EXHIBIT 10.6
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),
made as of the 17th day of November, 1997, among WINSTON
HOTELS, INC., a North Carolina corporation (the "Company"), XXXX
LIMITED PARTNERSHIP, a North Carolina limited partnership (the
"Partnership"), WACHOVIA BANK, N.A., formerly known as Wachovia
Bank of Georgia, N.A., as Administrative Agent (the
"Administrative Agent"), and the Banks listed on the signature
pages hereof, as Lenders (the "Banks").
WITNESSETH
WHEREAS, the Company, the Partnership, the Banks, the
Collateral Agent and the Administrative Agent are parties to that
certain Credit Agreement, dated as of October 29, 1996,
(as heretofore amended or modified, the "Credit Agreement")
(capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Credit
Agreement), pursuant to which, inter alia, the Banks have agreed
to make loans to the Company and the Partnership on the terms and
conditions set forth therein;
WHEREAS, pursuant to a certain Letter, dated as of October
19, 1997, executed by the Banks and the Agents and acknowledged
and agreed to by the Company and the Partnership (the "Consent
Letter"), the Banks consented to the Company's and Partnership's
consent to Winston Hospitality, Inc.'s entering into the
Transaction Documents (as therein defined);
WHEREAS, the Consent Letter contemplated the entry by the
Company and the Partnership into an agreement in a form
satisfactory to the Agents, the Banks, the Company and the
Partnership amending the provisions of the Credit Agreement so as
to permit the Transaction (as defined in the Consent Letter), and
the Company and the Partnership desire to enter into this
Amendment;
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency
whereof are hereby acknowledged, the parties hereby agree that
the Credit Agreement is hereby amended as follows:
A. AMENDMENTS
1. Section 1.01 of the Credit Agreement is hereby amended
by replacing the definition of "Lessee" with the following:
"Lessee" means CapStar Management Company, L.P., a
Delaware Limited Partnership, its successors and
assigns, or any other party operating a Hotel pursuant
to a Lease.
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2. The Line Availability Amount (that is, the amount
available to the Borrower under the Credit Agreement) has been
previously determined on the basis of the lesser of the "Loan to
Value Amount" and the "Cash Flow Amount." In connection with the
substitution of CapStar Management Company L.P. as Lessee, the
Banks have agreed that the Line Availability Amount shall be
determined exclusively on the basis of the Cash Flow Amount, and
that the Loan to Value Amount shall no longer be utilized to
determine the Line Availability Amount.
Accordingly, each and every reference to the Loan to Value
Amount in the Credit Agreement is deleted. The foregoing
deletions include the reference to "Loan to Value Amount" in the
definitions in Section 1.01 and also include references to "Loan
to Value Amount" in Section 2.01(b) and Section 3.02(a) of the
Credit Agreement.
3. Section 6.01 of the Credit Agreement is amended by
deleting the present text of clause (l) and substituting in lieu
therefor the following:
(l) The Lessee shall replace the Franchisor of a Hotel
without the prior written consent of the Banks.
4. Section 6.01 of the Credit Agreement is hereby amended
by deleting "thirty days" in clause (m) and substituting in lieu
therefor "sixty days."
5. Section 6.01 of the Credit Agreement is amended by
adding the following as new clause (n) thereto:
(n) A Franchisor declares an event of default under
its Franchise Agreement or exercises default remedies
upon the occurrence of a default by the Lessee under
the Franchise Agreement, which, in the judgment of the
Banks, might adversely affect the operation of the
applicable Hotel.
B. CONDITIONS PRECEDENT
The effectiveness of this Amendment is conditioned upon the
following conditions having been satisfied:
(1) the Subordination Agreements described in Exhibit
A attached hereto and incorporated herein by reference shall
have been terminated.
(2) the Banks and CapStar shall have executed and
delivered the Subordination Nondisturbance and Attornment
Agreement in favor of CapStar Management, L.P. ("CapStar")
in the form of Exhibit B attached hereto and incorporated
herein by reference.
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(3) The Collateral Agent shall have received the
following, each dated as of the Closing Date (unless
otherwise noted), in form and substance satisfactory to the
Banks in sufficient copies for each Bank:
(a) A duly executed original of this Amendment;
(b) A copy of the Transaction Documents, together
with all exhibits and schedules thereto certified as
true and correct by an officer of the Company on its
own behalf and as general partner of the Partnership
and evidence that the Transaction Documents are in full
force and effect and have not been amended, modified or
supplemented and that all conditions precedent to the
Transaction Documents have been fully satisfied or
waived; and
(4) all corporate and other proceedings taken or to be
taken in connection with the transactions contemplated
hereby and all other documents incident thereto or delivered
in connection therewith shall be satisfactory in form and
substance to each Bank.
C. REAFFIRMATION OF CONSENT
Notwithstanding any other provision in the Credit Agreement,
the Banks hereby consent to
(1) the consent by the Company and the Partnership, to
the execution and delivery of the Transaction Documents by
Winston Hospitality, Inc.; provided, however, that nothing
in this clause shall be construed as consent by the Banks to
any other matter arising or action taken by the Company or
the Partnership which is not expressly addressed in this
Amendment.
(2) the Amendments to the Leases described on Exhibit
C attached hereto and incorporated herein by reference.
D. MISCELLANEOUS
1. Nothing in this Agreement shall be construed to
constitute a novation of the indebtedness evidenced by the Credit
Agreement or any other indebtedness arising under the Loan
Documents related thereto, or to release, satisfy, discharge or
otherwise affect or impair in any manner whatsoever (i) the
validity or enforceability of the indebtedness evidenced by the
Credit Agreement; (ii) the charges, liens, pledges, security
interests, assignments and conveyances affected by the Loan
Documents or any other agreement securing the indebtedness
evidenced by the Credit Agreement, or the priority thereof; (iii)
the liability of the Company and the Partnership under the Credit
Agreement and all other Loan Documents or any other person that
may now or hereafter be liable under the Credit Agreement and the
other Loan Documents or any agreement securing the same; and (iv)
any other security or instrument now or hereafter held by the
Collateral Agent or the
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Banks as security for or as evidence of any of the indebtedness
evidenced by the Credit Agreement. Without limiting the
foregoing, the Agents and the Banks hereby reserve any and all
legal rights and remedies available to them at law, in equity,
under the Credit Agreement and all other Loan Documents.
2. The Company and the Partnership shall pay all
reasonable costs, expenses, taxes and fees incurred by the
Administrative Agent, the Collateral Agent, and the Banks in
connection with the negotiation, preparation, execution and
delivery of this Amendment, and all other documents and
certificates executed in connection herewith, including, without
limitation, the disbursements and reasonable professional fees
actually incurred of counsel to the Agents. To the extent that
any such fees and expenses are subject to value added taxes, such
taxes will be paid by the Company and the Partnership.
3. The Company and the Partnership agree to protect,
indemnify and save harmless the Administrative Agent, the
Collateral Agent and each Bank, and all directors, officers,
employees and agents of the Agent, the Collateral Agent and each
Bank, from and against any and all (i) claims, demands and causes
of action of any nature whatsoever brought by any person or
entity not a party to this Amendment and arising from or related
or incident to this Amendment or any other Loan Document, (ii)
costs and expenses incident to the defense of such claims,
demands and causes of action, including, without limitation,
attorneys' fees, and (iii) liabilities, judgments, settlements,
penalties and assessments arising from such claims, demands and
causes of action, provided such claims, costs and liabilities are
not the result of the gross negligence or willful misconduct of
such Administrative Agent, such Collateral Agent or such Bank.
The indemnity contained in this Section shall survive the
termination of the Credit Agreement, as amended hereby.
4. Except as expressly set forth herein, this Amendment
shall be deemed not to waive or modify any provision of the
Credit Agreement, and all terms of the Credit Agreement, as
amended hereby, shall be and shall remain in full force and
effect and shall constitute legal, valid, binding and enforceable
obligations of the Company and the Partnership to the
Administrative Agent and the Collateral Agent and the Banks. All
references to the Credit Agreement shall hereinafter be
references to the Credit Agreement as amended by this Amendment.
5. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA AND ALL
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
6. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same document.
7. This Amendment shall be binding on, and shall inure to
the benefit of, the successors and assigns of the parties hereto.
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8. In the event that any part of this Agreement shall be
found to be illegal or in violation of public policy, or for any
reason unenforceable at law, such finding shall not invalidate
any other part thereof.
9. TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.
10. The parties agree that their signatures by telecopy or
facsimile shall be effective and binding upon them as though
executed in ink on paper but that the parties shall exchange
original ink signatures promptly following any such delivery by
telecopy or facsimile.
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IN WITNESS WHEREOF, the Company, the Partnership, the Banks,
the Administrative Agent and the Collateral Agent have caused
this Amendment to be executed under seal by their duly authorized
officers the day and year first above written.
WACHOVIA BANK, N.A.,
as Collateral Agent and Bank
By: /s/ Xxxxxx Xxxxxx
--------------------------
Vice President
WACHOVIA BANK, N.A.,
as Administrative Agent
By: /s/ Xxxxxx Xxxxxx
--------------------------
Vice President
BRANCH BANKING AND TRUST COMPANY,
as Bank
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Senior Vice President
NATIONSBANK, N.A.,
as Bank
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Senior Vice President
SIGNATURE PAGE TO FIRST AMENDMENT TO THE CREDIT AGREEMENT
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SOUTHTRUST BANK, N.A.,
as Lender
By: /s/ Xxxx Xxxxxx
-------------------------
Vice President
WINSTON HOTELS, INC.
[CORPORATE SEAL}
ATTEST:
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx, III
-------------------- ----------------------------
Assistant Secretary President
XXXX LIMITED PARTNERSHIP, a North
Carolina limited partnership
By: WINSTON HOTELS, INC., General Partner
[CORPORATE SEAL]
ATTEST:
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx, III
-------------------- ---------------------------
Assistant Secretary Vice President
SIGNATURE PAGE TO FIRST AMENDMENT TO THE CREDIT AGREEMENT
