EXHIBIT 10.b
FIRST AMENDMENT OF
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AMENDED AND RESTATED LOAN AGREEMENT
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THIS FIRST AMENDMENT to Amended and Restated Loan Agreement (the "First
Amendment") is made as of October 17, 1994 (the "Effective Date") by and between
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION (the "Lender") and MARRIOTT
DIVERSIFIED AMERICAN HOTELS, L.P. a Delaware Limited Partnership (the
"Borrower")
WITNESSETH:
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WHEREAS, on June 30, 1993 Lender and Borrower entered into an Amended
and Restated Loan Agreement (the "Loan Agreement"); all terms having initial
capital letters used herein and not otherwise defined herein shall have the
meanings ascribed to those terms in the Loan Agreement; and
WHEREAS, the Loan Agreement sets forth certain priorities for
application of Operating Profit and Pari Passu Distributions; and
WHEREAS, Borrower and Lender have agreed to enter into this First
Amendment for the purpose of modifying the method for applying the Pari Passu
Distributions to, among other things, principal payments of the Series A Note
and Series B Note and for other purposes, all as more particularly set forth
herein;
NOW THEREFORE, for and in consideration of the premises and other good
and valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. AMENDMENTS
I. Section 1.1 (Definitions) is hereby modified and amended, to
include the following defined terms to have the following meanings,
which terms shall be deemed included in Section 1.1, effective as of
the Effective Date, where appropriate in alphabetical order as follows:
The term "Aggregate Adjusted Pari Passu Distribution
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Amount" means for a given Fiscal Year, an amount equal to (a) the
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sum of the Pari Passu Distributions received by Lender during
such Fiscal Year and deposited by Lender in the Pari Passu
Account for that Fiscal Year less (b) any amounts disbursed from
the Pari Passu Account as a result of adjustments requiring a
refund by Lender to Borrower of a Pari Passu Distribution made on
any Payment Date, Quarterly Reconciliation Date or the Annual
Reconciliation for that Fiscal Year in accordance with terms of
this Section 6.1.
The term "Annual Adjustment Date" means either the Series A
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Note Application Date or Series B Note Application Date, as
applicable.
The term "Annual PPD Interest" means as to each Fiscal Year
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the sum of the Annual Series A Note PPD Interest and Annual
Series B Note PPD Interest.
The term "Annual Series A Note PPD Interest" means in
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connection with Pari Passu Distributions made in connection with
Clause (A) of the Sixth priority of Section 6.1 (a), the interest
which accrued during the applicable Fiscal Year on fifty percent
(50%) of the Aggregate Adjusted Pari Passu Distribution Amount
and in connection with Pari Passu Distributions made in
connection with Clause (B) of the Sixth priority of Section 6.1
(a), the interest which accrued during the applicable Fiscal Year
on twenty-five percent (25%) of the Aggregate Adjusted Pari Passu
Distribution Amount.
The term "Annual Series B Note PPD Interest" means in
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connection with Pari Passu Distributions made in connection with
Clause (A) of the Sixth priority of Section 6.1 (a), the interest
which accrued during the applicable Fiscal Year on fifty percent
(50%) of the Aggregate Adjusted Pari Passu Distribution Amount
and in connection with Pari Passu Distributions made in
connection with Clause (B) of the Sixth priority of Section 6.1
(a), the interest which accrued during the applicable Fiscal Year
on seventy-five percent (75%) of the Aggregate Adjusted Pari
Passu Distribution Amount.
The term "Series A Note Application Date" means as to each
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immediately preceding Fiscal Year, the Annual Audited
Reconciliation Date unless the Borrowing with respect to the
Series A Note is a LIBOR Borrowing, then "Series A Note
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Application Date" shall mean the last day of the Interest Period
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of the LIBOR Borrowing in connection with the Series A Note in
which the Annual Audited Reconciliation Date occurs.
The term "Series A Note Pari Passu Adjustment Interest"
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means an amount equal to the positive difference between interest
actually paid on the Series A Note on each Payment Date during
the applicable Fiscal Year and the interest that should have been
paid on the Series A Note if the Aggregate Adjusted Pari Passu
Distribution Amount had been applied against the then outstanding
principal of the Series A Note on each Payment Date in the
amounts and at the times as required by Section 6.1(e) (i); such
amount being equal to the amount of interest overpaid on the
Series A Note on each Payment Date after making the appropriate
adjustments.
The term "Series B Note Application Date" means as to each
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immediately preceding Fiscal Year, the Annual Audited
Reconciliation Date unless the Borrowing with respect to the
Series B Note is a LIBOR Borrowing, then "Series
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B Note Application Date" shall mean the last day of the Interest
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Period of the LIBOR Borrowing in connection with the Series B
Note in which the Annual Audited Reconciliation Date occurs.
The term "Series B Note Pari Passu Adjustment Interest"
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means an amount equal to the positive difference between the
Series B Note Interest actually paid on each Payment Date during
the applicable Fiscal Year and the Series B Note Interest that
should have been paid on the Series B Note if the Aggregate
Adjusted Pari Passu Distribution Amount had been applied against
the then outstanding principal of the Series B Note on each
Payment Date in the amounts and at the times as required by
Section 6.1 (e) (i); such amount being equal to the amount of
Series B Note Interest overpaid on each Payment Date after making
the appropriate adjustments.
II. Section 6.1 of the Loan Agreement is hereby modified and amended,
effective as of the Effective Date, by deleting that Section in its
entirety and in lieu thereof substituting the following new Section
6.1:
6.1 Operating Profit Distribution Priorities. Until such
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time as the Series A Note and Series B Note shall have been paid
in full, distribute or apply any Operating Profit for the period
indicated except in accordance with the priorities set forth in
this Section 6.1:
(a) Priorities. (i) Payment Date. On each Payment Date,
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all distributions and applications of Operating Profit for
the applicable Accounting Period according to the following
priorities:
First: Payment of interest due and payable on the Series A
Note;
Second: Payment of Scheduled Amortization of the Series A
Note;
Third: Payment to the Lender for deposit into the Debt
Service Reserve in an amount equal to the aggregate
amount, if any, of the draws during the current
Fiscal Year from the Debt Service Reserve pursuant
to the Sixth priority of Section 6.1(b) that were
not necessary or required after taking into account
any reconciliation under this Section 6.1;
Fourth: Payment of Series B Note Interest.
Fifth: Payment of Interest Deficiency (for any and all
prior Accounting Periods during the then current
Fiscal Year);
Sixth: (A) Subject to clause (B) below, on a pari passu
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basis, as follows:
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(1) 50%, to the Lender to be deposited in the
Pari Passu Account and disbursed with respect
to each Fiscal Year, in accordance with
Section 6.1 (e) below on the applicable
Annual Adjustment Date; and
(2) 50%, to the Borrower, until such time as
the Borrower has received an aggregate amount
equal to $7,352,000.
(B) If at any time the Borrower has received an
aggregate amount equal to $7,352,000 in accordance
with clause (A) above of this clause Sixth, 100% to
the Lender to be deposited in the Pari Passu
Account and disbursed with respect to each Fiscal
Year in accordance with Section 6.1(e) below on
the applicable Annual Adjustment Date.
(ii) Exceptions. Notwithstanding the foregoing:
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(A) If at any time either the Series A Note or
Series B Note has been paid in full (the
"Satisfied Note") and the other such Note
shall not have been paid in full (the
"Outstanding Note"), then until the
Outstanding Note shall have been paid in
full, any amount to be distributed pursuant
to this Section 6.1 to the Satisfied Note
shall be applied to the Outstanding Note in
addition to any other amount that may be
required to be paid hereunder with respect
to the Outstanding Note.
(B) Upon receipt of the Annual Audited Statement
and after taking into account any adjustment
required under this Section 6.1, any
Interest Deficiency remaining unpaid as of
the end of any Fiscal Year shall be deemed
forgiven by the Lender as at the end of such
Fiscal Year.
(b) Operating Profit Deficiency. If on any
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Payment Date, Operating Profit shall be less than the
amount required to pay Scheduled Amortization of the Series
A Note and interest then due and payable on the Series A
Note ("Operating Profit Deficiency"), the following amounts
shall be paid by the Borrower or the Lender, according to
the following priorities, to be applied, first, to the
interest then due and payable on the Series A Note and,
second, to the Scheduled Amortization:
First: By the Borrower, all payments, if any,
received (and not repaid on any prior
Payment Date) as a Pari Passu
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Distribution during the then current Fiscal
Year in an amount not to exceed fifty
percent (50%) of the Operating Profit
Deficiency;
Second: By the Lender, all payments, if any,
received (and not repaid on any prior
Payment Date) and deposited into the Pari
Passu Account as a Pari Passu Distribution
under clause (A) of the Sixth priority of
Section 6.1(a)(i) during the then current
Fiscal Year in an amount not to exceed
fifty percent (50%) of the Operating Profit
Deficiency;
Third: By the Lender, all payments, if any
received (and not repaid on any prior
Payment Date) and deposited into the Pari
Passu Account as a Pari Passu Distribution
under clause (B) of the Sixth priority of
Section 6.1(a)(i) during the then current
Fiscal Year in an amount not to exceed the
Operating Profit Deficiency, if any;
Fourth: By the Lender, all payments, if any,
received (and not repaid on any prior
Payment Date) as payment of Interest
Deficiency in an amount not to exceed the
remaining Operating Profit Deficiency, if
any;
Fifth: By the Lender, all payments, if any,
received (and not repaid on any prior
Payment Date) as payment of Series B Note
Interest in an amount not to exceed the
remaining Operating Profit Deficiency, if
any; and
Sixth: By the Borrower, with finds withdrawn from
the Debt Service Reserve in accordance with
the Cash Collateral Agreement in an amount
not to exceed the remaining Operating
Profit Deficiency, if any.
(c) Reports and Certifications.
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(i) Without limiting the reporting requirements set
forth in Section 5.6 hereof, on each Quarterly
Reconciliation Date, the Borrower shall submit to
the Lender,
(x) a Quarterly Reconciliation Statement,
which statement shall show, in such
reasonable detail as may be requested by the
Lender, for the Fiscal Quarter most recently
ended for the Mortgaged Hotels, the
calculation of Gross Revenues (by category),
Deductions (by category, including the basis
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for, and the calculation of, Ground Rent and
FF&E contributions), Operating Profit, the
payment calculations as applied in Section
6.1(a), and all retentions, distributions
and other applications thereof, from the
beginning of the current Fiscal Year to the
end of such Fiscal Quarter, with respect to
the Mortgaged Hotels; and
(y) the certificate of an Authorized
Accounting Officer certifying the Quarterly
Reconciliation Statement as having been
prepared under his supervision in accordance
with the provisions hereof
(ii) Without limiting the requirements set forth in
Section 5.6 hereof, on the Annual Interim
Reconciliation Date, the Borrower shall submit to
the Lender,
(x) an Annual Interim Reconciliation
Statement for the Fiscal Year most recently
ended, which Annual Interim Reconciliation
Statement shall be controlling to the extent
there shall exist a conflict with the
Quarterly Reconciliation Statements
delivered during such Fiscal Year. The
Annual Interim Reconciliation Statement
shall show for such Fiscal Year each of the
calculations set forth in a Quarterly
Reconciliation Statement, the amount and
calculation of Minimum Operating Profit
Requirement and the amount, if any, of
outstanding Interest Deficiency; and
(y) the certificate of an Authorized
Accounting Officer certifying the Annual
Interim Reconciliation Statement as having
been prepared under his supervision in
accordance with the provisions hereof.
(d) Adjustments.
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(i) Quarterly Adjustments. Any Interest Deficiency
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revealed by any Quarterly Reconciliation Statement
shall, to the extent such Quarterly Reconciliation
Statement reveals Operating Profit Available For
Series B Note Interest in excess of the amount paid
toward Series B Note Interest on any Payment Date
through such Fiscal Quarter, be remitted by
Borrower to Lender on the Quarterly Reconciliation
Date, together with the Quarterly Reconciliation
Statement submitted by Borrower to Lender for
application in accordance with Section 6.1(a). Any
Series B Note Interest paid on a Payment Date in
excess of the Operating Profit Available For
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Series B Note Interest earned during the preceding
Fiscal Quarter as revealed by the Quarterly
Reconciliation Statement shall be paid by the
Lender to the Borrower for application in
accordance with Section 6.1(a).
(ii) Annual Adjustments. Any Interest Deficiency
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revealed by any Annual Interim Reconciliation
Statement shall, to the extent such Annual Interim
Reconciliation Statement reveals Operating Profit
Available For Series B Note Interest in excess of
the amount calculated and adjusted as of the end of
each Fiscal Quarter on each Quarterly
Reconciliation Date and distributed during the
applicable Fiscal Year, be remitted by Borrower to
Lender on the Annual Interim Reconciliation Date,
together with the Annual Interim Reconciliation
Statement submitted by Borrower to Lender.
Similarly, any Interest Deficiency revealed by the
Annual Audited Statement shall, to the extent such
Annual Audited Statement reveals Operating Profit
Available For Series B Note Interest in excess of
the amount calculated and adjusted as of the Annual
Interim Reconciliation, be remitted by Borrower to
Lender on the Annual Audited Reconciliation Date.
To the extent that Operating Profit Available
for Series B Note Interest for the Fiscal Year is
less than the total amount of Series B Note
Interest actually paid for the Fiscal Year (or
payable based on the fourth Quarterly
Reconciliation Statement for the Fiscal Year), then
such excess payments together with any excess
payments applied to the Series A Note or Series B
Note pursuant to the priority set forth above shall
be adjusted as appropriate so that the total amount
of Series B Note Interest actually paid for the
Fiscal Year does not exceed the cumulative
Operating Profit Available For Series B Note
Interest for the Fiscal Year as set forth in the
Annual Interim Reconciliation Statement, and as
confirmed or adjusted, as the case may be, in
accordance with the Annual Audited Statement.
In the event that adjustments are required as
aforesaid, any Pari Passu Distributions during
those Fiscal Quarters to Borrower shall be refunded
by Borrower to Lender as appropriate to make such
adjustments and any Pari Passu Distributions made
during those Fiscal Quarters to Lender and
deposited in the Pari Passu Account and not
otherwise disbursed for an Interest Deficiency
during the Fiscal Year shall be refunded by Lender
to Borrower as appropriate to make such
adjustments.
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(e) Application of Pari Passu Distributions received by
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Lender.
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All Pari Passu Distributions made to Lender with
respect to Priority clause Sixth of Section 6.1(a)(i)
above shall be deposited in an interest bearing account
under the sole dominion and control of Lender (the "Pari
Passu Account") and subject to any prior disbursements
required by Section 6.1 (b) or 6.1 (d) shall be held
therein, and disbursed for application to the Series A
Note and Series B Note with respect to each Fiscal Year
only as follows:
(i) The Aggregate Adjusted Pari Passu
Distribution Amount shall be disbursed from the Pari
Passu Account and applied against the principal of each
of the Series A Note and Series B Note as follows:
(A) [1] as to the Series A Note on the Series
A Note Application Date in a total amount equal to
(x) if pursuant to Clause (A) of Section
6.1(a)(i), 50% of such Aggregate Adjusted Pari
Passu Distribution Amount and (y) if pursuant to
Clause (B) of Section 6.1(a)(i), 25% of such
Aggregate Adjusted Pari Passu Distribution Amount
(the amounts referred to in clauses (x) and (y) of
this Clause A[1], sometimes referred to as the
"Series A PPD Application Amount"); and
[2] the Series A PPD Application Amount
shall be applied against the then outstanding
principal of the Series A Note, in inverse order of
maturity for each Payment Date during the Fiscal
Year, effective as of such Payment Date in the same
order as the Pari Passu Distributions were
deposited into the Pari Passu Account and in an
amount equal to the principal amount of (x) if
pursuant to Clause (A) of Section 6.1(a)(i), 50%
of such Pari Passu Distribution actually deposited
into the Pari Passu Account for such Payment Date
and (y) if pursuant to Clause (B) of Section 6.
1(a)(i), 25% of such Pari Passu Distribution
actually deposited into the Pari Passu Account for
such Payment Date (the amounts referred to in
clauses (x) and (y) of this Clause (i), sometimes
referred to as the "Series A PPD Amount") provided
that if any adjustments were made to the Pari Passu
Account resulting in a disbursement from the Pari
Passu Account for an Operating Profit Deficiency or
refund to the Borrower, the Pari Passu Distribution
actually deposited on any Payment Date shall, for
purposes of determining the Series A PPD Amount, be
deemed to have been reduced by the amount of the
adjustment disbursed with respect to that Payment
Date; provided further that such adjustment amount
will be deemed to have been disbursed from the Pari
Passu Account
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from each of the Pari Passu Distributions deposited
immediately prior to the Payment Date for which the
adjustment is required (in reverse chronological
order) so that in determining the amount of the
Pari Passu Distribution actually deposited for each
Payment Date during a Fiscal Year to determine the
Series A PPD Amount, the last deposited Pari Passu
Distribution shall in each case be deemed to be the
first disbursed for any adjustment.
(B) [1] as to the Series B Note on the Series
B Note Application Date in a total amount equal to
(x) if pursuant to Clause (A) of Section
6.1(a)(i), 50% of such Aggregate Adjusted Pari
Passu Distribution Amount and (y) if pursuant to
Clause (B) of Section 6.1(a)(i), 75% of such
Aggregate Adjusted Pari Passu Distribution Amount
(the amounts referred to in clauses (x) and (y) of
this Clause B[1], sometimes referred to as the
"Series B PPD Application Amount"); and
[2] the Series B PPD Application Amount
shall be applied against the then outstanding
principal of the Series B Note, for each Payment
Date during the Fiscal Year, effective as of the
Quarterly Reconciliation Date for each of the
Payment Dates during the applicable Fiscal Quarter
for which a Pari Passu Distribution is made in the
same order as the Pari Passu Distributions were
deposited into the Pari Passu Account and in an
amount equal to the principal amount of (x) if
pursuant to Clause (A) of Section 6.1(a)(i), 50%
of such Pari Passu Distribution actually deposited
into the Pari Passu Account for the Payment Dates
in each Fiscal Quarter to which the Quarterly
Reconciliation Date corresponds and (y) if pursuant
to Clause (B) of Section 6.1(a)(i), 75% of such
Pari Passu Distribution actually deposited into the
Pari Passu Account for the Payment Dates in each
Fiscal Quarter to which the Quarterly
Reconciliation Date correspond (the amounts
referred to in clauses (x) and (y) of this Clause
(i) (B)[2], sometimes referred to as the "Series B
PPD Amount") provided that if any adjustments were
made to the Pari Passu Account resulting in a
disbursement from the Pari Passu Account for an
Operating Profit Deficiency or refund to the
Borrower, the Pari Passu Distribution actually
deposited on any Payment Date shall, for purposes
of determining the Series B PPD Amount, be deemed
to have been reduced by the amount of the
adjustment disbursed with respect to that Payment
Date; provided further that such adjustment amount
will be deemed to have been disbursed from the Pari
Passu Account from each of the Pari Passu
Distributions deposited immediately prior to the
Payment Date for which the
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adjustment is required (in reverse chronological
order) so that in determining the amount of the
Pari Passu Distribution actually deposited for each
Payment Date during a Fiscal Year to determine the
Series B PPD Amount, the last deposited Pari Passu
Distribution shall in each case be deemed to be the
first disbursed for any adjustment.
provided that with respect to the foregoing Clause
(i), the Series A Note Pari Passu Adjustment
Interest shall accumulate and be applied as a lump
sum credit against the interest on the Series A
Note due and payable on the first Payment Date
immediately following the Series A Note Application
Date (or on the Series A Note Application Date, if
the same is a Payment Date) and the Series B Note
Pari Passu Adjustment Interest shall accumulate and
be applied as a lump sum credit against the Series
B Note Interest due and payable on the first
Payment Date immediately following the Series B
Note Application Date (or on the Series B Note
Application Date, if the same is a Payment Date);
and
(ii) The Annual PPD Interest shall be disbursed
from the Pari Passu Account and applied as follows:
(x) the Annual Series A Note PPD Interest
shall be disbursed from the Pari Passu
Account and applied on, and effective as of,
each Series A Note Application Date as a
lump sum payment against the then
outstanding principal of the Series A Note,
in inverse order of maturity; and
(y) the Annual Series B Note PPD Interest
shall be disbursed from the Pari Passu
Account and applied on, and effective as of,
each Series B Note Application Date as a
lump sum payment against the principal of
the Series B Note,
(f) General. Notwithstanding the foregoing, the
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provisions in this Section 6.1 shall not otherwise limit
or otherwise affect the Borrowers obligation to pay the
Series A Note and interest thereon and the principal
amount of the Series B Note and of the Series C Note on
their respective Maturity Dates or any other Loan
Obligations in accordance with the terms of Loan
Documents and this Agreement.
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III. Section 2.5 of the Loan Agreement is hereby modified and
amended, effective as of the Effective Date, by deleting the fourth
sentence of that Section in its entirety and in lieu thereof,
substituting the following new sentence:
There shall be no more than two Borrowings outstanding at any
time, and if such Borrowing is a LIBOR Borrowing, any Floating
LIBOR Borrowing or Adjusted Rate Borrowing, as in effect,
shall not be in an amount greater than the aggregate amount of
principal scheduled to fall due on the Loan during the
Interest Period selected for such LIBOR Borrowing.
2. RATIFICATION. As modified and amended hereby, the Loan Agreement shall
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remain in full force and effect including, without limitation, the release
provisions, which are ratified, confirmed and reaffirmed and incorporated herein
as of the Effective Date and which release provisions shall specifically but
without limitation, include AMIRESCOInstitutional, Inc. as part of the Released
Parties (as defined therein). Without limiting the foregoing, Borrower and
Lender acknowledge and agree that the application of the Pari Passu
Distributions prior to the Effective Date which were distributed and applied
against the Series A Note and Series B Note in the manner summarized on the
attached Exhibit A is hereby approved and affirmed as being the proper
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distribution and application of those Pari Passu Distributions and no further
adjustments shall be required in connection therewith. In addition and without
limiting the foregoing, Borrower and Lender further acknowledge and agree that
all interest accrued on certain funds held by Lender which include the Pari
Passu Distributions and certain other funds received by Lender in connection
with the Loan for the period prior to the Effective Date (said total interest
amount being referred to as the "Accrued PPD Interest") shall be disbursed on
the first Payment Date after the Effective Date and applied as follows: (a) 50%
of the Accrued PPD Interest shall be applied against the principal of the Series
A Note, in inverse order of maturity and (b) 50% of the Accrued PPD Interest
shall be applied against the principal of the Series B Note.
3. NOVATION. Neither shall Lender intend this First Amendment to be, and this
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First Amendment shall not be construed to be, a novation of any of the
obligations owing by the Borrower under or in connection with the Loan
Agreement.
4. ENTIRE AGREEMENT. The Loan Agreement, as amended hereby, together with the
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other Loan Documents, constitute the entire agreement and understanding among
the parties hereto and thereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof.
5. BINDING AGREEMENT. This First Amendment shall be binding upon and inure to
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the benefit of the parties hereto and their respective successors and assigns
subject, however, to any restrictions on transfer and encumbrance as set forth
in the Loan Documents.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, this First Amendment has been duly executed and
sealed by the parties the day and year first above written.
BORROWER:
MARRIOTT DIVERSIFIED AMERICAN
HOTELS, L.P., a Delaware limited
partnership
By: Marriott MDAH One Corporation,
a Delaware corporation,
its sole General Partner
By: /s/ C. G. Townsend
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Name: C. G. Townsend
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Title: Vice President
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Attest: /s/ Susan Wallace
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Name: Susan Wallace
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Title:
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LENDER:
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NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ Matthew B. Walsh
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Name: Matthew B. Walsh
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Title: Vice President
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[CORPORATE SEAL]
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EXHIBIT A
The Series A Note Pari Passu Distribution to Lender in the amount of 703,535.80
was applied all to the principal balance of the Series A Note effective on April
28, 1994.
The Series B Note Pari Passu Distribution to Lender in the amount of 703,535.81
was applied all to the principal balance of the Series B Note effective on April
25, 1994.