1
EXHIBIT 10.1
April 9, 1999
Xx. Xxxxx Xxxxxxxx
ShoLodge, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Re: Credit Agreement dated as of April 30, 1997 (as supplemented
by Joinder Agreement No. 1 dated as of June 11, 1997, as
amended by First Amendment to Credit Agreement dated as of
January 16, 1998, as supplemented by the Consent Letter
dated as of July 16, 1998, as supplemented by the Consent
and Waiver Letter dated as of August 13, 1998, as amended by
the Second Amendment and Waiver Agreement to Credit
Agreement dated as of October 21, 1998, and as further
amended, restated, supplemented or otherwise modified, the
"Credit Agreement") by and among ShoLodge, Inc.
("ShoLodge"), the Subsidiaries of ShoLodge party thereto
(the "Subsidiary Borrowers", and together with ShoLodge, the
"Borrowers"), the Lenders party thereto (the "Lenders"),
First Union National Bank (f/k/a First Union National Bank
of Tennessee), as Administrative Agent (the "Administrative
Agent"), and NationsBank of Tennessee, N.A., as Co-Agent
(the "Co-Agent")
Dear Xxxxx:
Reference is made to the above-referenced Credit Agreement.
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.
I. Waiver of Events of Default.
In accordance with the Credit Agreement, the Borrowers have
requested that the Administrative Agent and the Lenders waive the Event of
Default arising as a result of the non-compliance with Section 9.4, Fixed Charge
Coverage Ratio, of the Credit Agreement for the fiscal quarter ending December
27, 1998.
Subject to and in accordance with the terms and conditions set
forth herein, the Administrative Agent and the Lenders hereby agree to waive the
Event of Default arising as a result of non-compliance with Section 9.4, Fixed
Charge Coverage Ratio, of the Credit Agreement for the fiscal quarter ending
December 27, 1998.
II. Agreement with Respect to Interest and Fees.
Subject to and in accordance with the terms and conditions set
forth herein, the Borrowers, the Administrative Agent and the Lenders hereby
agree that:
2
(a) from and after the date of acceptance by the Company, on
behalf of the Borrowers, of this letter agreement, (i) the
Borrowers shall only be permitted to request Base Rate Loans
under the Credit Agreement, (ii) the Borrowers shall not be
permitted to request LIBOR Rate Loans under the Credit
Agreement, (iii) the Borrowers shall have no right to
convert any Revolving Credit Loan to or continue any
Revolving Credit Loan as a LIBOR Rate Loan and (iv) the
Lenders shall not be obligated to make any LIBOR Rate Loan
under the Credit Agreement (provided that any LIBOR Rate
Loans outstanding on the date hereof may remain outstanding
until the end of the then current interest Period applicable
thereto);
(b) from and after the date of acceptance by the Company, on
behalf of the Borrowers, of this letter agreement, the
Applicable Margin with respect to Base Rate Loans shall be
1.25%;
(c) on the date of the acceptance by the Company, on behalf of
the Borrowers, of this letter agreement, the Borrowers shall
pay to the Administrative Agent, for the ratable benefit of
the Lenders, a waiver fee in the amount of $125,000; and
(d) on the first Business Day of each calender month during
the remaining term of the Credit Agreement, the Borrowers
shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, a maintenance fee in the amount of
$50,000.
III. Miscellaneous Provisions.
To induce the Administrative Agent and the Lenders to agree to
the terms of this letter agreement, the Borrowers hereby agree that:
i. The agreements set forth herein are specific and limited
and shall not constitute an amendment, acceptance, consent or
waiver of any other provision of, or default or event of default
under, the Credit Agreement, the Loan Documents or any other
document or instrument entered into in connection therewith, or
any commitment or any other undertaking to agree to or otherwise
consider any further amendment, modification, acceptance, consent
or waiver of the provisions set forth therein at any time after
the execution of this letter agreement.
ii. Except as specifically set forth herein, all terms and
provisions of the Credit Agreement and all other documents
executed in connection therewith and all rights of the
Administrative Agent and the Lenders thereunder and all
obligations of the Borrowers and all other parties thereto shall
remain in full force and effect and are ratified and confirmed in
all respects.
iii. The default by the Borrowers in the performance or
observance of any covenant or agreement contained in Section II
of this letter agreement shall constitute an immediate Event of
Default under the Credit Agreement, which Event of Default shall
permit the Administrative Agent and the Lenders the right to
pursue all rights and remedies under the Credit Agreement and the
other Loan Documents. The Borrowers acknowledge that the
covenants and agreements contained in this letter agreement are a
material and
2
3
substantial inducement to the agreement of the parties hereto to
enter into this letter agreement.
iv. Upon the effectiveness of this letter agreement, each
representation and warranty made by the Borrowers under the
Credit Agreement and the other Loan Documents shall be true and
correct as of the date hereof (or, in the case of each such
representations and warranty deemed to have been made as of a
specific date, as of such date) and no Default or Event of
Default shall have occurred and be continuing.
v. The Borrowers hereby jointly and severally agree to pay
or reimburse (i) the Administrative Agent for all of its
reasonable and customary out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and
execution of this letter agreement and all other matters
respecting the Credit Agreement, including, without limitation,
the reasonable fees and disbursements of counsel for the
Administrative Agent, and (ii) the Administrative Agent, for the
ratable benefit of the Lenders, for all other fees set forth in
this letter agreement. The Borrowers hereby agree to pay all such
amounts on the date of the acceptance by the Company, on behalf
of the Borrowers, of this letter agreement (or, in the case of
each fee to be made on a specific date, as of such date).
This letter agreement shall be governed and construed in
accordance with the laws of the State of North Carolina, without reference to
the conflicts on choice of law or principles thereof. This letter agreement
embodies the final, entire agreement among the parties hereto and supersedes any
and all prior commitments, agreements, representations and understandings
whether written or oral relating to the subject matter hereof and may be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. This letter agreement may be
executed in one or more counterparts and on fax counterparts each of which shall
be deemed an original, but all of which shall constitute one and the same
agreement.
Very truly yours,
FIRST UNION NATIONAL BANK (f/k/a FIRST
UNION NATIONAL BANK OF TENNESSEE),
as Administrative Agent
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
----------------------------------
Title: Vice President and Director
----------------------------------
3
4
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
BORROWERS:
SHOLODGE, INC., on behalf of Itself and the
other Borrowers
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President, Chief
Financial Officer
4
5
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
LENDERS:
FIRST UNION NATIONAL BANK (f/k/a FIRST
UNION NATIONAL BANK OF TENNESSEE),
as Swingline Lender and as Lender
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Vice President and Director
5
6
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
NATIONSBANK OF TENNESSEE, N.A., as
Co-Agent and Lender
By: /s/ Xxx Xxxx
Name: Xxx Xxxx
Title: Senior Vice President
6
7
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
SUNTRUST BANK, NASHVILLE, N.A., as Lender
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
7
8
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
FIRST AMERICAN NATIONAL BANK, as Lender
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
8
9
ACCEPTED AND AGREED TO AS OF APRIL 9, 1999.
FIRST TENNESSEE BANK, NATIONAL
ASSOCIATION, as Lender
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
9
