANK ACCOUNTS. Borrower will maintain its principal checking
account at the Bank and will, at all times, keep on deposit therein adequate
amounts for the conduct of the business of the Borrower.
6.5 PROTECTION OF RIGHT, TITLE AND INTEREST. Borrower and the
Guarantors will take, or cause to be taken, all steps necessary and proper (i)
to protect and enforce their right, title and interest in and to all their
property, including the Property, and all such property necessary for the
conduct of their business; and (ii) to comply in all material respects with all
duties, terms and conditions undertaken or assumed by Borrower and the
Guarantors in connection with their property, including the Property, and their
business.
6.6 OPERATION AND MAINTENANCE. Borrower and the Guarantors will operate
and maintain in good order and repair their property, including the Property,
and shall make, or cause to be made, all necessary repairs, replacements,
additions and improvements thereto during the term of this Agreement.
6.7 COMPLIANCE WITH LAW. Borrower and the Guarantors will comply with
all applicable local, state and federal laws, rules and regulations relating to
any of their activities, and any of their businesses or operations, including
the requirements of the Federal Flood Insurance Act.
6.8 FINANCIAL REPORTS. Within thirty (30) days after the close of each
calendar quarter of each fiscal year and within one hundred twenty (120) days
after the close of the fiscal year of the Borrower and the Guarantors, each
shall furnish, or cause to be furnished to the Bank, an internally prepared
balance sheet of such entity as of the end of such period, and an earnings
statement of such entity for such period, each of which statements shall be
certified by an authorized manager, member or officer of such entity, that to
his best knowledge and belief the same are true and correct; and within one
hundred twenty (120) days after the close of the fiscal year, Pelican shall
furnish, or cause to be furnished, an annual financial statement, audited by
independent public accountants of recognized standing acceptable to the Bank,
which statement shall include a balance sheet and an earnings and surplus
statement of such entity as of the end of such fiscal year. All financial
reports required to be provided under this Agreement shall be prepared in
accordance with generally accepted accounting principles (GAAP), applied on a
consistent basis, and certified by the Borrower and/or Guarantor that the same
are true and correct.
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6.9 FEDERAL INCOME TAX RETURNS. Within one hundred twenty (120) days
after the close of each fiscal year of the Borrower and Guarantors, each shall
furnish or cause to be furnished to the Bank a copy of its most recent signed
federal income tax return.
6.10 RECORDS AND ACCESS. Borrower and the Guarantors shall keep, or
cause to be kept, full and complete books and records in which correct and
accurate entries will be made of all their business transactions and their
property, including the Property, and at any time, and from time to time, shall
give, or cause to be given to the Bank and their representatives reasonable
access during normal business hours to examine all of the Borrower's and the
Guarantors' books and records.
6.11 PAYMENT OF TAXES AND LIENS. Borrower and the Guarantors will pay
in full (i) prior in each case to the date when penalties for the nonpayment
thereof would attach, all taxes, assessments and governmental charges and levies
for which it may be or become subject, and (ii) prior in each case to the date
the claim would become delinquent for nonpayment, all other lawful claims
(whatever their kind or nature) which, if unpaid, might become a lien or charge
upon their property, provided, that no item need be paid so long as and to the
extent that it is contested in good faith and by timely and appropriate
proceedings which are effective to stay enforcement thereof.
6.12 INSURANCE. Borrower and the Guarantors shall keep, or cause to be
kept, with financially sound and reputable insurers, such insurance with respect
to their business and property, including the Property, in such amounts and
insuring against such risks, casualties and contingencies of such types
(including but not limited to insurance for loss or damage by fire and other
hazards and insurance for public liability for damage to persons and property in
connection with their property, including the Property, and the activities
conducted thereon or relating thereto) as is customary for persons, corporations
and other entities of established reputation engaged in the same or similar
businesses as the Borrower and the Guarantors and similarly situated, naming
Bank as mortgagee and loss payee or additional insured, as its interests may
appear; and shall keep, or cause to be kept, such coverage as required by any
applicable Workers' Compensation laws; and will furnish, or cause to be
furnished, certificates of all such insurance and coverage to Bank before the
initial borrowing hereunder and within one hundred twenty (120) days after the
end of each of its subsequent fiscal years. All policies to the extent
obtainable shall provide that they may not be altered or canceled except on
prior written notice to Bank.
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6.13 EXPENSES, FEES AND DISBURSEMENTS. Borrower shall pay, or cause to
be paid, all expenses, fees and disbursements, including reasonable legal
expenses, incurred by the Bank, or otherwise, in connection with the
preparation, recordation, filing, continuation, satisfaction and termination of
this Agreement, the Guaranty Agreements, the Deed of Trust, Financing
Statements, and any other loan documents and instruments or documents in
relation thereto.
SECTION 7. NEGATIVE COVENANTS
-----------------------------
The Borrower and the Guarantors covenant (jointly and severally) that
during the term of this Agreement and thereafter until all Notes issued
hereunder, together with all interest accrued thereon, shall have been paid in
full, unless the prior written consent of the Bank shall have been first
obtained, they will not:
7.1 LIMITED LIABILITY COMPANY OR CORPORATE ACTIONS. (i) Purchase,
redeem or otherwise acquire any of the outstanding shares of their membership
interests or capital stock, except pursuant to stock purchase agreements which
take effect upon the termination or death of an employee/stockholder/member;
(ii) effect a merger or consolidation with any corporation or other entity, or
liquidate or dissolve; (iii) sell, transfer, assign or otherwise dispose of any
of their material assets or acquire any assets other than in the ordinary course
of business, excepting, however, that purchases or sales of assets valued at an
aggregate amount exceeding $50,000.00 shall not constitute ordinary course of
business transactions; and (iv) pay dividends on their membership interests or
outstanding stock, or otherwise make distributions to their members or
shareholders. The foregoing notwithstanding, Pelican shall be exempt from the
provisions of subsections 7.1(i) and 7.1(iv) hereof so long as the Borrower and
the Guarantors are not in Default of the provisions of the Note, Deed of Trust,
Security Agreement and/or this Loan and Security Agreement.
7.2 SECURITY INTERESTS, ETC. Create or suffer to remain any security
interest, lien or encumbrance against or upon any of their properties, real or
personal, whether presently owned or hereafter acquired, other than to the Bank
provided, however, that this restriction shall not apply to or operate to
prevent (i) liens for taxes and other governmental charges, which taxes and
charges at a particular time are not due or remain payable without penalty, or
which are permitted to remain unpaid by reason of the operation of Paragraph 7.5
of Section 7 hereof; (ii) liens arising in the ordinary course of business out
of claims for labor, materials or supplies which are permitted to remain unpaid
by reason of the operation of Paragraph 7.5 of Section 7 hereof; (iii) deposits
and pledges made in the ordinary course of business to secure Workers'
Compensation, unemployment, old age benefits or other social security payments
or in connection with or to secure performance of bids, tenders, trade contracts
or leases, or to secure statutory obligations or surety, performance or appeal
bonds, or other pledges or deposits for purposes of like nature, and not in
connection with the borrowing of money; and (iv) easements, rights-of-way,
restrictions, minor defects in title and other similar real estate encumbrances
not in the aggregate interfering with the ordinary conduct of the business of
such Borrower, or Guarantor.
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7.3 GUARANTY. Become Guarantor or surety for or on any indebtedness,
contract or undertaking of any person, firm or corporation, except in the
ordinary course of business.
7.4 LOANS. Make any loans or advances directly or indirectly to any
person, firm or corporation, other than in the ordinary course of business,
provided that loans to members, officers and employees shall not be considered
to be in the ordinary course of business.
7.5 INDEBTEDNESS. Suffer to remain, create or incur any indebtedness
except (i) indebtedness evidenced by Notes issued hereunder; (ii) indebtedness
secured by liens permitted by Paragraph 7.2 of this Section 7; (iii)
indebtedness subordinated to the liabilities of the Borrower to the Bank in a
manner satisfactory to the Bank; and (iv) accounts payable and accrued expenses
(other than borrowings) incurred in the normal course of business.
SECTION 8. EVENTS OF DEFAULT
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8.1 EVENTS OF DEFAULT. If any one or more of the following events of
default shall occur and be continuing, that is to say:
(A) The Borrower shall default in the payment when due of any
installment of interest or principal on any Note issued hereunder and
such default shall not be remedied for a period of ten (10) days after
deposit in the United States mail, certified and postage prepaid,
addressed to Borrower, 0000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, or a
written notice to and demand upon Borrower to cure or cause to be cured
such default;
(B) Any representation or warranty made in connection with the
delivery of this Agreement or any of the Notes issued hereunder, or in
any certificate furnished pursuant thereto shall prove to have been
false or misleading in any material respect as of the time made;
(C) The Borrower shall default in the performance of any term,
covenant, agreement or condition contained in Sections 3 and 4 hereof
and such default shall not be remedied for a period of ten (10) days
after deposit in the United States mail, certified and postage prepaid,
addressed to Borrower, 0000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, or a
written notice to and demand upon Borrower to cure or cause to be cured
such default; or
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(D) The Borrower or the Guarantor shall default in the
performance of any term, covenant, agreement or condition contained
herein other than any of those referred to in Subparagraphs (A), (B),
and (C) of this Paragraph 8.1, and such default shall not be remedied
for a period of thirty (30) days after deposit in the United States
mail, certified and postage prepaid, addressed to Borrower, 0000 Xxxxxx
Xxxxxx, Xxxxxxxx, XX, 00000, or a written notice to and demand upon the
Borrower to cure or cause to be cured such default;
then and in any such event the Bank shall have the right by written notice to
the Borrower to declare the unpaid balance of the principal of all Notes then
outstanding hereunder, together with all interest accrued thereon, to be
forthwith due and payable, and the same shall thereupon become due and payable,
without any presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived.
8.2 ADDITIONAL DEFAULT CONSEQUENCES. If one or more of the following
described events of default shall occur, that is to say: The Borrower or either
of the Guarantors shall become insolvent and bankrupt or cease paying its debts
as they mature, or make an assignment for the benefit of creditors, or consent
to the appointment of a trustee or receiver, or a trustee or receiver or
liquidator shall be appointed for it or for a substantial part of its property,
or bankruptcy, reorganization, arrangement, insolvency or similar proceedings
shall be instituted by or against it under the laws of any jurisdiction and, in
case of any such proceeding instituted against it, the same shall not have been
dismissed within a period of seventy-five (75) days, then any Note or Notes then
outstanding hereunder, together with all interest accrued thereon, shall
thereupon become due and payable, without any presentment, demand, protest, or
other notice of any kind whatsoever, all of which are hereby expressly waived.
SECTION 9. SET-OFF
------------------
9.1 SET OFF. In addition to any of the rights it may have under this
Agreement or pursuant to law, upon the occurrence of an event of default
hereunder, any and all moneys now or hereafter in the hands of the Bank on
deposit or otherwise belonging to the Borrower shall immediately become the
subject of set-off by the Bank against any indebtedness that shall then be in
existence hereunder, and any other liability or liabilities of the Borrower to
the Bank then in existence, whether said indebtedness and liability or
liabilities are due or to become due, and such moneys may immediately be
appropriated by the Bank to the payment of such indebtedness and liability or
liabilities in such manner as it shall see fit.
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SECTION 10. MISCELLANEOUS
-------------------------
10.1 WAIVER AND MODIFICATION. No waiver by Bank of any default shall
operate as a waiver of any other default or of the same default on a future
occasion. No failure to exercise, and no delay in exercising, on the part of the
Bank, any power, remedy or right shall operate as a waiver thereof, nor shall
any single or partial exercise of any power, remedy, or right preclude other or
further exercise of any power, remedy, or right. This Agreement and the other
loan documents, including the Notes, Guaranty Agreements and Deed of Trust, may
only be modified or waived by a written document executed by Borrower,
Guarantors and Bank.
10.2 NOTICES. All notices or other correspondence required or made
necessary by the terms of this Agreement and the other loan documents shall be
in writing and shall be considered as having been given to each party if mailed
by registered or certified mail, postage prepaid, to their respective addresses
as follows:
If to BANK: with a COPY to:
Mr. David Pel Xxxxx X. Xxxxxxx, Esq.
Commercial Loan Department Xxxxxx Xxxxxx-Xxxxxx, Esq.
Wesbanco Bank Wheeling PHILLIPS, GARDILL, KAISER
Xxx Xxxx Xxxxx & XXXXXXXX
Xxxxxxxx, XX 00000 00-00xx Xxxxxx
Telephone: (000) 000-0000 Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to BORROWER:
C. Xxxx Xxxxx, Xx. and Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000 Hotel, LLC
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a COPY to:
Xxxxx X. Xxxx, Xx., Esq. and Xxxxxx Xxxxxx, Jr., Esq.
STEPTOE & XXXXXXX X.X. Xxx 000000
X.X. Xxx 0000 Xxxxxxxx, XX 00000-0000
Xxxxxxxxxx, XX 00000-0000 Telephone: (000) 000-0000
Facsimile: Facsimile: (000) 000-0000
(000) 000-0000
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Each party shall have the right to change its address at any time, and
from time to time, by giving written notice thereof to the other party.
10.3 CERTAIN TAXES. Borrower agrees to pay, and save Bank harmless
from, all liability for any federal or state documentary stamps or other tax
liability, together with any interest or penalty, which is payable or may be
determined to be payable with respect to the execution or delivery of this
Agreement or any other documents including the Notes, the Guaranty Agreements,
the Deed of Trust and the Financing Statements, which obligations of the
Borrower shall survive the termination of this Agreement.
10.4 APPLICABLE LAW. This Agreement shall be a contract made under and
governed by the laws of the State of West Virginia.
10.5 SEVERABILITY. In the event that any term or provision of this
Agreement or any other loan documents including the Notes, Guaranty Agreements
and the Deed of Trust is lawfully held or declared to be invalid, illegal or
unenforceable, it shall be deemed deleted to the extent necessary under
applicable law, and the validity of the other terms and provisions shall not be
affected thereby.
10.6 SUCCESSORS AND ASSIGNS. This Agreement and the other loan
documents shall be binding upon the Borrower, Guarantors and Bank and their
respective successors and assigns, and shall inure to the benefit of Borrower,
Guarantors, and Bank and the successors and assigns of Bank (except that
Borrower and Guarantors shall have no right to assign, voluntarily or by
operation of law, any of its rights or obligations hereunder or under any other
loan documents without Bank's prior written consent and provided further that
nothing herein is intended by any party hereto to confer any rights upon any
third party as a beneficiary hereof).
10.7 REQUIREMENT OF NOTICE OF BANK DEFAULT. Borrower agrees to give
Bank written notice of any action or inaction by Bank, or any agent or attorney
of Bank, in connection with this Agreement or the loan(s) that may be actionable
against Bank or any agent or attorney of Bank or a defense to payment of the
loan(s) for any reason, including, but not limited to, commission of a tort or
violation of any contractual duty or duty implied by law. Borrower agrees that
unless such notice is duly given as promptly as possible (and in any event
within sixty (60) days after Borrower has knowledge, or with the exercise of
reasonable diligence should have had knowledge, of any such action or inaction)
Borrower shall not assert, and Borrower shall be deemed to have waived any claim
or defense arising therefrom.
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10.8 LIQUIDATED DAMAGE CLAUSE. In view of the difficulty of
ascertaining damages for Bank's failure to fund advances, which may subsequently
be deemed to be in violation of the provisions of this Agreement, Borrower
agrees that any liability of Bank for such failure to fund advances shall be
liquidated at the sum of the two (2) months' interest accrual on the principal
amount of the loan outstanding as of date of the failure to so fund such
advances.
10.9 LIMITATION OF CONSEQUENTIAL DAMAGES. Neither Bank nor any agent or
attorney of Bank shall be liable to Borrower for consequential damages arising
from any breach of contract, tort, or other wrong in connection with the
negotiation, documentation, administration or collection of the loan(s).
10.10 ORAL AGREEMENT. Any oral agreements (past, present and future)
concerning any aspect of the loan are null and void. This document contains all
the agreements between the Borrower, Guarantors and the Bank and this document
can be amended only by writings signed by all parties hereto.
10.11 HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof.
10.12 TIME. Time is the of essence of this Agreement.
WITNESS the due execution hereof as of the day and year first above
written.
BORROWER:
WHEELING CITY CENTER HOTEL, LLC, A
WEST VIRGINIA LIMITED LIABILITY COMPANY
BY______________________________________
ITS __________________________
BANK:
WESBANCO BANK, INC.
A WEST VIRGINIA BANKING CORPORATION,
By_______________________________________
ITS _________________________
GUARANTORS:
PELICAN PROPERTIES, INTERNATIONAL
CORP., A FLORIDA CORPORATION
BY_______________________________________
ITS _________________________
XXXXXX HOUSE HOTEL & CONFERENCE
CENTER, LLC, A WEST VIRGINIA LIMITED
LIABILITY COMPANY
BY_______________________________________
ITS __________________________
