SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 10, 2003
Commission File Number: 333-84334
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RFS PARTNERSHIP, L.P.
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(Exact name of registrant as specified in its charter)
Tennessee 62-1541639
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(State of organization) (I.R.S. Employer
Identification No.)
450 South Orange Avenue, Orlando, Florida 32801
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(Address of principal executive office) (Zip Code)
(800) 650-1000
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(Registrant's telephone number, including area code)
(Page 1 of 6)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On July 10, 2003, RFS Hotel Investors, Inc. ("RFS"), the former general
partner of RFS Partnership, L.P. (the "Partnership"), consummated its previously
announced merger with CNL Rose Acquisition Corp. ("CNL Acquisition"), a wholly
owned subsidiary of CNL Hospitality Properties, Inc. ("CNL"). Further, on July
10, 2003, the Partnership consummated its previously announced merger with a
wholly owned subsidiary of CNL, in which the Partnership is the surviving entity
(the "Partnership Merger", and together with the merger of RFS with and into CNL
Acquisition, the "Mergers"). As a result of the Mergers, RFS's separate
corporate existence terminated and CNL Rose GP Corp., a Delaware corporation and
wholly owned subsidiary of CNL ("CNL Rose GP") became the new general partner of
the Partnership. On July 10, 2003, the Partnership filed an amendment to its
Certificate of Limited Partnership with the Tennessee Secretary of State,
reflecting the change in its general partner.
In connection with the consummation of the Partnership Merger, the
partnership units held by the Partnership's limited partners were converted into
the right to receive $12.35 in cash per limited partnership unit outstanding,
and each limited partner's interest in the Partnership terminated. By virtue of
the Mergers, CNL Acquisition became the sole limited partner, and CNL Rose GP
became the sole general partner, of the Partnership and, accordingly, the
Partnership is currently an indirect, wholly owned subsidiary of CNL. On July
10, 2003, the Partnership amended and restated its partnership agreement to
reflect, among other things, its new ownership and simplify the methods by which
it is governed.
In the Mergers, CNL paid approximately $383 million in total merger
consideration to the former stockholders of RFS and the former limited partners
of the Partnership. Of the total merger consideration, (i) approximately $189
million was financed by proceeds from the sale of CNL's common stock in its
current equity offering, (ii) approximately $43 million was financed by
borrowings under CNL's existing line of credit, (iii) approximately $50 million
was provided in permanent financing related to one of CNL's properties, and (iv)
approximately $101 million was financed by a bridge loan (the "Bridge Loan"),
pursuant to the terms of that certain Credit Agreement (the "Credit Agreement")
dated July 10, 2003, among the Partnership and RFS Financing Partnership, L.P.,
a Tennessee limited partnership ("RFS Financing", and together with the
Partnership, the "Borrowers")), as borrowers, CNL, certain lenders, and Bank of
America, N.A. ("BOA"). The Borrowers executed a note in the amount of $320
million on July 10, 2003, evidencing the Bridge Loan (the "Note"). The Bridge
Loan requires monthly payments of interest only. Interest is incurred at an
annual rate equal to the average British Bankers Association Interest Settlement
Rate for Deposits in Dollars with a term equivalent to one month (the
"Eurodollar Rate") plus (i) 3% of the loan value up to $278,650,000 and (ii) 6%
of the loan value in excess of $278,650,000 (collectively referred to as the
"Applicable Rate"). The Eurodollar Rate on July 10, 2003, the date of the
execution of the Credit Agreement, was 1.05%. The Applicable Rate will increase
by 0.5% on November 7, 2003, and on the last day of each subsequent three-month
period thereafter. The first $250 million borrowed under the Bridge Loan (the
"Tranche A Loans") and any interest accrued thereon, is due and payable by the
Borrowers no later than January 10, 2004. Subject to compliance with certain
loan covenants, the balance of the loan proceeds, an additional $219 million is
available to the Borrowers for future draws in order to refinance former RFS
debt to which CNL succeeded and
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for certain other approved uses. The Borrowers may continue to make multiple
draws until November 7, 2003. Any additional borrowings in excess of the
Tranche A Loans and any interest accrued thereon is due and payable by the
Borrowers on July 10, 2005. Pursuant to that certain Continuing Guaranty
Agreement, dated July 10, 2003 (the "Guaranty Agreement"), CNL, CNL Rose GP and
CNL Acquisition have jointly and severally guaranteed the repayment of any
borrowings by the Partnership under the Credit Agreement.
In connection with the Bridge Loan, certain parent entities of the
Partnership each entered into Security and Pledge Agreements with BOA, all dated
July 10, 2003, pledging, as collateral security, its equity ownership interests
in the Partnership and certain of its direct parent entities. Pursuant to the
terms of the Security and Pledge Agreements, upon an Event of Default, as
defined in the Credit Agreement, BOA may foreclose on the equity ownership
interests being held as collateral pursuant to the Security and Pledge
Agreements. Such a foreclosure may result in a change in control of the
Partnership.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 10, 2003, the Partnership and several of its subsidiaries
entered into that certain RFS Acquisition Agreement by and among CNL Hospitality
Partners, LP, a Delaware limited partnership and wholly owned subsidiary of CNL,
CNL Hotel RI-Orlando, Ltd., a Florida limited partnership and indirect wholly
owned subsidiary of CNL, CNL Hotel CY-Edison, LP, a Delaware limited partnership
and wholly owned subsidiary of CNL (collectively, the "Transferors"), the
Partnership and CNL Acquisition, pursuant to which CNL Acquisition issued an
amount equal to 24.4% of all classes of its capital stock to the Transferors in
exchange for the Transferors transferring certain real estate properties to the
Partnership.
In connection with the Bridge Loan, the Partnership and certain of its
parent entities also entered into certain Security and Pledge Agreements with
BOA, all dated July 10, 2003, pledging, as collateral security, its equity
ownership interests in certain of its subsidiaries to BOA.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not Applicable
(b) Financial Statements required by this Item 7(b) will be filed by
amendment within 60 days after the date hereof.
(c) The following Exhibits are filed as part of this Current Report on
Form 8-K:
2.1 RFS Acquisition Agreement dated as of July 10, 2003, by
and among CNL Hospitality Partners, LP, CNL Hotel
RI-Orlando, Ltd., CNL Hotel CY-Edison, LP, RFS Partnership,
L.P. and CNL Rose Acquisition Corp.
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3.1 Amendment to the Certificate of Limited Partnership of RFS
Partnership, L.P. (This Exhibit 3.1 was filed as Exhibit
3.17 to the Post-Effective Amendment No. 2 to CNL
Hospitality Properties, Inc.'s Registration Statement on
Form S-11, filed with the Securities and Exchange
Commission on July 14, 2003, and is incorporated herein by
reference in its entirety).
3.2 Sixth Amended and Restated Agreement of Limited Partnership
of RFS Partnership, L.P.
10.1 Credit Agreement, dated as of July 10, 2003, among RFS
Partnership, L.P., RFS Financing Partnership, L.P., CNL
Hospitality Properties, Inc., Bank of America, N.A. and
certain lenders named therein. (This Exhibit 10.1 was filed
as Exhibit 10.69 to the Post-Effective Amendment No. 2 to
CNL Hospitality Properties, Inc.'s Registration Statement
on Form S-11, filed with the Securities and Exchange
Commission on July 14, 2003, and is incorporated herein by
reference in its entirety).
10.2 Note, dated July 10, 2003, made by RFS Partnership, L.P.
and RFS Financing Partnership, L.P. (This Exhibit 10.2 was
filed as Exhibit 10.70 to the Post-Effective Amendment No.
2 to CNL Hospitality Properties, Inc.'s Registration
Statement on Form S-11, filed with the Securities and
Exchange Commission on July 14, 2003, and is incorporated
herein by reference in its entirety).
10.3 Continuing Guaranty Agreement, dated as of July 10, 2003
among CNL Hospitality Properties, Inc., CNL Rose GP Corp.,
and CNL Rose Acquisition Corp., in favor of Bank of
America, N.A.
10.4 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to common stock of RFS TRS Holdings, Inc.).
10.5 Security and Pledge Agreement, dated as of July 10, 2003
between CNL Rose Acquisition Corp. and Bank of America,
N.A. (relating to limited partner interests in RFS
Partnership, L.P.).
10.6 Security and Pledge Agreement, dated as of July 10, 2003
between CNL Hospitality Properties, Inc. and Bank of
America, N.A. (relating to common stock of CNL Rose
Acquisition Corp.).
10.7 Security and Pledge Agreement, dated as of July 10, 2003
between CNL Rose GP Corp. and Bank of America, N.A.
(relating to general partner interest in RFS Partnership,
L.P.).
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10.8 Security and Pledge Agreement, dated as of July 10, 2003
between CNL Hospitality Properties, Inc. and Bank of
America, N.A. (relating to common stock of CNL Rose GP
Corp.).
10.9 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to limited partner interest in Ridge Lake, L.P.).
10.10 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to common stock of RFS 2002 Financing, Inc.).
10.11 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to limited liability company interest in RFS
Financing 2002, L.L.C.).
10.12 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to limited partner interest in RFS Financing
Partnership, L.P.).
10.13 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to common stock of Ridge Lake General Partner,
Inc.).
10.14 Security and Pledge Agreement, dated as of July 10, 2003
between RFS Partnership, L.P. and Bank of America, N.A.
(relating to limited liability company interests in Ridge
Lake, L.L.C.).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
RFS PARTNERSHIP, L.P.
By: CNL Rose GP Corp., its
general partner
Dated: July 25, 2003 By: /s/ Thomas J. Hutchison, III
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Name: Thomas J. Hutchison, III
Title: Chief Executive Officer