EXHIBIT 10.2
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THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amendment to Amended and Restated Credit Agreement
("Amendment") is made and entered into as of December 21, 2001, among WESTCOAST
HOSPITALITY, LIMITED PARTNERSHIP, a Delaware limited partnership, formerly known
as Cavanaughs Hospitality Limited Partnership (the "Borrower"), the several
financial institutions that are party to this Amendment (collectively, the
"Lenders"; individually, a "Lender"), and U.S. BANK NATIONAL ASSOCIATION, as
administrative agent for the Lenders (the "Agent").
RECITALS:
A. On December 29, 1999, the Borrower, the Lenders and the Agent
entered into that certain Amended and Restated Credit Agreement (together with
all amendments, supplements, exhibits, and modifications thereto, the "Credit
Agreement") whereby the Lenders agreed to extend certain credit facilities to
the Borrower. The Borrower, the Lenders and the Agent have entered into two
amendments to the Credit Agreement.
B. WHC has entered into that certain Purchase Agreement with
Doubletree Corporation and Hilton Hotels Corporation dated as of December 21,
2001 (the "Red Lion Purchase Agreement"), whereby WHC has agreed to acquire all
of the issued and outstanding capital stock of Red Lion Hotels, Inc. (the "Red
Lion Stock Purchase").
C. The Borrower has requested the Lenders to consent to the Red Lion
Stock Purchase and to amend certain provisions of the Credit Agreement in order
to permit WHC to consummate the Red Lion Stock Purchase.
D. The purpose of this Amendment is to set forth the terms and
conditions under which the Lenders will agree to the Borrower's requests.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the parties agree as follows:
ARTICLE I. AMENDMENT
The Credit Agreement, as well as all of the other Loan Documents, are
hereby amended as set forth herein. Except as specifically provided for herein,
all of the terms and conditions of the Credit Agreement and each of the other
Loan Documents shall remain in full force and effect throughout the terms of the
Loans, as well as any extensions or renewals thereof.
ARTICLE II. DEFINITIONS
2.1 DEFINED TERMS
As used herein, capitalized terms shall have the meanings given to them
in the Credit Agreement, except as otherwise defined herein or as the context
otherwise requires.
2.2 AMENDED DEFINED TERMS
Section 1.1 of the Credit Agreement is hereby amended to add or modify
(as the case may be) the following defined terms:
"Borrowing Base" means, on each day that any Loans are outstanding or
any day that there is any Letter of Credit Usage, an amount equal to the lesser
of (a) 60% of the Collateral Pool Value or (b) the Implied Debt Service Coverage
Cap.
"Collateral Documents" means, collectively, (a) the Security
Agreements, the Deeds of Trust, and all other security agreements, pledge
agreements, mortgages, deeds of trust, patent and trademark assignments, lease
assignments, guarantees and other similar agreements between the Borrower, WHC
or any Subsidiary and the Lenders or the Agent for the benefit of the Lenders
now, heretofore or hereafter delivered to the Lenders or the Agent pursuant to
or in connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the Uniform Commercial Code or comparable law) against the Borrower, WHC or any
Subsidiary as debtor in favor of the Lenders or the Agent for the benefit of the
Lenders as secured party, and (b) any amendments, supplements, modifications,
renewals, restatements, replacements, consolidations, substitutions and
extensions of any of the foregoing.
"Collateral Pool Value" means the sum of the Approved Appraised Values
of all Eligible Real Property from time to time.
"Commitment" means $70,000,000 less the aggregate amount of mandatory
prepayments made in accordance with Section 2.6, excluding any prepayments made
as a result of the Morgan Refinancing and any of the Subsequent Refinancings.
"Deed of Trust" means a deed of trust or mortgage executed by the
Borrower, WHC or a Subsidiary approved by the Agent in favor of the Agent as
agent for the Lenders pursuant to Section 5.3, in a form approved by the Agent,
as well as all amendments to the foregoing, whether any such deed of trust,
mortgage or amendment thereto was executed pursuant to the Initial Credit
Agreement or pursuant to this Agreement. The Deeds of Trust shall be in the form
designated by the Agent.
"EBITDA" means, with respect to WHC and its Subsidiaries for any
applicable period, Adjusted Net Income for such period, plus, to the extent
deducted in determining Adjusted Net Income for such period, the aggregate
amount of (a) Interest Expense, (b) federal, state, local and foreign income
taxes and (c) depletion, depreciation and amortization of tangible and
intangible assets. In the event that the Borrower has consummated any
Acquisition during the applicable period, "EBITDA" shall include the EBITDA from
the Person acquired (or the portion thereof allocable to the portion of the
Person acquired) for such period, provided that the Borrower has delivered to
the Agent documentation deemed adequate by the Agent to verify such EBITDA, as
well as a Compliance Certificate on a pro forma basis and pro forma financial
statements on a consolidating basis approved by the Agent. Subject to approval
of the Required Lenders confirmed in writing by the Agent, any such pro forma
Compliance Certificate and pro forma financial statements may exclude expenses
of the acquired Person that will terminate upon completion of the Acquisition,
and shall include expenses that would have been incurred during the applicable
period. An example of such an expense that may be excluded is the franchise fee
under a franchise agreement that will be terminated upon completion of the
Acquisition.
"Eligible Real Property" means each parcel of real property and related
improvements (a) that has been approved by the Agent in writing in its sole
discretion, (b) the fee title interest of which is owned by WHC or a Subsidiary
approved by the Agent (provided that in connection with the parcel or real
property located in Hillsboro, Washington County, Oregon , the Borrower's
interest in the property may be a leasehold interest provided that the Agent
receives a landlord's consent in a form acceptable to the Agent), (c) that is
fully developed and improved and with respect to which there has been issued a
certificate of occupancy, (d) in which the Agent, for the benefit of the
Lenders, holds a first priority Deed of Trust to secure the Obligations, (e)
with respect to which the Agent has obtained the Collateral Documents described
in Section 5.3, (f) with respect to which the Approved Appraised Value has been
established, and (g) that is not encumbered by any Liens other than Permitted
Liens.
"Fixed Charge Coverage Ratio" means the ratio of (a) for the applicable
period, the sum of (i) EBITDA less (ii) an amount equal to 4% of the aggregate
of all amounts which, in accordance with GAAP, would be included as gross
revenue on a consolidated statement of income of WHC and its Subsidiaries
arising out of or related to hotel or restaurant operations (including, without
limitation, gross revenues from the lease or licensing of space in any of the
hotels or restaurants of WHC and its Subsidiaries), to (b) for the applicable
period, the sum of (i) scheduled payments of principal on Indebtedness of WHC
and its Subsidiaries (including the portion of payments on capitalized leases
allocable to principal, but excluding (A) mandatory prepayments of the Loans
required under Section 2.6, and (B) balloon payments made with the proceeds of
Indebtedness permitted pursuant to Section 8.5), whether or not made, (ii)
Interest Expense, (iii) Pro Forma Interest Expense, (iv) income and gross
receipts taxes paid in cash or cash equivalents, (v) Pro Forma Taxes, (vi)
dividends and distributions paid in cash or cash equivalents (including, without
limitation, dividends paid on the Preferred Stock, but excluding distributions
of cash made by the Borrower to WHC in an amount necessary to allow WHC to pay
income and gross receipts taxes on the taxable income of the Borrower that is
recognized by WHC for tax purposes and excluding distributions made by any of
the direct or indirect Subsidiaries of the Borrower to the Borrower or by the
Tier II LLCs to the Tier I LLCs), and (vii) payments made to redeem or otherwise
acquire for value any partnership units of the Borrower or shares of capital
stock of WHC or any warrants, rights or options to acquire such partnership
units or shares.
"Indemnification Agreements" means the indemnification agreements
executed by WHC, the Borrower and/or their Subsidiaries in favor Agent as agent
for the Lenders pursuant to Section 5.3, in a form designated by the Agent,
together with all amendments thereto.
"Interest Coverage Ratio" means the ratio of (a) EBITDA for the
applicable period, to (b) the sum of (i) Interest Expense for the applicable
period, (ii) Pro Forma Interest Expense for the applicable period, and (iii)
dividends paid on the Preferred Stock.
"LIBOR" means the LIBOR rate quoted by the Agent from Telerate Page
3750 or any successor thereto (which shall be the LIBOR rate in effect two New
York banking days prior to commencement of the Interest Period of a LIBOR Rate
Loan, for the number of days comprised therein; provided, that in lieu of
determining the rate in the foregoing manner, the Agent may determine the rate
based on rates offered to the Agent for deposits in United States Dollars
(rounded upwards, if necessary, to the nearest 1/16 of 1%) in the interbank
eurodollar market at such time for delivery on the first day of the Interest
Period for the number of days comprised therein.
"Preferred Stock" means the Series A and Series B preferred stock
issued by WHC as a portion of the consideration paid by WHC for the Red Lion
Stock Purchase.
"Prime Rate" means the prime rate announced by U.S. Bank from time to
time, as and when such rate changes. Any change in the prime rate announced by
U.S. Bank shall take effect at the opening of business on the day specified in
the public announcement of such change.
"Pro Forma Interest Expense" means Interest Expense that would have
been incurred by WHC or any of its Subsidiaries on Indebtedness incurred in
connection with any Acquisition during the applicable period if such Acquisition
had been completed and such Indebtedness incurred on the first day of the
applicable period. If such Indebtedness has a floating or formula rate of
interest, for purposes of this definition, the implied rate of interest for the
applicable period shall be determined by utilizing the rate which is or would be
in effect with respect to such Indebtedness as of the relevant date of
determination.
"Pro Forma Taxes" means income and gross receipts taxes that would have
been payable in cash or cash equivalents during the applicable period by WHC and
its Subsidiaries (including the acquired Person) on the net income and gross
receipts of any Person acquired by WHC or any of its Subsidiaries in an
Acquisition if such Acquisition had been completed on the first day of the
applicable period.
"Red Lion Purchase Agreement" has the meaning set forth in Recital B of
the Third Amendment.
"Red Lion Stock Purchase" has the meaning set forth in Recital B of the
Third Amendment.
"Security Agreements" means all security agreements heretofore or
hereafter executed by the Borrower, WHC and the Subsidiaries and in favor the
Agent as agent for the benefit of the Lenders in connection with the Initial
Credit Agreement or this Agreement in forms designated by the Agent, together
with all amendments and restatements of the foregoing.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, limited liability partnership, joint
venture or other business entity of which more than 50% of the voting stock,
membership interests or other equity interests (in the case of Persons other
than corporations), is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of WHC.
"Third Amendment" means that certain Third Amendment to Amended and
Restated Credit Agreement dated as of December 21, 2001, and entered into among
the Borrower, the Agent and the Required Lenders.
2.3 OTHER INTERPRETIVE PROVISIONS
Section 1.2(h) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(h) Each reference hereunder to Subsidiaries is effective at such
time and to the extent that any Person has existing Subsidiaries (as defined
herein).
2.4 MODIFICATION OF REFERENCE RATE TO PRIME RATE
All references in the Credit Agreement and the other Loan Documents to
the "Reference Rate" are hereby amended to constitute references to the "Prime
Rate."
ARTICLE III. MISCELLANEOUS CONSENTS AND AMENDMENTS
3.1 USE OF PROCEEDS
Section 7.12 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
The Borrower shall use the proceeds of the Loans for working
capital, the WestCoast Acquisition, the Red Lion Stock Purchase, other
Acquisitions permitted hereunder, funding operations, and other general
business purposes not in contravention of any Requirement of Law or of
any Loan Document; provided that all proceeds shall be used for the
benefit of the Borrower.
3.2 FURTHER ASSURANCES
The introductory clause of Section 7.14(d) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
(d) Promptly upon any Person becoming after the date hereof a
Subsidiary, the Borrower:
3.3 CONSENT TO RED LION STOCK PURCHASE
Pursuant to Section 8.4(d) of the Credit Agreement and subject to the
terms and conditions set forth in this Amendment, the Required Lenders hereby
approve the Red Lion Stock Purchase, provided that the Red Lion Stock Purchase
is consummated in accordance with the terms and conditions of the Red Lion
Purchase Agreement in the form provided by the Borrower to the Agent prior to
the date of this Amendment.
3.4 USE OF PROCEEDS
Section 8.7 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
The Borrower shall not, and shall not suffer or permit WHC or
any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (a) to purchase or carry Margin Stock, (b) to purchase or
redeem any stock, partnership units or other equity interest of the
Borrower or WHC; provided that Loan proceeds may be used to redeem
Preferred Stock to the extent that WHC is not precluded from redeeming
Preferred Stock by the provisions of this Agreement (including, without
limitation, Section 8.10), (c) to repay or otherwise refinance
indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (d) to extend credit for the purpose of purchasing or
carrying any Margin Stock, (e) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act, or
(f) to finance or refinance the acquisition of any interest in real
property that is not used primarily in the hospitality business or the
acquisition of any Person whose primary business is not the hospitality
business except as otherwise approved by the Required Lenders and
confirmed in writing by the Agent; provided that Loan proceeds may be
used to finance the acquisition by the Borrower of nonoperating real
property for an acquisition price not to exceed (i) $500,000 for any
individual parcel of real property, or (ii) $1,500,000 in the aggregate
after January 1, 2000.
3.5 RESTRICTED PAYMENTS
Section 8.10 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
The Borrower shall not, and shall not suffer or permit WHC or
any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock,
partnership units or other ownership interests (as the case may be), or
purchase, redeem or otherwise acquire for value any shares of its
capital stock, partnership units or other ownership interests (as the
case may be) or any warrants, rights or options to acquire such shares
or partnership units, now or hereafter outstanding; except that (a) WHC
or the Borrower may declare and make dividend payments or other
distributions payable solely in its common stock or partnership units
(as the case may be), (b) the Borrower may make distributions to its
partners in an amount necessary to allow WHC to pay income and gross
receipts taxes on the taxable income of the Borrower that is recognized
by its partners for tax purposes, provided that (i) at the time of
making the distribution there exists no Event of Default and (ii) after
giving effect to any proposed distribution, there would not exist any
Event of Default, (c) WHC and the Borrower may pay dividends and
distributions to their shareholders or partners (as the case may be) or
purchase or redeem shares of capital stock or partnership units (as the
case may be), provided that (i) at the time of making the dividend,
distribution, purchase or redemption payment there exists no Event of
Default, (ii) after giving effect to the proposed payment, there would
not exist an Event of Default, (iii) as of the end of the fiscal
quarter of WHC immediately prior to the date of the proposed payment
for the four fiscal quarters then ended and as of the end of the fiscal
quarter of WHC in which the date of the proposed payment is to be made
for the four fiscal quarters then ended, the Funded Debt Ratio shall be
less than 3.50:1.00, and (iv) after giving effect to the proposed
payment, the Capitalization Ratio would not exceed 0.50:1.00, (d) WHC
may pay regularly scheduled dividends on the Preferred Stock to the
holders thereof, provided that (i) at the time of making any such
dividend payment there exists no Event of Default and (ii) after giving
effect to the proposed payment, there would not exist an Event of
Default, (e) WHC may issue stock to partners of the Borrower in
exchange for partnership units of the Borrower, and (f) any Subsidiary
other than the Borrower may pay dividends and make distributions to WHC
or to any Subsidiary that owns and controls more than 50% of the voting
stock, membership interests or other equity interests of the Person
paying the dividend or making the distribution.
3.6 FINANCIAL COVENANTS
Section 8.14(f) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(f) As of the end of each fiscal quarter, the aggregate amount
of gross assets reflected on the WHC's balance sheet attributable to
Persons other than the Borrower and other wholly owned and controlled
Subsidiaries of WHC shall not exceed 10% of the aggregate amount of
gross assets reflected on the WHC's balance sheet.
3.7 ERISA EVENT OF DEFAULT
Section 9.1(h) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(h) (i) An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower, WHC or any Subsidiary
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $500,000; or (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000; or (iii) the Borrower, WHC or any ERISA
Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $500,000; or
ARTICLE IV. CONDITIONS PRECEDENT
The modifications set forth in this Amendment shall not be effective
unless and until the following conditions have been fulfilled:
(A) CREDIT AGREEMENT AND NOTE
The Agent shall have received this Amendment duly executed by the
Borrower, WHC, the Subsidiaries that are a party hereto, the Agent and the
Required Lenders.
(B) RESOLUTIONS; INCUMBENCY
The Agent shall have received, in a form acceptable to the Agent:
(i) Copies of the resolutions of the board of directors or other
governing body of the Borrower, WHC, Red Lion Hotels, Inc., Red Lion
Properties, Inc. and each other Subsidiary that may become party to a
Loan Document authorizing the transactions contemplated hereby,
certified by the Secretary or an Assistant Secretary of such Person;
and
(ii) A certificate of the Secretary or Assistant Secretary of the
Borrower, WHC, Red Lion Hotels, Inc., Red Lion Properties, Inc. and
each other Subsidiary that may become party to a Loan Document
certifying the names and true signatures of the officers of the
Borrower, WHC, Red Lion Hotels, Inc., Red Lion Properties, Inc. and
such other Subsidiaries authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be
delivered by them hereunder.
(C) ORGANIZATION DOCUMENTS; GOOD STANDING
The Agent shall have received each of the following documents:
(i) the Organization Documents of the Borrower, WHC, Red Lion
Hotels, Inc., Red Lion Properties, Inc. and each other Subsidiary that
may become party to a Loan Document, certified by the Secretary or
Assistant Secretary of the Borrower, WHC, Red Lion Hotels, Inc., Red
Lion Properties, Inc. and such other Subsidiaries as of the Closing
Date;
(ii) a good standing certificate for the Borrower, WHC, Red Lion
Hotels, Inc., Red Lion Properties, Inc. and each other Subsidiary that
may become party to a Loan Document from the Secretary of State (or
similar, applicable Governmental Authority) of its state of
organization; and
(iii) a Revised Article 9 certificate for the Borrower, WHC, Red
Lion Hotels, Inc., Red Lion Properties, Inc. and each other Subsidiary
that may become party to a Loan Document in the form designated by the
Agent.
(D) LEGAL OPINIONS
The Agent shall have received an opinion of counsel to the Borrower and
WHC and each Subsidiary party to any Loan Document as in effect on the date of
the consummation of the Red Lion Stock Purchase, addressed to the Agent and the
Lenders, in a form acceptable to the Agent.
(E) LOAN FEE LETTER
The Agent shall have received, duly executed by the Borrower, a loan
fee letter in the form designated by the Agent.
(F) ADDITIONAL ELIGIBLE REAL PROPERTY
The Agent shall have received evidence satisfactory to the Agent that
all of the conditions for the seven hotel properties owned by Red Lion Hotels,
Inc. and the two hotel properties owned by Red Lion Properties, Inc. to
constitute Eligible Real Property have been satisfied.
(G) OTHER COLLATERAL DOCUMENTS
The Agent shall have received the following Collateral Documents, duly
executed by the Borrower, WHC and the Subsidiaries (as the case may be), in
forms designated by the Agent:
(i) amendments to all Deeds of Trust heretofore executed and
delivered to the Agent, which amendments shall be substantially in the
form designated by the Agent;
(ii) the issuance of such endorsements to each Title Insurance
Policy heretofore issued in connection with the Deeds of Trust as the
Agent deems necessary in its sole discretion, issued by a title
insurance company reasonably acceptable to the Agent, dated as of the
date of the recording of the amendment to each Deed of Trust, and in a
form acceptable to the Agent;
(iii) a guaranty of the Obligations from each of Red Lion Hotels,
Inc. and Red Lion Properties, Inc. in the form designated by the Agent;
(iv) a security agreement from each of Red Lion Hotels, Inc. and
Red Lion Properties, Inc. in form designated by the Agent, granting a
security interest in all of such Person's assets (other than their
leasehold interests in leases of real property) in favor of the Agent
for the benefit of the Lenders, in the form designated by the Agent;
(v) to the extent not previously provided to the Agent, a pledge
agreement from each of the Borrower, WHC and each other Subsidiary
(including, without limitation, Red Lion Hotels, Inc.) that owns any
Subsidiary pledging in favor of the Agent for the benefit of the
Lenders as security for the Obligations, all of capital stock and other
ownership interests in Subsidiaries, in the form designated by the
Agent, together with certificates evidencing all of the issued and
outstanding shares of capital stock (or other evidence of beneficial
ownership) of each such Subsidiary, together with undated stock powers
(or similar instruments of transfer) owned by such Persons duly
executed in blank and appropriately completed Uniform Commercial Code
financing statements, if applicable, with respect thereto (or, if any
such shares of capital stock (or other evidence of beneficial
ownership) are not represented by certificates, confirmation and
evidence satisfactory to the Agent that the security interest in such
shares (or other such evidence) has been transferred and/or registered
in accordance with the laws of the applicable jurisdictions so as to
create a valid first-priority perfected security interest therein for
the benefit of the Agent and the Lenders);
(vi) acknowledgment copies of all UCC financing statements filed,
registered or recorded to perfect the security interests of the Agent
for the benefit of the Lenders, or other evidence satisfactory to the
Agent that there has been filed, registered or recorded all financing
statements and other filings, registrations and recordings necessary
and advisable to perfect the Liens of the Agent for the benefit of the
Lenders in accordance with applicable law;
(vii) written advice relating to such lien and judgment searches
as the Agent shall have requested, and such termination statements or
other documents as may be necessary to confirm that the Collateral is
subject to no other Liens in favor of any Persons (other than Permitted
Liens);
(viii) such consents, estoppels, subordination agreements and
other documents and instruments executed by landlords, tenants,
franchisors, licensors and other Persons party to material contracts
relating to any Collateral as to which the Agent shall be granted a
Lien for the benefit of the Lenders, as requested by the Agent or any
Lender;
(ix) evidence that all other actions necessary or, in the opinion
of the Agent or the Lenders, desirable, to perfect and protect the
first priority security interest created by the Collateral Documents
and to enhance the Agent's ability to preserve and protect its
interests in and access to the Collateral, have been taken; and
(x) amended and restated security agreements in the form
designated by the Agent from the Borrower, WHC and each of the other
Subsidiaries from which the Agent has previously received Security
Agreements; provided that at the discretion of the Agent, the Agent may
not require such amended and restated security agreements until after
the consummation of the Red Lion Stock Purchase, in which case, the
Borrower shall and shall cause WHC and each such other Subsidiary to
execute and deliver such Collateral Documents within five days of
request by the Agent.
(H) INSURANCE POLICIES
The Agent shall have received lenders' payable endorsements and
insurance certificates with respect to the insurance policies or other
instruments or documents evidencing insurance coverage on the properties of the
Borrower in accordance with Section 7.6.
(I) CERTIFICATE
The Agent shall have received a certificate signed by a Responsible
Officer, dated as of the date of consummation of the Red Lion Stock Purchase,
stating that:
(i) the representations and warranties contained in Article VI of
the Credit Agreement are true and correct on and as of such date, as
though made on and as of such date after giving effect to the Red Lion
Stock Purchase and the requested Loans to finance the Red Lion Stock
Purchase;
(ii) no Default or Event of Default exists or would result from
the consummation of the Red Lion Stock Purchase and making the
requested Loans to finance the Red Lion Stock Purchase;
(iii) there has occurred since September 30, 2001, no event or
circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect; and
(iv) the Borrower shall be in compliance with the Financial
Covenants on a pro forma basis as though the Red Lion Stock Purchase
and the requested Loans to finance the Red Lion Stock Purchase had been
made one year prior to the actual consummation thereof. The Borrower
shall have also provided to the Agent with pro forma financial
statements in a form acceptable to the Agent confirming pro forma
compliance with the Financial Covenants. In addition, within 15 days of
the date of the consummation of the Red Lion Stock Transaction, the
Borrower shall provide the Agent with copies of its Independent
Auditor's examination of such pro forma financial statements.
(J) COMPLIANCE CERTIFICATE
The Agent shall have received a pro forma Compliance Certificate signed
by a Responsible Officer, dated as of the date that the Red Lion Stock Purchase
is to be consummated.
(K) RED LION STOCK PURCHASE
The Agent shall have received evidence acceptable to the Agent that
concurrently with the advance to the Borrower under the Loans to finance the Red
Lion Stock Purchase, WHC will have completed Red Lion Stock Purchase for the
benefit of the Borrower on the terms and conditions set forth in the Red Lion
Purchase Agreement.
(L) NOTICE OF BORROWING; REIMBURSEMENT AGREEMENT
The Agent shall have received a Notice of Borrowing executed by the
Borrower.
(M) OTHER DOCUMENTS
The Agent shall have received such other approvals, opinions, documents
or materials as the Agent or any Lender may request.
(N) PAYMENT OF INDEBTEDNESS
The Agent shall have received evidence that all Indebtedness of Red
Lion Hotels, Inc. and its Subsidiary that is not permitted by Section 8.5 has
been paid in full or will be paid in full concurrently with the consummation of
the Red Lion Stock Purchase and that all commitments to Red Lion Hotels, Inc.
and its Subsidiary to provide Indebtedness have been canceled.
ARTICLE V. GENERAL PROVISIONS
5.1 REPRESENTATIONS AND WARRANTIES
(A) EXISTING REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Lenders that as of
the date of this Amendment, there exists no Default or Event of Default and
after giving effect to the Red Lion Stock Purchase and requested Loans to
finance the Red Lion Stock Purchase there would exist no Default or Event of
Default. All representations and warranties of the Borrower contained in the
Credit Agreement and the other Loan Documents, or otherwise made in writing in
connection therewith, are true and correct as of the date of this Amendment and
after giving effect to the Red Lion Stock Purchase and requested Loans to
finance the Red Lion Stock Purchase would be true and correct. The Borrower
acknowledges and agrees that all of the Borrower's Indebtedness to the Lenders
under the Credit Agreement is payable without offset, defense or counterclaim.
(B) ADDITIONAL REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Lenders that:
(I) EXISTENCE AND POWER
Each of Red Lion Hotels, Inc. and Red Lion Properties, Inc.:
(A) is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(B) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver and perform its obligation under the
Loan Documents;
(C) is duly qualified as a foreign entity and is licensed and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification or license; and
(D) is in compliance with all Requirements of Law; except, in
each case referred to in clause (C) or clause (D), to the extent that
the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(II) AUTHORIZATION; NO CONTRAVENTION
The execution, delivery and performance by Red Lion Hotels, Inc.
and Red Lion Properties, Inc. of the Loan Documents to which such
Person is party, have been duly authorized by all necessary action, and
do not and will not:
(A) contravene the terms of any of that Person's Organization
Documents;
(B) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction,
writ or decree of any Governmental Authority to which such Person or
its property is subject; or
(C) violate any Requirement of Law.
(D) Governmental Authorization
No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority (except
for recordings or filings in connection with the Liens granted to the
Agent under the Collateral Documents) is necessary or required in
connection with the execution, delivery or performance by, or
enforcement against, Red Lion Hotels, Inc. and Red Lion Properties,
Inc. of the Loan Documents to which they are parties.
(III) BINDING EFFECT
Each Loan Document to which Red Lion Hotels, Inc. and Red Lion
Properties, Inc. is a party constitute the legal, valid and binding
obligations of Red Lion Hotels, Inc. and Red Lion Properties, Inc. to
the extent each such Person is a party thereto, enforceable against
such Person in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally
or by equitable principles relating to enforceability.
(IV) PRO FORMA FINANCIAL STATEMENTS
To the best of the Borrower's knowledge after due investigation,
the pro forma financial statements provided to the Agent pursuant to
Article IV(i)(iv) fairly present the financial condition of the WHC and
its Subsidiaries as of the dates thereof and results of operations for
the periods covered thereby, based upon the assumption that the Red
Lion Stock Purchase was completed.
(V) SUBSIDIARIES
The Borrower and WHC have no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 5.1 hereto and have no
equity investments in any other Person other than those specifically
disclosed in Schedule 5.1.
(VI) SOLVENCY
The Borrower, WHC and each of their Subsidiaries are Solvent as
of the date of this Amendment and upon consummation of the Red Lion
Stock Purchase and the making of the Loans to finance the Red Lion
Stock Purchase, the Borrower, WHC and each of their Subsidiaries
(including Red Lion Hotels, Inc. and Red Lion Properties, Inc.) will be
Solvent.
(VII) NO LIENS
Upon consummation of the Red Lion Stock Purchase and the making
of the Loans to finance the Red Lion Stock Purchase, each of Red Lion
Hotels, Inc. and Red Lion Properties, Inc. will own its assets free and
clear of all Liens other than the Permitted Liens.
5.2 SECURITY
All Loan Documents evidencing the Agent's security interest in the
Collateral on behalf of the Lenders shall remain in full force and effect, and
shall continue to secure, without change in priority, the payment and
performance of the Loans and all other secured obligations of the Borrower to
the Agent on behalf of the Lenders.
5.3 SURVIVAL OF LOAN DOCUMENTS
The terms and conditions of the Credit Agreement and each of the other
Loan Documents shall survive until all of the Borrower's obligations under the
Credit Agreement have been satisfied in full.
5.4 PAYMENT OF FEES
Within five Business Days of demand by the Agent, the Borrower shall
pay directly or reimburse the Agent (as the case may be) for all Attorney Costs
and other expenses in accordance with the provisions of Section 12.4 of the
Credit Agreement. On January 2, 2002, the Borrower shall pay the Agent the loan
modification fee provided for the fee letter referenced in Article IV(e) of this
Amendment.
5.5 CONSENT OF GUARANTORS
By execution of this Amendment, each of WHC and the Subsidiaries that
have executed and delivered to the Agent guaranties, security agreements and
other loan documents consents to this Amendment and reaffirms its obligations
under its respective guaranty, security agreement and each of the other Loan
Documents to which it is a party.
5.6 COUNTERPARTS
This Amendment may be executed in one or more counterparts, each of
which shall constitute an original agreement, but all of which together shall
constitute one and the same agreement.
5.7 STATUTORY NOTICE
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
IN WITNESS WHEREOF, the Borrower, the Agent, and the Lenders have
caused this Amendment to be duly executed by the respective, duly authorized
signatories as of the date first above written.
WESTCOAST HOSPITALITY, LIMITED PARTNERSHIP
By: WestCoast Hospitality Corporation,
General Partner
By
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Title
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U.S. BANK NATIONAL ASSOCIATION,
as Agent
By
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Title
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U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By
------------------------------------
Title
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BANK OF SCOTLAND
By
------------------------------------
Title
----------------------------------
BANK LEUMI USA
By
-----------------------------------
Title
----------------------------------
WELLS FARGO BANK, NATIONAL ASSOCIATION
By
------------------------------------
Title
----------------------------------
COLUMBIA STATE BANK
By
------------------------------------
Title
----------------------------------
STERLING SAVINGS BANK
By
------------------------------------
Title
----------------------------------
COMERICA BANK CALIFORNIA
By
------------------------------------
Title
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PACIFIC NORTHWEST BANK
By
------------------------------------
Title
----------------------------------
Each of the undersigned (a) acknowledges that it has reviewed and
approved this Amendment, (b) reaffirms its obligations under its respective
guaranty and the other Loan Documents to which it is a party and (c) agrees to
the addition of the following provisions to its guaranty:
13.11 RIGHT OF SETOFF
In addition to any rights and remedies of the Lenders provided by law,
if an Event of Default exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior notice to Guarantor,
any such notice being waived by Guarantor to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at any
time owing by, such Lender to or for the credit or the account of Guarantor
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Guaranty or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify Guarantor and the
Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
13.12 JURY WAIVER
GUARANTOR, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. GUARANTOR, THE LENDERS AND THE AGENT EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
WESTCOAST HOSPITALITY CORPORATION
By
---------------------------------
Title
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WESTCOAST HOTELS, INC.
By
---------------------------------
Title
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TICKETSWEST.COM, INC.
By
---------------------------------
Title
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