Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of June 30, 2004, by and between WESTCOAST HOSPITALITY CORPORATION, a
Washington corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Bank").
RECITALS
A. Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of October 24, 2003, as amended from time to time ("Credit Agreement").
B. Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. Sections 4.9(b) and (c) are each hereby deleted in their entirety, and
the following substituted therefor:
"(b) Funded Debt to EBITDA Ratio. Funded Debt divided by EBITDA not
greater than: (i) 5.95 to 1.00 as of the end of the fiscal quarter ending
September 30, 2003, for the four quarters then ended; (ii) 5.75 to 1.00 as
of the end of each of the fiscal quarters ending December 31, 2003 and
March 31, 2004, for the four fiscal quarters then ended; (iii) 6.25 to 1.00
as of the end of each of the fiscal quarters ending June 30, 2004 and
September 30, 2004, for the four fiscal quarters then ended; and (iv) 5.50
to 1.00 as of the end of the fiscal quarter ending December 31, 2004 and at
the end of each fiscal quarter thereafter, for the four 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 Preferred Trust Offering, as such term is defined in Section
5.3 herein) plus all capital lease obligations of the WestCoast Entities.
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(c) EBITDA Coverage Ratio. EBITDA divided by Debt Service not less
than 1.50 to 1.00, determined at each fiscal quarter end for the four
fiscal quarters then ended; provided, however, that EBITDA divided by Debt
Service may be not less than 1.25 to 1.00 as of the end of any given fiscal
quarter for the four fiscal quarters then ended if both of the following
conditions have been met: (i) Borrower shall have had no greater than One
Million Dollars ($1,000,000.00) outstanding in the aggregate under Line of
Credit A and Line of Credit B at any time during the thirty (30)
consecutive days immediately prior to the end of such fiscal quarter; and
(ii) Borrower shall have an aggregate balance outstanding under Line of
Credit A and Line of Credit B of no greater than One Million Dollars
($1,000,000.00) as of the last day of such fiscal quarter. 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) 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."
2. In consideration of the changes set forth herein and as a condition to
the effectiveness hereof, immediately upon signing this Amendment Borrower shall
pay to Bank a non-refundable fee of $2,500.00.
3. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
4. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
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 Amendment to be
executed as of the day and year first written above.
WESTCOAST HOSPITALITY XXXXX FARGO BANK,
CORPORATION NATIONAL ASSOCIATION
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxxxx
By: ------------------------- By: ---------------------------
Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
Chief Financial Officer Senior Relationship Manager
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