EXHIBIT 10.1
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FOURTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amendment to Amended and Restated Credit Agreement
("Amendment") is made and entered into as of June 30, 2002, 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 three
amendments to the Credit Agreement.
B. The Borrower has requested the Lenders to extend the Maturity Date
under the Credit Agreement and amend certain provisions of the Credit Agreement.
C. 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:
"Commitment" means $68,500,000 less the aggregate amount of mandatory
prepayments made in accordance with Section 2.6.
"Fixed Charge Coverage Ratio" means the ratio of (a) for the applicable
period, the sum of (i) EBITDA less (ii) an amount equal to 4.5% 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), (iii) income and gross
receipts taxes paid in cash or cash equivalents, (iv) Pro Forma Taxes, (v)
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 (vi) payments made to redeem or otherwise
acquire for value any partnership units of the Borrower or shares of common
stock of WHC or any warrants, rights or options to acquire such partnership
units or shares of common stock 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, and (iii)
Pro Forma Interest Expense.
"Fourth Amendment" means that certain Fourth Amendment to Amended and
Restated Credit Agreement dated as of June 30, 2002, and entered into among the
Borrower, the Agent and the Lenders.
"Implied Debt Service" means the aggregate amount of annual principal
and interest payments that would be required to fully amortize the aggregate
amount of the outstanding principal balance of the Loans on the measurement
date, assuming (a) an interest rate equal to the greater of (i) 8% or (ii) the
interest rate reasonably determined by Agent on ten-year
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United States Treasury Bond Equivalent Yield Rate as of the measurement date
plus 3.25%, and (b) a 25-year amortization, with equal quarterly payments.
"Implied Debt Service Coverage Cap" means the maximum outstanding
aggregate principal balance of the Loans such that (a)(i) aggregate EBITDA from
Eligible Real Property (measured on a trailing four-quarter basis) less (ii) an
amount equal to 4.5% 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) equals or exceeds(b) Implied Debt Service by a ratio of 1.60:1.00.
"Maturity Date" means the earlier of (i) June 30, 2005 and (ii) the
date the Obligations are accelerated pursuant to Section 9.2 hereof.
"Salt Lake Commercial Property" has the meaning set forth in Section
3.6 of the Fourth Amendment.
ARTICLE III. CONSENTS AND AMENDMENTS
3.1 LOANS AND INVESTMENTS
Section 8.4 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
The Borrower shall not purchase or acquire, or suffer or
permit WHC or any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or
make or commit to make any Acquisitions, or make or commit to make any
advance, loan, extension of credit or capital contribution to or any
other investment in, any Person including any Affiliate of the
Borrower, except for:
(a) investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business;
(c) extensions of credit by the Borrower, WHC or any
Subsidiary to any direct or indirect wholly-owned Subsidiaries of
Borrower or WHC;
(d) investments made in connection with and constituting
part of the consideration paid for Acquisitions to the extent that (i)
any such Acquisition is not prohibited under Section 8.7, and (ii) any
such Acquisition is approved in writing by the Required Lenders;
provided that no Acquisition shall be consummated by the Borrower, WHC
or any Subsidiary unless the Borrower has demonstrated to the
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reasonable satisfaction of the Required Lenders with pro forma
financial statements prepared to reflect such Acquisition that the
Borrower will be in compliance with the Financial Covenants; and
provided further that Acquisitions described in Section 8.7(f) shall
not require the written approval by the Required Lenders; and
(e) investments in Persons in the hospitality industry;
provided that (i) any such investment is not prohibited under Section
8.7, (ii) the Borrower shall disclose each such investment in writing
to the Agent promptly after the consummation thereof, (iii) neither the
Borrower, WHC nor any Subsidiary may guarantee or become contingently
liable for any indebtedness of other obligations of any such Person
other than Guaranty Obligations with an aggregate exposure to Borrower,
WHC and the Subsidiaries not to exceed $10,000,000 in the aggregate at
any time, (iv) the amount of such investments on and after June 30,
2002, shall not exceed $5,000,000 in the aggregate at any time; and (v)
as a result of each such investment, the Borrower must obtain a
management contract to manage the hospitality project that is owned,
leased or occupied by the Person in which the investment is being made;
and provided further that in the event that any such management
contract is terminated for any reason, all the obligations of the
Borrower, WHC and the Subsidiaries under any guaranty or other
contingent obligation permitted under clause (iii) shall be terminated
concurrently.
3.2 LIMITATION ON INDEBTEDNESS
Section 8.5 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, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 8.8;
(c) Indebtedness existing on the Closing Date that is
described in Schedule 8.5 and any refinance of such Indebtedness in an
amount not to exceed the outstanding principal balance thereof as of
the Closing Date; provided that if any such Indebtedness is Nonrecourse
Indebtedness that is secured by assets not used primarily in the
hospitality business, then any Indebtedness to refinance such
Indebtedness shall be Nonrecourse Indebtedness;
(d) Indebtedness consisting of Subordinated Debt incurred
after the Closing Date;
(e) Nonrecourse Indebtedness incurred after the Closing
Date;
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(f) Indebtedness secured by a Lien permitted under
Section 8.1(j) or (m);
(g) Indebtedness incurred in connection with leases
permitted pursuant to Section 8.9(a); and
(h) Guaranty Obligations permitted under Section 8.4(e).
3.3 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) with respect to the payment of
dividends on the common stock of WHC only, (A) 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 (B) after giving effect to the
proposed payment, the Capitalization Ratio would not exceed 0.50:1.00,
and (iv) purchases and redemptions of the common stock of WHC on and
after June 30, 2002, shall not exceed $5,000,000 in the aggregate, (d)
WHC may issue stock to partners of the Borrower in exchange for
partnership units of the Borrower, and (e) 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.
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3.4 FINANCIAL COVENANTS
Sections 8.14(a) and (b) of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:
(A) FUNDED DEBT RATIO
As of the end of each fiscal quarter for the four fiscal
quarters then ended, the Funded Debt Ratio shall not exceed 4.50.
(B) RECOURSE FUNDED DEBT RATIO
As of the end of each fiscal quarter for the four fiscal
quarters then ended, the Recourse Funded Debt Ratio shall not exceed
(i) 4.00:1.00 for each fiscal quarter ending through December 30, 2002,
and (ii) 3.75:1.00 for each fiscal quarter ending thereafter.
3.5 PRO RATA SHARE SCHEDULE
Schedule 2.1 to the Credit Agreement is hereby replaced and superceded
by Schedule 2.1 attached to this Amendment.
3.6 SALE OF SALT LAKE CITY COMMERCIAL PROPERTY
The Deed of Trust that encumbers the Eligible Real Property located in
Salt Lake City encumbers not only a hotel, but also a commercial building and
land that is used for other purposes (the "Salt Lake Commercial Property"). In
the event that the Borrower desires to sell the Salt Lake Commercial Property,
the Lenders hereby consent to the partial reconveyance of the Deed of Trust that
encumbers the Salt Lake Commercial Property; provided that (a) the disposition
of the Salt Lake Commercial Property is in accordance with the provisions of
Section 8.2 of the Credit Agreement and (b) the Agent is provided with legal lot
and such other endorsements to the Title Insurance Policy insuring such Deed of
Trust as reasonably deemed appropriate by the Agent all at the Borrower's cost.
3.7 SALE OF HEADQUARTERS BUILDING
Lenders' hereby consent to the sale of WHC's headquarters building in
Spokane, Washington which closed on March 28, 2002, and waive any violation of
the Credit Agreement resulting from such sale; provided that concurrently with
the execution of this Amendment, the Borrower shall execute and deliver to the
Agent all instruments and documents necessary for the Borrower to pledge to the
Agent for the benefit of the Lenders an exclusive security interest in the
promissory note, deed of trust and other documents evidencing the seller
financing in connection with such sale. The Borrower hereby authorizes the Agent
to file (including electronic or facsimile filing) assignments of all financing
statements filed to perfect the Borrower's security interest in the collateral
securing such seller financing.
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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) AMENDMENT TO CREDIT AGREEMENT
The Agent shall have received this Amendment duly executed by the
Borrower, WHC, the Subsidiaries that are a party hereto, the Agent and the
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, WestCoast Hotels, Inc.,
XxxxxxxXxxx.xxx, Inc., 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, WestCoast Hotels, Inc., XxxxxxxXxxx.xxx, Inc.,
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,
WestCoast Hotels, Inc., XxxxxxxXxxx.xxx, Inc., 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) GOOD STANDING CERTIFICATES
The Agent shall have received a good standing certificate for the
Borrower, WHC, WestCoast Hotels, Inc., XxxxxxxXxxx.xxx, Inc., 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.
(D) LOAN FEE LETTER
The Agent shall have received, duly executed by the Borrower, a loan
fee letter in the form designated by the Agent and shall have received all loan
fees payable in accordance with such fee letter.
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(E) 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; and
(iii) 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.
(F) ASSIGNMENT OF NOTE AND DEED OF TRUST
The Agent shall have received the instruments and documents referred to
in Section 3.7 of this Amendment.
(G) OTHER DOCUMENTS
The Agent shall have received such other approvals, opinions, documents
or materials as the Agent or any Lender may request.
ARTICLE V. GENERAL PROVISIONS
5.1 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. 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. 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.
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,
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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.
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.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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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
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Title
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BANK OF SCOTLAND
By
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Title
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BANK LEUMI USA
By
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Title
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XXXXX FARGO BANK, NATIONAL ASSOCIATION
By
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Title
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COLUMBIA STATE BANK
By
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Title
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PACIFIC NORTHWEST BANK
By
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Title
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Each of the undersigned (a) acknowledges that it has reviewed and
approved this Amendment and (b) reaffirms its obligations under its respective
guaranty and the other Loan Documents to which it is a party.
WESTCOAST HOSPITALITY CORPORATION
By
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Title
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WESTCOAST HOTELS, INC.
By
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Title
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XXXXXXXXXXX.XXX, INC.
By
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Title
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RED LION HOTELS, INC.
By
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Title
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RED LION PROPERTIES, INC.
By
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Title
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SCHEDULE 2.1
PRO RATA SHARE OF EACH LENDER
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LENDER COMMITMENT PRO RATA SHARE
AMOUNT
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U.S. Bank $20,708,310.00 30.23110949%
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Bank of Scotland $14,458,380.00 21.10712409%
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Columbia State Bank $12,000,000.00 17.51824817%
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Pacific Northwest Bank $10,000,000.00 14.59854015%
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Xxxxx Fargo Bank $ 5,833,310.00 8.51578102%
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Bank Leumi $ 5,500,000.00 8.02919708%
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TOTAL $68,500,000.00 100.00%
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